legal Domain Front Running by Lumis.com

[silentg]

Lumis was trying to broker Kosmos(.)com without domain owner's knowledge and the owner got with UDRP. @jberryhill represented the owner and won. Owner still lost out on the legal fees.

https://twitter.com/x/status/1569695070462386180

Thanks to @GeorgeK for posting it on Twitter.

 

[GeorgeK]

What are they asking for Kosmos?

This is like kannabis, worthless

"Kosmos" is registered in over 200 TLDs:

https://dotdb.com/search?keyword=kosmos&position=any

Your analysis is simply incorrect, repeatedly. You should listen more, and speak less.

 

[GeorgeK]

Yet it hasn’t sold. It’s a typo.

We’d all like to own cannabis.com but none of us want kannabis.com

Again, you don't know what you're talking about. "It hasn't sold" is one of the weakest arguments that buyers throw around. You could have said that for Voice.com for 2 decades, yet then it sold for $30 million.

There's a "bid-ask spread". Bid and ask only meet occasionally, when transactions actually take place. It's undeniable that this a high value domain (i.e. the bid side is "high").

If the owner doesn't want to take that bid (their ask is even higher), the fact remains that the "bid" is still high (due to the fact that it's such a popular term).

(in reality, there's a probability distribution, not just a single value....for more valuable domains, that probability distribution will have much higher values than that of a lower domain, like flhsghhsghk.horse)

 

[jstenn13]

Thanks for posting Lumis's reply, @bmugford. What's very concerning is Lumis apparently doesn't even care if a domain is already being brokered by a seller broker, they'll still reach out to potential buyers. Hey Lumis, what if the seller broker had already reached out to that buyer to try and sell them the domain? Clearly, your business practices are potentially harmful to not just domain owners but also other brokers. Stop, just stop. Ask the domain owner for permission before reaching out to any potential buyers, especially if the domain is knowingly owned by a domain investor and/or broker.

 

[bmugford]

Why would you be against your domain being pitched?

I’d gladly have y’all pitch my domains. It’s free outbound.

Well, they are my domains. I can decide what I want to do with them.

That is not for a third party to decide. It is not appropriate for an unauthorized third party to be offering domains for sale, domains that might not even be listed for sale, to another party.

If you want to pitch a domain, especially one that is not listed for sale, get the owner's permission first.

I am not really sure why I have to explain this. It can create a large number of issues.

Brad

 

[DomainNature]

You people should start looking up words, in Ancient Greek language many words start with K instead of the C letter, go look wikipedia Crypt word.
Same case for Cosmos.
Edit: added links.

 

[jstenn13]

To me, it's pretty black and white.

If a broker has to add a disclaimer to their email, they should reevaluate/stop what they're doing.

Nobody should do anything that puts someone else's valuable assets at risk unless they have express written consent to do so.

A broker should ask a domain owner for permission before reaching out to an end-user.

 

[tonyk2000]

It doesn’t always make sense to list with BIN. When you do that, you’re potentially losing money.

100% agree ;-(). But, after being "in shoes" of a frontrunning victim myself (not UDPRs like this lumis case, but still...) - yes, one of my "makeoffer" domains was mystically spammed by somebody else - I simply decided to switch to BIN. As a side effect, it saved a lot of time, and "time is money"

 

[bmugford]

By the way, I had called them out on this in 2021, too, see the thread on Twitter at:

https://twitter.com/x/status/1394237344107175938

for example, or:

https://twitter.com/x/status/1394217334546616322

(you have to scroll up in the Twitter thread, to see the context, etc.)

How is this creating "opportunities"?

If so then why not reach out to the owner first, and ask them if they want you to represent their domain.

A party should not be offering another parties domain for sale, without their authorization. Period.

In this case it certainly didn't appear to create an opportunity. It seems like it actually created a costly problem for the registrant.

Brad

 

[Future Sensors]

Yet it hasn’t sold. It’s a typo.

The philosopher Pythagoras first used the term kosmos (Ancient Greek: κόσμος, Latinized kósmos) for the order of the universe.

So, Pythagoras made a typo?

 

[GeorgeK]

It’s not worthless imo but it’s not worth this thread. Front running a typo isn’t worth creating a thread.

It's valuable enough that folks have tried 2 UDRPs on it already, spending thousands of dollars on legal fees to fight for it.

