Here’s the situation:  a domain name registrant (“Registrant”) has one or more domain names.  Along comes a claimant (“Claimant”) contending that the Registrant is violating the Claimant’s rights of trademark in the domain.

Here, in the more interesting of the situations, the Claimant makes an offer to purchase the domain for either the Registrant’s costs or for a sum in excess of the Registrant’s costs.  The Registrant then makes a counter offer to sell it for a sum in excess of either the costs or the offer.  This is the scenario that presents a careful approach to the legal issues and one that requires a knowledge of the current state of how these matters are handled within the legal system set up by both UDRP and ACPA.

        In order to justify the counter offer made by the Registrant, the Registrant would appear to have to demonstrate some legitimate basis for the counter offer.  It would appear that it is not enough to pick a number out of the air for that counter offer since merely having the Claimant be the first to make an offer and then having the Registrant make a high counter offer would not appear to be enough to defeat a claim of “bad faith.”  If it appears that any “use” was not bona fide but merely a ruse to try and create a higher demand, such ruse may be disregarded by the panel and that panel may find “bad faith.”

        In this regard, the UDRP section above dealing with the definition of “bad faith” comes together with the section in the UDRP that defines what “legitimate interests” the Registrant may have in the domain.  For a further explanation of this latter term, read “Legitimate Interests in Domain Name Disputes.”