Actionship.com: How a domain investor lost a $34,000 dollar prospect via Afternic

Domain investors follow one simple mantra: buy low, sell high. In the case of Actionship.com, the domain is a great, short, brandable pseudo-dictionary domain.

We call it pseudo-dictionary because although it appears to be a valid dictionary word, it’s in fact an invented portmanteau of action and another word, such as “relationship” that forms a new word.

Unfortunately, the word ActionShip is also a registered brand which led to the filing of a UDRP by Teapplix, Inc.

The Complainant, Teapplix, Inc., has rights in the ACTIONSHIP mark based on the registration of the mark with the United States Patent and Trademark Office. The mark was registered in 2018, all while the domain Actionship.com was registered in 2003, so what is the issue here?

Simply put, the Respondent acquired the domain in 2020 for an undisclosed amount and listed it for sale on Afternic for the sum of $34,000 dollars. The three member Forum (NAF) panel determined that the domain’s acquisition in 2020 constitutes a “break” in registration as if the domain dropped and was re-registered. Had the ownership carried on continuously since 2003, it might have been a completely different decision.

Final decision: Transfer the domain Actionship.com to the Complainant.

Teapplix, Inc. v. Johnny Gray / ArtWired, Inc.

Claim Number: FA2111001974009

PARTIES

Complainant is Teapplix, Inc. (“Complainant”), represented by Xudong Yan, Nevada, USA. Respondent is Johnny Gray / ArtWired, Inc. (“Respondent”), represented by Howard Neu of Law Office of Howard Neu, P.A., Florida, USA.

REGISTRAR AND DISPUTED DOMAIN NAME

The domain name at issue is , registered with Wild West Domains, LLC.

PANEL

The undersigned certify that they have acted independently and impartially and to the best of their knowledge have no known conflict in serving as Panelists in this proceeding.

Gerald M. Levine, Dennis A. Foster and Alan L. Limbury, as Panelists.

PROCEDURAL HISTORY

Complainant submitted a Complaint to the Forum electronically on November 19, 2021. The Forum received payment on November 19, 2021.

On November 22, 2021, Wild West Domains, LLC confirmed by e-mail to the Forum that the domain name is registered with Wild West Domains, LLC and that Respondent is the current registrant of the name. Wild West Domains, LLC has verified that Respondent is bound by the Wild West Domains, LLC registration agreement and has thereby agreed to resolve domain disputes brought by third parties in accordance with ICANN’s Uniform Domain Name Dispute Resolution Policy (the “Policy”).

On November 29, 2021, the Forum served the Complaint and all Annexes, including a Written Notice of the Complaint, setting a deadline of December 20, 2021 by which Respondent could file a Response to the Complaint, via e-mail to all entities and persons listed on Respondent’s registration as technical, administrative, and billing contacts, and to postmaster@actionship.com. Also on November 29, 2021, the Written Notice of the Complaint, notifying Respondent of the e-mail addresses served and the deadline for a Response, was transmitted to Respondent via post and fax, to all entities and persons listed on Respondent’s registration as technical, administrative and billing contacts.

A timely Response was received and determined to be complete on December 20, 2021.

On December 29, 2021, pursuant to Respondent’s request to have the dispute decided by a three-member Panel, the Forum appointed Gerald M. Levine, Dennis A. Foster and Alan L. Limbury as Panelists.

Having reviewed the communications records, the Administrative Panel (the “Panel”) finds that the Forum has discharged its responsibility under Paragraph 2(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the “Rules”) “to employ reasonably available means calculated to achieve actual notice to Respondent” through submission of Electronic and Written Notices, as defined in Rule 1 and Rule 2.

RELIEF SOUGHT

Complainant requests that the domain name be transferred from Respondent to Complainant.

PARTIES’ CONTENTIONS

A. Complainant

Complainant, Teapplix, Inc., has rights in the ACTIONSHIP mark based on registration of the mark with the United States Patent and Trademark Office (“USPTO”). Complainant uses the ACTIONSHIP mark in commerce for a suite of on-line non-downloadable computer e-commerce software to allow users to perform electronic business transactions via a global computer network. Respondent’s domain name is identical to Complainant’s mark.

Respondent lacks rights and legitimate interests in the domain name. Respondent is not commonly known by the domain name, nor has Complainant authorized Respondent to use the ACTIONSHIP mark. Respondent does not use the domain name for any bona fide offering of goods or services, nor for any legitimate non-commercial or fair use because Respondent has simply put the domain name up for sale using GoDaddy’s service (afternic.com).

Respondent registered and uses the domain name in bad faith because Respondent uses the service provided by GoDaddy/afternic.com to sell the domain name. Respondent instructed to accept only bids that are within 10%-20% of the asking price of $34,000, an excessive amount compared to the direct cost of acquiring the domain name. Furthermore, Respondent registered the domain name shortly after Complainant’s registration for the same domain name expired.

B. Respondent

Respondent has rights and legitimate interests in the domain name since Respondent’s business entity, ArtWired, Inc., invests in registering generic domain names to sell or rent to prospective start-up or operating businesses.

