For filing a frivolous UDRP! — $50,000 penalty
Firm pays big bucks following filing losing UDRP.
A Belgium maker of ultrasound equipment has paid $50,000 to settle a lawsuit stemming from a frivolous UDRP it filed.
SDT International filed a UDRP for the domain named SDT.com last year. The domain name is owned by Nat Cohen’s Telepathy, and SDT had tried to purchase the domain name ahead of filing the complaint. (Cohen was on the Reglike Podcast recently, discussing similar frivolous cases).
Upon receipt of the UDRP, Cohen reached out to SDT’s managing director suggesting that he withdraw the UDRP. Cohen pointed out that SDT’s attorney, Novagraaf Belgium NV/SA, had by now been censured for filing abusive UDRPs.
I’ve written regarding two cases involving Novagraaf.
In a 2010 case, a panelist blasted the complainant for apparently trying to mislead the panel. The next year, a panel stated Novagraaf was either trying to mislead panel or being “inexcusably careless”.
In the email to SDT’s managing director, Cohen pointed out that the facts weren’t in his firm’s favor and that Telepathy would seek a finding of RDNH. The firm did not withdraw the complaint.
Cohen stuck to his promise and took it a step further. Ahead of the WIPO panel decided the case, he filed a lawsuit against SDT in U.S. Federal Court requesting statutory damages for Reverse Domain Name Hijacking and a statement that its ownership of sdt.com was lawful. He was represented by David Weslow of Wiley Rein.
SDT filed a response in federal court challenging jurisdiction. Telepathy then filed an amended complaint addressing the jurisdiction issue and adding additional claims for Breach of Contract, Fraud, and Negligent Misrepresentation.
SDT agreed to settle the dispute (pdf). In addition to signing off on Telepathy’s rightful ownership of the domain name, the firm paid Telepathy $50,000. Cohen notes the payment has been received.
I sometimes receive messages from firms that have been founded to have engaged in reverse domain name hijacking. In fact, a firm posted a comment on Reglike recently saying it wasn’t aware of reverse domain name hijacking, and that it had received bad legal advice.
As Cohen informed SDT’s managing director, “While Novagraaf is paid for providing bad advice, it is their clients who suffer the consequences.” That was indeed the case here.
Many firms don’t realize they might have to pay up for filing losing cases. Even in a case in which a firm won a UDRP, the firm paid $25,000 to settle a lawsuit brought by the domain name owner.
