The owner of the domain was hired by the Complainant to help him acquire the domain.
Toast, Inc., the company behind the ubiquitous ordering system for restaurants, has won the domain name toast.io (pdf) in connection with a cybersquatting litigation.
The company filed the dispute with the World Intellectual Property Organization under the .IO Domain Name Dispute Resolution Policy.
This policy differs from the UDRP in one key way: it requires registration Where use in bad faith, no registration and use in bad faith. This means that an action can be won if the domain was registered before a trademark was acquired but was subsequently used in bad faith.
In this case, the domain is being passed on to Toast’s rival, Clover, indicating bad faith on the part of the domain owner.
But the case is a little more interesting than that. She names Jeff Bennett of Bennett Global Group as the respondent. Bennett was one of the founders of Name Media, the company that owned Afternic and BuyDomains before selling the former to GoDaddy and the latter to what is now Newfold Digital.
According to the WIPO decision, Toast engaged the defendant to help it acquire toast.io. In late 2018, Bennett Global’s broker sent a note to Complainant reporting “good calls” with “the owner of Toast.io”:
We spoke with the owner of Toast.io over the weekend and again yesterday. He had no intention of selling, but had a few questions. He reconsidered and came back last night saying he would sell for $125,000 (USD).
Toast, Inc. didn’t end up agreeing to buy the domain.
So how did Toast’s broker end up owning the domain? Complainant was unable to determine when Bennett acquired the domain name, but noted two possibilities: Bennett owned the domain when acting on behalf of Toast to acquire it from an apparent third party, or he subsequently acquired it. (Bennett did not respond to the dispute.)
Either way, redirecting it to a competitor’s site is against .IO’s dispute policy. Panelist Scott Blackmer wrote:
Respondent entered into a contract with Complainant to help it acquire domain names in May 2018 and specifically acted as Complainant’s representative in negotiating the purchase of the Domain Name later that year. If Respondent already owned the Domain Name or acquired the Domain Name for itself during this engagement, without informing Complainant and acting as Complainant’s broker and claiming that it was negotiating with a third party, then this misleading practice shall be considered bad faith under the Policy. On the other hand, if the Respondent was not the owner of the Domain Name in 2018, it undeniably became aware of the Claimant and its marks at that time (the Respondent publishes the name and logo of the Claimant’s mark on the “Clients” page of the Respondent’s website), as well as the Complainant’s interest in the Domain Name. The respondent then redirected the domain name to competitor websites. This would be consistent with Respondent acquiring the Domain Name after 2018 for the purpose of selling it to Complainant or a competitor for more than the disbursements (Paragraph 4(b)(i) of the Policy). In both cases, it is indisputable that the respondent has at least since December 2021 redirected the domain name to competing websites. Whether or not the Respondent is paid for this is immaterial. This conduct is consistent with the Policy’s example of bad faith, paragraph 4(b)(iv), as Internet users are mistakenly directed to other websites for commercial purposes, using a Domain Name identical to Complainant’s mark.
Blackmer ordered the transfer of the estate.