Selling TM Domains

[slimjim270]

Hi All,

Has anyone developed (applied for) a Trademark with USPTO prior to selling a domain and offered to transfer (assign) the TM as part of the sale?

This thread is not an inquiry about selling domains that infringe on someone else's TM. Rather, I am considering an approach of initiating the Trademark application with USPTO as a "value-add" assignable asset during the domain sale for a "brandable" name.

The reason I ask...

1) There is much discussion on the NamePros Forum about "brandables".

2) The sites BB/BR/NR and many others have all implemented logos as a technique to generate buyer interest.

3) I would think most SMB would consider a TM (registered or application in process) a great asset when purchasing a name / branded domain.

4) An investment of $350 (app fee) to apply with USPTO, I would think would increase the domain's value 2X-5X.

5) I am considering building a group of 8-10 LeadGen sites to provide "free" leads to potential domain buyers. These "free" leads would be an opportunity to develop rapport with each potential buyer and to build value in the domain (brand).

6) I recognize the "brandable" sites are primarily domain brokers, but why not develop the next level of branding value for potential SMB by showing them a proof-of-concept included an assignable TM. My thought is rather than cold pitching a catchy name for $1,500, instead pitch the domain, logo, and TM for $3,000 - $5,000 as a package.

7) From observing many threads on NamePros, many members are extremely gifted at creating catchy names and then submit these names (in the form of a domain) to brandable sites. I am curious if any member has taken their naming skills to another level. If so, what incremental value have you sold TM branded domains (that you own or have applied for the TM) versus only selling the domain solo.

What are your thoughts / insight on the approach?

Thank you,

-Jim

 

[DomainVP]

4) An investment of $350 (app fee) to apply with USPTO, I would think would increase the domain's value 2X-5X.

You cannot own a TM without a demonstration of 'use' of the name within a specific area of commerce. Owning a domain does not qualify for 'use' under USPTO guidelines. Your application will be denied.

So essentially if you want to go through all of these steps, you will be going through full development and launch of a website / domain. If you do that and someone else wants that name, then it will definitely increase the value of the domain/name.

However, when you are talking about brandables, you should qualify it as being a name worthy of those kinds of steps. If you are a large portfolio holder of brandables, this is not worth your time.

These are good ideas, but pick your names carefully that you wish to execute this strategy with.

 

[slimjim270]

You cannot own a TM without a demonstration of 'use' of the name within a specific area of commerce. Owning a domain does not qualify for 'use' under USPTO guidelines. Your application will be denied.

So essentially if you want to go through all of these steps, you will be going through full development and launch of a website / domain. If you do that and someone else wants that name, then it will definitely increase the value of the domain/name.

However, when you are talking about brandables, you should qualify it as being a name worthy of those kinds of steps. If you are a large portfolio holder of brandables, this is not worth your time.

These are good ideas, but pick your names carefully that you wish to execute this strategy with.

@DomainVP -

Thank you for the insights!

Your post highlights a great point... that some level of site (LeadGen, content, etc) would need to be developed prior to the TM application to demonstrate "current use" (1A filing) or at a minimum "intent to use" (1B filing). Fully agree there needs to be some level of intent demonstrated, otherwise it's a waste of energy/cost to apply.

Also a great point that it's impractical to TM each name in a large portfolio. A select few would be more manageable / realistic. Plus, it could get costly... quickly.

Also, I should mention, the term TM is sometimes used in discussions to represent either Trademarks (TM) or Service Marks (SM), both of which are available through the USPTO. A Trademark (TM) being a product marking and a Service Mark (SM) being a service/process marking.

Developing a LeadGen site would qualify under SM to my knowledge as the site would be a sales channel /service that is being provided. Products provided on the site could be TM'd, but the site service would be actually be a SM application. At least that's my understanding of the difference and is what I've done in the past with other marks that have passed registration. They were SM's, not product TM's.

@DomainVP - curious on your thoughts - you mentioned that "if you do that and someone else wants that name, then it will definitely increase the value of the domain/name"

What are your thoughts of "by how much"? A name that I typically list on a "brandable" site for $1,500 - what are your thoughts on pricing the name if I included a logo and registered TM with the sale? What price range would you consider to be a reasonable adjustment given the extra value?

