Prior owner fail to renew, existing contract involved

[warnerms]

Existing Situation
-------------------------------------------------------------------------
Party A acquires a Domain Name X at Auction in 2006, and is the current
registrant of record for Domain Name X.

Party B has failed to pay the Registrar in order to extend the domain
name registration period for Domain Name X.

Party B does not reclaim Domain Name X during the mandatory redemption
period provided for the former registrant (Party B) following the Auction
of Domain Name X.

Party A finds out after it becomes the current registrant of record
for Domain Name X, that Party B (the former registrant) has an existing
contractual agreement with Party C that involves Domain Name X.

Party B has an existing contract with Party C, in which Party B
(as part of the contract) has agreed to transfer Domain Name X to
Party C (sometime in the future) for valuable consideration from Party C.
Party C has paid in full, all valuable consideration to Party B.
Transfer of Several Domain Names, sometime in the future, from Party B to
Party C will conclude the contract. Of the Several Domain Names that are
suppose to be transfered, Domain Name X is one of them.

Domain Name X is of considerable potential value to Party A, and Party A
has no interest in transfering Domain Name X back to Party B or transfering
Domain Name X to Party C, without considerable consideration from party B,C,
or Both.
-------------------------------------------------------------------------
GIVEN CURRENT DOMAIN AND CONTRACT LAW:

What is the legal standing of Party A, and possible legal
implications/repercussions for Party A?

Does Party B have any existing rights to have Party A return Domain Name X?

Can Party C or Party B compell Party A to honor the contract between
Party B and Party C?

What could happen if Party A sells the domain name to a forth party, Party D

 

[Dave Zan]

It's going to be one messy party.

Here's what my fuzzy logic tells me.

Party A has full rights to the domain name. Party A has no obligations to B, C,
D, E etc. except not to infringe any intellectual property rights any of them
might have, if any at all.

In absence of any agreement, no.

No because Party A has no contract with B or C. That's a problem between B
and C.

Anything can happen.

BTW, redemption is not mandatory.

 

[warnerms]

Well the Party gets messier
-------------------------------------------------------------------------------------------------------------------------------------
Well Party C sued Party B claiming they were infringing on their Trademark.
Party B counter-sued Party C, claiming the Trademark was a generic term in
common use in the Industry before Party C Trademarked the term. Judge can
see the merit of Party B claim, and sets a Jury trial. There appears to be
a very real possibility, based on the historical evidence, that Party C
could indeed loose their Trademark. Party C settles out of court with Party B. The terms of the contract are: Party C pays Party B a large sum upfront; Party B agrees to transfer several domain names, several years in the future, that Party C felt infringed on their Trademark.
Party B fails to renew registration on one of the domain names
in question. Party A buys name at auction, redemption period expires,
Party A is now the legal registrant of domain name. Party A was unaware of the legal proceeding
prior to becoming the new registrant, and just assumed Party B had gone out of business.
Nope, Party B just changed the name of their company.

 

[Chelsea]

Party B had binding contract with obligations they did not follow through.
Party C can sue Party B for the loss, but as they obviously settled out of court I don´t think that they could claim any trademark anymore - I mean, you can´t settle first and than claim from another party.

Party B has no rights either - they agreed to transfer the name. their problem that they can´t fulfill the deal now...

But, this is just my thought of this situation as I am no legal expert.

 

[Dave Zan]

In any case, Party A has nothing to do with Party B and C. And would do well
to stay out of their messy party.

 

[tas38]

If I was party C, I would take it to a real court. Because partys C's contract predates party A's contract then, then win that court case send icann the court order. Icann then follows court order, and hands over name to party C.

Odds would be, this could be done with out bugging party A even. As party B did not own the name to lose, meaning party A's contract is not any good. Then Icann takes the name, party A has no recourse what so ever.

My guess is that is why party C, is having it out with party B right now. But yes it's between party B and party C, and if party C wins in a real court then party A loses said name. I do believe some one said party C has a real paper contract, meaning party C can take that right into a real court then. And aprty B would have to agree, that party C had a contract that they own the name on such and such date.

 

[Dave Zan]

If I was party C, I would take it to a real court. Because partys C's contract predates party A's contract then, then win that court case send icann the court order. Icann then follows court order, and hands over name to party C.

