Web designer cannot hold domain name as security for fees

The US-based panellist hearing the case was a member of the National Arbitration Forum, one of four bodies approved to hear cases under the Uniform Dispute Resolution Policy (UDRP) of ICANN, the technical co-ordination body of the internet. The UDRP was drawn up by ICANN as an efficient means of dealing with cases of cybersquatting.

Map Supply Inc. of North Carolina registered the domain name MapSupply.com in 1996. In July 2000, the company contracted with a web design company called Multilynx for services in connection with the domain name. Multilynx consulted New York-based On-Line Colour Graphics over design issues. The site did not appear because On-Line Colour Graphics said it was not paid by Multilynx for the design work and sought the sum of $3,200 from Map Supply, despite the apparent absence of any contract between the two companies.

On-Line Colour Graphics then took control of the domain name registration which it said was a routine transfer since it was supposed to host the web site. It claimed that it became owner of the name by default when its account was not paid.

The panellist observed that the only fact in dispute was whether Map Supply consented expressly or impliedly to the transfer of the name into the control of On-Line Colour Graphics. The panellist took the view on the evidence presented that the transfer was made without authority in order to secure payment.

Panellist Hon. Roger Kerans said:

“[On-Line Colour Graphics] has failed to persuade me that there is any chance that the law would permit it, without the consent of the client, to take control of a domain name, and then retain control as a security against payment for web-design work. And that is what happened here.”

Finding evidence of bad faith use of a domain name, he added that, “to re-register a domain name without any authority from the registrant in order to gain a bargaining position over the registrant – with whom it had no legitimate dispute – is unconscionable.”