Domain Selling – Trademark Responsibility?

[DomainerTom]

Hi,

I am new to domaining. I was looking at possible markets for selling domains, and I noticed that both Godaddy and Sedo require the seller to be responsible for possible trademark violations. That doesn’t seem right to me.

Let’s say someone is selling Orange.com, and someone has a registered trademark to use “orange” for a real estate business. That doesn’t mean someone else can’t use “orange” for a night club. How can the seller be held responsible for trademark violations when they don’t know what the buyer is intending to use it for?

Are there any domain markets that require the buyer to be responsible for checking possible trademark issues? If not, can I just sell it as an individual and have a contract requiring the buyer to be responsible for trademark violations?

Any feedback would be appreciated.

Thanks, Tom.

 

[DU]

Trademarks are really the responsibility of the buyer; however, as a seller you are responsible for obvious TM infringement where you are profiting from it. This is mostly related to made up / known terms (Google/Verizon/etc).

If you've been sent any form of cease&desist or a claim to ownership of that name you are really obligated to make that known at point of sale. So if Orange called and laid claim to it, you should let the buyer know. They can still buy the name but you've indemnified yourself against future action.

 

[Name Trader]

After the sale. The buyer IS responsible for any TM violation that occur under his ownership of a domain. However. The seller is still responsible for any TM violation that occurred under their ownership of the domain. The Trademark owner has full rights for compensation from both the buyer and the seller. Violations don't pass on with the sale of the domain, to the buyer. The buyer is not responsible for the sellers violations.

 

[DomainerTom]

Thanks for the replies. If that is true, I find it kind of unsettling that I could be sued even after I have sold a domain name.

Do most domainers operate as an individual or as a business such as an LLC? I’m starting to think I might want to set up an LLC if I am going to pursue domaining. If I set up an LLC, at least my personal assets are protected.

Tom

 

[Tudor V]

Registering trademarked domains is a dangerous game, some of the domainers get away with this, but still, is your responsability to check before registering. I don't think a LLC is the solution, more like a complicated road to take, but that's just me...

 

[Name Trader]

Thanks for the replies. If that is true, I find it kind of unsettling that I could be sued even after I have sold a domain name.

Do most domainers operate as an individual or as a business such as an LLC? I’m starting to think I might want to set up an LLC if I am going to pursue domaining. If I set up an LLC, at least my personal assets are protected.

Tom

You of course, need to have actually violated somebody's trademark, to be liable fro trademark infringement. Just owning the domain doesn't necessarily mean you are violating a trademark. You need to have some action, like parking the domain, to violate somebody's trademark. Of course multinational companies, might be an exception, Like Google, or Esso.

Running your domaining business via an LLC is an excellent way to protect your private assets. Many domainers end up going that route.