Pru.com was created in 1997. This domain name belongs to the very closed club of those whose market value is inversely proportional to the number of characters that compose them. Although coveted, the power of such business signs to exclude third parties is reduced by the presence of homonyms. In other words, a brand incorporating only three letters is as catchy as fragile. Building such a brand requires considerable investment at a transnational level. The Prudential Insurance Company of America (“Prudential”) adopted this strategy regarding its “PRU” trademark, created in 2002. However, pru.com has been a thorn in the side of Prudential since the creation of the “PRU” brand. A bluff, a fluke, and the precious domain pru.com was finally incorporated in Prudential’s portfolio, in 2023, at the end of legal proceedings, which could have been avoided if some imprudence had not been committed.
Pru.com: the missing piece
Since 2002, Prudential has developed its “PRU” brand, which also corresponds to its ticker at the New York Stock Exchange (NYSE). Molding such a brand requires diligence, consistency, and patience. For example, Prudential obtained the transfer of the domain name <pru.us> at the end of a bitterly discussed UDRP procedure (Forum, FA1106001392709, The Prudential Insurance Company of America v. Konstantinos Zournas, July 26, 2011, <pru .us>, transfer, panelists Daniel B. Banks, Jr. (chair), Carol Stonern, and Diane Campbell (dissenting opinion)). This decision should have been regarded as a warning. Indeed, the shorter the name, the lower the chances of success. Accordingly, Prudential should feel lucky with this transfer decision. Subsequently, Prudential acquired the .PRU top-level domain, the delegation of which was signed on July 25, 2016 (Delegation report for .pru: icann.org). The acquisition of the .PRU was indispensable, given the brand’s vulnerability to possible namesakes. Other companies in a similar situation have very opportunely taken the necessary steps to ensure exclusivity on the top-level domain of their flagship brand(s), including American Automobile Association (.AAA) and Mutuelles du Mans Assurance (.MMA), which are the most prominent examples. Prudential is therefore deploying substantial resources to give consistency to its “PRU” brand. However, when Prudential launched its “PRU” brand in 2002, it did not have control over pru.com, which a Texas-based company owned.
Developing a brand with global reach without controlling the equivalent domain name in the .com top-level domain (TLD), which was then (and remains) the flagship TLD, it must be recognized that the bet was spirited. Nevertheless, backed by its financial capacity and endowed with an implacable desire to develop the “PRU” brand, acquiring pru.com was a question of time.
Pru.com “for sale”: the missed opportunity
One can naturally imagine that, since 2002, Prudential has never ceased to scrutinize pru.com with all due diligence. However, the monitoring of pru.com was not up to the ambitions of the owner of the “PRU” trademark. Indeed, Prudential failed to buy pru.com when, towards the end of 2016, the domain name was put up for sale on Sedo, a brokerage platform.
In early 2017, a Chinese company called Shenzhen Stone Network Information (“SSN”) purchased pru.com, which purportedly paid 100,000 USD. Finding the reasons that prevented Prudential from acquiring this critical domain name is difficult. In this particular case, the subjective value (the value of the domain name in the eyes of Prudential to enhance its “PRU” brand) is undoubtedly higher than the objective value (the value of the domain name with regard to its intrinsic qualities). In such a situation, it would have been adequate for Prudential to buy pru.com, if necessary, for a few hundred thousand dollars, a perfectly reasonable valuation given the stakes for the valuation of the “PRU” brand. Moreover, it is worth remembering that the intrinsic characteristics of a domain name define its value on the market. Therefore, the data below demonstrates that three-character domain names are commonly valued above $100,000.
The extrajudicial procedure: a bluff
It was not before March 2020 that Prudential attempted to acquire pru.com by taking the initiative to make an anonymous offer to SSN. The anonymous approach was the most appropriate: the subjective value being higher than the objective value, anonymity can help reduce the acquisition price. However, SSN rejected the offer, and a few days later, Prudential filed a Uniform Domain Name Dispute Resolution Policy (UDRP) complaint with the World Intellectual Property Organization (WIPO) Arbitration and Mediation Center. The complaint had the effect and probably the primary purpose, if not the only one, of blocking the domain name to prevent any transfer to a third party. Once the domain name was frozen, Prudential made a new offer at 50,000 USD. SSN also rejected this offer. It must be recognized that in the eyes of the market, the offer could seem frugal. Prudential was then in an impasse: by going to the end of the UDRP procedure, it faced a high risk of rejecting its complaint.