Respondent registered and uses the domain name in good faith since Respondent is in the business of acquiring and selling generic domain names. Respondent invests primarily in two-word dot com domain names and the domain name fits into the pattern of domain names in which Respondent’s company invests.

Respondent purchased the domain name in July 2020 and had no knowledge of Complainant’s mark. In fact, at no time did Respondent attempt to contact Complainant to try to sell the domain name to Complainant, and Complainant cites no confusion by any entity between Respondent’s website and Complainant’s trademark. There is no infringing hyperlink on Respondent’s website. Complainant also did not use the ACTIONSHIP mark on Complainant’s website at the time of Respondent’s purchase.

FINDINGS

Complainant has established all the elements entitling it to relief.

DISCUSSION

Paragraph 15(a) of the Rules instructs this Panel to “decide a complaint on the basis of the statements and documents submitted in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.”

Paragraph 4(a) of the Policy requires that Complainant must prove each of the following three elements to obtain an order that a domain name should be cancelled or transferred:

(1) the domain name registered by Respondent is identical or confusingly similar to a trademark or service mark in which Complainant has rights; and

(2) Respondent has no rights or legitimate interests in respect of the domain name; and

(3) the domain name has been registered and is being used in bad faith.

Identical and/or Confusingly Similar

Complainant has shown that it has rights in the ACTIONSHIP mark based on registration of the mark with the USPTO (e.g., Reg. No. 5,637,159, registered Dec. 25, 2018). The Panel finds Respondent’s domain name to be identical to Complainant’s mark since it incorporates the mark in its entirety, adding only the inconsequential “.com” generic top-level domain (“gTLD”), which may be ignored.

Complainant has established this element.

Rights or Legitimate Interests

Paragraph 4(c) of the Policy sets out three illustrative circumstances as examples which, if established by Respondent, shall demonstrate rights to or legitimate interests in the domain name for purposes of paragraph 4(a)(ii) of the Policy, i.e.

(i) before any notice to Respondent of the dispute, the use by Respondent of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or

(ii) Respondent (as an individual, business or other organization) has been commonly known by the domain name, even if Respondent has acquired no trademark or service mark rights; or

(iii) Respondent is making a legitimate non-commercial or fair use of the domain name, without intent for commercial gain to misleadingly divert customers or to tarnish the trademark or service mark at issue.

According to the Registrar’s verification, the domain name was originally registered on June 6, 2003. Complainant says it acquired the domain name in August 2017, redirected it immediately to its corporate website, “www.teapplix.com”, and registered the term “actionship” as a trademark. Complainant’s registration of the domain name expired in around June 2020 because Complainant missed the renewal email. The domain name was obtained by Respondent as the winning bidder at a GoDaddy auction on July 14, 2020. It was registered in Respondent’s name on July 18, 2020, and thereafter offered for sale, parked at a sales lander page with Afternic.com, the auction arm of GoDaddy.

These circumstances, together with Complainant’s assertions, are sufficient to constitute a prima facie showing of absence of rights or legitimate interests in respect of the domain name on the part of Respondent. The evidentiary burden therefore shifts to Respondent to show that it does have rights or legitimate interests in the domain name. See JUUL Labs, Inc. v. Dryx Emerson / KMF Events LTD, FA1906001849706 (Forum July 17, 2019) (“According to the majority of Panel decisions this Panel also takes the position that while Complainant has the burden of proof on this issue, once the Complainant has made a prima facie showing, the burden of production shifts to the Respondent to show by providing concrete evidence that it has rights to or legitimate interests in the domain name at issue.”).

Respondent says he is in the business of acquiring and selling generic domain names to sell or rent to prospective start-up or operating businesses; the two-word domain name fits into the pattern of domain names in which Respondent’s company invests; and that Respondent registered the domain name without knowledge of Complainant’s mark. He contends that the phrase “action ship” is generic and as such has a right or legitimate interest in it.

This raises a fundamental question: did Respondent, a professional domain name reseller, have a duty to research any trademark database? The consensus of Panel views is that it does. See WIPO Overview section 3.2.3: “Noting registrant obligations under UDRP paragraph 2, panels have however found that respondents who (deliberately) fail to search and/or screen registrations against available online databases would be responsible for any resulting abusive registrations under the concept of willful blindness; depending on the facts and circumstances of a case, this concept has been applied irrespective of whether the registrant is a professional domainer.”

In these circumstances the Panel considers the following passage from Fundación EOI v. Kamil Gaede, D2021-3934 (WIPO December 21, 2021) to be applicable:

“…as a person who is in the business of buying and selling domain names, the Respondent has a heightened obligation to comply with Paragraph 2 of the Policy, which requires the Respondent to “represent and warrant to us that . . . (b) to your knowledge, the registration of the domain name will not infringe upon or otherwise violate the rights of any third party.” Further, the Policy makes clear that “It is [the Respondent’s] responsibility to determine whether your domain name registration infringes or violates someone else’s rights.” The Respondent does not appear to have done anything to comply with its obligations under the Policy. Even if the Respondent was not actually aware of the Complainant and its trademark rights, the Respondent is charged with knowledge if it was wilfully blind to the Complainant’s rights. See generally WIPO Overview, Sections 3.2.2 and 3.2.3.”