Appreciate your feedback to give me a sense of "how much" of a difference in pricing it might generate? And is it even worth the effort / time commitment to pursue?

Thanks,

-Jim

 

[Asfas1000]

Would not the trademark need a revision later, depending on the business specifics ? If so, how much time and trouble is the buyer really saving ?

 

[Asfas1000]

And I guess this only caters to businesses in the US ?

 

[slimjim270]

Would not the trademark need a revision later, depending on the business specifics ? If so, how much time and trouble is the buyer really saving ?

@Asfas1000 -

Good point. To my knowledge, you are not allowed to change IC (category code) during the application process as it would require a new application for the new category class. However, during the initial application process (prior to the patent attorney moving the application to the Opposition Period) you are allowed to request wording modifications to the description of the application for clarification purposes.

Once a TM owner has a Trademark, applying for additional IC (category code) is simpler as you segment into different products/services or IC categories. Also, for a domain buyer, knowing a 1st round registration has occurred provides a comfort level that their likelihood of "opposition" is lesser on a 2nd IC application as the waters have already been tested. I'm not saying it guarantees a new IC acceptance, but certainly is more likely it would be a smoother ride for them than starting flat footed with no idea and an attorney charging crazy fees for starting the process.

Thank you for asking the question. I hope my response is helpful...

-Jim

 

[slimjim270]

And I guess this only caters to businesses in the US ?

@Asfas1000 -

Anyone purchasing a .com domain (brandname) and intending to sell products or services in the U.S. would benefit having a U.S. Trademark (TM).

I believe (but may stand correct) that non-US companies can apply for US Trademarks to protect their brands while selling products/services in the United States.

For example, Mercedes-Benz (based out of Germany) and Toyota (based out of Japan) own U.S. Trademarks on their names to protect their brand identity while selling products in the U.S. An example - the term "TOYOTA" is U.S. Trademark Reg# 3655725 (LIVE). One of many that Toyota Motor Corporation of Japan has on file at uspto.gov

I hope the feedback is helpful...

-Jim

 

[Asfas1000]

Good points SlimJim.

 

[Kate]

A TM attached will make sales more difficult instead, and probably deter potential buyers. Buyers are supposed to do due diligence when they intend to use the domain for business. Even in a reseller capacity, I will think hard before buying a domain if I see the name in USPTO or other international TM databases. If in doubt, I will look for another domain.

Even if you make it clear that the TM is yours and comes with the domain as a bundle, it's not a selling point at all. Buyers want domain names that they are free to use and brand as they like. If your TM does not fit their business plans, they will have to ditch it, amend it, or start the process over again. It's useless.
The domain is the only thing that is important, not the logo or the TM.

The bottom line is that you need to keep your operating costs as low as possible. A domain costs less than $10 per year, yet it's hard to make a profit selling domains. Filing TMs will increase your expenses dramatically for no results.

The only way your idea makes sense, is when you sell a developed website with revenue (= a business), then the TM is a possible asset. But it's something that the buyers could do on their own anyway.

 

[slimjim270]

A TM attached will make sales more difficult instead, and probably deter potential buyers. Buyers are supposed to do due diligence when they intend to use the domain for business. Even in a reseller capacity, I will think hard before buying a domain if I see the name in USPTO or other international TM databases. If in doubt, I will look for another domain.

Even if you make it clear that the TM is yours and comes with the domain as a bundle, it's not a selling point at all. Buyers want domain names that they are free to use and brand as they like. If your TM does not fit their business plans, they will have to ditch it, amend it, or start the process over again. It's useless.
The domain is the only thing that is important, not the logo or the TM.

The bottom line is that you need to keep your operating costs as low as possible. A domain costs less than $10 per year, yet it's hard to make a profit selling domains. Filing TMs will increase your expenses dramatically for no results.

The only way your idea makes sense, is when you sell a developed website with revenue (= a business), then the TM is a possible asset. But it's something that the buyers could do on their own anyway.

@sdsinc -

Thanks for your candid response.

I agree it's important to keep your operating cost down when dealing with low margin products (for example if you are selling domains slightly above your acquisition cost). I was viewing this as an opportunity to increase GP by providing a value-add to the business during the domain purchase, but see your point that too much out-of-pocket money up front in TM app fees could add up quickly and could be capital intensive if done with too many names/domains.

