Why $100k+ Award for RDNH is a Big Deal | DomainInvesting.com

Why $100k+ Award for RDNH is a Big Deal

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Andrew Alleman wrote about the U.S. Federal District Court decision that awarded a domain owner $126,830 in damages, attorney’s fees, and costs in response to a case of Reverse Domain Name Hijacking (RDNH), and I believe this decision is a big deal for domain investors.

In 2009, the city of Paris, France filed a UDRP for the domain name Parvi.org, and the sole panelist ruled in favor of the city, meaning the domain name was ordered to be transferred to the city. The domain owner responded by filing a lawsuit against the city of Paris, France in the state of Texas (the jurisdiction of the domain registrar). The city of Paris did not respond, and the Texas court issued a default judgment in favor of the domain owner, awarding him over $125,000.

The above synopsis is the shorter version of the story, and I recommend reading the fuller version on the JD Supra legal website. The article was written by Travis Crabtree, who worked on the case with noted domain attorneys John Berryhill and Paul Keating.

Even though this was a default judgment, I think it’s an important decision domain investors should know about.

There is little recourse at the arbitration level when a domain name is subject to a Reverse Domain Name Hijacking UDRP. There really is no penalty (financial or other) when a RDNH finding is made against a complainant. However, there is now case law on the books awarding over $100,000 to a domain owner after a court’s finding of RDHN.

Yes, the legal expense may be considerable if the domain owner chooses litigation, but this could be a deterrent to a company filing a questionable UDRP if they know you might hire an attorney to seek damages.

It seems that companies have been tossing the dice with UDRP filings, betting that their $1,500 filing + attorney fees would net them a high value domain name. If the company knows they could be on the hook for RDNH damages of over $100k, they might think twice about following through with a proceeding. Even if the domain owner doesn’t win, the complainant’s legal fees would skyrocket. Their $5-8k UDRP filing could turn into a $50,000+ defense.

Perhaps an attorney would take the RDNH case on contingency and be paid only if victorious, knowing that they could win a $100k+ reward. I am not an attorney, so I don’t know if this is something that could or would be done in this type of situation.

It’s good to know that  domain owners may now have recourse should a UDRP be filed on a descriptive domain names.


About The Author: Elliot Silver is an Internet entrepreneur, and he is the publisher of DomainInvesting.com, a website that shares domain investing news, insight, and strategy. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (13)

    George Kirikos

    Let’s not forget that Digimedia was awarded $100K last year, in a different case:

    http://domainnamewire.com/2011/03/29/court-awards-digimedia-100000-for-reverse-domain-name-hijacking/

    October 6th, 2012 at 12:53 pm

      Elliot Silver

      There was no UDRP filing in the Digimedia case. They were threatened with litigation and it seems their hand was forced to litigate. In the Parvi.org suit, it went through the UDRP process, and not only did litigation save the name but it got them a $100k+ reward. As Andrew pointed out in his article, perhaps the city will want to pay to clear up this domain related issue prior to the .paris award.

      October 6th, 2012 at 8:17 pm

      John Berryhill

      In the Digimedia case, the situation was pretty egregious. Digimedia was the defendant in the action as originally filed, and subsequently dismissed in Florida. Then, the plaintiff filed another case in Texas. The RDNH award arose from counterclaims which Digimedia filed as the defendant.

      October 8th, 2012 at 5:48 pm

    Karen Bernstein

    Congratulations to the legal team successfully beating the aggressor back! Hopefully, this decision will also make UDRP panelists think twice before rubber stamping a poor decision.

    October 6th, 2012 at 3:48 pm

    RaTHeaD

    now that they have have 500 million in the bank some hotshot attorney might go after icaan for civil racketeering and it will be game over for udrp.

    October 6th, 2012 at 4:08 pm

    Samit

    Is Rick pursuing civil action on the RDNH he won?

    If enough companies sue on the basis of an RDNH and win six figures in damages, it just might be a deterrent to frivolous UDRPs.

    And if you an attorney is willing to work on a contingency basis on a similar case I’d be happy to talk to them.

    October 6th, 2012 at 7:48 pm

      Elliot Silver

      Not sure, but that would be a very interesting case to follow. One issue would be that the company may not have US assets to go after (not really sure).

      October 6th, 2012 at 8:14 pm

    Frank Schilling

    In ten years this will be viewed as a massive ruling. Significant precedent here – this is different than the Digimedia case.

    October 6th, 2012 at 8:11 pm

    Voltaire

    I agree. Massive moment for domain owners.

    Vexatious legal actions (and UDRP is a legal action) have always been frowned upon in a democratic legal system….finally, its been recognised in a court of law that silly UDRP actions have consequences.

    A couple more of these, and shallow-based UDRP will cease to occur.

    October 6th, 2012 at 9:31 pm

    Brett Lewis

    Great decision. It would be useful to define what exactly the legal team had to prove to establish RDNH. It’s not just an overreaching claim, but was based on a narrow statutory clause. The gist is that where a party files something utterly meritless, which interferes with a registrant’s ownership of a domain name, the Court can make a finding of RDNH.

    October 8th, 2012 at 3:28 pm

      John Berryhill

      You can stare at a statute for ten years and one morning look at it in a way you hadn’t noticed before.

      15 USC 1114(2)(d)(ii)(iv)

      “…the person making the knowing and material misrepresentation shall be liable for any damages, including costs and attorney’s fees…”

      For some weird reason, I had always looked at the costs and fees part, but hadn’t really paid attention to the “any damages” part. Let that sink in… “any” damages.

      October 8th, 2012 at 6:01 pm

    Voltaire

    @John Berryhill:

    “…the person making the knowing and material misrepresentation shall be liable for ANY damages, including costs and attorney’s fees…”

    Oh, this gets better and better for domainers, who are the victim of a spurious UDRP claim…

    …as long as it can be established that ‘any’ damage (including costs/fees etc) have been incurred as a result of such a claim, then we have legal respite…!

    At last! A disincentive for Reverse hijacking.

    Thanks to John B. for clarifying this…..And, thanks to Elliot for bringing it to our attention.

    October 8th, 2012 at 6:08 pm

    Philip Corwin

    Excellent precedent, and well-deserved congratulations to the legal team.

    When the brand interests propose loser pays for UDRP filings (as they already are for URS) perhaps a counterproposal should be money damages within the UDRP for RDNH, so that recourse to the courts isn’t necessary.

    October 9th, 2012 at 12:58 am

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