This panelist understands expired domain names.

National Arbitration Forum published an interesting case decision today involving a domain picked up at DropCatch.com.

Dr. Alan Y. Chow, d/b/a Optobionics, owned the domain optobionics.com but let it expire. Janez Bobnik acquired the domain on DropCatch.com and created what I’d call a “skeleton blog” on the domain.

When the Complainant realized the domain expired, it demanded that Bobnik give it the domain. Bobnik said he’d transfer it for $1,850, representing the cost of acquiring the domain, establishing the blog, and hosting. Instead of paying that amount, the Complainant filed a UDRP against the domain. It lost the case.

Panelist Aaron Newell made an educated examination of drop catching domain names and explains that buying an expired domain doesn’t prove that the domain owner targeted the Complainant. He wrote:

The mere fact that Respondent acquired the domain name from Dropcatch is, in this Panel’s view, insufficient to raise a presumption that it should have constructive knowledge of the Complainant and its rights.

Even if I am wrong about that, there is a basis for a presumption of equal force that if someone is acquiring a domain name from Dropcatch (or any backorder / aftermarket service), it is because that domain name lapsed and, therefore, is no longer of interest to the previous registrant. Most registrants will set important domain names to “auto-renew” if critical to their business.

For completeness, the Panel should add here that the Respondent does not say that it did not hear of or know of the Complainant and/or its use of the domain name prior to acquiring the domain name, but it also does not say that it did know of the Complainant prior to registering the domain name.

Accordingly, on the totality of the evidence, the case file itself does not demonstrate any basis on which the Panel can conclude that, on the balance of probabilities, the Respondent was targeting the Complainant with its registration of the domain name…

…It is in theory possible that before registering the domain name, the Respondent realized that there was a possibility that the previous owner might have let it lapse inadvertently and, in turn, might attempt to recover it from the Respondent in due course, perhaps enabling the Respondent to make a profit on the domain name.

However, there is simply no compelling evidence put forward by Complainant in support of this theory, and there is therefore no evidence available that enables the Panel to conclude that, on the balance of probabilities, Respondent targeted the Complainant in its registration of the domain name…

I’ve talked to many people who think that drop catching is a practice in which people buy domains to sell them back to the previous owner. This might have been part of the business many years ago, but ICANN put into place notification requirements that make it extremely unlikely that a domain expires without the owner’s knowledge. This includes required notifications and a change to the nameservers well before a domain goes through the full expiration cycle. If the person is using the domain for an active website, that website will go dark, alerting them to the expiration. In all of my years investing in domains, I can count on one hand the number of former owners who inquired about a domain I acquired in the drop.

Newell retorted another one of the Complainant’s interesting arguments. The Complainant argued that the domain owner suggesting they use Escrow.com somehow suggests bad faith:

Complainant notes that the Respondent offered to effect the transaction using escrow.com and in turn assets that Respondent’s proposal to use escrow.com is evidence of a “familiarity with quickly transferring domain names for a profit.”

The Panel is particularly surprised at this line of argument. This allegation is entirely speculative and there are a number of good faith reasons why the Respondent would want to effect a secure transaction in respect of the domain name. Surely the Complainant would itself have sought to use escrow.com or a similar service had it agreed to a monetary settlement.

Reading between the lines, it sounds like Newell thought this might be a case of reverse domain name hijacking but decided not to rule on it. He wrote:

Neither party has commented in respect of reverse domain name hijacking. I will therefore stop short of that point and find simply that the Complainant has not satisfied the relevant criteria for transfer and/or cancellation of the domain name which, consequently, should remain with Respondent.

This case is another example of someone spending more to file a UDRP (after presumed legal costs) than it would have cost to acquire a domain name. There are times this makes sense, but you better be damn sure you have a solid case and don’t phone it in.