Odds would be, this could be done with out bugging party A even. As party B did not own the name to lose, meaning party A's contract is not any good. Then Icann takes the name, party A has no recourse what so ever.

Party C has no legitimate enforceable claims against Party A or ICANN.

 

[warnerms]

If I was party C, I would take it to a real court. Because partys C's contract predates party A's contract then, then win that court case send icann the court order. Icann then follows court order, and hands over name to party C.

Odds would be, this could be done with out bugging party A even. As party B did not own the name to lose, meaning party A's contract is not any good. Then Icann takes the name, party A has no recourse what so ever.

My guess is that is why party C, is having it out with party B right now. But yes it's between party B and party C, and if party C wins in a real court then party A loses said name. I do believe some one said party C has a real paper contract, meaning party C can take that right into a real court then. And aprty B would have to agree, that party C had a contract that they own the name on such and such date.

Party A acquired the name at a registrar auction. Party A has no contract with Party B or Party C. I suppose Party A could enter into a contract to sell the name to either Party B or
Party C. Or Party A could change the current use of the domain name in question, so as not to infringe on the Trademark of Party C and just keep it, not sure how this works?
Or I suppose Party A could sell the domain name to a foreign entity in a Country where the Trademark of Party C would not be enforceable?

 

[jberryhill]

Icann then follows court order, and hands over name to party C.

Actually, ICANN doesn't give a poop about any of these types of situations.

The registrar is the one you have to look out for, though, because some registrars are on auto-pilot relative to court orders.

Variations on this fact pattern (as far as I can tell - I skimmed it) come up fairly frequently [1]. I have seen about seven or eight different situations where my client acquired a dropped domain name, and then several months later someone shows up with a court order arising from a dispute between two other parties which was ongoing prior to the time the name dropped.

These are the situations where you don't want domain names to be treated as "property", but as registration service contracts. The right to receive services under a registration contract was what those two parties were fighting over. When that registration contract expired, then the thing they were fighting over ceased to exist. The re-registration of the domain name is not really "a re-registration" of anything - it is a new contract which does not relate to the old contract in any manner whatsoever.

I suppose Party A could enter into a contract to sell the name to either Party B or Party C.

In those situations where registration of a domain name buys you a ticket to someone's ongoing battle, you generally don't want to be in the position of favoring one side or the other which, itself, is a good reason NOT to transfer the domain name to either side. You can, of course, be pragmatic about it when, for example, one side has a much better claim and/or a whole lot more firepower than the other side.

But I do get amused when the prevailing party in some contest between B and C decides to approach A with the outcome on the pretense that A has any sort of obligation under a dispute to which A was not a party:

http://www.wipo.int/amc/en/domains/decisions/html/2006/d2006-0975.html
The Panel notes that the Complainant apparently did not obtain an order from the Court in England requiring the Federation to transfer the disputed Domain Name to the Complainant, which allowed the name to become disused and, as happened, to be picked up by the various services which scavenge for discarded domain names.

 

[GoPC]

Looks alike a case of Fraud and Party C is entitled to compensation or Remedy.

Take away the "domain" part in insert any other product or service.

If you sold something to one guy and then sold it to someone else as well and the product (for all intense and purposes) ceases to exist and is therefore not physically able to be delivered, then the Remedy is awarded to the Frauded party in the sum of the amount paid plus an amount determined to be or have been lost by the party as well as any punative damages, attorneys fees and costs.

I don't think, specifically in the case of domains, that they can pull the domain back from the new owner.

However, I do see an opportunity here... since Party C will (apparently has) sued for the fraud/negligence, they will presumably have the capital to not only buy the Domain in question but have money left over as well.

If I owned the domain now, I would certainly make friendly with the company and point out the fact that now they CAN buy the domain for the agreed price and in the end, have money left over with all of the extra fees they will generate from the suit.

HOWEVER... it is important to point out that if the new deal is KOWN to the court, then "winfall" arguments come into play and Party C stands to loose much of the Remedy if the Court knows or assumes that the domain will eventually fall back into their posession and they stand to make the same money.

