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Cybersquatting case goes "squatters" way
A rare event in the world of domain names and cybersquatting is when a party accused of cybersquatting not only wins a claim but wins a counter claim about an attempted reverse domain name hijacking.
Indigo Networks, a Nassau, Bahamas- based telecommunication company that in November 2007 found itself hit with a complaint. It was alleged that they had no legitimate rights or interest to the domain name Onephone.com. OnePhone (a Stockholm , Sweden based company) took its complaint to the World Intellectual Property Organization (WIPO). The Geneva-based United Nations agency is one of four ICANN-approved domain-name dispute-resolution service providers.
OnePhone asked WIPO to transfer the domain name Onephone.com because it was the rightful owner of the European registration “ONEPHONE”. OnePhone also claimed it had the pending registration rights to the name in several other countries, although not in the Bahamas.
OnePhone.com was originally registered by Patrick Low in 1999 and OnePhone said it had tried to buy the domain in 2005 for $1,800. The offer was rejected and later Low sold the domain name to Indigo in 2007 for $10,000.
In requesting the transfer, OnePhone said that its registered business name was identical to the domain name used by Indigo. The company pointed out that Indigo did not do business in the name of OnePhone prior to the registration of the domain name, nor was it commonly known by that name. It argued that Indigo acted in bad faith when it registered the domain name. OnePhone went on to claim that Indigo was a competitor that more than likely was aware, or should have been aware, of the existence of OnePhone and the fact that the company had tried to buy the domain name from Low in 2005. After OnePhone had filed its complaint, Indigo’s domain registrar locked the disputed domain to prevent it from being transferred to another registrar during the arbitration fight. Indigo had 20 days to respond.
The company decided to fight back. "Some companies are abusing the original intent [of the domain-name dispute-resolution process] to essentially try and hijack domains from smaller companies," said Jason Adams, Indigo's vice president of network services and co-author of the company's official response to the complaint. Determined not to let a larger company wrest the name away, Indigo filed a counterclaim. "We responded to all of their charges," Adams said. "We also said this was a strong case for reverse domain-name hijacking, and we presented a counterclaim."
Indigo asked for a three-person WIPO panel to hear the case instead of the usual one-person panel, even though it cost an additional $1,500 to do so. Under WIPO's dispute-resolution rules, one of the panellists was picked by Indigo, one by OnePhone, and the presiding panellist was tapped by WIPO.
Indigo claimed that it has used “onephone” since 2006 to advertise and describe its VoIP (voice over IP) service. Indigo had invested a lot of money into advertising and that thousands of customers had signed up for the services. As a counter argument Indigo claims that OnePhone had not launched any product or services using that name. It also claimed it was unreasonable to expect to know about OnePhone’s rights to a name in other countries.
Indigo also charged OnePhone with attempted reverse domain-name hijacking. It said that the Swedish company had made no attempt to learn whether Indigo had used the domain name legitimately. It also charged OnePhone with not disclosing all of the information of its own use of the name and for recklessly disregarding the potential disruption to Indigo's business. In order to prove that Indigo was cybersquatting OnePhone had to convince the three man panel that Onephone.com was confusingly similar to its own trademark. OnePhone also had to show that Indigo didn’t have the rightful interest in the name and the Bahamas based company acted in bad faith when registering the name.
"Our response was strong enough to satisfy the panelists across the board," Adams said. "It was a very, very strong ruling on our behalf. There was no dissenting opinion. Even the panelist that [OnePhone] selected, ruled for us."
On the 22nd December the panel concluded that Indigo had a legitimate reason for using Onephone.com and added it was reasonable to believe the company did not know about OnePhones rights to the name in other countries. Dismissed outright was the argument that Indigo was not an international company and therefore shouldn’t be allowed a .com domain put forward by OnePhone. The claim that the name was registered in bad faith was also dismissed as there was no reason to claim that Indigo had registered the name for anything other than valid reasons. OnePhone it was concluded acted in bad faith in an attempt to reverse domain name hijacking. The Swedish company had shown reckless disregard in failing to research whether Indigo had a valid claim to the domain name.
This case is a rare example of a domain-name dispute ending in favour of the respondent. Of the 1,430 such disputes WIPO arbitrated last year, 1,219 ended with the domains being transferred to the firm or person who filed the complaint. Those accused of cybersquatting prevailed in just 190 instances, equalling just over 13% of all the cases in 2007, while 21 settled. Adams said he believes that “one of the biggest factors behind his company's success was its decision to go with a three-person panel”. Though it cost the company more to defend itself, “having the case heard by multiple panellists was crucial”, he said.
Jesper Sellin, an attorney at Bergenstrahle & Lindvall AB, the Stockholm-based law firm that represented OnePhone in the dispute, expressed disappointment with the outcome. "We strongly oppose the finding that the complaint was brought in bad faith," Sellin said via e-mail. "In our opinion, it is far from clear that a holder of worldwide trademark rights should find it obvious that a company operating in a small territory like the Bahamas should have legitimate rights in a .com domain name," he said. He also argued that it was Indigo's correspondence with the original domain-name holder that led OnePhone to believe the Bahamian company had acquired the domain name in bad faith. "It is unlikely that our client will take this case further," he added