Lewis and Hand, LLP | New York Law Firm » Internet Law

Getting the (Right) Domain of Your Dreams

admin — Thu, 05 May 2011 20:31:25 +0000

Using a short, brandable domain name has always been an important element of any web startup’s success; a necessary but not sufficient condition (see Pets.com et al.). Last week Fred Wilson wrote a great post on how he thinks startups should go about procuring domains. He offered a list of tips for those going through the domain buying process, which I was inspired to add some thoughts to:

“Don’t obsess about getting a name that is descriptive.” This is a great point, especially when viewed through the lens of trademark law. To establish trademark rights in a brand that also describes your goods or services, you have to be able to show “secondary meaning”, i.e. that when consumers see your brand, they read it to indicate that you are the source of those goods or services, not just for that descriptive meaning. Tim Ogilvie points out in the comments to Fred’s post that this can lead more people to be comfortable registering similar domains to profit off of your investments in driving traffic. Kickstarter was a great choice that edged up to this line, but arguably stayed in the less problematic territory of “suggestive” marks. Zynga obviously did just fine staying at the far end of the spectrum with a made-up, “fanciful” mark, just like Pepsi, Exxon, Reebok, Verizon, and many other Fortune 500 companies.

“If you own a domain that can work, give it serious consideration.” This is also good advice, with the caveat that you should make sure that domain isn’t already just a typo away from another brand (see above). To work off Fred’s example, you may have owned zyngz.com for years, and it might seem like a perfectly serviceable brand for your crowdsourced directory of “oh snap!” quotes, but that doesn’t mean it’s not going to be more trouble than its worth. I’m not suggesting that Zynga could just waltz up and take the domain from you—we’ve won similar cases—but you could easily spend as much money in such a fight as you could have buying a new domain in the first place.

“Be prepared to pay up for a good domain.” Fred thinks it’s unlikely you’ll find a good domain for less than $10,000, and that’s certainly in the range we’ve seen. It’s a wide range—we’ve been involved with sales ranging from hundreds to millions of dollars—but it’s an important data point to see an expert early-stage investor who is willing to send up to $50,000 of his money out the door immediately to get the right domain. You may not feel like paying for an intangible asset rather than productive man-hours at this point in your startup’s life, but if it’s the right domain, you will end up buying it, and it’s only going to get more expensive.

“Think about rent to own.” This is an interesting option that we’re starting to see more frequently, and it can be the most feasible option if the owner wants cash and you have very little to spare at the moment. It’s also good if you have a fairly tentative, non-descriptive brand that you’re working with, because it may lower the cost of rebranding; you only pay for the time you use, so if you find that bonzu.com just isn’t forging a connection with users, you can leave it behind more easily. That said, you might be able to get more than you paid for a domain in the end, but domain speculation isn’t core to most startups’ businesses; it’s likely not worth the distraction.

“Think about offering equity instead of cash.” You have far more of the former than the latter in the early stages, and the domain seller might very well be interested in taking the risk to get at the potential upside. I’m sure the original owners of facebook.com and foursquare.com, for example, wish they had taken (or had the opportunity to take) equity. If the owner is reluctant to take equity, you may be able to entice them with some kind of reversion provision—so that if your startup flames out and stops using the domain, they get it back—but be wary of incurring that obligation, and talk it through with your attorney before that becomes part of the deal.

“Find an intermediary.” This can be a key part of the transaction. Negotiating through an intermediary can prevent a rapid escalation in price from the seller seeing your clear need for the domain (or your clear ability to pay). Getting a lawyer with experience conducting these types of transactions involved will allow you to avoid common mistakes and let you minimize the distraction of the acquisition process.

As is often true on Fred’s blog, there’s a wealth of information in the comments on his post, so make sure to read those, too; there’s a lot of collective expertise in that community.

FirstShowing.com UDRP Fails to .net Desired Outcome

admin — Thu, 24 Feb 2011 17:02:51 +0000

The owner of FirstShowing.net filed a UDRP complaint against the registrant of FirstShowing.com, contending that the domain name had been registered in bad faith. (click here) In a case where the Complainant sought to use the .net version of a domain name to acquire the more commercial .com extension, the Panel found that, “[the] evidence does not indicate that Respondent registered the disputed domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to Complainant or to a competitor of Complainant.” The Complainant also failed to submit sufficient evidence from which the Panel could conclude that the Complainant had trademark rights in the domain name at the time that the Respondent registered the domain. Lewis & Hand represented the Respondent.

