buying/sell a domain without knowing name is trademarked

domainquestion · 10-29-2002, 08:05 AM

If you buy a domain that turns out to be trademarked and for some reason the trademark was not listed in uspto.com or other online database, can you be sued for buying the name in bad faith?

If someone asks you how much you want for a domain name, the name not listed as being trademarked in uspto.com, and you give an amount that you want for the domain can the person then sue you for cybersquatting if you had no reasonable way of knowing the name was indeed trademarked, either in the U.S. or elsewhere, if it turns out in the end that the name was trademarked?

Thanks

**RON2** · 10-29-2002, 01:32 PM

Yes, of course you can be sued for anything almost anytime.

I have been through the process before where a "trademark holder" brought a multi-million dollar lawsuit against me for allegedly violating their "common-law trademark".

A "common-law trademark" is another name for a trademark that is unregistered, but has gained recognizability with a particular company.

**Ari Goldberger** · 10-29-2002, 02:10 PM

These issues are very fact intensive and depend on the specific domain name and trademark. Just because a word is contained in a registered trademark does not mean that someone else cannot use it -- in a domain name or otherwise. A good rule of thumb is that if the word is a common word or descriptive term, anyone has the right to use it or register, buy or sell a domain name containing it -- except it should not be used in a way that attempts to trade off the mark. For example, you could use apple.com for many purposes, but not for computer-related purposes. In analyzing whether or not the domain name can be used by a non-trademark holder in good faith, ask yourself whether the name would have any value, but for the existence of the tradmark. If the answer is yes, than it can be used in good faith. Regarding the sale of a domain name, one should always be cautious in these situations. A trademark owner will often allege that such a sale constitutes bad faith, regardless of whether it, indeed, does. There have been several UDRP decisions which have held that it is entirely ok to sell a common word domain. Nevertheless, I believe it is best to be cautious and avoid offering names for sale. Wait for a buyer to come to you.

domainquestion · 10-29-2002, 03:17 PM

Do I have to worry that an owner of a trademarked domain can ask me how much I want for it just so he can take the response as evidence in a suit that I tried to cybersquat (even though I didn't know and he didn't tell me it was trademarked)?

domainquestion · 10-29-2002, 03:24 PM

Do I have to worry that an owner of a trademarked domain can ask me how much I want for it just so he can take the response as evidence in a suit that I tried to cybersquat (even though I didn't know and he didn't tell me it was trademarked)?

domainquestion · 10-29-2002, 03:27 PM

Sorry about the double post. Bit of a mystery how it happened. Will be more careful in future.

**jberryhill** · 10-29-2002, 09:15 PM

"Do I have to worry that an owner of a trademarked domain can ask me how much I want for it just so he can take the response as evidence in a suit that I tried to cybersquat (even though I didn't know and he didn't tell me it was trademarked)?"
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Absolutely. You need to be particularly careful of solicitations that ask "if you would be interested in transferring the name" but which do not expressly state an offer to buy the domain name. Part of the "gotcha" game that some people play is to claim that the idea of selling the domain name originated with you, so that you cannot claim you were merely responding to an offer to buy the domain name.
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Always trace the IP address in email that you receive from Yahoo or Hotmail, as the originating IP is included in the header of Yahoo and Hotmail email messages.
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If you find out that the person pretending to be interested in buying the domain name was, in fact, a lawyer, then check out the professional ethics code in that lawyer's state at www.legalethics.com , and read the section on "Communications With Third Parties". In most states, it is a serious breach of ethics for an attorney to contact you in a representative capacity and to (a) make a material misrepresentation of fact or law, or omit to state facts to make the communication otherwise misleading, and (b) fail to identify him/herself as an attorney acting in a representative capacity.

**HOWARD** · 10-30-2002, 07:43 AM

The short answer to your question is - never quote a price!
Valuation of domains is basically what an interested buyer is willing to pay for them and NOT what you would like to get for them.

