Over time domain name registrations of words and combinations attractive as trademarks have increasingly removed domain names from inventory that later created businesses would like to capture. I discussed in the August 14 Note the risk of forfeiture for second and subsequent generations of transferees to such words and combinations. Changes of use away from the phonetic value of the domain name to trademark value coupled with a transfer can be an irresistible opportunity. An even better illustration of this phenomenon than the one previously cited is the decision in ehotel AG v. Network Technologies Polska Jasinski Lutoborski Sp.J., D2009-0785 (WIPO August 5, 2009). The domain name <ehotel.com> has been controlled since its registration in 2003 by an individual who in 2007 transferred it to a company in which he is a partner and who appeared in the proceeding to argue in Respondent’s favor. The Panel noted that

The difficulty in this case is that although the Domain Name is now registered in the name of the Respondent, the Respondent contends that the Domain Name is still controlled by and held on behalf of Mr. Lutoborski. Should then Mr. Lutoborski be treated as the “true Respondent” for the purposes of this assessment?

The question is whether the transfer constituted a new registration. This requires a closer examination of the timing of the transfer and the prior use to which the domain name was put:

In the circumstances, the Panel is not prepared to find in the Complainant’s favour so far as this heading of the Policy is concerned solely on the basis that Network Technologies Polska Jasinski Lutoborski Sp.J. has no right or legitimate interest in the Domain Name. (Emphasis added).

The Panel reasoned that “Complainant’s case in this respect stands or falls on whether at the time of the filing of the Complaint Mr. Lutoborski had such an interest” and concluded that he did not:

For reasons that the Panel describes in greater detail under the heading of bad faith below, even if the Panel were to give Mr. Lutoborski the benefit of the doubt and to assume that at the time of original registration of the Domain Name he was operating a legitimate business under the “eHotel” name, the Panel is not convinced that he retained such a right or interest at the time that the Domain Name was transferred into the name of the Respondent or at the time of the filing of this Complaint. In the Panel’s view, by that time the reason why he held the Domain Name was to take advantage of its associations with the Complainant. (Emphasis aded).

There is in ehotel no evidence that the domain name was not registered in good faith. However, two different changes occurred. The first was that in 2004 through 2006 by way of an understanding between the parties (“experimental” in the words of Mr. Lutoborsky) <ehotel.com> resolved to the Complainant’s website at <ehotel.de>. In 2007 occurred the transfer to the Respondent and this pointed to the conclusion quoted above that “by that time the reason why he held the Domain Name was to take advantage of its associations with the Complainant.”

The problem is that Mr. Lutoborski did not [continue to use the domain name legitimately].... Instead, he effectively abandoned his own prior use and actively sought to associate the Domain Name with the Complainant’s business. This combined with the subsequent transfer of the Domain Name proved fatal to his case.” The Panel offers a coda:

It might be argued that the conclusion in this case is unfair to Mr. Lutoborski or the Respondent. If a respondent has registered a domain name for a legitimate business purpose, and another business comes along that chooses to use the same name, should he not be allowed to take advantage of that fact? The answer to that question depends upon how exactly the domain name is used. If he merely intends to continue to do what he has always legitimately done, then it is difficult to see how that continued use could be characterised as use in bad faith.

Thus is a domain name forfeited by the second generation even though the first generation allegedly continues to control it and the business.