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GoDaddy reviews : Recommend I invest in GoDaddy?? What Are My Risks with Buying a Dropped Domain?

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Note: I'm not sure if I should give the exact domain name or not, so I apologize if this post is a little cryptic. The domain consists of 3 generic words.

A couple of weeks ago I found a 3-word .com that had been dropped and I purchased it. As I do with most of my new domains, I parked it for the time being. There is an option in the parking account to set a minimum bid amount to be automatically applied to any domains I add to my portfolio there, and I almost always set these new domains "for sale" just to see if there is any interest.

Today I got an email from the parking/aftermarket company letting me know that I had received a bid on this domain. I could use some extra cash right now, so I thought I might launch the domain to auction. As I was researching some stats to put into the auction description, I realized that one particular company has registered this domain in .net, .org, .biz, .info, .us, and .ws. I wasn't able to access the Wayback records for the .com, but it's common sense to assume that this company had also registered the .com and had somehow let it drop. I suspect the offer I received is from the previous /img/avatar7.jpg who realized they screwed up and want the .com back.

I checked for trademarks on "all three words" and allthreewords and "all three" and allthree and found no registered trademarks.

Here are my questions and concerns about the situation: Am I being unethical or underhanded if I raise my price? Am I being a cybersquatter if I decide to keep the domain and the traffic it gets (which is why I registered it in the first place)? Am I at risk of legal reprisals if keep and develop the domain in a noncompeting industry?.

Any insights will be greatly appreciated!..

Comments (17)

As I read your post it made me think of a few things:.

- are the other extensions held by the same company developed?.

- if developed, can they make a good argument that they have established trademark by usage?.

- what dollar amount would I be happy with by selling this domain at this point in time?..

Comment #1

Other people may feel it's unethical or underhanded if you raise your price. But.

Do they dictate it unless limited by your parking/aftermarket agreement?.

You're generally not a cybersquatter if you're not using the domain name that.

Is potentially infringing a party's trademark use. Of course, that doesn't stop.

Others from believing you're doing so anyway.

You're always at risk since anyone can dispute your registration anytime. But.

Generally, noncompeting use has a chance of being protected.

I'll post more later on, unless others chime in and beat me to it...

Comment #2

Make sure none of the parking ads is in their industry. Even if you have to change keywords.

Also were the .net etc regged after you got the name or before?..

Comment #3

(1) All of the other extensions show the exact same page, which is their developed website. I checked Whois for all other extensions and they are registered in an individual's name, not a company name.

(2) This particular website seems to have been up since 2005, so I suppose the trademark-by-use argument could hold some water. Given that the owner is an individual, I'm thinking the chances of legal action are relatively low. (Is that an overly optimistic or ignorant assumption?).

(3) As I mentioned before, some extra cash would come in handy right now, so I'm not set against selling the name. Although this guy would probably be willing to pay dearly to have his .com back, I'm inclined to sell at a very reasonable price because (a) I didn't pay much for the domain and I could make a great short-term ROI and (b) I'm not the kind of person to hold hostages!.

Thanks for your post - it helped me look at the situation in a slightly different light. I hope I understand you correctly. I'm not restricted by how much I can ask for the domain. I have not accepted or responded to the offer, nor have I put it into auction. I wanted first to see what the great folks on this forum would have to say about it. I figure I'm in a good position to squeeze the guy for a slightly higher price than his original offer.

If I were to continue parking or go into development, I would not have any trouble with focusing on a noncompeting market. The existing website(s) are about helping people avoid foreclosure on their homes, while my intention was to focus on ways people can save money in their daily lives. The generic nature of the name is appropriate for either use.

Determining whether I'm engaging in true cybersquatting - even unintentionally - is far more important than worrying whether someone "thinks" I'm a cybersquatter. However, the previous owner would most likely think I have done this intentionally and see me as cybersquatting. At the worst, I have failed to do my due diligence to avoid a potential problem. If I were to be up against a corporate giant in this case, I would be a lot more concerned. What it all comes down to is that I care most about doing the "right" thing AND staying out of hot water. Well... that, and the fact that I AM in this business to make money!.

Thanks very much for sharing your thoughts! All of the other extensions were regged at the same time as the .com...

Comment #4

Maybe your reading into this before you've considered the buyer may not be the original owner. What if your buyer is in the same position as you and has researched the domain and found it could have VALUE?.

If you feel that there are no TM issues and that the original owner is a sole proprietor - you may want to go ahead and raise your pricing - SLIGHTLY, after all it's his/her duty to maintain the registration of the domain(s) in especially the dot com. A mistake like this on their behalf is bound to go unscathed and I'm sure that anyone who's missed the boat on renewal would expect to be faced by a dealer after a drop somewhere down the line.

If it's not the original owner then raising your pricing SLIGHTLY can't hurt either....

Comment #5

Zorag, you make some good points. It would be nice if I could find out who the buyer is, but alas that information is not shared with the domain owner. I will only have the chance to figure that one out via Whois, after the sale.

Okay, so the original offer is low $xxx. That's pretty small potatoes, but I did nab the name for really cheap. To those who have suggested I raise my price (counter offer) slightly: would mid $xxx be reasonable? I know that's a nearly impossible question to answer, given that I have not divulged the actual domain name....

My other option would be to launch the domain to auction and see where it goes. If the original owner is the bidder, I may only end up with the original bid. Hmmm. I'm afraid this thread may be heading away from the legal issues.

