TRX.com Cybersquatting Lawsuit: Judge Remains Skeptical, Offers One Last Chance
A judge presiding over a high-stakes cybersquatting lawsuit involving the domain name TRX.com has signaled a potential turning point, offering the plaintiff a final opportunity to substantiate their claims. This development suggests that the court is not entirely convinced by the arguments presented thus far, adding another layer of intrigue to this complex legal saga.
The case revolves around the valuable domain name TRX.com and accusations of cybersquatting leveled against its current owner. To fully grasp the significance of the judge’s recent decision, it’s essential to delve into the background and intricacies of this legal battle.
Background: A Timeline of Events Leading to the Lawsuit
The story begins with Loo Tze Ming, who acquired the domain name TRX.com for a substantial sum of $138,000 in April 2022 through the domain marketplace 4.cn. This acquisition set the stage for the legal challenges that would soon follow.
In October 2022, Fitness Anywhere LLC, a company then undergoing bankruptcy proceedings, asserted its rights to the “TRX” trademark and filed a cybersquatting claim under the Uniform Domain Name Dispute Resolution Policy (UDRP). This policy is designed to resolve disputes over domain names that are allegedly registered in bad faith.
The following month, in a controversial decision, the UDRP panelist sided with Fitness Anywhere, awarding the company the domain name. This decision was met with criticism and raised questions about the application of the UDRP in cases where the domain name was registered long before the trademark was established.
Loo Tze Ming, unaware of the dispute notice, failed to respond to the UDRP proceedings. Consequently, he initiated legal action in Arizona, suing Fitness Anywhere to prevent the transfer of the domain name. This move marked the beginning of a protracted legal battle in the U.S. court system.
In February 2023, a new player entered the scene: JFXD TRX ACQ LLC. This company, identifying Fitness Anywhere as its predecessor in interest, filed an *in rem* lawsuit against TRX.com in Virginia, the location of the .com registry. An *in rem* lawsuit is filed against the domain name itself, rather than the owner.
The decision by JFXD TRX to file an *in rem* suit, despite knowing the identity and contact information of the domain owner, raised eyebrows. This tactic seemed unusual, given the ongoing lawsuit in Arizona.
Ming successfully petitioned the court to transfer the *in rem* case to Arizona, where his original lawsuit was already underway. This strategic move proved crucial, as it brought the case under the jurisdiction of the Ninth Circuit.
The Ninth Circuit’s precedent holds that the original registration date of a domain is the relevant date for cases brought under the Anticybersquatting Consumer Protection Act (ACPA). This law provides a legal framework for addressing cybersquatting, which involves registering, trafficking in, or using a domain name with the bad faith intent to profit from the goodwill of a trademark belonging to someone else.
TRX.com was initially registered in 1999, well before the plaintiff obtained trademark rights to the term “TRX.” Under the Ninth Circuit’s interpretation of the ACPA, the plaintiff’s claim appeared to face a significant hurdle, as the original registration predated their trademark rights.
The Judge’s Scrutiny: Demanding Clarification and Addressing Concerns
In January, the judge overseeing the case issued an order seeking clarification on several key points. The judge specifically questioned how a domain registered in 1999, prior to the plaintiff’s acquisition of trademark rights, could be deemed a violation of the ACPA under Ninth Circuit precedent.
Furthermore, the judge sought a clearer explanation of the relationship between Fitness Anywhere and JFXD TRX, entities both represented by the same lawyer, Alain Villeneuve. The ownership of the trademarks and the timing of any transfers between these entities were central to the court’s inquiry.
The judge’s order highlighted the confusion surrounding the ownership of the TRX-related intellectual property, stating:
The filings in this case, as well as the filings in the case pending before Judge Logan [the case Ming filed to stay the UDRP transfer], show some confusion regarding the current owner of the TRX-related property and the proper defendant for Ming’s challenge to the order transferring trx.com. According to statements made by Mr. Villeneuve, Fitness Anywhere owned all TRX-related property, including the TRX trademarks, until it sold that property to JFXD in August 2022. Despite no longer owning any TRX-related property, in October 2022 Mr. Villeneuve initiated a domain name dispute proceeding on behalf of Fitness Anywhere. During those proceedings Mr. Villeneuve stated Fitness Anywhere was “the owner of the famous trademark TRX.” That administrative proceeding resulted in an order that trx.com be transferred to Fitness Anywhere. If Fitness Anywhere no longer owned the TRX-related property prior to the administrative proceeding, it would appear the transfer order was improper. If, however, Fitness Anywhere did own the property and continued to own the property, Ming’s claims against Fitness Anywhere pending before Judge Logan are the proper avenue for resolving ownership of trx.com. In that situation, however, JFXD’s current complaint is improper because JFXD does not own the TRX-related property. In explaining why its complaint does not state a claim for relief, JFXD must explain the conflicting positions adopted by Mr. Villeneuve. In particular, JFXD must explain whether Fitness Anywhere owned any TRX-related property at the time Mr. Villenueve stated Fitness Anywhere “is the owner of the famous trademark TRX.”
