The recent "myspace.co.uk" appeal decision highlights a number of the issues involved in both the trading of domain names in the Uk, and the process of dealing with who should own them.
By way of brief background, "myspace.co.uk" was originally registered by an English company, Total Web Solutions Limited ("Total"), back in August 1997. Myspace was founded in the United States in 2003 and launched in the UK in May 2006.
Myspace tried to buy the domain name in January 2006 but baulked at paying Total's asking prices which reportedly varied from USD 100,000 to USD 430,000. Myspace also wrote a "cease and desist" letter in May 2007, demanding, amongst other things, that the domain name be transferred to Myspace. Total stood their ground, and replied stating "we are still open to accepting the original agreed offer of £220,000 plus VAT".
Clearly, Myspace were not keen to do a deal and opted instead for the standard Nominet Dispute Resolution Service in the UK hoping they could get the domain name transferred to them.
The adjudicator took the view that there had been some abuse of the domain name by Total who had changed its use by "parking" it on a Sedo site from 2005 at around the time News International acquired Myspace - and thus using it to generate income. On that basis, he decided the name should be transferred to Myspace Inc.
Total appealed. Appeals are very rare (apparently less than 0.1% of all decisions are appealed) but in this case it was worth it for Total, because the panel overturned the adjudicator's decision and allowed the appeal by giving the name back to Total and restoring the status quo.
It remains to be seen whether either of the parties will end up in court, but the signs are there. Total argued that there was a contractual dispute arising out the Myspace's approach to buy the domain (denied by Myspace incidentally), and Myspace appear to want to enforce their trade mark for "myspace" which they registed in the US in 2006. Neither of these matters can be dealt with by Nominet's Dispute Resolution Service and the Appeals panel concluded that the "just result is to leave it to the Complainant (Myspace) to litigate the issues if it so wishes".
So what issues did these decisions highlight?
1. Well, it reinforced the proposition that it isn't an abuse to ask for a "high price" for a domain name provided it isn't an abusive registration. Putting a value on that domain name, though, remains as difficult as ever.
2. There's also the issue that if you can't do a deal, you may well end up with nothing. Total may now own the "myspace.co.uk" domain, but if Myspace are not prepared to pay for it, it's unlikely to find any other willing purchasers.
3. Nominet's Appeal process, whilst rarely invoked, appears to work - up to a point. The panel were fairly straightforward in setting out what they could and couldn't do. The panel is not a court and they do not have the powers of a court.
4. "Parking" a domain name may not necessarily be "exploiting it". It all depends on the circumstances.
5. It confirms that the registration of domain names is still a first-come first served system and no registrant who innocently acquires a domain name should be liable if that domain name subsequently acquires value or notoriety through no fault of the original registrant, provided that he does nothing actively to exploit his position.
6. I assume that both parties incurred relatively substantial legal costs in taking this matter through the Nominet procedures and it reinforces the fact that there's no way either party, winner or loser, can recover any of those costs. They won't be as high as the costs of going to court, but they are not to be underestimated.
Links:
Adjudicator's Decision is available as a PDF here.
The Decision of the Appeal Panel is available here.
Note: An "abusive registration means a Domain Name which either:
was registered or otherwise acquired in a manner which, at the time when the registration or acquisition took place, took unfair advantage of or was unfairly detrimental to the Complainant's rights; OR
has been used in a manner which took unfair advantage of or was unfairly detrimental to the Complainant's Rights".
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