I also agree filing for a TM is something they could do on their own as the USPTO does not require an attorney to process the filing (unlike a Patent filing where that process has an attorney filing requirement), but many individuals have never done a TM application before and would hesitate spending time learning the process if they own a small business. While they might like to have Trademark, I would anticipate many would hesitate due to heavy attorney fees that accumulate during the process.

Thanks again for responding. I agree with several of your points, but am not clear why a buyer receiving a TM with a domain hinders their ability to develop the domain in any direction they choose after the purchase.

I'm curious to learn... and may have misunderstood your point... please let me know if you were referring to hindering the sale (due to an increased price point) or hindering their options with the domain (because they received a TM with the purchase).

You offer a different perspective, so I'd like to better understand your view.

Thanks,

-Jim

 

[Kate]

I also agree filing for a TM is something they could do on their own as the USPTO does not require an attorney to process the filing (unlike a Patent filing where that process has an attorney filing requirement),

It's true, there is no requirement to retain the services of a lawyer, everybody can file a TM. But there is a possible risk that the TM will not be filed properly. Example: not choosing the right product class(es).
Worst case scenario is that a TM can be challenged or invalidated.

but many individuals have never done a TM application before and would hesitate spending time learning the process if they own a small business.

Do you know how to transfer the TM ? I have never done that, so I don't have an idea of the costs and clerical work involved. But it's something you would have to fully master and understand. It could be tedious, it could be easy - I don't know.

I'm curious to learn... and may have misunderstood your point... please let me know if you were referring to hindering the sale (due to an increased price point) or hindering their options with the domain (because they received a TM with the purchase).

Both. 1) You will have to factor the TM related costs in the final price. This will increase the domain price.
2) As said earlier, the TM has to fit the envisioned business plans of the buyer, or it's useless.
3) But the biggest problem is the perceived legal risk. If you sell XXXXXXXXX.com and the name XXXXXXXXX is listed in USPTO, this is an instant put-off to any potential buyer. If I see one or more TMs on the name, I will usually stop looking. I don't want to take a chance with a TM domain, possibly get sued, or lose the domain though UDRP.
I may not even see that the domain holder and the TM holder are in fact the same entity. But that also depends on how much information you disclose on the domain name itself (eg. on a placeholder page). The first step of a potential buyer is usually to check the domain to see if it's being used and how.

 

[tomcarl]

'If it ain't broke, don't fix it.'

Brandables market is fine the way it is before you want to start getting TMs involved with negotiations and sales and complicate things more. After a company acquires a name, they use it, they have fair use TM, they can go on to do the other steps if they wish. That's their business.

 

[slimjim270]

@sdsinc -

Thanks for follow-up and insight.

When developing an idea, it is easy for one (myself on this topic) to be caught up in the positive side of the equation and not develop a broad view of the potential risk.

Your response was extremely interesting and worth considering as I think though this strategy.

Thanks,

-Jim

 

[slimjim270]

The other side of the topic is the idea of developing LeadGen sites as an opportunity to develop rapport with a variety of potential buyers.

Has anyone utilized this strategy in their buyer development as a prospect development technique.

-Jim

 

[S-B]

I recently applied for an intent to use trademark. Total cost was $434. I think it's a worthy investment.

 

[DU]

I recently applied for an intent to use trademark. Total cost was $434. I think it's a worthy investment.

It is a worthwhile investment but not in the context being asked.

I suppose the thinking is similar to selling an idea without a patent vs with. Or land that has mixeduse/commercial designation. But in those instances the value is the patent and available planning/use permission and not the idea or land alone. The domain is just a name and nothing else. It's not a trademark or servicemark of any real value. The domains is the value

The question that I have is whether the trademark is for <domainname.com> or <domainname>.

In the former there is no value as it's just $434 the way you did it or more or less the way someone else does it (most recommend getting an operational TM lawyer involved because it avoids simple mistakes). If it's the latter I fail to see how you can possible fail the TM in the manner that someone would want. The TM should defined exactly what you need it for - you can get them "with intent" but that "intent" has to be imminent.

