ALLOCATION.COM, REMAINS ALLOCATED TO ORIGINAL USER

"This is the first time that I'm aware of ... where any decision-making body in the world has said registering a domain name for the purpose of selling it is just fine, and you may have more of a right to it than the trademark holder," said the winning lawyer, David J. Loundy, of Chicago's D'Ancona & Pflaum.

Since the Anti-Cybersquatting Consumer Protection Act was passed last year, trademark holders usually have prevailed in battles for domain names.

But Loundy said that he's not sure bringing an action in U.S. court rather than before WIPO would have made a difference in this case because it involved a generic term rather than a known brand or the name of a famous person.

Loundy represented Steve Gregory against the German computer services company Allocation Network GmbH (docket No. D2000-0016) regarding the domain name Allocation.com. Allocation Network, which had registered its trademark for computer service products, owned the domains allocation.net, allocation.org and allocation.de. The company sought to compel Gregory to turn over his domain name.

400 NAMES REGISTERED

Gregory, a resident of the Philippines, had registered more than 400 domain names composed of generic terms and phrases, with the intent to sell them. He operates the Web site www.rockbottomdomains.com, according to Loundy.

Allocation Network brought its case under the arbitration rules of the Internet Corp. for Assigned Names and Numbers (ICANN). WIPO's Arbitration and Mediation Center is a designated arbitration provider.

The case, filed online in January and conducted entirely via e-mail, was decided by arbitrator Wolter Wefers Bettink, of the Netherlands. Bettink ruled that Gregory had a legitimate interest in registering allocation.com and had not done so in bad faith. The arbitrator accepted as "prima facie acceptable" Gregory's explanation that he chose many domain names at random from the dictionary.

Allocation Network "has not provided any evidence of facts which might indicate that [Mr. Gregory] knew or should have known of its trade name use or trademark registrations," the arbitrator stated.

In fact, the German trademark registration was granted in April 1999, after Gregory registered the domain name. Applying ICANN's dispute resolution policy, the arbitrator stated, "[N]othing in the Policy can be construed as requiring a person registering a domain name to carry out a prior trademark search in every country."

Requiring parties to do such searches would be onerous, Loundy said. A worldwide trademark search for this case took about 1,600 hours to complete, he said. But he found two registrations for "allocation" that predated Allocation Network's trademark.

The arbitrator also stated that selling domain names to the highest bidder could constitute, under ICANN's rules, "use of the domain name in connection with a bona fide offering of goods and services." It would be different, he said, "if it were shown that allocation.com has been chosen with the intent to profit from or otherwise abuse [Allocation Network's] trademark rights."

The arbitrator noted that the fact that Gregory had registered a number of generic names trademarked in various parts of the world did not show bad faith. Generic terms trademarked for some goods and services may be merely descriptive elsewhere, he stated.

CLARIFYING RULING

"What this decision is saying is, if you aren't trying to trade off of somebody else's name, you aren't doing something objectionable under the rules," Loundy said. He has not received notification of appeal.

Dr. Philip Neuwald, of Munich, Germany's Lorenz Seidler Gossel, represented Allocation Network. He didn't respond to an e-mail about the case.

Gregory has other ways of profiting online. Allocation.com links to a site that sells domain names and invites viewers older than 18 to view pornography sites that then link to other sites.

During the WIPO proceeding, the scantily clad icons leading to the adult sites disappeared. They reappeared after Gregory won. Loundy doesn't keep up with that part of his client's business but surmises that the racy links are a way to generate click-through referral fees.

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