The largest Russian bank hijacked a domain name from American entrepreneurs and doesn’t know what to do with it

Sber (formerly Sberbank) is a state-owned bank and the largest financial institution in Russia. In 2020, having announced that it had become more than just a bank, Sber officially dropped the “bank” part from its name, which was preceded by multiple trademark applications for “Sber” internationally, including the United States trademark filed for in 2017 and registered in 2018.

In the same year the company has confirmed (Vedomosti, in Russian) the acquisition of the most relevant for the domestic market domain name Sber.ru. And in the same year Sberbank became the registrant of the most desirable and trustworthy international domain name, a matching “dotcom” — Sber.com.

The latter cannot be, however, classified as “acquisition”. The domain name was transferred to Sber as a result of the domain arbitration dispute filed by the company in the Czech Arbitration Court — one of the providers for the Uniform Domain Name Dispute Resolution Policy (UDRP), established by the Internet’s ruling body, ICANN.

In very harsh language, befitting the worst of all cybersquatters, the panel stated:

…the Panel infers that the Respondent had the Complainant’s trademarks “SBER” and “SBERBANK” in mind when registering the disputed domain name, which was therefore registered, and is being (passively) used in bad faith, in order to take advantage of the reputation and the renown of the Complainant’s trademarks.

– On-line ADR Center of the Czech Arbitration Court (CAC), case #101932

Was the registrant really an evil cybercriminal, maliciously targeting the poor rich Russian bank? Not at all.

SBER, in full Struever Bros. Eccles & Rouse, Inc., is a construction company from Baltimore, Maryland, founded in 1976, when the Internet did not even exist. Neither did any of Sberbank’s international trademarks, and nobody could even foresee an entity from the then-Soviet Russia ever acquiring any from behind the Iron Curtain.

SBER, the US construction company had been successfully operating for decades, having registered and started to use Sber.com domain name as their website address in the ’90s and until it went out of business following the US housing crisis of 2008.

While the site had been shut down since then, the current status of the company is “revived”, according to data provided by the Government of Maryland. And as it can be seen via the public domain name ownership history records, one of the SBER’s founders, Cobber Eccles, retained ownership of the domain name so it continued renewing until getting hit by the arbitration dispute from Sberbank.

The arguments for the arbitration panel's decision don’t feel quite right.

In fact, according to the UDRP policy, attempts to get domain ownership based on a trademark obtained at a later date than the domain name registration date, are often classified as “Reverse Domain Name Hijacking”. But it did not happen here.

John Berryhill, an intellectual property attorney, who specializes in helping legitimate domain registrants to protect their rights, commented on the case:

It is a typical default decision issued by a panelist who doesn’t feel the need to look at obvious facts. It is quite clear that the domain name was registered by and for a legitimate business whose initials are SBER.

– John Berryhill, Ph.d., Esq.

The decisions of UDRP arbitration are not absolute, and whenever either side of the dispute deems one to be unfair, the fight can continue in court. Sometimes it is the complainant, sometimes the respondent. The decision over Sber.com looks like the one with a good chance to be overturned, should the case be brought to court.

It is not impossible that following this dubious domain dispute decision its sides in fact had contacts and reached some kind of amicable agreement in regards of this domain name that would nullify the chance of any future legal disputes.

However, while the rebranding of Sberbank into Sber had been completed and the website on the Russian domain name Sber.ru was launched following the rebranding announcement, almost three years later there is still nothing to be found on Sber.com — this domain name simply does not resolve. So most likely, there were no contacts and no agreement, and Sber is fully aware of its vulnerable position in regards of this domain name registration rights. And now they simply try to wait it out.

Could be a lawsuit that is just waiting to happen.

How much can this domain name be worth?

As reported by the Vancouver Sun in 2019, the Insurance Corporation of British Colombia, a government-owned insurance company in Canada, which owns the domain name ICBC.com, at one time had been in negotiations with the state-owned Industrial and Commercial Bank of China about a possible deal. The Chinese bank, operating on ICBC.com.cn, was seeking an upgrade to the respectable “dotcom”, and it almost sold for $10 million. However, the deal between two companies was rejected by the Canadian government.

As Sber tries hard to succeed as a brand name for a large ecosystem of services and even aspires to become an international tech giant, Sber.com can also be worth that much or even more.