3.5: Setting a Price and Offering for Sale

3.5 Setting a Price and Offering for Sale

If a Respondent has a legitimate interest in a Domain Name, the Respondent is entitled to offer its business asset for sale at market price and this is not bad faith. Where a Respondent has a legitimate interest in a domain name and it forms part of a Respondent’s stock-in-trade, it constitutes “use of the domain name in connection with a bona fide offering of goods or services”. In such circumstances, a Respondent has the right to convey rights in its domain name for whatever price it deems appropriate regardless of the value that a Complainant may ascribe to the domain name.

Selling domain names with commercial value can itself be a bona fide offering of goods or services and a general offer to sell a domain name is not evidence of bad faith absent any specific intent derived from exploitation of the goodwill associated with an incidental trademark. Dealing in domain names in the secondary market is a legitimate trading activity and by its very nature, is speculative. A domain investor usually has the intention of reselling domain names at a price in excess of the purchase price. Some domain names sell and some sit on the shelf unsold. Being a domain name investor is a risky business and is not always profitable but trying to make a profit by reselling domain names is not bad faith per se.

As a lawful registrant, a Respondent has the right to sell a domain name for whatever price it deems appropriate regardless of the value that a Complainant or an appraiser may ascribe to the domain name. Panels are generally ill equipped to judge market prices.

In some cases, an offer for sale can be an indication of bad faith but is not necessarily in and of itself evidence of bad faith having regard to the circumstances. Panels are required, as stated in 4(b)(i) of the Policy, to determine whether an offer to sell is “primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name”.

Factors that may be taken into account in order to determine the “primary purpose” may include for example; a) the distinctiveness of the Complainant’s mark; b) the strength and reputation of the Complainant’s mark on the date of domain name registration; c) the number of third-parties making commercial use of a term that is similar to the Complainant’s mark and/or the term that forms the basis of the disputed domain name; d) the scope of any third-party usage in comparison with that of the Complainant; e) the ownership and usage of the domain name prior to the acquisition by the Respondent, if any, as a possible indication of third-party appeal; f) the nature and composition of the Disputed Domain Name; g) the prior conduct of the Respondent; h) the plausibility of the Respondent’s explanation for originally registering the domain name, such as use of the Disputed Domain Name for Respondent’s own business or any other project; and i) if the Respondent is a domain name investor, whether the Respondent can demonstrate a practice of registering domain names with comparable inherently appealing characteristics or which follow a similar naming pattern.

Panels should exercise considerable caution when attempting to draw an inference from an asking price alone. Panels are typically not experts in valuations in the domain name aftermarket nor do they typically have a clear grasp of the pricing required to support a domain investor business model. An inference drawn from an asking pricing is best treated as confirming or undercutting a finding drawn from other evidence, rather than as the primary basis for a finding. For example, if other evidence indicates that the Respondent registered a domain name primarily for the purpose of targeting the Complainant, an exceptionally high asking price that could reasonably be justified only due to the value of the Complainant’s goodwill could assist in supporting such an inference.

On the other hand, if other evidence suggests that a domain name investor registered the Disputed Domain Name based on a business strategy of registering domain names that fit a similar pattern, if the Respondent can demonstrate that it consistently listed and/or sold such domain names at prices that were similar to that set for the Disputed Domain, then the asking price could support an inference of good faith registration and use.

Even where a Respondent is aware of a Complainant and its marks and solicits them for the purchase of the domain name, bad faith may not necessarily be established if the Respondent can demonstrate, for example, that the primary purpose of the registration was not the Complainant specifically, but rather the universe of numerous parties who all share what is a common term and therefore may all share an interest in the domain name.

Where the sole value of the domain name appears to be due to the use by an existing trademark owner rather than due to its possible appeal to potential new entrants to the marketplace, unless it can be satisfactorily demonstrated that the term is of sufficiently common usage or appeal such that no single trader could reasonably claim exclusive rights to it, then the explanation from the Respondent will likely be unsatisfactory and insufficient to rebut the Complainant’s allegations of bad faith.

Outreach to the Complainant with an offer to sell a domain name is not necessarily evidence of bad faith intent (See also Perspectives 3.3 Targeting). If the Respondent can demonstrate that the registration did not target a particular trademark owner but rather was registered due to its broad appeal and therefore the Respondent reached out to several companies that were identified because the disputed domain name might appeal to them, then the outreach may not support an inference of bad faith targeting.