To what extent a registrant is expected to perform a search to ensure that it is not infringing on the rights of others depends on the linguistic elements of the mark. If a mark is generic without doubt, that is one set of facts, but as a phrase moves to the other end of the continuum, that is another set of facts. Here, Respondent labels “ACTIONSHIP” as a generic phrase, but offers no evidence that the phrase has any widespread usage in any linguistic community. A search by the Panel of the United States trademark database, where both parties are located, would have revealed Complainant as the sole user of the term. This is evidence that although the words “action” and “ship”, taken separately, are generic, the combined phrase “ACTIONSHIP” is not generic but rather one-of-a-kind. Panels have generally found “willful blindness” in cases of famous or well-known marks. It cannot be said that ACTIONSHIP is in either category. Does this make a difference? In the Panel’s view, marks that are neither famous nor well-known but are one-of-a-kind cannot be ignored by professional domain resellers even if their failure to conduct research is less than willful.

The response to Respondent’s “generic” argument is that a professional domain name reseller has a duty, greater or lesser depending on the distinctiveness of the mark, to assure itself that it is not infringing the rights of others. See Fragrance Foundation, Inc. v. Texas International Property Associates, D2008-0982 (WIPO August 28, 2008). (“[i]t seems to this Panel and others that people who make a living from registering vast numbers of domain names must make a reasonable effort…to ensure that they are not infringing on the rights of others.”). See also Citigroup Inc. v. Andrew Robert Wilson, Andrew Robert Wilson, D2021-1058 (WIPO June 1, 2021). “Nor indeed will mere ignorance of the existence of the trade mark be sufficient to bring the adoption and use of the name within the fold of honest practice. Honest practice in the choice of a name to be used in trade must imply reasonable diligence in ascertaining that the name chosen does not conflict with, inter alia, an existing trade mark, and thus in verifying the existence of any such mark.”).

The Panel concludes that, in registering the domain name for resale without becoming aware of Complainant’s ACTIONSHIP trademark from at least the United States trademark database, Respondent has not shown that he has rights or legitimate interests in the domain name.

Complainant has established this element.

Registration and Use in Bad Faith

Based on the circumstances set out above in relation to the second element, the question must be: did Respondent register and is he using the domain name in bad faith? The Panel has found that the phrase “action ship” as a trademark is distinctive to Complainant alone. Of the four nonexclusive circumstances evidencing bad faith, the Panel finds that the domain name was registered and is being used in violation of Paragraph 4(b)(iv) of the Policy. Had Respondent offered any evidence to the contrary and demonstrated other persons marketing goods or services under that mark, the Panel would have been constrained to agree with Respondent and dismissed the Complaint, but there is no such evidence in the record. What is clear from the record is that Respondent failed to even consider the status of “action ship” and it is only now when it is challenged that it is said to be generic.

Thus, as a professional domain name reseller, Respondent is to be taken to have registered and used the domain name in bad faith by registering it and putting it up for sale without exercising reasonable diligence before registering it to ascertain whether the domain name conflicted with prior rights.

Complainant has established this element.

DECISION

Having established all three elements required under the ICANN Policy, the Panel concludes that relief shall be GRANTED.

Accordingly, it is Ordered that the domain name be TRANSFERRED from Respondent to Complainant.

Gerald M. Levine, Dennis A. Foster and Alan L. Limbury, Panelists.

Dated: January 4, 2022

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Comments

3 Responses to “Actionship.com: How a domain investor lost a $34,000 dollar prospect via Afternic”
  1. Alex says:

    “The three member Forum (NAF) panel determined that the domain’s acquisition in 2020 constitutes a “break” in registration as if the domain dropped and was re-registered. Had the ownership carried on continuously since 2003, it might have been a completely different decision.”

    “Had the ownership carried on continuously since 2003”.

    Good Points!

    Let me ask you this: same owner or different owner matter? For example, domain not dropped, and sold someone else, so is that good for domain? Does it give an advantage for new owner?

  2. DomainGang says:

    Alex – Thanks for reaching out. Not a lawyer! However, the paragraph you quoted addresses exactly that: IF the domain had dropped (which it hasn’t) then it’d be a similar scenario, IMO.

    There’s a recent case about Canvas.com: https://domainnamewire.com/2022/01/05/wow-judge-orders-canvas-com-to-stop-using-its-domain-name/ – the company acquired the domain afresh but a tm holder now wants them to stop using the brand.

  3. DomainGang says:

    Alex – Here’s another fresh example of a domain that dropped (but wasn’t deleted) and was auctioned off to a new registrant; they were hit with a UDRP and lost: https://domaingang.com/domain-law/speculet-com-udrp-trademark-speculation-can-lose-you-the-domain/

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