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Vote now – Selling a domain name you don’t own fair or foul?

Labeled as poll in Legal Discussion started by equity78, Aug 30, 2019.

Replies:
47
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2,673

?

Selling a name you don’t own

  1. Totally legit if it's for sale

    27 vote(s)
    26.0%
  2. Not legit, unethical and should be illegal

    75 vote(s)
    72.1%
  3. Totally legit and I have done it

    2 vote(s)
    1.9%
Total: 104 vote(s)
  1. equity78

    equity78 Top Member TLDInvestors.com TheDomains Staff PRO Gold Account VIP ★★★★★★★★★★

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    So a debate is starting to stir on a topic I wrote about back in 2015. Selling A Domain Name You Don’t Own – Cool or Not Cool ? My article was sparked by a post written on AntiCareer.com. There was a blog post by AntiCareer.com which talked about buying and selling a name that they did not own. The post titled “Turning A No Into A Yes and a $5,000 profit. Morgan Linton had touched upon this … [Read more...]

    That's on TheDomains.com

    Vote here if you think it's legit or not
     
    The views expressed on this page by users and staff are their own, not those of NamePros.
  2. Gube

    Gube Member Epik.com Staff

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    I call it "Domain dropshipping"
    I think It's ok like dropshipping, but only if you're sure you can buy the domain from the current owner to honor the sale and pay for the domain on time
     
  3. bmugford

    bmugford www.DataCube.com PRO ICA Member VIP ★★★★★★★★★★

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    In general, foul.

    If I own a domain I don't want some random third party to represent me or my domain without my permission.

    Domains are not are a reproducible product that can be drop shipped. A domain is a one of a kind asset like many types of art, collectibles, etc.

    I have dealt with this in the past. It can go anywhere from unethical to outright fraud when a third party represents themselves as owning or having permission to offer your domain for sale.

    The domain owner is then on the hook for the actions of these unauthorized third parties.

    Any negative repercussion such as legal issues will fall on the domain owner.
    It can also damage the domain when it comes to potential end users.

    Brad
     
  4. bluetooth

    bluetooth Established Member

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    A similar situation occurs in Real Estate. Find someone who needs to sell or is interested in selling and you are the buyer. You yourself have a buyer so you set up a "simultaneous" closing where your buyer takes possession from you at closing, the seller having bargained away the property to you just prior, and you rake in a handsome profit for sitting in the middle of the transaction for possibly just a few minutes. Of course if something goes awry and your seller backs out--you just bought the property and possibly the headache as well.

    There are of course "variables" that you have to be aware of so it is not as easy as it may sound and may require the services and advice of a licensed attorney experienced in RE law.

    A motivated seller is the key to this, someone who is behind on payments or someone who inherited a house needing work and cannot afford to do it and/or pay the taxes, insurance, etc.

    At first I was taken aback by Domain "Dropshipping" but as long as everyone is aware of what exactly is going on, its just a sale as long as full disclosure is made to all parties, but that may require some sort of licensing and oversight. I see too many possible snags occurring to even think about this and also I am not familiar enough with IP lawyers.

    To each his own, I like to say.
     
  5. Lox

    Lox ----- Gold Account VIP

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  6. Internet.Domains

    Internet.Domains Top Member VIP

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    In the other thread it was mentioned that fear, or the potential, of a UDRP is the reason they are against this practice.

    If a domain owner lives with fear of a UDRP, maybe it's best to not own the domain in the first place. It seems like a guilty conscience is guiding the decisions.

    From a different perspective if someone has a buyer for my domains, let's do it, let's make it happen. Keep the spread. Let's make it a win-win-win.
     
  7. Internet.Domains

    Internet.Domains Top Member VIP

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    If the domain owner never authorized the third parties, how can the domain owner then be on the hook?
     
    Last edited: Aug 30, 2019
  8. equity78

    equity78 Top Member TLDInvestors.com TheDomains Staff PRO Gold Account VIP ★★★★★★★★★★

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    I think what has gotten overlooked here is most people have done this for 20 years not the way Rob mentioned. The people doing it did not want the owner to know anything, they wanted no relationship with them and no option.

    It went like this, "Bro that guy listed example.com on Sedo for $1,000, I Googled 10 end users that could use that name, I am going to contact them." They contacted potential end users get a buyer at $5,000, hit the buy it now on Sedo for $1,000. Get the name and then tell the company let's set up escrow. So in that scenario if you see @EJS has FML.com for sale at Sedo $20,000, you start emailing potential prospects at $50,000, if one of them says wait we have a TM on FML we are going to start a UDRP and use the email as proof of bad faith.

