Zija International, Inc. of  Utah just lost its UDRP bid to get control of the domain name zija.com, a domain it repeatedly tried to buy from the domain holder for $15,000 since 2006.

Yes way back in 2006 after a series of letters back and forth, the domain holder refused to sell the domain name for $15,000 or even or counter with a selling price.

Fast forward 6 years later and the trademark holder files a UDRP and now loses the UDRP.

Here are the facts and findings by the three member panel:

The Complainant owns a United States trademark registration for the mark ZIJA in block letter form.

Registered: August 7, 2007; Filed: September 27, 2004

 

The Respondent is a for-profit California organization that has no connection or relationship with the Complainant.

 

At the time the Respondent registered the disputed domain name on August 1, 2002, it had no knowledge of the Complainant as the latter did not exist until two years later, i.e. during 2004.

The Respondent commercially used the disputed domain name from 2002 through 2006 to direct Internet users to “www.blueknight.com”, a website owned by the Respondent, at which the Respondent sold T-shirts.

 

The Respondent renewed its registration for the disputed domain name on October 12, 2007.

“During March 2006, the Complainant, through an e-mail letter, contacted the Respondent about purchasing the disputed domain name. During April 2006, the Respondent informed the Complainant that it did not want to sell the disputed domain name.

 

“Subsequently, on July 14, 2006, the Complainant’s counsel, by letter (Annex A to the Response) requested the Respondent to immediately cease and desist from all further use of the disputed domain name and to “voluntarily and immediately relinquish” the disputed domain name. He further stated that “costly legal-wranglings” could be avoided if the matter were resolved on the Complainant’s terms. Counsel further stated that the Complainant had previously offered to purchase the disputed domain name from the Respondent for USD 15,000, but had thus far received no response to the offer.”

 

“Shortly thereafter, through a letter dated July 21, 2006, (Annex B to the Response), the Respondent advised the Complainant’s counsel that it had acquired and used the disputed domain name before the Complainant commenced its business and would not transfer the disputed domain name to the Complainant. The Respondent further noted that it had never received a USD 15,000 offer from the Complainant.”

 

“Later, in a letter dated August 16, 2006, (Annex C to the Response), the Complainant’s counsel stated that in his “opinion the law distinguishes between ‘first use’ and ‘commercial use’” and repeated his client’s desire to purchase the disputed domain name for USD 15,000.”

 

“Subsequently, in a letter dated August 29, 2006, from the Respondent to the Complainant’s counsel (Annex D to the Response), the Respondent declined the Complainant’s repeated USD 15,000 offer to purchase the disputed domain name and made no counter-offer to sell.”

 

“Nearly six years later, in a letter dated July 13, 2012, (Annex E to the Response), the Complainant’s counsel stated that the Complainant had recently become aware that the Respondent was using the disputed domain name.”

“Counsel also implied, without issuing an explicit threat, that the Complainant might institute a federal lawsuit against the Respondent for injunctive relief, damages, and attorney’s fees. ”

“The letter included the following demand:

 

“Demand. We therefore demand that Deep Frontier’s immediately cease and desist the use of ZIJA, or variant spellings of this registered trademark, and transfer the zija.com domain name to Zija International. We also require that Deep Frontier provide written confirmation within ten (10) days that it has complied with the foregoing demand.” (Emphasis in original).

 

“The Panel finds that the Respondent did not register and has not used the disputed domain name in bad faith.”

 

“It is rather axiomatic that if a complainant was not in existence at the time a domain name was registered, then the domain name could not have been registered in bad faith – as the respondent could not have had any prior knowledge of the complainant, its business plans or its marks (to the extent it had any at the time) when the respondent registered the domain name.”

“That is the exact situation here, with the Respondent having registered the disputed domain name more than two years prior to the time the Complainant started its business. ”

“Further, the Complainant did not succeed in obtaining transfer of the disputed domain name from the Respondent, in as much as the Respondent simply refused the Complainant’s repeated offers to purchase the disputed domain name for USD 15,000. There is no evidence of record that the Respondent’s refusal was motivated by any purpose, such as extracting a higher offer from the Complainant, other than its desire to simply retain the rights to its registration.”

 

“An issue now arises as to whether the Respondent’s renewal of its registration under the facts here, particularly in light of its knowledge of the Complainant and its trademark rights, constitutes bad faith registration. A consensus view as to whether the act of renewal, in and of itself, can constitute bad faith appears in paragraph 3.7 of WIPO Overview 2.0 which states in pertinent part:

 

“While the transfer of a domain name to a third party does amount to a new registration, a mere renewal of a domain name has not generally been treated as a new registration for the purpose of assessing bad faith. Registration in bad faith must normally occur at the time the current registrant took possession of the domain name.“

 

“The actions of the Respondent, here, in ceasing its use of the disputed domain name and thereafter, even with knowledge of the Complainant and its trademark rights, renewing its registration do not reflect bad faith.”

“The Panel is persuaded by the Respondent’s undisputed contention that it ceased its use of the disputed domain name starting in the 2006 for fear of the Complainant instituting litigation against it on the basis of the latter’s US trademark registration. ”

“From that time to the present, the Respondent did nothing further with the disputed domain name. ”

“This is not an instance of passive holding that might otherwise constitute bad faith, but rather the Respondent exercising its own desire, based on a well-founded apprehension of an imminent lawsuit, to protect itself from the time and expense of litigation by consciously abstaining from further use of the disputed domain name and thus, in turn, significantly reducing its risk of exposure – even assuming it would likely have ultimately prevailed in a litigation by virtue of having established prior rights in the disputed domain name.”

“Under the specific facts here, not engaging in conduct to avoid litigation is not bad faith but rather is a legitimate response to the Complainant’s repeated threats. ”

Moreover, there is no requirement that a domain name holder, who legitimately possesses a domain name, must accept any offer by another to transfer the disputed domain name to the latter. The holder can simply decline the offer and maintain his rights – as the Respondent did here.

 

D. Reverse Domain Name Hijacking

 

“Contrary to the Respondent’s view, the Panel finds that, under the specific facts of this case, the Complainant’s actions in filing its Complaint do not rise to the requisite level of bad faith to warrant a finding of reverse domain name hijacking. ”

“Specifically, the Panel believes that the Complainant had a reasonable basis, though misguided and ultimately incorrect, to believe that it might prevail in this proceeding and thus did not institute the proceeding merely to harass the Respondent and hence as an abuse of the administrative procedure.”