Always let the buyer make the first move when it comes to price. Never fall into the trap of answering the question "what do you want for it?" It can be used against you in a UDRP or ACPA action and you might be underpricing the domain as to what it is worth to the buyer and what he would be willing to spend to obtain it.

domainquestion · 10-30-2002, 08:15 AM

Wouldn't a court or arbitration panel ask the trademark holder if he informed the domain owner that he owns the domain name before asking for a price?

What happens if the trademark owner offers an amount and you refuse (without being informed or knowing that the trademarked existed), is that in itself evidence of cybersquatting?

And what happens if you agree to the offer of a trademark owner for the domain name and instead of paying the amount he takes your agreement as evidence of cybersquatting? Can he do such a thing?

If it's not a famous trademark and/or it's not listed in uspto.gov how is a domain holder supposed to know that the name has been trademarked already? Would a court or arbitration panel say "well you should have know anyway"?

**HOWARD** · 10-31-2002, 07:21 AM

An arbitration panel doesn't ask the Complainant anything. there is very little, if any discourse between the panel and either of the parties. All they usually do is review and act upon the submissions.

A court DOES ask questions and one of the pertinent ones would be whether a C & D letter had been sent and put the respondent on notice of TM infringement.

As to your 2nd question - a refusal to sell a domain to a TM holder at a particular price is not evidence of cybersquatting.

However, there is a case pending in Federal Court in Utah where the domain holder refused to sell the domain at any price and the Complainant alleged that the domain holder was extorting money from him - the Court found that the allegation of extortion was sufficient to give the Court jurisdiction over a non-resident domain holder.

3rd question - If a TM owner makes an offer to buy a domain at a certain price to which the domain holder has agreed - any attempt to claim cybersquatting by the TM holder will be considered fraud as the offer upon which the domain holder acted was not genuine.

4th question - A search of the USPTO will generally protect a domain holder from the allegation that the domain was REGISTERED (but not necessarily used) in bad faith. There have been exception, however, especially if the alleged TM IS somewhat famous.

**jberryhill** · 10-31-2002, 07:55 AM

There is also at least one UDRP decision in which the Complainant successfully argued that rejection of an offer was based on a desire for a higher offer. There are quite a few recurring UDRP issues which have panelist-dependent outcomes, and can turn on how well the situation is explained. Legal argument is often about persuasion. If there were clear right or wrong answers, then there wouldn't be much of an argument on either side.

The "truth" does not always win. It would be nice to be able to tell clients what the outcome of a dispute will be. The only time an outcome is assured is when the parties agree to one. When the dispute is in the hands of a panelist, judge, or jury, then anything at all is possible. What is probable, on the other hand, depends on the credibity of the evidence and the persuasiveness of the arguments.

One of the advantages that folks like Howard, Ari, and I have is that it is usually the case that a UDRP complaint is prepared by an attorney who has never prepared one before, and is not as deeply familiar with relevant prior decisions. We also share information about interesting decisions so that we are prepared when any of several recurring issues is at hand.

On the point of the complainant making an unqualified offer to buy a domain name, as opposed to an assertion of right and an offer to settle, an argument can be made that the offer itself is an admission that the domain registrant indeed was in possession of a right that was subject to a negotiated sale.

The newby complainant faces a dilemma which they often resolve wrongly (from their point of view). On the one hand, they want to obtain evidence that the domain registrant was merely trying to sell the domain name to them. On the other hand, they know that if they raise a legal issue and offer to compromise, then the correspondence is inadmissible as evidence. So, they will often opt for the first approach, which leaves them open to the argument that they have made an admission of right on the part of the domain registrant.

If anyone else here shares my enthusiasm for handicapping horse races, then you understand the difference between making a solid analysis based on the data in the form, and cashing a ticket at the window after the race is over. Two of my picks in the Breeder's Cup races at Arlington were Domedriver and Landseer. The crowd disagreed, and Domedriver paid $54 to win. On the other hand, Landseer tragically broke a leg in a collision coming around the turn into the stretch, did not finish, and was euthanized immediately after the race. It was a good bet, but ended up as far from the cashier's window as one can be.

That's the difference between having a good argument and winning.