    Elliot is going to have to prove that he did not send the email, defend the UDRP, potentially lose the name.
     
  9. Internet.Domains

    Internet.Domains Top Member VIP

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    If someone has that much fear or anxiety over owning a domain, maybe domain investing is not for them. UDRP's are a potential issue regardless if a third party is involved. To me it seems very skiddish. Like someone not getting in a car because of the potential of a crash.
     
  10. DomainRecap

    DomainRecap Top Member VIP

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    Yep, and in the very least you are going to on the hook legal costs to defend the UDRP or even potentially an actual court case for damages.

    And this has actually happened and spawned a few UDRPs, whereby the "fake broker" was also brought into the discussion and had to be dealt with as to whether he or she had the right to contact the complainant and negotiate the deal. You might win, but you'll still lose money.

    And that's the problem, these boiler room yahoos don't give a carp about losing the domain, because they don't own it in the first place, and to potentially make a few bucks they have no problem sticking you with thousands in legal fees to defend an IPO or US court challenge.
     
    Last edited: Aug 31, 2019
  11. DomainRecap

    DomainRecap Top Member VIP

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    It's not the fear of owning the domain, it's the fear or a) losing thousands in legal costs and b) the outside chance of losing a valuable domain just because some yahoo with no rights whatsoever takes it upon himself to fraudulently represent the domain and contact potential TM owners.

    If $5,000 in unnecessary legal fees to defend the actions of a "fraud broker" isn't a big deal to you, then send some my way.
     
  12. Internet.Domains

    Internet.Domains Top Member VIP

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    Are you able to provide one case where an unauthorized third party was responsible for the loss of a domain via UDRP?
     
  13. DomainRecap

    DomainRecap Top Member VIP

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    Read what I wrote.

    And yes, there have been many cases where "fraud brokers" have lost thousands of dollars in legal costs for innocent owners to defend a UDRP or US lawsuit.That is for certain.

    And if there was any money in it, I could almost certainly find at least one whereby the domain was lost, as I remember reading one a year or two ago. As you know, there are "rogue panelists" who for love, money or clients, can rule against you without any evidence of wrong-doing.

    So if you get a "fraud broker" + "litigious SPAM recipient" + "rogue panelists" then it's a guaranteed loss.

    These yahoos better watch it, as if they pull that on someone like Schwartz or Rosener, et al, then they could be up the creek, as any resultant UDRP or lawsuit would certainly be followed by a life-changing US lawsuit again said "fraud broker" for damages.
     
    Last edited: Aug 31, 2019
  14. Internet.Domains

    Internet.Domains Top Member VIP

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    I understand you say there have been many cases. So where are they? Any specific examples?
     
  15. bmugford

    bmugford www.DataCube.com PRO ICA Member VIP ★★★★★★★★★★

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    There are plenty of generic terms that can all of a sudden become a potential TM issue when some random idiot pitches your domain to some random party. Normally said idiot represents himself as the domain owner, or some type of broker.

    I have dealt with this type of thing many times and it has lead to legal threats. It has lead to third parties entering into some bogus sales agreement without my permission. When things go south, guess who has to deal with it? The random idiot has already moved on to the next domain he is pitching without permission.

    If I wanted to pitch my domain I will do it myself. I don't need some idiot to do it.

    Brad
     
    Last edited: Aug 31, 2019
  16. Internet.Domains

    Internet.Domains Top Member VIP

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    I suppose I may feel differently if someone could supply one UDRP or legal case that could be reviewed. So far it all seems very hypothetical. Hyperbole until proven.
     
  17. bmugford

    bmugford www.DataCube.com PRO ICA Member VIP ★★★★★★★★★★

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    I think it would me more comparable to not letting a third party use your car, not knowing what they are going to do with it and knowing they are not going to be around if something goes wrong.

    I don't trust some random person pitching my domain, just like I am not going to trust some random person with my car.

    Brad
     
    Last edited: Aug 31, 2019
  18. bmugford

    bmugford www.DataCube.com PRO ICA Member VIP ★★★★★★★★★★

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    I don't have a mechanism to search through tens of thousands of UDRP cases.

    I know personally I have had issues with this exact thing in the past. It didn't lead to a UDRP as I was able to diffuse the situations before it got to that point. It was still a mess that I had to spend my time and resources to clean up though.

