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.

 

[trelgor]

I'm not sure why brokers would need to do outbound to any side before there is an assignment. Seems from my experience that just existing will land you atleast some work, similar to accountants, doctors, lawyers. (Every business needs a domain.) And with some marketing, I'm sure clients will come, and come back again if pleased with the service.

I am guessing then that landing the gigs that have disproportionate upside must have come to have an equally disproportionate focus. One way to acquire these payday gigs may be to locate opportunity through premium inventory and do some matchmaking. Analyzing this further, I think that the original sin - besides the lack of an industry standard ethics charter - is the commission model, which sometimes even seems to spawn a temptation for fraudulent representations of price. Which is why I don't use it. It may work sufficiently well in the real estate business, but not with assets that can range from $500 to $5,000,000 based on chance alone.

Anyway - I think we should still consider though, that it may be hard equating alerting a prospective buyer of the potential existence of an acquisition opportunity to "selling". And if it's not "selling" - would it need "permission" per se?

Is telling customers and potential customers that you help businesses acquire domains wrong? If an example comes up - is it wrong to suggest that it's worth a shot in the specific case and that we can try to help? Does it matter if the opportunity is scraped from the internet, from overhearing a conversation in a bar, or brought up by a client?

Just trying to see both sides. Not always clear cut from that perspective. That said, I would never try to sell or market something specific that I don't own, without an assignment to do so. Or represent to buy something specific unless I actually will, will on behalf of someone, or have a pure brokerage assignment.

Another aspect is that UDRP decisions that hinge on guesswork around the role of a broker should not have been UDRP cases in the first place!

 

[bmugford]

@GeorgeK

I know you have some really good domains. Do you mind if I pitch them?

JK. Trick question. It looks like I don't need permission!!!

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

 

[Mytz.com]

Why ?

 

[MSN-Domains]

KOF .com UDRP ends with RDNH ruling

The UDRP was the result of a front running broker.
https://domainnamewire.com/2022/10/25/coca-cola-bottler-tries-to-reverse-hijack-kof-com/

Was this Lumis again?

 

[ksusha64]

Lumis did nothing wrong. People file udrp for no reason. The buyer made up a reason and manipulated facts. We need more great people like George for calling these jokers out.

 

[Keith]

And @bmugford how would you propose selling others domains is stopped?

 

[rh2000]

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

In a heartbeat.

 

[Keith]

Well, there have been (2) complaints filed involving (6) panelists.
The cost for a (3) member panel is $4K.

You have $8K spent on the UDRP panels alone.
That does not include lawyer fees, which are probably in that range or higher.

Brad

Wasted money because Kosmos will forever be confused with the correct spelling.

I wouldn’t spend anything on Kanada, kape, kalm, or any other typo. It’s an uphill battle to compete with the correct spelling.

 

[Keith]

https://en.wiktionary.org/wiki/kosmos

I hope it's available in your country.

An archaic form of cosmos. You know what archaic means?

 

[Keith]

Alright, I am done with this conversion. It is beating a dead horse at this point.

I can post a list of thousands of domains using this term, or the many companies using the term via opencorporates.com...but no one uses the term.

Brad

How many typos do you own? Should I buy cick.whatever? It’s a typo of sick and kick.

You wouldn’t recommend that.

 

[Keith]

Sorry, but I think you are on the wrong side both morally and legally.

Just because ownership is public does not mean another party can offer your property for sale without permission. It is really an irrelevant point quite honestly.

I don't want people pitching my domains without permission. If they do they are likely to get a C&D.
If I incur damages because of it, I will seek further remedy.

The last thing I want is an army of low level amateurs spamming my domains to third parties.

That is the inevitable end game if this behavior is accepted...unqualified people pitching domains with no skills and no skin in the game. What could go wrong?

Brad

You have assets that are publicly known. You cannot stop any outside influence from promoting your domains.

 

[Keith]

That's fine. You can disagree.

However, let's say I owned a LL.com. Something that is potentially worth millions.
I have made the choice to not list if for sale.

Is it appropriate for a third party to just start pitching that to a bunch of other parties, many that likely own TM for the term in various fields...without permission.

I don't think so. The potential damage they could cause is massive.
That is certainly not a benefit to the domain owner.

Brad

It’s a publicly known asset. If you own io.com how can you stop me from trying to sell it? It’s beneficial to you ultimately.

You cannot stop me from trying to sell your domain and that’s a fact. You might not like it but that’s tough shit.

 

[Keith]

@GeorgeK @bmugford

2 legends here. I listen and respect your opinions!!!

 

[Keith]

Since you appear to believe that anyone offering anyone else's domain to a third party without permission is a beneficial, how about this -

Would it be beneficial to others if I gathered a list of premium domains, that were not listed for sale, then hired 100 low quality employees to spam third parties about them?

Brad

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.

 

[Keith]

I would love to see how you would react in a reversed situation when one of your high-value domains is being dragged into a legal battle due to spammers selling your things which they don't own or haven't received permission from you to sell.

If there are unauthorized sales attempts for a domain, it would seem obvious that the law would side with the current owner.

That said, if someone you haven’t authorized brings you a big offer, you saying no and walking away? Probably not.

Btw, usually people contact me via email with inquiries or offers. I don’t know who they are or who’s really trying to buy the domain. If I give them a price and they say sold, it doesn’t matter to me if they’re buying it personally or pitching it elsewhere. As long as it sells at my ask we’re good.

 

[Keith]

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

https://www.berlitz.com/blog/most-spoken-languages-world

Cosmos is English. What language is Kosmos?

 

[Sjpals]

agree. Its just like dropshipping.

 

[Keith]

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

So it’s worth $1k in an attempt to steal? Not an exact science for valuation purposes.

 

[Keith]

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.

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

 

[Keith]

No such thing as front running. Your domain is public knowledge, get over it.

 

[Keith]

The domain is wide open here. Let’s stop placing blame! Their page basically says, please make an offer.

 

[Keith]

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)

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???

You’re trying to say voice for $30 million is like voyce. No chance

 

[Keith]

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

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

 

[Keith]

Not relevant.

Maybe not to you but in terms of the world it’s relevant.