Additional Information

Relevant Decisions

Minute Men, Inc. v. Domain Administrator / PTB Media Ltd, Forum FA2407002106746, <minutemen.com>, 3-member, Denied with a dissenting opinion

Majority:

The domain name comprises two dictionary words in common use and evocative of the American Revolutionary war. Further, many American businesses use the name for all manner of goods and services. Since 1962 the US military has used an intercontinental ballistic missile called the Minuteman, and “Minutemen” is the title of a 1980’s punk rock band and a 1940’s superhero comic book series.

Against this backdrop, the majority of the Panel finds it unlikely that Respondent was aware of or targeted Complainant. Rather, its claim to be a domain name investor which purchases brandable and inherently valuable domain names is supported by the evidence. Respondent’s registration of many other generic or descriptive domain names, including some with the “…men” postfix, provides legitimacy to the assertion that it was following this practice rather than targeting specific trademarks with these domain names.

Dissent:

I believe that it is more likely than not that the Respondent through its common director with its predecessor in title (the subject of several adverse decisions under the UDRP) was aware of the rights of the Complainant at the time of acquisition of the Domain Name. Having bided its time the Respondent is now seeking to profit from its acquisition of the Domain Name which was at the time of acquisition, and is now, extremely valuable. Its value is predictably due to a large degree to the rights of the Complainant in the MINUTEMAN name both in terms of the desirability of the Domain Name to the Complainant and due to the traffic that the Complainant’s rights would bring to the Domain Name in use, especially so for competitors of the Complainant who have been demonstrated to have paid for pay per clicks from the Domain Name.

Cronos Group Inc. v. Mira Holdings, Inc., CIIDRC 23351-UDRP (2024), <cronosgroup.com>, 3-member, Denied, RDNH

Complainant’s evidence of bad faith—it does not attempt to separate bad faith registration and bad faith use— focuses on the Respondent’s business as an investor in domain names and is largely deprecatory. Thus, it asserts that the Respondent “has a history of registering trademark-abusive domains and is a serial litigant (as a respondent) before UDRP panels,” that it “acquired the domain for the purpose of selling it for an excessive amount,” and that “the website parking page was also tied to a domain brokerage service specifically designed to ‘MAXIMIZE PROFITS’ through domain name sales.” This may all be true for it is in the nature of domain investing to buy low and sell high, but unless there is some act or conduct in addition to the desire to “maximize profits” it does not support bad faith.

Alimonti S.r.l. v. Domain Manager (eWeb Development Inc.), CAC – UDRP-106684 (2024), <alimonti.com>, Denied, RDNH

Complainant does not specifically cite any of the above paragraphs in its arguments for bad faith, although it appears to refer to paragraph 4(b)(i) given the offer from Respondent to sell the Disputed Domain Name for $39,500 USD. However, Respondent has provided context for this offer, indicating that the communication about a sale was initiated by Complainant. Further, there is no evidence that Respondent registered the Disputed Domain Name for the purpose of selling it “to the complainant.” On the contrary, the Response states that “[a]t no time had Respondent been aware of Complainant or its business and certainly did not register the Domain Name because of Complainant or its business.”

Young Pharmaceuticals, Inc. v. Xiaopeng Zhou, WIPO D2024-1699, <young.com>, 3-member, Denied, RDNH

Owning a large portfolio of domain names is not bad faith per se. Dealing in domain names in the secondary market is a legitimate trading activity. A domain name investor usually has the intention of reselling domain names at a price in excess of the purchase price…

There is no evidence that the Complainant was singled out as the “real” target of the Respondent. The Respondent cites Royal Caribbean Cruises, Ltd. v. James Booth, BQDN.com, WIPO Case No. D2019-1042 to illustrate the point that a direct approach from a broker does not automatically demonstrate targeting in and of itself. The Panel agrees.

