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.

 

[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]

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

 

[Keith]

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

 

[bmugford]

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.

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?

All that is likely to do is create legal issues and burn bridges with potential buyers in the future.

Brad

 

[bmugford]

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

A lot of things are public knowledge. It doesn't mean you should offer someone else's property for sale without permission.

Brad

 

[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.

 

[bmugford]

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.

Sorry, but I think you are on the wrong side.

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

 

[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.

 

[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]

I contacted Lumis via their contact form regarding the Kosmos.com dispute and linked to this thread.

I figured I would bring this to their attention so they can clarify their business, and what went on in this case, if they choose to.

I hope we can get their thoughts on this.

Thanks,
Brad

 

[Future Sensors]

Welcome, @Hobi Michalec @Slade Michalec

 

[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.

 

[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!

 

[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.

 

[trelgor]

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.



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.

I help businesses buy domains from other active businesses all the time. I think I have not done them wrong, or forced them to sell. They are capable, adult human beings that can make business decisions just fine.

They are capable enough I would say to also realize that if a person contacts you about buying something they do not own, it is not to be regarded as a purchase offer but something else.

It is unfortunate that such correspondence can be used against the domain owner party, that may have had nothing to do with it, "in a court of law". But maybe "the court of law" is the issue in that case.

I think the key here will have to come down to semantics.

Of course you can do outreach and sell your general brokerage services. Of course you can target that outreach as precise as you can. Of course you can even say that you can try to help acquire a specific name, worded right, in the right context.

What you shouldn't say if you value your credibility, and industry status, is "I am selling" or "I can get XXXXX.com for you" or "I know this seller" or "I have a lead" and so on. Anything that would let on that you represent the owner.

Because unless you really do, you are misrepresenting fact, and could potentially increase the risk to harm the owner - and shoot yourself in the foot in the process.

IMO.

 

[Sjpals]

agree. Its just like dropshipping.

 

[bmugford]

agree. Its just like dropshipping.

It is not the same thing.

Dropshipping basically involves fungible goods, not one of a kind assets that might or might not actually be for sale.

Many domain owners choose not to list their domains for sale for whatever reason.

Again, as soon as you go down this path you open up the floodgates.

Would it be acceptable for me to harvest a list of premium domains, then hire an army of low skilled labor to spam potential end users about a domain that might or might not be for sale? If not, why not?

It just seems like a shortcut to being a broker IMO.

Brad

 

[akos]

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

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.

 

[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.

 

[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.

 

[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.

 

[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.

 

[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"

 

[Lox]

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.

#38

Regards

 

[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