 

[tonyk2000]

You cannot stop any outside influence from promoting your domains

Why? So far, I was able to do this by:

a) Stopping using makeoffer model. BIN and only BIN. Well visible and published on landing pages. This also saved a lot of valuable time. Indeed, frontrunners are doing everything possible to remain in business, and, if one has a makeoffer, they _will_ submit offers, receive counters, and start their "job" by spamming all the world as if the domain is already theirs. Any complaints from endusers? The registrant would by guilty then, it is still his domain.

b) Not giving _any_ discounts from published BIN prices in 99% of cases.

 

[bmugford]

Again, you don't know what you're talking about. "It hasn't sold" is one of the weakest arguments that buyers throw around. You could have said that for Voice.com for 2 decades, yet then it sold for $30 million.

https://www.cosmos.com/

The domain the owner of Kosmos wished they had. Why would anyone in their right mind pay to play second fiddle???

Cosmos.com is a potential million dollar domain. Kosmos is also great.

There are 160 million .com. It is not some zero sum game where only one domain has value.

Hundreds of companies use the term Kosmos in branding.

Brad

 

[Future Sensors]

the correct spelling

Try to accept that there are multiple languages and ways of writing in the world.

 

[bmugford]

Anyone can try to sell anything. I have no problem here.

As a domain owner, I’d like all of Namepros to pitch my assets. The gray area is how you pitch the asset and to whom. Ultimately, it’s sell, sell, sell, with integrity and good intentions.

Really? So I can take someone's domain that is not listed for sale, then pitch it to a major company that owns a TM.

When shit hits the fan, the registrant can deal with the fallout. That is ridiculous.

Domains are not fungible goods. They are all one of a kind assets and come with unique potential legal issues.

This behavior is looking for low hanging fruit, and basically shifting the risk to the registrant... risk they did not sign up for.

Brad

 

[TERADOMAIN]

How is this creating "opportunities"?

If so then why not reach out to the owner first, and ask them if they want you to represent their domain.

A party should not be offering another parties domain for sale, without their authorization. Period.

In this case it certainly didn't appear to create an opportunity. It seems like it actually created a costly problem for the registrant.

Brad

 

[bmugford]

Yet it hasn’t sold. It’s a typo.

We’d all like to own cannabis.com but none of us want kannabis.com

I would be happy to add it to my portfolio.

Between com/net/org/biz/us/info the term is contained in 503 domains, each one of them much worse than the exact match .com.

Brad

 

[bmugford]

Thanks for posting Lumis's reply, @bmugford. What's very concerning is Lumis apparently doesn't even care if a domain is already being brokered by a seller broker, they'll still reach out to potential buyers. Hey Lumis, what if the seller broker had already reached out to that buyer to try and sell them the domain? Clearly, your business practices are potentially harmful to not just domain owners but also other brokers. Stop, just stop. Ask the domain owner for permission before reaching out to any potential buyers, especially if the domain is knowingly owned by a domain investor and/or broker.

Yes, I am wondering what their role is if an authorized broker is attached.
If I hire a broker to represent my domain, I am expecting them to represent it.

Instead we now have an unconnected third party reaching out to potential end users, without the permission of the owner and likely without the knowledge of the owner or broker.

I realize they have a disclaimer, but still this could very likely get in they way of the authorized broker's work.

So, how exactly does a commission work?

Does the buyer pay a commission to Lumis?
Does the seller pay a commission to their broker AND Lumis?
Is their authorized broker squeezed out?

This is like adding an extra middleman when there is already a middleman, an authorized one.

Brad

 

[GeorgeK]

In the comment thread on Elliot Silver's blog:

https://domaininvesting.com/rdnh-finding-in-kosmos-com-udrp/#comment-95089

Derek Giordano alleges a similar situation, "They reached out to a company that had a trademark for the very name I had acquired, although a dictionary word."

 

[bmugford]

On the flip side, if I brought you a $xx,xxx offer for a .us you own, you’d surely take it.

So now the question is, how did you get the offer? Does it matter?

The argument about pitching TM is bs too. If you hire a broker, who do you think they’re going to contact first?!

Yes, it does matter. If you hire a broker, you at least have to shoulder some risk.

This appears to be a situation where they initiated contact without the permission of the owner with a third party. How is that the same?

If I found a party pitching my domains in a potentially damaging way I would consider taking legal action against them, including an absolute bare minimum of a C&D.

Brad

 

[bmugford]

The only issue created is when it doesn’t benefit you. Again, a 5-6 figure, unsolicited offer, you’d jump on.

No, I don't want any party pitching my domains to a third party unless they are authorized to do so. Period.

I bet many others are in the same boat. If I wanted to pitch my domains to third parties, I am perfectly capable of doing so myself.