AVM Computersysteme Vertriebs GmbH v. 3DNS Privacy, LLC, John Doe, WIPO D2024-0706, <fritz.box>, 3-member, Transfer

Turning to the fact that the disputed domain name has been offered for sale in a substantial amount, the Panel notes that this in itself could give rise to a finding of registration and use in bad faith in the circumstances of this case. It is clear, taking the disputed domain name as a whole, that it is intended to mimic the Complainant’s internal or private domain name as well as its trademarks. The Panel is satisfied, therefore, that the Respondent is targeting the Complainant, and that while the disputed domain name appears to be being offered for general sale, it is nevertheless clear that the Respondent expects the disputed domain name to be purchased by the Complainant for a substantial sum in the hope of avoiding the threat to its customers of potential name collisions, and that the Respondent has fixed the price accordingly.

YPF S.A. v. Internet Portfolio SA, WIPO DCO2024-0038, <ypf.co>, Denied

The Respondent submits that the disputed domain name was registered due to its interest and appeal as a three-letter domain name. Based on the record of this proceeding, the Panel finds this explanation plausible. Given that three-letter domain names are relatively rare, the Panel is ill-equipped to judge whether the Respondent’s asking price of EUR 10,000 for the disputed domain name better reflects its value to the Complainant or a competitor of the Complainant as a domain name identical to the YPF mark, rather than its potential value to a wider group of third parties as a three-letter acronym.

Calmino group AB v. Domain Administrator, DomainMarket.com, WIPO D2024-1579, <proibs.com>, Denied

In some circumstances, the price of the disputed Domain Name could be a factor that may allow the panel to infer that because only a business of the size of the complainant could or would pay that price, the respondent is targeting the complainant. On the other hand, if the disputed Domain Name in fact is registered without knowledge of the complainant and otherwise in good faith, then setting a high price would be a matter purely for the respondent in view of its business plans.

IBA SA v. Ousmane Ba, WIPO D2023-3619, <iba.com>, Denied

In any event there is nothing inherently wrong in asking a high price for a domain name which is legitimately held and the fact that the Disputed Domain Name is, as the broker put it “a premium domain name” would mean that such a suggestion was not surprising. The Respondent has subsequently indicated to the Complainant that if it wants to purchase the Disputed Domain Name it should make an offer. There is nothing wrong with this. Offering for sale, or inviting offers to purchase, a legitimately held domain name is not per se a bad faith use.

Sage Global Services Limited v. Narendra Ghimire, Deep Vision Architects, WIPO DAI2023-0010, <sage.ai>, 3-member, Denied

Concurrence of Tony Willoughby:

In paragraph 29 the Complainant objects to the exorbitant price being sought for the disputed domain name by the Complainant, but of itself there is nothing objectionable in a seller seeking whatever price he or she likes for a domain name. The bad faith cases registering an exorbitantly high price for a domain name invariably involve some other factor leading to that inference. The only portion of the second case (COBEGA,S.A. v EAGERBIZ,S.L., WIPO Case No. D2003-0375) which has been translated reads: “In fact, it should be noted that several panel decisions have established that the offer of the domain name for sale to the public is an important indication of the existence of a lack of legitimate interest in the domain name.”

Travellers Exchange Corporation Limited v. Erol Basar, WIPO D2023-4023, <travelx.net>, Denied

The Panel has taken note of the use that the Respondent makes of the disputed domain name. The maximum selling price that he is asking for it is much higher (USD 99,999) than his purchase price. The Complainant submits that therefore the Respondent seeks to use its connection with the TRAVELEX brand as a means of enticing a sale, either to the Complainant, or to a competitor of the Complainant. However, the Panel is ill-equipped to judge whether the Respondent’s asking price (which is presented as an opening offer) is more likely than not to reflect the value of the disputed domain name to the Complainant or its competitors as a typographical error (even of a global brand). The Complainant has not, for example, presented arguments or evidence to show that it (or a competitor per UDRP paragraph 4(b)(i)) has been targeted insofar as it alone would be in a position to pay the asking price (based on its turnover) versus other third parties using “travelx” (who may not be in as strong a financial position) who would be incapable of realistically paying the Respondent’s asking price.

