So, to begin... - I was about to begin promoting a merchant website's product line, and was planning on joining their affiliate program. For this story, let's say the name of the domain the company is hosted at is www.zenixauto.com
What I did is purchased and registered the domain name www.zenix-auto.com, which I was going to use to promote their site and products.
When I applied to their affiliate program, I was denied. The affiliate program manager told me that my domain name was a registered copyright/trademark and that they were going to begin cracking down on all affiliates who had the company name in the domain name, even ones that were phonetically similar, i.e. www.xenixauto.com, etc.
Does this seem right? It sounds incredibly shady to me. And what a way to burn affiliates that are marketing for you, who are going to have their domain names bought up, either that or being cancelled as an affiliate.
I was told by the affiliate program manager that they would purchase the domain from me, that all I needed to do was go to the site I registered the domain name with and transfer it over to them. (How is this done? Shouldn't they be paying me first?)
Now, if I choose to sell it to them, how much do I charge? Can I set my own price? And is there any way of them finding out how much I paid for the domain?
I'm a little leary of this whole situation. I'd still like to become an affiliate of their company with a more generic domain name, but I'd like to get my trouble's worth out of this predicament.
Yes, that's exactly what trademarks are about.
A trademarked term doesn't only signify the product, it also signifies the producer. The point is that the manufacturer doesn't want visitors to get confused about whether they're on one of their own sites, or on the site of a reseller. If the domain name is very similar to the trademark (literally or phonetically), then most visitors will assume it to be operated by the manufacturer. Trademarks are there to protect against this kind of confusion.
Now, if I choose to sell it to them, how much do I charge?
The price should cover your actual expenses to register, operate, and sell the domain. This is more than the registration fees you paid so far and may include eg. the cost of your time etc., but shouldn't include any extra profit (any extra profit would constitute yet another trademark infringment).
You're lucky they offered to buy the name. I would quote a reasonable price using the considerations Bird mentions. If you try to hold the name for ransom, the company can very possibly go to ICANN and have the name taken from you anyway.
You can register and name trashydomain.com and use a subdomain to get the keyword in when promoting their affiliate program.
merchantsite.trashydomain.com
Not as effective as the root domain but there are no trade mark issues as far as ownership.
Though I seem to remember a suit back in the day of Yahoo.com vs Sex.com over -- Yahoo.Sex.com
But I think Yahoo lost because they were using wildcard matching.
Because the PPC/Affilite Co. is profiting from the exploitation of other company's trademarks. In essence, they become a joint venturer or partner in the wrongful act. Also, it would be more effective to kill the practice and more likely that a plaintiff would win compensation by going after the big fish - the PPC company or the affiliate operator - than goin after the individual trademark infringers one at a time.
This will come to pass so those that don't clean up their traffic sources will take a hit. The coup de grace could even come in the form of a FTC injunction.
Kill the revenue source and you will kill the incentive for registering famous marks.
