Wednesday, August 11, 2010

In Which We Learn the Cost of Letting a Domain Name Expire During a Litigation

Lesson of the day: Just because you have won a court case does not mean you get to collect valuable prizes. It can be easier to win the case than to collect damages. Many losing parties when confronted with a piece of paper that says fork over property or cash, will respond with that legal defense, "yeah, you and what army?!?!?"

Today's case is one of those situations. Skydive Arizona, Inc. v Cary Quattrocchi, (D Arizona July 28, 2010). This is an Anti Cybersquatter Consumer Protect Act (ACPA) case where plaintiff had prevailed against defendant regarding six different domain names. The original Court ordered defendant to transfer the domain names in question to Plaintiff. The Defendant transferred five of the six domains to Plaintiff, but a funny thing happened on the way to compliance; apparently the sixth domain name expired before defendant could transfer it.

"Bummer," said Defendant. "Since I am no longer the domain name owner, and as the domain name is now held by someone else, it is quite impossible for me to comply."

According to the Court, the facts are like these: while the litigation was pending, the domain expired. It was picked by a domain registrar. When the court went to the website associated with the domain name (intelligently the court never actually names the domain name in question), the court saw a page indicating that the domain name was available for purchase (go look at cybertelecom.com as an example of one of these).

Before the Court was Plaintiff's Motion to Require Defendants to Perform Renewal Requirements to Effectuate Transfer of the Domain Name. In response to defendant's argument was that this would be impossible, the Court' said "too bad."

[] Defendants had an obligation to maintain the status quo with respect to their ownership of [The Domain Name that Must Not be Named] during the pendency of this action…Were it otherwise, litigation and arbitration decisions concerning proper ownership of domain names could easily be thwarted by defendants who allowed their domain name registrations to expire, then claimed they did so by mistake. Additionally, prior to the entry of the permanent injunction, Defendants had every opportunity to inform this Court that their ownership of [The Domain Name that Must Not be Named] had lapsed, but failed to do so. Consequently, the Court has little sympathy for the predicament in which Defendants now find themselves; in non-compliance with the permanent injunction.

Pursuant to Federal Rule of Civil Procedure 70, "'a district court may direct a party to complete a specific act where the district court previously directed the same party to perform the same act in its final judgment and that party has failed to comply.' Additionally, Rule 70 allows courts to hold the disobedient party in contempt." While impossibility may be a legitimate defense to compliance, it's not a legitimate defense, says the court, where the impossibility is your own dumb fault for letting the domain name expire in the first place.

In the end, the Court gives defendant two choices. Behind Door Number One: Defendant will reacquire the [The Domain Name that Must Not be Named] and effectuate the transfer; or behind Door Number Two: Defendant will be sanctioned $10k for failure to comply with the injunction.

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