Reverse hijacking found in 'sex.shop' case

A National Arbitration Forum (NAF) panel has issued the first New.net Model Domain Name Dispute Resolution Policy decision, involving the 'sex.shop' domain name. The panel not only ruled against the complainant, but determined that this was in fact a case of reverse hijacking.

The complainant, Eric Von Lerner Kalaydjian, owns the registered US trademark SEX.SHOP, while the respondent, Simon Steinle, had registered and made use of the domain 'sex.shop'.

The panel ruled that although Steinle's domain name is "identical or confusingly similar" to Kalaydjian's trademark, there was proof that Steinle has legitimate interests in the domain name and had not registered it in bad faith. Also, the panel held that Kalaydjian had no bona fide intent to use the trademark SEX.SHOP, only registering it to obstruct subsequent registrations of the mark as a domain name whenever the generic top-level domain (TLD) '.shop' became available.

The ruling that Kalaydjian's conduct constituted reverse domain-name hijacking means that Steinle is able to continue to use the disputed domain name. The panel did not take action against Kalaydjian's continued use of the SEX.SHOP trademark, despite its disapproval of his trademark registration strategies.

The well-established rule in domain name disputes is that any similarity must lie between the second-level domain and the mark - in this case, the word 'sex' and the registered trademark SEX.SHOP. However, the panel held that following this rule and finding no protection is allowed for 'sex' would set a dangerous precedent and increase the threat of future cybersquatting. The panel gave the example of 'Pizza Hut' and pointed out that if a cybersquatter could successfully argue that 'pizza' was generic and hence not protected as a trademark, the cybersquatter could register the domain name 'pizza.hut' and frustrate the efforts of the owner of the PIZZA HUT mark.

For a description of New.net domains, see New.net venture may increase cybersquatting.

John J Dieffenbach and Scott Glazer, Kaye Scholer LLP, New York

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