Anyone else care to comment on the legal aspects?..

Comment #6

Oh, watch out for this bit: http://www.wipo.int/amc/en/domains/d...2007-1425.html I don't know of any legal decision involving that yet (maybe John B or any of.

The lawyers here can fill in on that). But that's happened in various UDRPs, of.

Which the one I linked here is a recent decision.

Well, no risk no gain, no guts no glory...all that stuff...

Comment #7

Quoted from the document you linked to: "It is now well established by previous panels that supplementary submissions should not be accepted except in exceptional circumstances." Who says lawyers don't have any literary talent or sense of humor?.

Seriously though, I'm wondering how I could be found to have registered the domain in bad faith when the previous owner had the domain and let it go. Wouldn't that weigh against the previous owner's case? In other words, it seems that because he failed to maintain ownership of the domain, he thereby relieved himself (hehe) of the right of ownership. If I buy a house but "forget" to pay the property taxes, does the government not assume that I have given up my right to own that home? If I don't pay my mortgage, does the bank not assume that I have given up my right to live there?.

If I build a website and eventually let the domain name drop (again, intentionally or not), what gives me the right to later on file a lawsuit against someone who bought the domain after the fact? That makes no sense and, in my opinion, amounts to reverse hijacking. It seems to me that any court allowing that precedent would be opening a gargantuan can of worms.

Oh, wait! Here's the answer: "Panels have previously found that a respondents registration of a domain name after complainants registration lapsed is evidence of bad faith." What?? It's far more evidential of a complainant with a bad case of DUH. You snooze, you lose, buddy! If complainant can't manage to renew an important domain name for $9.95, what does that say about their ability to manage the rest of their business? Trying to nail someone else for your own screw-up is very bad faith (and bad PR). The complainant in that case is a decades-old multinational corporation! The judgment panel should just laugh in their faces and make them buy it back from the guy again.

My god, I can't read that case anymore - it's cracking me up! Even I weren't a domainer I'd have to side with the respondent. How can anyone involved in that case keep a straight face? If that case is found in favor of the complainant, it will be just one more glaring example of what's wrong with this world.

.....

Uh, what were we talking about? [mind numbed from overexposure to stupidity].

...

Comment #8

Uh, you were asking what are the risks with buying a dropped domain?.

Well, there are different and all kinds of people on this earth, including those.

Who are willing to lie and falsify their claims when disputing someone's rights..

That happens every other day, and that's a thing arbitration panels, lawyers.

And judges are there for.

Looks like you pretty much know what the risks are. It's just a matter of how.

Much you're willing to play the game...

Comment #9

Wow, that's a very lawyerish thing to say.

Interesting twist of the Latin phrase in your sig, by the way...

Comment #10

I can attest to this first hand. I am in a dispute where 1 10 minute call where I rejected any discussion of selling a domain and did not discuss any money during the conversation turned into claims of "Years of contact" and "extortion of $6000-$10000". There are some real lowlifes out there who will say and do anything to get their way, right Deborah and Ivan? (don't ask)..

Comment #11

Pdcom.

You've mentioned in your first post that there are NO TM issues, in view of this there is NO "immediate" legal requirement for you to return the domain to the registry or transfer it to the original owner.

In perspective, if they have overlooked the renewal then unfortunately "like any similar scenario" it's a hurdle they must face. I totally understand when you say it may be unethical to banter over the pricing with the buyer - IF they are the original owners. However in this particular scenario you don't know who the buyer is.

And surely if the buyer is the original owner they would have contacted your parking company if they were that serious about claiming it back - My advice, place it in auction! That way they can banter over it with others and it will sell at the price it's meant to be sold at...

Comment #12

And in his next post, he states they may be able to show TM through usage. I am usually cynical when a domainer claims "no TM" or uses "generic" to justify themselves. So with that in mind, maybe there is something he would need to do to cover himself. Now if the domain is "descriptive" (as opposed to generic) for the services offered, he should assert his "rights" to use the domain in the descriptive sense.

Of course, this is all dependant on the actual name itself, if the "generic" name is "Arundal" (a county in MD) "Mills" (a factory) and "mall" (a gathering of stores in one general area) which clearly are all generic and geo, but run them all together and you get Arundal Mills mall which is a famous mall here in MD.

In conclusion, you can never give a definitive answer to something which has no specifics. All we can do is offer both sides and hopefully does the correct actions...

Comment #13

I'd like to give the exact domain name to assist in this discussion, but I'm not sure if doing so could harm me in the event of any future legal complaint regarding domain ownership. Am I right to maintain nondisclosure in this forum?..

Comment #14

If your going to post it just separate the words..

Not sure about Non Disclosure but I think this area of the forum is protected from search bots - to an extent...

Comment #15

Personally, I don't like when people post the actual names. I see too many posts where a name is listed and someone will say "You are ok" when in fact that person doesn't have a clue what theyare saying. Even though others may state differently, sure enough, the OP will hold onto that one opinion and run with it.

Now, if you gave examples (such as I did) to properly convey the actual name, that could help too...

Comment #16

I decided to go ahead and just accept the offer. The buyer paid right away. After the ownership transfer has completed, I plan to check the Whois to see if the buyer was, in fact, the previous owner who "dropped" the domain.

All seems well.

Thanks very much to everyone who participated in this discussion!..

Comment #17


This question was taken from a support group/message board and re-posted here so others can learn from it.

 

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