Automobili Lamborghini S.p.A. v. Domain Administrator, See PrivacyGuardian.org / Richard Blair, WIPO D2022-1570, <lambo.com>, 3-member, Transfer over a dissent

Majority Opinion:

Third, the very high prices at which the disputed domain name has been offered for sale on the website to which it has resolved (particularly bearing in mind the Respondent’s assertion that prospective purchasers would not have been able to acquire the disputed domain name at the lower prices at which it was offered for sale on the third party platforms) are clearly indicative of the Respondent’s belief that a company might be willing to pay a sum approximating or approaching the exceptionally high sum sought by the Respondent and the very high asking price for the disputed domain name tends to affirm the likelihood of targeting by the Respondent…However, having regard to the very widespread use of the word “Lambo” to denote the Complainant’s vehicles and the likely value of this term to the Complainant, the only conceivable buyer of the disputed domain name at the level of consideration sought by the Respondent is the Complainant or, conceivably, a competitor of it.

Dissent:

Putting the domain name up for sale is the only use to which he has put the domain name and that use is entirely lawful, no matter what the price the seller asks.

Arm Limited v. Harrison Canning, HTC Enterprises, WIPO D2022-1129 <cortexcomputer.com>, Denied

There is no evidence currently before the Panel that suggests the Respondent’s asserted motive for registering the disputed domain name is simply a cloak for some other, mal-intentioned, motive. It is true that the Respondent assigned a “personal value” of USD 20,000 to the disputed domain name, when rejecting the Complainant’s proposal for settlement of the dispute. It seems to the Panel that this “personal value” of USD 20,000 is almost certainly influenced by commercial considerations – that is, it reflects a perception of the disputed domain name’s commercial value, not just the degree of personal attachment the Respondent has to it. However, being influenced by commercial considerations when assigning a value to a domain name is not, of itself, evidence that the holder of the domain name does not have rights or legitimate interests in it. If, as is the situation here, the holder of the domain name makes out a case that they have rights or legitimate interests in it, that case does not fall away simply because the holder places a high – and, perhaps to others, an unrealistic – value on the domain name. In the context of the particular facts of this case, the Panel does not consider that the willingness of the Respondent to transfer the disputed domain name to the Complainant for a sum significantly in excess of his admitted out-of-pocket costs related to the domain name establishes that the Respondent’s motive in registering the disputed domain name was other than the one he asserted and supported with evidence.

Saudi Arabian Mining Company (Ma’aden) v. Fundacion Privacy Services LTD, WIPO D2021-3590, <maaden.com>, Transfer with a dissenting opinion

Majority:

The Respondent saw the sale of the disputed domain name as an opportunity to later sell it to the Complainant at some point in the future for large sums of money, as evidenced by the Respondent’s attempt to sell it for USD 500,000, a price tag clearly directed at a company the size of the Complainant.

Dissent:

Responding to unsolicited offers alone are not evidence of bad faith regardless of how outrageously high the Complainant believes to be the price.

“V Kontakte” LLC v. zhou cai, WIPO D2018-2939, <vk.app>, 3-Member, Transfer

It appears that the Complainant was the first entity to which the Respondent offered the disputed domain name for sale and no evidence has been submitted that the Respondent also offered the disputed domain name to parties other than the Complainant. The content and timing of this message satisfy the Panel that it is more likely than not that the Respondent registered the disputed domain name targeting the Complainant and with an intent to offer it for sale to the Complainant at a high price.

Costa Crociere S.P.A. v. Yoshiki Okada, WIPO D2018-1632, <costa.com>, 3-member, Denied

Turning to the Respondent’s asking price of USD 1 million for the disputed domain name, it is the view of the Panel that, where an investor in domain names legitimately registers a domain name which appreciates in value, it is reasonable to expect the registrant to seek the full price it believes to be achievable for the sale of that name. The Respondent made no approach to the Complainant for 21 years and quoted the price in question in response to an enquiry from the Complainant. In the view of the Panel, the facts of the case overall are more supportive of an inference that the Respondent registered the disputed domain name because of its Spanish dictionary meaning and in the hope that it would appreciate in value generally, rather than with the specific intention of selling it to the Complainant or a competitor of the Complainant for an excessive price.

Digest Commentary

Digest Vol.5.19 <clio.ai>, Denied

Digest Vol.5.9 < hydacservice.com>, Denied

Digest Vol. 4.35 <cronosgroup .com>, Denied, RDNH
Digest Vol. 4.29 <young.com>, 3-member, Denied, RDNH
Digest Vol. 4.26 <ahnu.com>, Denied
Digest Vol. 3.49 <travelx.net>, Denied
Digest Vol. 2.46 <trx.com>, Transfer