So, in your dealings with Party C, it should be understood that as far as any decisions have been made, they will NOT be getting the domain. Wait until AFTER the settlement/award and THEN sell the domain.

Windfall occurs when the courst deems that awarding a judgement will result in the party getting both award AND the benefit. Remedy/Award is in lieu of, not in combination with.

You "Keeping Qquiet" should be worth doing the deal for Party C.

Best of luck!

GoPC

 

[tas38]

I don't think, specifically in the case of domains, that they can pull the domain back from the new owner.

Why not, if some one takes your auto and sell it. The person buying the auto loses the money and auto, they know where the domain is there for it could be returned.

And Icann would heed to a court order I would think, or they could be stopped from selling anything in that country. If you read the fine print when buying a domain, it says they can take it for reasons of a court order. That is part of the new contract, I do believe but yes the judge could order the funds be repaid.

But in that case, they could go ahead with any TM problems with party A as well. But incases where they got a problem with TM to had such a contract, the judge is likely to rule the domain be giving back to party C correct ?

If I was party C, knowing party B could not pay I would want the domain back. And the judge my well agree, if TMing was a problem before after all they know where it is. They could easy take party A to court, and force them to paid some good money to defend the name as well.

Party C does have options, to force party A to give domain name back. I do agree, being on partys C good side best though. Party A may well be able to make a deal, as party B had a deal with party C to begin with.

 

[warnerms]

Why not, if some one takes your auto and sell it. The person buying the auto loses the money and auto, they know where the domain is there for it could be returned.

Ahh, but this situation is more like Party B was leasing the car, and quit making their
lease payment. The leasing company takes the car back and signs a new lease for the
same car with Party A. If Party B had agreed to transfer the lease for the car to Party C
it would seem they are SOL at this point. The situation is not really comparable to
outright theft of someones car, in which case the person acquiring the stolen property
would have to return it to the original owner.

 

[tas38]

AHHHH ha, now that could be that case and hopefully this works out for you that way.

 

[Dave Zan]

Like I said, Party A would do well to stay out of Party B and C's mess.

If Party C feels they have a claim against Party A, good luck.

 

[Steen]

Actually, ICANN doesn't give a poop about any of these types of situations.

The registrar is the one you have to look out for, though, because some registrars are on auto-pilot relative to court orders.

Would you be so kind as to point out which (major) registrars are on "auto-pilot" when it comes to court orders and which take a second glance at things for themselves?

 

[myst woman]

Can you take this stuff to court?

 

[tas38]

Yes it can be taken to court, and if it was in court for the contract it can go right back now.

 

[jberryhill]

Would you be so kind as to point out which (major) registrars are on "auto-pilot" when it comes to court orders and which take a second glance at things for themselves?

It is not reliably predictable. High volume, low margin registrars are less likely to be motivated to spend time on someone who registers onesies and twosies. Some registrars have developed a reputation for servicing domainers, and tend to care a bit more, since from that perspective, it matters a lot more if one customer has hundreds of domains there.

 

[Dave Zan]

Yes it can be taken to court, and if it was in court for the contract it can go right back now.

And even if you take it to Court, are you guaranteed to win?

 

[tas38]

No of course not, this would be old laws being used on some thing new.

The law has not yet defined, what a domain name really is. Nor how it should be handled, beyond the normal Icann based rules that are based on international laws.

But if there is a paper contract inked, the court can see it based as a real contract. It's one reason when a domain has big money hooked to it, a paper contract should be inked by all partys. No one in their right mind, can trust how Icann has things setup with alot of money riding on a name.

Like microsoft left one of it's name expire, some one seen it and renewed it for them. But some one could of just as easy, tried to hold them hostage to get the name back fast. By Icanns rules, it would have to be put on hold till it was worked out.

Now a place like microsoft, is not going to wait for Icann to get it back for them. They will get a court order in short order, by showing a judge they own the TM on it. And they will stuffer alot of damages from not getting it back right away, and the court will give them a court order to hand it over to microsoft.

Any registrar in the country the court order is for, would have to hand the name back to them then. And if a registrar would not do it, they would be in big trouble. Most likely microsoft, would have law inforcement hand the registrar the court order. To insure they hand it over right away, the court order would be temp of course.