Snapchat's parent company tried to buy the domain name "geofilters.com" but its current owners refused, and Snap has lost its first legal challenge to try and take the domain away.
Geofiltering is a critical feature on Snapchat, both for users and from a revenue perspective. The feature allows online marketers to pay to offer Snapchat users graphics, such as a ring of flowers or digital sunglasses, that can be placed over photos taken in a specific geographic location.
According to a copy of a June 2 ruling by the World Intellectual Property Organaization, Snap tried to buy the domain last year from Primary Knowledge, Inc., a company based in Santa Monica, California.
When Primary refused, Snap filed for a trademark on the name "geofilter" in December from the U.S. Patent and Trademark Office. That organization tentatively approved, so then Snap went to the WIPO and argued that the trademark should give it rights to the domain.
Snap argued that it "has used the GEOFILTER mark in commerce since July 2014" and that it "has extensively used and promoted the GEOFILTER mark worldwide."
Yet the three-person WIPO panel, which rules on cases of "the abusive registration of domain names," better known as cybersquatting, declined to use that preliminary trademark approval as a basis to rule in Snap's favor.
Instead, the URL will remain under the control of Primary Knowledge, which argued that "the disputed domain name was acquired as a descriptive term for a geo-filtered app platform," and that Snap does not have trademark rights to "geofilter" or "geofilters."
If Snap does try to buy the rights again, it could cost plenty. According to the ruling, Primary Knowledge "indicated to the Complainant's (i.e., Snap's) representative that the disputed domain name was available 'in the mid-six figures range.'"
This kind of legal protection has become more important for Snap as larger rival Facebook has copied several of its key features, denting Snap's growth in the first quarter.
On Thursday, Snap shares fell nearly 5 percent to $17 a share, the same price its IPO shares had in early March, over growth concerns.
An email to Snap was not immediately returned.
Correction: Snap did not offer a firm price for the domain. The seller indicated that it was available for sale for more than $100,000.