If a party is pitching premium domains, without the owner's permission, they are creating many potential issues that would not exist otherwise. It is like navigating a minefield, but when they step on on a mine it is the registrant that gets blown up.

Brad

 

[bmugford]

Lumis responded to my message, and gave me permission to share their response here -


Hi Brad, Thank you for reaching out. I’m happy to provide clarity on this situation. We reached out to the Kosmos.com buyer and spoke with them about assisting them to acquire this domain. It was made clear that we did not represent the owner of the domain nor were we associated with the domain. We explained our service and that we are an acquisition brokerage firm. In addition, we also asked if there were any other domain names that we can assist them to acquire.

We had back-and-forth discussions with the buyer and explained the estimated market value for such a domain and the expected costs required to secure such a domain. The buyer stated:

“We understand, but how I said, we don't have that amount of budget.
We could make a big effort and try to get to 15-20k, but it will a bit difficult.”

We then stated:

“Understood. Given the domain and current ownership, we would be unable to approach the owner of this domain with a $15-20k budget.

Please let me know if you have any questions or if anything ever changes with Kosmos.com, happy to help.”

Based on the UDRP filing, it would appear that sometime later the buyer reached out to the listed broker on the domain (MarkUpgrade) and submitted an offer to purchase the domain (likely an offer we rejected to work with them on). I would assume that the buyer did not receive a favorable response from the listed broker and then intentionally and maliciously manipulated/omitted facts in the UDRP filing. In our conversation with the buyer, we also clearly stated that the brokerage firm representing the owner of Kosmos.com was MarkUpgrade.

Our email communication was provided to the seller’s legal counsel.

The buyer blatantly attempted to mislead the UDRP panel. Anytime that Lumis reaches out to an owner of a domain name with an offer, we represent our clients with a signed contract and have been authorized to submit the offer. We are a domain buyer acquisition firm.
--
Hobi Michalec
Co-Founder | Tech | Lumis

I appreciate their response regarding this situation.

I think the UDRP was clearly nonsense and rightfully decided. Everyone should be able to agree on that.

With that said, I still think there are potential issues when contacting a third party about a domain that might not be listed for sale, is unpriced, or has a seller broker already attached to represent it.

I have concerns with a third party proactively reaching out to another party regarding a domain owned by another party. It just seems like on some occasions this could cause issues that otherwise would not exist.

Brad

 

[bmugford]

Well, I have a massive issue with this, if true.

You should not be offering other people's property for sale without permission, disclaimer or not.

This is not like offering a car or some random tangible good for sale. It can really open up Pandora's box when it comes to legal issues, and the registrant is forced to deal with the fallout.

I have seen this issue in the past involving others, and my domains as well.

I have brought this to the ICA. I would like more explanation of what happened here.

Brad

 

[GreatBrand.in]

Your assets are publicly known dude. You’re on the wrong side here.

You are dodging my question too. If I brought you a big offer for your .us you’d take it. That’s a fact so let’s not play games.

Publicly known and being a public property are two different things. Also public property is not private property of any individidual. Therefore success and failure of future deal is irrelevant to judge whether its right or wrong. NO ONE has right to represent other's domain without permission and consent from the legitimate owners.

Also, when deal succeed broker get or charge 20-30% commission, right? Will they bear the cost of legal issues / fees if it fails and get into legal trouble or will they give 30% of the domain value to the legitimate domain owner if the owner lost its domain in legal battle because such brokers spamming efforts? If they can't share the burden they have no right to represent your case. "Profit is mine and loss is yours" is not ethical or sustainable business model. Here the company who is pitching domains without owners consents are morally, ethically and legally WRONG.

 

[DomainConcepts]

Why would you be against your domain being pitched?

Well, since you ask:

Imagine that I have a business, and I've obtained a domain name for it. Let's call it my.cooltld. I'm in the early stages of building up the business and the brand.

Then someone announces on the Internet that "if you're interested in obtaining the domain my.cooltld, we can help you to negotiate with the seller". That gives the impression that the owner of the specific domain my.cooltld is open to selling it. And that in turn gives the impression that I'm not very committed to my new business venture, and that impression is not good for my brand and my business.

I'm with Brad here. I think that's out of order.

Point is, your crazy to turn away people that want to sell your assets.

For some domainers, the only reason domains exist is to make money for people buying and selling them; they don't have any other purpose. This kind of domainer doesn't have any sense of responsibility to people who are impacted by his business dealings. That may be legal (or not, and that may simply depend on how good the lawyer is who is making the case). But to my mind, it's not professional or ethical.