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