JFXD TRX’s Response: A Contentious Attempt to Justify the Claim
JFXD TRX’s attempt to address the judge’s concerns involved a complex and, at times, convoluted argument. The plaintiff attempted to argue that the 2022 sale of the domain TRX.com constituted a new registration, which should therefore be considered cybersquatting. This argument hinged on the notion that the domain’s previous registration had expired, and Ming had subsequently re-registered it.
However, the plaintiff’s arguments were met with skepticism and criticism, with many finding them incoherent and difficult to follow. The response was riddled with grammatical errors, inconsistencies, and a general lack of clarity. The plaintiff also appeared to conflate the roles of domain registrars and marketplaces, further muddying the waters.
One particularly perplexing argument involved the claim that the value of .com domains was “plummeting” due to the availability of other top-level domains. This assertion seemed to contradict the company’s insistence on acquiring the TRX.com domain, raising questions about the true motivation behind the lawsuit.
The judge herself expressed confusion over the plaintiff’s arguments, stating, “The Court cannot understand large portions of Plaintiff’s response and it is not clear whether this is, in fact, Plaintiff’s argument [that the domain expired and was subsequently registered]. Liberally construed, however, Plaintiff is arguing the registration of trx.com expired on some date after the TRX trademark purportedly owned by Plaintiff came into existence.”
The plaintiff’s response also demonstrated a lack of understanding of the domain name system, as evidenced by the following passage:
FURTHER EVIDENCE A REGISTRAR OWNS THIS URL
Mid 2022, Plaintiff looked if the URL was available for $19.99 on GoDaddy®. It was not. GoDaddy LLC offered a paid broker service for $69.99. Plaintiff gladly paid. What happened next is worthy of a fiction book. Within the hour, an excited private agent called saying he was from the GoDaddy brokerage. There was a smell of money in the air, the same vibe as entering a used car showroom. The GoDaddy [sic] refused to contact the owner to simply see if it was willing to sell. The WHOIS had listed “au tuu” from Iceland and Plaintiff’s previous efforts never worked. The agent was forceful and explained the URL was “worth millions” and tried to bully Plaintiff in giving an initial seven number initial offer. Plaintiff, pushed back saying a broker should not have an incentive to raise prices and online tools priced this, at most, in the mid five figures. The exchanges were so forceful, Plaintiff reported the misconduct to GoDaddy LLC who then magically assigned a new broker. The second agent was in shock and did not know who the first agent was and what had happened.
This anecdote, describing the plaintiff’s experience with a domain buying service, failed to provide any concrete evidence of cybersquatting and instead highlighted the common practices of domain brokers.
Furthermore, the plaintiff’s response completely ignored the judge’s request for clarification on the relationship between Fitness Anywhere and JFXD TRX and the ownership of the intellectual property. This omission further fueled the judge’s skepticism.
The Judge’s Ruling: A Partial Victory for Ming, But the Case Continues
In a recent order, the judge ruled in favor of Ming, granting the plaintiff one final opportunity to file an amended complaint. This amended complaint must demonstrate that the domain expired and was subsequently registered anew by Ming.
The judge emphasized that any such filing must address the outstanding questions regarding the relationship between Fitness Anywhere and JFXD TRX and the ownership of the intellectual property. The judge stressed the importance of resolving these issues, as they could potentially undermine the validity of the UDRP proceedings and the plaintiff’s claim to the “TRX” trademark.
The judge’s decision represents a partial victory for Loo Tze Ming, but the case is far from over. The plaintiff now faces the challenge of presenting a compelling argument that can overcome the legal hurdles and address the judge’s concerns. The future of the TRX.com domain remains uncertain, and the legal battle is likely to continue for some time to come.