At this point, it matters what use SSN was making of the domain name. First, the latter led to a parking page that displayed hyperlinks to Prudential competitors in the United States. However, it should be remembered that, for almost all service providers, the content of parking pages is, by default, determined automatically. The presence of links to competing sites, therefore, did not necessarily result from a deliberate choice by SSN but rather from the algorithms conceived by the service provider according to, among other things, the territory of the Internet user who consults the page concerned. As a result, these links were likely different from Chinese territory. Second, putting a domain name on sale is not a practice contrary to the law. The circumstances could therefore have been interpreted in favor of SSN. However, the latter made several errors, two of which can be described as significant. First, SSN planned to use pru.com to deliver financial information. This argument could certainly not work in its favor for two reasons. On the one hand, without going so far as to encroach on the services of Prudential, SSN placed itself awkwardly in the financial sphere. SSN put its fit it! On the other hand, SSN could not provide the slightest evidence likely to attest to the reality of such a project. Second, SSN claimed to have received a six-digit offer from a third party, but again SSN could not provide any evidence of this unless the offer was minted with the seal of confidentiality, a plausible scenario.
Despite SSN’s mistakes, Prudential’s success was not guaranteed. The road to the transfer of the domain name remained strewn with doubts, so much so that Prudential closed the UDRP procedure to initiate legal proceedings in the United States. Prudential sued SSN before a court in Virginia on various grounds (Anti-Cybersquatting Consumer Protection Act or “ACPA” and Lanham Act). In the particular case of pru.com, when the transaction amount exceeds a certain threshold, recourse to the state procedure becomes profitable.
The judicial procedure: a fluke
In a decision dated June 30, 2021, Judge T. S. Ellis, III ruled in favor of Prudential and ordered the transfer of pru.com to Prudential (United States District Court for the Eastern District of Virginia, at Alexandria, T. S. Ellis, III, Senior District Judge (1:20-cv-00450-TSE-MSN)), after which SSN filed an appeal. On January 24, 2023, the court upheld the first instance decision (The Prudential Insurance Company of America v. Shenzhen Stone Network Information Ltd., No. 21-1823 (4th Cir. 2023).
The ACPA provides nine factors that jurisdiction may consider in determining whether a domain name has been registered in bad faith. These non-exclusive factors must be assessed according to the general weighting method. In this case, the court considered that eight factors went against SSN’s position.
SSN has attempted to take advantage of the ACPA’s exemption provisions with its trademark filings for “PRU” in the UK, Australia, New Zealand, and the US. However, these filings dating from June 2020, concomitant with the opening of the judicial proceedings, the court ruled that they did not allow SSN to be granted rights to the “PRU” sign.
It seems possible to put forward the idea that, in this case, Prudential owes its salvation to the multiple errors of SSN:
- the maintenance of the configuration of the parking page comprising hypertext links defined by default
- the choice of a project related to the world of finance
- the modification of WhoIs data; and
- the filing of “PRU” trademarks
Indeed, domainers holding names with three characters or less, aware of the value of such domains, act in a rational and prudent manner. For example, pro.org currently does not contain commercial links. It can also be argued that Prudential could have avoided these hurdles by placing the domain name pru.com under watch and acquiring it immediately after it went on sale at the end of 2016.
The interpretation of the term “registration” in the ACPA
Finally, the court helped a split case law progress on the point of knowing if the term “registration” could be extended to “renewals” or “subsequent registrations” (see also “United States: a strict interpretation of the word “registration” of a domain name in the ACPA de facto excluding the act of acquisition”, iptwins.com, 2021-05-07). Specifically, SSN argued that the scope of the ACPA was restricted to registered domain names only, as opposed to “acquired” or “renewed” domain names. In support of its reasoning, SSN referred to GoPets Ltd. vs. Hise (657 F.3d 1024, 1026, 9th Cir. 2011). The court energetically rejected SSN’s position with compelling arguments. First, the court recalled that the ACPA, like any other text of a legislative nature, must be interpreted in such a way as to make it effective concerning the objectives set. The ACPA aims to fight against cybersquatting for the good of consumers. Consequently, “registration” should be construed broadly enough to allow the law to apply effectively. This option had previously been adopted by the 3rd (Schmidheiny v. Weber 319 F.3d 581, 582, 3rd Cir. 2003) and 11th circuits (810 F.3d 767, 777 (11th Cir. 2015)). And the court rightly added that it would be “absurd” not to include renewals in the ACPA. In the end, the court adopted the following solution:
“Accordingly, we join the Third and Eleventh Circuits in holding that the term “registers” and its derivatives extend to each registration of a domain name, including the initial registration and any subsequent re-registrations. Where a successive registration of a disputed domain name postdates the trademark registration of the corresponding mark, the mark owner may show that the successive registration was done in bad faith. This interpretation furthers the ACPA’s purpose of eliminating cybersquatting and protecting American businesses, consumers, and online commerce.”
This question of renewal also arises in similar terms in Chinese law, a point on which we have had the opportunity to take a position on several occasions:
- China: acquisition of domain name, limitation period and admissibility of the complaint under the China dispute resolution procedure;
- The starting point of the limitation period in the cnDRP: rejecting the creation date of the domain name in favor of the date of the occurrence of a new fact;
- Article 2 of the cnDRP: the issue of the starting point of the limitation period in case of a domain name that has been assigned; and
- Article 2 of the cnDRP: the reaction time of brand owners.
