Financial Firm Found in Violation for Reverse Domain Name Hijacking: a Case Study of Zelig AI, LLC

Recently, a UDRP (Uniform Domain Name Dispute Resolution Policy) panel ruled that Zelig AI, LLC, a financial education company, was in violation of the law when it attempted to acquire the domain name ValueSync.com through reverse domain name hijacking. This case not only reveals the legal guidelines in domain name disputes, but also reminds companies that domain name claims need to be reasonable and legitimate.

1. Background

Zelig AI, LLC, which provides financial education services on its website ValuSyncIt.com, had applied for the ValueSync trademark with the USPTO. However, when it filed a UDRP dispute against the registrant of the domain name ValueSync.com, it was found by a panel to constitute reverse domain name hijacking (RDNH). Notably, the domain owner did not respond to this dispute.

2. Key issue: lack of trademark rights

The Panel found that Zelig AI, LLC had not acquired commercial rights to the ValueSync trademark at the time it filed its lawsuit. Although Zelig claimed to have been using the name since May 2023, its trademark application, filed in April 2024, was based on “intent to use” rather than actual use. This means that Zelig did not have a sufficient basis in the trademark application to prove legal rights to the ValueSync name.

Panelist David E. Sorkin noted that Zelig AI, LLC did not submit sufficient evidence of distinctiveness to establish common law trademark rights. The Complainant provided only a screenshot of its website and the USPTO's Trademark Status page, which indicated that the company had not yet used the mark in commerce.Sorkin made it clear that Zelig's legal representatives should have known that filing a lawsuit without sufficient trademark rights would be unreasonable.

3. Legal and Ethical Tests

Sorkin ultimately dismissed Zelig AI, LLC's complaint and determined that the conduct constituted reverse domain name hijacking. Foley & Lardner LLP, as the Complainant's legal representative, filed the dispute without sufficient evidence to support it, which posed a double test of morality and legality for its client.

4. Significance of Reverse Domain Name Hijacking

This case shows that domain name disputes are not only a fight over trademark rights, but also a test of corporate legal ethics. Reverse domain name hijacking will be regarded as a misbehavior that attempts to abuse the UDRP mechanism. When pursuing brand protection, enterprises must ensure that their rights are clear and well-documented to avoid improper dispute applications.

In Summary

The fact that Zelig AI, LLC was convicted of reverse domain name hijacking for failing to provide a reasonable basis for its trademark rights reminds businesses to proceed with caution in trademark and domain name disputes. Defending trademark and domain name rights in a legitimate and reasonable manner is not only the basic essence of brand maintenance, but also an important manifestation of a company's legitimate operation.