Trademarks, Domains, and $10,000

Do we understand our rights properly? Should we pay $10,000 to reseller?

[Mister Smith]

Hi. We have two big questions about trademarks and domains.
(1) Are we understanding our rights properly?
(2) Should we pay $10,000 to the domain reseller?

We have a trademark and the corresponding legacy domains (.com, .net, .org).

The trademark is two words combined.
The combo is not currently used in normal conversation.
And, one of the words has a unique spelling.

We came across a typosquatting article.
As we are just starting out, this raised concerns.
There are 3 domain variations we are concerned with.

(A) [word1][word2].com (no unique spelling)
(B) [word2][word1].com (no unique spelling)
(C) [word2][word1].com (unique spelling)

We researched these variations. Two are for sale by domain resellers and the other serves ads. These domains were created before the trademark.

Our understanding (correct us if we're wrong) is that if any of these sites change their business model (after the trademark date) that could be seen as trying to take advantage of the trademark.

For example, if the domain serving ads starts serving ads in the same niche as our site that could be a trademark issue.

We wondered, if anyone buys the other two sites, would that almost automatically mean it's a trademark issue (since it would be after the trademark's established date)?

If that is roughly the right understanding, then we are mostly concerned with getting Domain (A) so we don't lose potential traffic. However, the reseller has a $10,000 asking price.

Researching this reseller, comments vary. Some say they were able to get a deal, others say negotiating increased the price (so just pay the full amount).

We are trying to weigh what is the best bet. But it is especially difficult without understanding all the pieces and how things could go wrong.

Do we wait for an issue then use the Uniform Domain Name Dispute Resolution (UDRP) process for $1,500?

Or, do we pay $10,000 and avoid an issue (is this ultimately cheaper or a huge waste of money)?

Has anyone else found themselves in this set of circumstances? Thanks in advance for any feedback and insights.

[not2easy]

Hello Mister_Smith and welcome to WebmasterWorld [webmasterworld.com]

Sorry, I can't offer much help about the copyright/trademark issues, as a rule we do not offer legal advice since these things can vary depending on location.

On the other hand, it is likely that other users here have been in those shoes and can offer their personal observations and experiences. Unfortunately given the run-up to weekend timing, it could be a while before anyone has a useful response for the situation you have described. With patience someone will step up.

[lucy24]

I gather you have already considered and discarded the option of paying that same $1500 to consult with an attorney specializing in this subject and knowledgeable about the law as it applies to your specific situation in your specific jurisdiction.

[NickMNS]

Researching this reseller, comments vary. Some say they were able to get a deal, others say negotiating increased the price (so just pay the full amount).

Given the above, to answer question two, I would send a low ball offer. To piss-off the seller real good. Then they will push the price up. I would then repeat the offer on consistent basis every 6 month to a year. Any spammer will then be forced to pay the premium to buy the domain, so it will remain parked. And if the seller eventually gets sick of parking it, then you will get it at the reduced price. In every situation you achieve your goal of not allowing others to use the domain to compete.

As to question 1, if you are willing to blow $10k on a domain, then take a few hundred of those dollars and hire a trademark lawyer and get a real opinion. We are a smart bunch of folks here at WW, but legal advice is not our strength.

[Mister Smith]

Thanks for the replies so far.

We agree only a hired lawyer may be qualified to offer specific legal advice. To help clarify, our post is trying to understand the general issues.

The comment about people offering "personal observations and experiences" is among the input we are hoping for.

The bidding advice is the sort of pragmatic strategies we are also interested in hearing. We wouldn't use it to antagonize, but it would free us to try to get a better deal and, if the price goes up, it's not necessarily a bad thing.

We are not discarding hiring a lawyer. That can be good advice. An analogy may help explain where we are (at this point). Let's say we were asking about what makes a good domain name. People could suggest we consult a design firm. That's one way to think about it, yet people here may also have valuable experiences to share.

People here could even say consulting a design firm was worth every penny. We wouldn't necessarily hear that if we skipped asking here first. It may not be a perfect analogy. But hopefully it helps expand the discussion.

The topic definitely has a legal aspect, but there is a larger business aspect. Bringing others to court, even if one is in the right, doesn't always mean it's the right business decision (time, money, headache). As we wondered, is $10,000 ultimately cheaper?

Since some people here likely have had to purchase variations of a domain name from a reseller (or deal with typosquatting), the strategy used could be insightful.

How did they decide which one's were worth buying? Which ones were worth getting a lawyer involved? And so on.

The forum description encourages discussions on topics "such as: domains as a brand, domain values, negotiating domain sales" and that's sort of how we are trying to weigh things.

[tangor]

The area you are looking at will require an attorney of your choice. Some here have gone that route in the past with varying degrees of success.