L & H Defends ScoutInvestments.com

admin — Fri, 18 Feb 2011 20:27:44 +0000

In the matter of UMB Financial Corporation v. Cynthia Galant, Case No. D2010-1855 (WIPO, Jan. 31, 2011), the three-member Panel unanimously ruled in favor of the Respondent in denying UMB’s claim of cybersquatting. Although the Panel found that there was confusing similarity between UMB’s registered SCOUT trademark, and the domain name, the Panel cited case law noting the differences between hedge fund and mutual fund trading, and held that, “we are unable to agree that Complainant has met its burden of showing bad faith registration and use based on the mere registration of a similar domain name for use in the financial services field.”

Clorox® Doesn’t Clean Up in UDRP

MelissaA — Fri, 20 Aug 2010 22:09:13 +0000

Under a split decision issued by WIPO, Lewis & Hand, LLP successfully defends the generic Spanish-language domain name cloro.com from overreaching claims of abusive cybersquatting by the trademark owner, with the majority of the Panel finding: “Businesses are entitled to register domain names with generic meaning and value as an investment and decide what to do with them later. They may use them for any non-infringing use, or sell them, as they see fit.” The Clorox Company v. Domains for sale, dba Netegg, Case No. D2010-0831 (August 13, 2010).

UDRP Complaint Up In Smoke

MelissaA — Tue, 30 Mar 2010 15:59:04 +0000

Lewis & Hand, LLP successfully defended 51 domain names registered during the course of a 5 year authorized distribution relationship in WIPO proceeding Storz & Bickel GmbH & Co. KG v. MSI Imports LLC, Case No. D2009-1769. See related coverage on Wired.com.

Paperless UDRPs Are Here!

MelissaA — Fri, 11 Dec 2009 23:05:52 +0000

WIPO, one of the primary domain name dispute arbitration forums, just announced that it will be requiring all UDRP filings to be made electronically, no hard copies required or permitted, starting March 1, 2010, with the option to file electronic-only or by paper through February 28. Not only is the change designed to speed up the notification process for newly filed complaints, the move to e-filing should significantly decrease the cost of prosecuting and defending UDRP complaints – as the expense of shipping documents to Geneva has a way of adding up – especially when opting for a three-member panel! At 50 megabytes total, the file-size limits should be generous enough to cover even the lengthy stack of exhibits that tend to accompany a well-documented case. And not to worry – to be sure proper notice of a dispute is given, WIPO will still take care of sending written notice of a complaint to the respondent’s physical address. Now if only the National Arbitration Forum (NAF) would follow WIPO’s lead – NAF is still penalizing UDRP respondents for failing to fax or mail hard copies of responsive papers and all exhibits for receipt by the forum on the due date.

Retroactive “Bad Faith” in Recent UDRP Decisions

MelissaA — Tue, 01 Dec 2009 16:01:51 +0000

Five UDRP decisions may signal a surprising trend. Following a position first espoused by M. Scott Donahey earlier this year, yet another UDRP panelist recently opined in WIPO Case No. D2009-1278, that “[t]here seems no reason in logic or in principle why the availability of redress [under the UDRP] should be limited to situations where bad faith is present at the time of acquisition of the domain name.” Of course, for most of the past decade, the basis for that position was the UDRP, itself, which by its plain language requires some showing of “registration and use in bad faith” – in contrast to United States federal trademark laws that only require evidence of bad faith use, like the Anti-Cybersquatting Protection Act (ACPA). In view of these recent decisions, it may be more likely for a registrant to be found to violate the UDRP based on a subsequent use (or non-use) of a domain name, even where the complainant does not allege that the domain name was actually registered in bad faith.

WIPO Pushes the Accelerator on the UDRP

melissa — Tue, 03 Nov 2009 23:40:54 +0000

WIPO has just announced that it will launch a fast track option for the Uniform Domain Name Dispute Resolution Policy (UDRP), which will likely become available in the first few months of 2010. The “fast track” is meant to give trademark owners and other complainants an opportunity to expedite the decision process for relatively straightforward cases. The new process will also be cheaper than a full proceeding, although WIPO has not yet published the fee schedule. A UDRP proceeding filed with WIPO currently takes from 45-90 days, from commencement to decision, and costs $1,500 for up to 5 domain names (single panelist).

A Paper-Free eUDRP

Brett — Thu, 09 Jul 2009 23:06:57 +0000

A collaboration between the World Intellectual Property Organization and ICANN aims to streamline the Uniform Domain Dispute Resolution Policy by introducing paperless “eURDP” filings. Advocates for reform of the process cite the difficulty of delivering hard, paper copies of complaints to global domain owners. While the proposal is in review stage, make sure to check your inboxes: UDRP is headed to PDF and the acronyms keep on rolling.