It's not often that a domain-name holder accused of cybersquatting actually prevails in a dispute with the party that filed the complaint. It's rarer still for that entity to then win a counterclaim of attempted reverse domain-name hijacking.
But that's just what happened to Indigo Networks, a Nassau, Bahamas-based telecommunications company that last November found itself hit with a complaint alleging that it had no legitimate interests or rights to the Onephone.com domain name it owned.
The complaint, filed by OnePhone Holding AB, a Stockholm-based telecommunications investment company, went to the World Intellectual Property Organization (WIPO). The Geneva-based United Nations agency is one of four ICANN-approved domain-name dispute-resolution service providers.
OnePhone asked WIPO to have the Onephone.com domain name transferred because it was the rightful owner of a European registration under the name "ONEPHONE." The Swedish company also claimed that it had registrations or pending registrations of the name in several other countries -- though not in the Bahamas.
The disputed domain name itself had been originally registered by Patrick Low in 1999. OnePhone said that it had tried purchasing the domain name in 2005 from Low for US$1,800. Low refused, eventually selling the Onephone.com domain name to Indigo for $10,000 in 2007.
In requesting the transfer, OnePhone said that its registered business name was identical to the domain name used by Indigo. The company pointed out that Indigo did not do business in the name OnePhone prior to the registration of the domain name, nor was it commonly known by that name. It argued that Indigo acted in bad faith when it registered the domain under its name. OnePhone went on to claim that Indigo was a competitor that more than likely was aware, or should have been aware, of the existence of OnePhone and the fact that the company had tried to buy the domain name from Low.
After OnePhone filed its compliant, Indigo's domain registrar locked the disputed domain to prevent it from being transferred to another registrar during the arbitration fight. As is customary, Indigo had 20 days to respond.
The company decided to fight back. "Some companies are abusing the original intent [of the domain-name dispute-resolution process] to essentially try and hijack domain names from smaller companies," said Jason Adams, Indigo's vice president of network services and co-author of the company's official response to the complaint. Determined not to let a larger company wrest the name away, Indigo filed a counterclaim. "We responded to all of their charges," Adams said. "We also said this was a strong case for reverse domain-name hijacking, and we presented a counterclaim."
Indigo asked a three-person WIPO panel to hear the case instead of the usual one-person panel, even though it cost an additional $1,500 to do so. Under WIPO's dispute-resolution rules, one of the panelists was picked by Indigo, one by OnePhone, and the presiding panelist was tapped by WIPO.
Indigo said that it had used the "onephone" name since 2006 to describe a voice-over-IP (VoIP) service offering. It claimed to have invested considerable money to promote the offering and had thousands of customers who had signed up for the service. In contrast, Indigo said, OnePhone had not launched any products or services using that specific name. Indigo also said it was unreasonable to expect it to know about OnePhone's rights to the name in other countries.
Indigo also charged OnePhone with attempted reverse domain-name hijacking. It said that the Swedish company made no efforts to learn whether Indigo had used the domain name legitimately. It also charged OnePhone with not disclosing all of the facts of its own use of the name and for recklessly disregarding the potential disruption to Indigo's business.
To prove that Indigo was cybersquatting, OnePhone had to convince the panel that Onephone.com was confusingly similar to its own trademark. It also had to show that Indigo did not have a rightful interest in the name and that the Bahamian company acted in bad faith when it registered the name.
"Our response was strong enough to satisfy the panelists across the board," Adams said. "It was a very, very strong ruling on our behalf. There was no dissenting opinion. Even the panelist that [OnePhone] selected, ruled for us."
In a Dec. 22 decision, the panel agreed that Indigo had a legitimate reason for using Onephone.com and said it was reasonable to believe the company did not know about OnePhone rights to the name in other countries. The panel dismissed outright OnePhone's argument that Indigo was not an international company and therefore should not be allowed to use the .com domain. The panelists also disagreed with OnePhone's bad-faith claim and said that there was nothing to show that Indigo had registered the domain for anything other than valid reasons.
Instead, it was OnePhone that acted in bad faith in an attempt at reverse domain-name hijacking, the panelists ruled. They said the Swedish company had shown reckless disregard in failing to find out whether Indigo had a valid claim to the domain name.
The case is a rare example of a domain-name dispute ending in favor of the respondent. Of the 1,430 such disputes WIPO arbitrated last year, 1,219 ended with the domains being transferred to the firm or person who complained. Those accused of cybersquatting prevailed in just 190 instances, or just over 13% of all the cases in 2007, while 21 settled.
Adams said he believes that one of the biggest factors behind his company's success was its decision to go with a three-person panel. Though it cost the company more to defend itself, having the case heard by multiple panelists was crucial, he said.
Also important was his Indigo's quick response to the original complaint, Adams said. Maintaining up-to-date contact information for the domain name ensured that the complaint was received in a timely manner, Adams said.
Jesper Sellin, an attorney at Bergenstrahle & Lindvall AB, the Stockholm-based law firm that represented OnePhone in the dispute, expressed disappointment with the outcome. "We strongly oppose the finding that the complaint was brought in bad faith," Sellin said via e-mail. "In our opinion, it is far from clear that a holder of worldwide trademark rights should find it obvious that a company operating in a small territory like the Bahamas should have legitimate rights in a .com domain name," he said.
He also argued that it was Indigo's correspondence with the original domain-name holder that led OnePhone to believe the Bahamian company had acquired the domain name in bad faith. "It is unlikely that our client will take this case further," he added.
Linda Rosencrance contributed to this story.