As someone who trades in and develops domain names you may have come across some unfortunate requests from companies who lay claim to a domain name that you own because it resembles a brand or trademark that they own. This happens rather often to domain investors with large portfolios. Most domain investors don’t purchase domain assets to try and sell them back to a specific brand or company. This is especially true in the case of short, liquid domain names as they all have inherent value and are traded as financial instruments.
That being said, every once and awhile you receive an email from a business demanding that you hand over one of your domain assets typically with the threat of a lawsuit. We all want to avoid lawsuits because it isn’t our business to get involved in protracted legal battles, we are speculators. So how do we avoid these types of situations?
The first tip we suggest is to Google the domain name that you intend to purchase. Check to see if there are potential end users that could lay claim to your domain name through a trademark. If you do see a potential end user that does have a trademark matching the name that you want to purchase but you still want to purchase the name anyway for development or any other reason then you have to be careful moving forward. Don’t post this name for sale in any aftermarket domain trading platforms such as Flippa.com, Sedo.com, Namejet.com, Afternic.com, etc.
If you park your name through a parking company or create a landing page for your domain name be sure to avoid using the statement “This name is for sale” on your page. Using this terminology will invite companies to take legal action against you siting that there is no intention to use the name. Most importantly, do not offer your name for sale to anyone from the company with a trademark.
Even with your best efforts you may still find a company may go after one of your domain assets, especially if it is a highly valuable one. So here are some important things to know. Filing a domain dispute costs around $4,000 USD and it takes around 1-2 months for a decision to be rendered. If you are being threatened by a company, this information is important to know because you can attempt to settle for a dollar amount in this range and you can almost be assured that they will settle as well. When you have domains that have a value in the tens and hundreds of thousands of dollars range this option may not be available to you, which brings me to my personal story.
I have been a domain speculator, trader and developer for the last 10 years. I own a broad portfolio of domain names and at any given time I am developing, trading or brokering domain names. There are times when a do not intend to sell names that I develop and there are times when I receive an offer too good to pass up. I view this the same way that I would view a merger between a large company that swallows up a smaller company. Regardless, every domain name, development and transaction has it’s own story. This is the nature of business.
Unfortunately, at the end of August I received an email from a company claiming ownership of a domain asset that I own, ZIC.com. They claim that the domain name corresponds to one of their brands. They approached me proposing an offer of $3,000 USD to transfer the domain asset into their account in order to avoid filing a complaint. For those of you in the domain world you know that a name like ZIC.com commands at least 10 times that amount in the open market. This email completely came out of the blue as I was not aware of this company’s brand.
I had never reached out to them; I had never promoted this name and in fact had no intention of selling this name at this time. This name has many possible applications for development. I communicated that I did not have any intention to sell the name so they proceeded to take action and file a complaint on the 1st of September 2015.
If you EVER receive a complaint of this nature it is imperative that you find an attorney to represent you. You will need save and provide all sorts of information such as all communication with the complainer, date of purchase of the domain asset, a list of other intellectual property that you own, etc. Your attorney has 20 days to respond to the complaint with a defense otherwise the domain asset will be automatically transferred to the complainer so time is of the essence. I was fortunate to find Jason Shaeffer from esqwire.com to represent me in this matter.
After the complaint was filed and our defense was filed to WIPO (World Intellectual Property Organization) we were informed that a decision would be rendered after the 7th of October 2015. This WIPO has final authority over these matters and works with the registrars to meet out justice.
It is my hope after seeing all of the evidence that the WIPO will rule in my favor as I had no ill intention and was solicited by this company that has now brought forth litigation. This type of litigation came into existence because there were domain investors out there that attempted to make money by squeezing companies. Now it has shifted and companies are trademarking everything they can get their hands on and going after domain names, using their power to coerce domain investors into selling their assets for well below market value. It is important for domain investors to be aware and knowledgeable, to prevent unethical behavior by businesses that are trying to pick up cheap assets and expose these businesses when they do play unfairly. It is also important for domain investors to bring to the concept of “eminent domain” to the WIPO so that even if there is a ruling against a domain investor they should still be compensated in some way.
As people that are inherently entrepreneurial we should be allowed to own intellectual property and use it to our full creative potential. We should speculate, invest, develop and make decisions based on the idea of creating harmony amongst ourselves. When lawyers are engaged it indicates that there is separation in the system and that something needs to be done in order to restore balance.
I hope you enjoyed reading this and received some tips to help you avoid trouble or if you are in the thick of it, to help you get out of trouble. Stay tuned for more.
Andrea Sabatini – CEO at QLQ.com