The whole strategy seems massively flawed as you're trying to attach an add-on to the item that supposedly has value. I don't see any benefit anywhere unless it's a revenue generating site where the TM applies directly to the revenue stream.


If you want to make money in TM, become a TM laywer, imho.

 

[S-B]

It is a worthwhile investment but not in the context being asked.

I suppose the thinking is similar to selling an idea without a patent which has significantly less value than a patent but in that instance the value is the patent and not the idea. The domain is just a name and nothing else. It's not a trademark or servicemark of any real value.

The question that I have is whether the trademark is for <domainname.com> or <domainname>.

In the former there is no value as it's just $434 the way you did it or more or less the way someone else does it (most recommend getting an operational TM lawyer involved because it avoids simple mistakes). If it's the latter I fail to see how you can possible fail the TM in the manner that someone would want. The TM should defined exactly what you need it for - you can get them "with intent" but that "intent" has to be imminent.

The whole strategy seems massively flawed as you're trying to attach an add-on to the item that supposedly has value. I don't see any benefit anywhere unless it's a revenue generating site where the TM applies directly to the revenue stream.

Solid question, DU.

The trademark is for word word not wordword.com.

 

[slimjim270]

I recently applied for an intent to use trademark. Total cost was $434. I think it's a worthy investment.

@this_username_was_banned -

Curious, did you file an "intent to use" (1B filing) or a "current use' (1A filing)?

The reason I ask is, if you filed a 1B, you will need to file a "Statement of Use" (converting it to a 1A) for the TM to move forward to eventually become "registered"... FYI - a 1B does not require a "1st use" date, but to get your application approved to a formal "Registration" stage, you will need to file a "1st use" date with the patent attorney.

Also, another item to consider... did you file a Trademark (TM) or a Service Mark (SM). Both are commonly called "trademarks", but one difference worth noting is that a website is commonly referred to as a "marketing service" and can be used as a "Specimen" for a SM application. USPTO is picky about product Trademarks and isn't fond of marketing material (not affixed to the product) being used as "Specimes" for a product Trademark application. For some reason a website is not considered a product, though the items you sell on your website can individually be "stamped" with a trademark (brand marking). "Google" for example has many registered marks, primarily as a Service Marks (SM). (Reg# 4168118 for example)

Best of luck with your application.

-Jim

 

[S-B]

@slimjim270

I filed an intent to use trademark. I was not asked to file a statement of use though. Maybe that's coming up next? I'm really trademark ignorant so I don't have many answers.

 

[slimjim270]

@this_username_was_banned -

USPTO offers a terrific series of videos to help explain their application process and some of their lingo.

If you are filing on your own and haven't completed an application before, you might find them interesting/helpful.

Below is a link to their TMIN (Trademark Information Network - videos provided by USPTO.gov)

http://www.uspto.gov/learning-and-resources/uspto-video-streams

Hope they are helpful...

-Jim

 

[S-B]

@slimjim270

I filed with LegalZoom. I didn't want to navigate the process alone. Thanks for the information though!

 

[Name Trader]

@slimjim270 - I couldn't answer your poll question because I'd sell it for less than $1500 if it had a trademark. The chances of you branding apple to computers/phones 30 years ago would have been a genius stroke, but who would have thought of it? So the chances of you getting the trademark exactly to what any random buyer may want is slim to none. I agree with @sdsinc and @defaultuser. Because TM's are like brandable domains, you have very little chance of getting it right. And if it's not right, it's a liability. Your project is a waste of time and money.

 

[S-B]

@stub

While you have a point you are forgetting that semi generic domains sometimes have a single purpose and it does make sense in that instance.

 

[Name Trader]

@this_username_was_banned - What is semi generic? Example please?

 

[S-B]

@this_username_was_banned - What is semi generic? Huge Domains?

That's hard to define. I was hoping you would understand what I meant... lol

I can easily tell you what it isn't... For example, "apple" is more of a brandable as it could have an unlimited number of uses and couldn't be trademarked for the fruit itself.

I'll use one of my own domains as an example... DirectAdvertising.com. I could trademark "Direct Advertising" for all direct marketing services. It would have to be worded appropriately but it's doable. That domain has one of two purposes: offer a service or offer quality content. In only one instance would it make sense to get a trademark.