Welcome to Chip Rosenthal’s Nightmare: Unicom Systems Inc. vs. Chip Rosenthal

Last week I ran across one of the most blatant cases of reverse domain name hijacking that I’d ever seen. What is “reverse domain name hijacking?” According to ICANN’s “Uniform Domain Name Dispute Resolution Policy” it is…

“…using the Policy in bad faith to attempt to deprive a registered domain-name holder of a domain name.”

In other words, if you try to twist ICANN’s rules to acquire a domain name you have no rights too, then you are “reverse domain name hijacking.”

Welcome to Chip Rosenthal’s Nightmare.

Back in: 1990: Chip acquired the domain name “unicom.com.” Since then he’s used the domain to “publish software and information”.

In 1998, Chip Rosenthal was contacted by Corry Hong of: Unicom Systems Inc.. Mr. Hong seemed quite interested in getting his hands on the Unicom.com domain name. In fact, he even let Mr. Rosenthal know that he might be willing to offer a business partnership or even a job if Chip would turn over Unicom.com. Mr. Rosenthal let him know that he was rather attached to his domain name. He did offer to provide a link from his site to the Unicom Systems Inc. website. However, he also let Mr. Hong know that he wouldn’t get rid of his domain name unless quite a bit of money were involved. After some discussion it became quickly apparent the both sides were quite far apart dollar wise. Mr. Rosenthal was looking for something in the “mid-five-figure-range” and Mr. Hong was offering $5000. After it became obvious that a deal couldn’t be reached, things were quiet for a while and then they got very interesting.

On October 31st, 2001 Unicom Systems Inc. filed a suit against Chip Rosenthal alleging that Mr. Rosenthal was guilty of everything from cyberpiracy, to dilution of trademark, to unfair competition. However, the main thrust of the suit seems to be that since Unicom Systems Inc. had trademarked the name “Unicom”, they alone have the right to use the domain name “unicom.com.” That is an interesting claim to make considering that Unicom Systems Inc.’s current trademark was filed in 1997, 7 years after Chip Rosenthal had purchased Unicom.com!

Furthermore, Unicom is not a unique name by any stretch of the imagination.Unicom.net: points to Earthlink for example. A simple search under the name “unicom” on the Google search engine pulls up: 125,000: different listings including UNICOM Seminars Home Page, PSX2 Unicom, UNICOM – A Network Systems Solution, Unicom – Advanced Networking and Internet Solutions, United Communications, Inc. dba UNICOM, Unicom – Call Center Solution, etc, etc, etc.

If Unicom Systems Inc. were to win this lawsuit it would set off a very troubling standard. What do I mean? Let’s say that someone found that “Slashdot: “, “Wired“, or “Fark“, were not trademarked names. They could simply trademark those names and demand that the domains be turned over to them using this case as a precedent. That is blatantly unfair to the people and companies that had not only the foresight to purchase these domain names, but put in the elbow grease to build them up.

In an attempt to get some answers from Unicom Systems, Inc. I sent them the following email…


I was interested in getting a comment from someone at Unicom Systems, Inc. about your lawsuit against Chip Rosenthal of Unicom Systems Development. An article on the lawsuit is going to be published next week on Brass Knuckles Webzine. The article is scheduled to be published on Thursday the 17th on January. I would need to receive an answer by 5:00 PM, Eastern standard time on Wednesday the 16th for it to be included in the article. Here are some questions I’d like to have answered about the case.

– Did you trademark the name “Unicom” in 1997?

– One of your allegations in the lawsuit is that Mr. Rosenthal is a “cybersquatter”. How can that be possible if he bought the domain in 1990 and you trademarked Unicom in 1997?

– When I did a search on the word “unicom” I pulled up quite a few different companies. So the name “Unicom” is certainly not a unique or uncommon name. In your opinion, what entitles you to have a legal claim on the name as opposed to mr. Rosenthal who’s owned the domain since 1990 or many of the other firms with the name Unicom?

– What do you say to claims that this is frivolous lawsuit with no legal merit that is designed to get Mr. Rosenthal to sell based on the cost and inconvenience rather than on any real legal claim you might have on the domain name?

– Unicom.net has been owned by Earthlink since 1995. Have you reached some sort of deal with them to acquire the name? If not, are you planning to sue them as well?

– What would you say to people who say that your attempt to acquire unicom.com appears to be a textbook case of “Reverse Domain Name Hijacking”?

I look forward to hearing from you.

Thank you”

Regrettably, Unicom Systems Inc. chose not to reply. On the other hand, Chip Rosenthal had nothing to hide and was happy to discuss this issue with me. He pointed out quite a few of the things I’ve discussed in this article and even has a “save.unicom.com” section of his website where you can look at the communications and court filings relevant to this issue. The one thing that Chip Rosenthal really wanted to get across was that…

“OK, if you want to go toe-to-toe on dates, I’m there. I registered in 1990. I’ve got a common law trademark that predates their fed registration. We can talk about that if we want, but I think it overlooks an important issue. The domain was registered in good faith. The web site has been used for non-infringing purposes. As an independent publisher, I have certain free speech rights. Are we to say that “intellectual property rights” trump all? I hope not. I don’t want an Internet that holds independent publishing as valueless.”

I agree. But will the court? Chip Rosenthal’s lawyers have filed a motion to dismiss that will be heard on Jan 28. This decision could have a seismic impact across the net. As Chip Rosenthal’s lawyer says…

“This case boils down to whether a little-known corporation, which obtained a federal trademark registration long after defendant began using his domain, can leverage the trademark by forcing defendant to give up his domain name without regard to the law.”

If the answer to that question is “yes”, then expect a crippling wave of domain name looting to begin using the “Unicom Trademark Loophole.” I think I speak for much of the net when I say that is something we hope doesn’t happen.

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