    Brad
     
  19. Internet.Domains

    Internet.Domains Top Member VIP

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    Using the car analogy, there are many documented cases of people using other peoples cars and creating legal issues.

    With domains, I see the possibility you are conveying, but I am not sure the probability of losing a domain due to an unrelated third party is a real threat. The probability seems very small. So small, in fact, that there may not be one documented case.
     
  20. elevator

    elevator DnCombo.com VIP

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    I see no reasons why is it illegal or unethical, it only become illegal when you can not deliver the name when someone purchased it from you.
    Provided auctions are doing it everyday !. Anyone can as well establish auction and sell someone domain names.
     
  21. equity78

    equity78 Top Member TLDInvestors.com TheDomains Staff PRO Gold Account VIP ★★★★★★★★★★

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    Well what is not hyperbole is someone doesn't have the right to try to sell your domain name without you knowing it. Whether there are cases that resulted in loss of the name, there are many @bmugford for one that have had to pay to defend names because someone who was not related to him or had a deal with him, approached people they should not have with any of a number of unscrupulous sales pitches. If you have no potential for loss you are going to push the envelope further than someone who owns the name.
     
  22. GeorgeK

    GeorgeK Leap.com PRO VIP ★★★★★★★★★★

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    I did a quick search at UDRPsearch.com, and found a case involving Frank Schilling's company, for DealBook.com, see:

    https://www.adrforum.com/domaindecisions/1349045.htm

    which appears to involve this issue.

    Bill Sweetman hypothesized this in the comments of a DNW.com article involving a UDRP, too:

    https://domainnamewire.com/2018/10/04/flying-dog-brewery-domain-hijack/

    Here's another case, for Galvanize.com:

    https://www.adrforum.com/domaindecisions/1557092.htm

     
  23. GeorgeK

    GeorgeK Leap.com PRO VIP ★★★★★★★★★★

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    I'm not a lawyer, but it conceivably could fall under "Slander of Title", as it's clouding the ownership of the domain name (i.e. the unauthorized individual is holding themselves out as the owner, essentially):

    https://en.wikipedia.org/wiki/Slander_of_title

    [emphasis added]
     
  24. EJS

    EJS DomainInvesting.com DomainInvesting.com PRO ICA Member VIP ★★★★★★★★★★

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    George shared a couple UDRP filings above. This is not something that is easy to search for in UDRP decisions so there may be more. Here's an excerpt from a 2 letter .com UDRP from 2015 (https://www.wipo.int/amc/en/domains/search/text.jsp?case=D2015-1470)

    Complainant:
    "On July 9, 2015, the Complainant entered into an email exchange, which was initiated by someone called "Mike" using a "gmail" email address. The opening message read: "Hello Brian, Selling WI.com and it would be perfect for your company. Let me know if you are interested?" The Complainant replied: "Hello Mike, maybe depending on how much you ask for the domain." Mike replied: "Hi Brian, I was looking for USD700k but I am willing to negotiate and get a sale. Let me know your best offer?" The Complainant replied: "Hi Mike, could we agree on USD400." Mike responded: "Hi Brian You meant USD400k lol. How about USD650k?" The correspondence concluded with the Complainant's response: "Hi Mike, no we are talking by wrong dimension taking into account that WICOM is a protected trade mark and we can sue and get it by court order … (we did this already before). I would be willing to pay something to avoid law suit but it must be reasonable.""

    Respondent:
    "The Respondent states that until it received the Complaint it had never heard of the Complainant or his WICOM trade mark. It states that the email correspondence exhibited to the Complaint evidencing the sales approach to the Complainant, had nothing to do with the Respondent. The correspondence in question was initiated by someone using a gmail address, whereas the Respondent only corresponds via its MediaOptions.com email channel. It acquired the Domain Name legitimately by way of the terms of the brokerage deal described at section 4 above and has never used the Domain Name in any way that could remotely be said to be in bad faith, let alone bad faith towards the Complainant of whom it had never heard until it received the Complaint."

    ---

    It's not just losing a domain name via UDRP that is concerning. It's having to spend thousands of dollars defending a domain name because someone else tried to sell it without permission of the owner.
     
  25. DomainRecap

    DomainRecap Top Member VIP

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    Thank you so much George - I knew I had read some and knew some were there, but I just didn't have time yesterday to go through the UDRP searching.

    And there are plenty more, as I remember a few 1-2 years ago that had to do with Chinese respondents, having to clean up the mess left by fraud-brokers spamming potential TM holders to try a little unauthorized arbitrage.
     
    Last edited: Aug 31, 2019

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