As for TRADEMARKS, most jurisdictions have very specific laws and remedies in place that can be helpful, even in the case of typo squatters, etc. Again, an attorney will be needed.

Anything else offered is pure speculation and should not be considered as actionable advice.

Good luck!

[RedBar]

At one time I had hundreds of domain names to avoid name sitting, typos etc however during this last decade I have reduced them to about 30.

Why have I done that? In the early to mid 90s I was very concerned about squatting and typos but as search engines refind and progressed I found this unneccessary and when companies / people started asking if I wanted to sell specific names for their personal / business purposes, I willingly sold many.

A couple of devil's advocate questions for you ...

1. Do you have confidence in your product(s) standing on their own?

2. Do you have confidence in your website desgn and construction to rank for that / those product(s)?

Remember this, a squatter / typo only do this for one reason and, IMHO, is it not to compete with you selling your product, quite simply it is to inflate a USD 10 purchase to USD 10,000 and make a phenomenal profit, they are not doing this for work, they are doing this to scam and frighten you into paying this amount, to me it is attempted blackmail / extortion.

Ok, that's not legal advice of any sort whatsoever and most probably not advice a lawyer would give you either BUT it is something you may need to consider.

[Mister Smith]

Yes, we are definitely looking to hear about those "here have gone that [legal] route in the past with varying degrees of success." Particularly, if their circumstances were close to ours.

If the reseller starts infringing, we did see an option to report abuse to the registrar that the reseller is using. Another potential option to weigh.

As to search engine ranking, that's definitely an area that needs further development. We realize most people likely use a search engine. The rough percentage that type in a URL directly is harder to find.

One of the typosquatting articles did have a rough number after crunching billions of DNS queries. The number worked out to at least 1 out of every 500 landed on a typosquatter.

Some businesses have calculated the dollar amount to earn one new customer. This is often in the context of return on advertising dollars.

We agree, that for the majority of users, getting the search engine ranking is a higher priority.

And, even if we were already Number 1 in all search engines, we are still trying to understand when getting a typo domain makes sense.

For people with dozens of domains and years of exeperience, perhaps a way to think of it (from our startup perspective) is, let's say you only had one of your domains. How much would you pay for a typo domain?

[RedBar]

How much would you pay for a typo domain?

Zero BUT when we first launched in 1993 we were a 153 year old business and extremely well-known in our global widget trade.

I do know of several now well-known businesses did register typo domains in their early days and some have actively pursued typo squatters and many with success.

You seem to have cash to burn as a start-up as a precaution for your "product". Is this an exclusive product? Is it a physical product? Is it an easily cloned product?

Typo squatters sit there mostly hoping to derive advertising clicks by people accidentally landing on their page and clicking they way from the site OR by trying to sell you this basically valueless domain name from your fear of losing possible visitors / business / etc.

Personally I would ignore them and even more so if your product is unique / exclusive. People seeking such a product will find you and especially so if it has mass-market appeal and is marketed well through social channels that will, in turn, ensure everyone knows the correct URL.

[Mister Smith]

Thanks for all the feedback.

The questions asked have helped highlight the many factors we're trying to appropriately weigh.

We are currently leaning towards a "wait and see" approach. We are also considering making an offer at a fraction of the price.

It's not so much "cash to burn." Ultimately, it's more about spending money wisely. We don't want to look back and think "if we knew then what we know now, buying it would have been the cheaper move."

Infringement, legal fees, lost visitors, and so on are concerns.

As a new non-physical product, we believe it's unique. Could it be cloned easily? Depending upon the definition of "easily," a poor facsimile could probably be cloned quickly.

These are all concerns, but sort of secondary. The more primary concern is the longer it takes to grow, the more potential for these other issues to grow (and outgrow our ability to address).

If we were already a house-hold name, we'd be less concerned with typos. But since our name has a unique spelling, it's likely the ratio typing in the "typo" domain (and its proper-dictionary-word spellings) may be high.

In terms of growth, this could be a factor. Word-of-mouth sharing might be a mouthful if people need to explain the spelling. In a world where people make decisions within seconds, any obstacles getting to the site may be problematic.

We'd like to be idealistic and believe a good product will rise above all, but we realize that alone is not always enough.

The feedback in this thread has been helpful. And, if any any more insights come up, we are open to better understanding the range of experiences, considerations, and possibilities revolving around these topics.

[tangor]

If we were already a house-hold name, we'd be less concerned with typos. But since our name has a unique spelling, it's likely the ratio typing in the "typo" domain (and its proper-dictionary-word spellings) may be high.

One way to test that is to create a local group (actually high school kids if you can find a computer class) ... say the URL out loud and have them type it in and check the results.

Otherwise, not sure how you could test the "may be high" aspect.