Charged Media, LLC v. Daniel Holsinger
Case No. D2019-2255
6 December 2019
The arbitration process through the UDRP has shown its great value over the years. But it is equally true that there are some disputes where the UDRP is not appropriate or not the best means of resolving the dispute. Indeed, there are some disputes where panellists (or arbitrators) will not handle a dispute which they believe really should be heard by a court. Sometimes the panellist will decide that the dispute cannot be resolved though the UDRP (or its equivalent) because it needs some of the processes available in a court, but which are not available under the UDRP, like discovery of documents, interrogatories, or evidence and cross-examination of witnesses.
Sometimes the panellist will decide that the dispute is, more basically, not a domain name case at all, but a commercial dispute, and will rule that one of the parties should start court proceedings if it wishes. It is often a finely balanced issue as to which, if either, of these courses a panellist should take.
A recent case shows up this dilemma and how one experienced panellist resolved it.
The Complainant, Charged Media, LLC, operated “gay themed adult websites” and the Respondent Holsinger had an interest in its predecessor. He then had an interest in Charged and became part of its management, working on “product and content development.” Holsinger acquired or registered the disputed domain names which were used by Charged. But then the parties fell out, a dispute arose as to who owned what and a settlement agreement was entered into that did not clarify this vital point.
A preliminary skirmish resulted in the panelist finding that Charged had common law trademarks in CHARGED CASH, FAMILY DICK, LATINLECHE and YOUNGPERPS and that the domain names were identical to those trademarks. The issue of rights and legitimate interests was deferred. The case thus became one of whether bad faith could be proved.
A lot of confusing evidence emerged, including that Holsinger had originally registered the domain names under his own name, but paid for them with the company’s money and via a company credit card in his name. It therefore looked as if they had been registered as part of the common business interests of both Charged and Holsinger and hence not in bad faith. In fact, Charged did not allege that Holsinger had registered the domain names, but that he had used them in bad faith by moving them from his “business” account to his “personal” account, after the settlement agreement between the parties.
Possibly as part of the process of re-writing history, in which parties in these cases often engage, Holsinger claimed that he had registered the domain names for his own benefit and then orally licensed them to Charged. Charged rejected that claim, not surprisingly, and contended that the domain names had always belonged to it, i.e., Charged.
If you are not confused by now, you should be. The panelist was also faced with two conflicting stories and no clear evidence to show who was telling the truth on the vital issue of who owned the domain names at the time they were registered. Nor did the settlement agreement clarify the issue, because although it talked about domain names it did not say which domain names it meant. The panelist lamented, on good grounds, that the problem with the expedited process under the UDRP was that there is no discovery, witness examination or cross examination which, in court cases, gets the court closer to the truth and which might have elicited the truth in this case.
All of this meant that Charged, as complainant, had not proved that it had owned the domain names and hence that they had been registered and used by Holsinger in bad faith. Nor had Holsinger proved the contrary. Accordingly, the case was “better suited” to be heard in another venue and was thus dismissed.
All cases are different, but this one may be used as an analogy if similar facts arise in a case in the future.