Managing negotiations takes skill, especially when you are negotiating with the world's most popular social network, Facebook Inc. (Nasdaq: FB). In October 2006, Gal Erel bought the domain name Facebook.co.il, as a provider of information about Israeli charities. On the website, he says that there is no connection to the social network. Facebook Inc. could not ignore this, and offered to buy the domain name.
Erel initially asked for $10,000 for the domain name, but Facebook refused, offering just $3,000. Erel lowered his asking price to $8,000, but Facebook still refused, and initiated arbitration through the Israel Internet Association. The Association ruled in favor of Facebook, and Erel will be compelled to transfer the domain name to Facebook Inc. for nothing.
In the arbitration, Facebook claimed that it owned more than 100 domain names that included the word "facebook", and that it had been in business since July 2004, while Erel acquired the Facebook.co.il domain name in October 2006. The arbitrators ruled, "When registering the domain name, Erel knew, or should have known, that the name was owned and used by the petitioner (Facebook Inc. - R.G.)."
The arbitrators added, "It is improbable that the respondent was unaware of the petitioner, its services and rights when registering the name. It seems that the respondent has no interest in holding the domain name or using it for his own purpose, except to make a profit by transferring the rights in it to the entity which has the rights to the name for an unreasonable sum. This conduct indicates bad faith."
The arbitrators ordered Erel to transfer the domain name to the petitioner within 30 days of the date of the decision.
Published by Globes [online], Israel business news - www.globes-online.com - on April 29, 2013
© Copyright of Globes Publisher Itonut (1983) Ltd. 2013