Are sellers forced to disclose a TM exists on a domain ?

[angel69]

When I was new we bought an acronym in auction and thought we had conducted due diligence as to whether or not the term was TMd. I just received an enquiry from someone who wants to buy it, I was ready to close. Then a 2nd guy contacted us he's interested but that he'd be getting it appraised. I haven't heard again from the 2nd guy. The 1st guy is still around and ready to buy, we agreed on a price. But while looking at some appraisals for kick I did a TM search also, and the acronym is TMd and it's a live one, the TM was obtained just months before I won it in auction, so when I acquired this acronym it was already TMd and I didn't know this until today

My parked page is totally unrelated to the business the TM holders are in. I also see that my acronym in the two other major extensions is developed, and each site is different w/different owners so that makes 3 people right there owning a TMd domain, without any of our pages/sites having anything to do with the TM owner's space. Had I not been fooling around thinking about appraisals & search results I would not know today such TM on my domain even exists

Do I have a problem if I simply expect the buyer to do his due diligence about TMs before he buys ? Or am I legally obligated to disclose I have knowledge of this prior to the sale ? They say "ignorance is bliss".....lol. I was more content not knowing about the TM before. But .....should I decide the same applies to the buyer and he's better off not knowing .....? To begin with, he may never have any problems with this domain if his use doesn't interfere with the TM holders' business. My buyer is an end user, not a domainer (.....or so he tells me) I'm just wondering if the burden is actually on the buyer to check for possible TMs before closing. Has anybody here had a similar case ?

I have a feeling the deal will fall through if I mention this to him (and he might never have any conflicts at all with the TM owners anyway, as long as he uses his domain according to the "fair use" doctrine found in TM law) But losing a sale is preferable to have to face legal problems later as the seller. The buyer doesn't know I did a TM search, I'm just not sure if I should let him do research on his own (instead of helping him which will work against me)...

:noidea:

 

[chipmeade]

Do you have to disclose it? No. I would not even worry one minute about it. There are trademarks for everything and tons of overlap. You can't control what someone is going to do with their domain. They (like you did earlier) need to do their own due diligence. But, if you have some sort of pending legal action, you will need to disclose or risk having the sale negated (with possible penalties) from some sort of legal proceeding.

 

[Biggie]

Do I have a problem if I simply expect the buyer to do his due diligence to see if there is a TM before he buys ? Or am I legally obligated to disclose I have knowledge of this prior to the sale ?



I have a feeling the sale will fall through if I mention this to him, and he may never have any conflict at all with the TM owners anyway, as long as he uses his domain according to the "fair use" concept in TM law. But losing a sale is preferable to have to face legal problems later on as the seller. The buyer does not know I did a TM search at all, I'm just not sure if I should let him do the research on his own instead of helping him, which will work against me...

Hi

since above is basically the "meat"...




you should ask yourself....

how would you feel, if someone sold you same domain, without divulging what you "now know" about it?


then after you bought it, you got a c&d letter for infringement.


would you blame the seller, or just suck it up as "Failure to Perform Due Diligence"?




imo....

 

[Gerry]

Q: Are sellers forced to disclose a TM exists on a domain ?
A: No, just like a car thief does not have to disclose the car he is selling is a stolen automobile.

 

[chipmeade]

Hi
you should ask yourself....

how would you feel, if someone sold you same domain, without divulging what you "now know" about it? then after you bought it, you got a c&d letter for infringement. Would you blame the seller, or just suck it up as "Failure to Perform Due Diligence"?

A better question might be; If you reached out and offered to buy a typo and the owner sold it to you, who would you blame?

Q: Are sellers forced to disclose a TM exists on a domain ?
A: No, just like a car thief does not have to disclose the car he is selling is a stolen automobile.

If a car is stolen, they do not own the car to sell. You have recourse with the thief to get your money back.

You are talking about an acronym. If you want to disclose the TM you found, feel free. If they ask you if you know of any TMs, you absolutely tell them. I just don't feel like you are compelled to. They approached you. Sounds like you are having second thoughts about not telling them so for you own peace of mind, maybe you should tell them but there is NOTHING unethical (nor illegal) about not telling them if they don't ask. The question was: Are sellers forced to disclose a TM. The Answer is 100% NO.

 

[Theo]

No, you should not have to disclose that for example, XboxOne.com breaches on a tm. It's pretty obvious.

 

[Biggie]

A better question might be; If you reached out and offered to buy a typo and the owner sold it to you, who would you blame?

although angel69 never said it was a typo....

an even better question might be:

if the OP discovered there was a TM on the domain prior to bidding, would he/she/ still purchase it?




though after re-reading initial post, if the TM was regged a few months before the auction and if the domain retained it's original registration date.....then it's a possibility the domain is older than the TM.



angel, did you check that?

 

[katherine]

You say it's an acronym so I suppose it's an LLL or something like that.
It's not a blatant violation unless maybe it's very famous like IBM.

What would be unethical is failure to disclose you've received a C&D for example.
A DNF member actually was booted for selling a TM typo after receiving a C&D but he failed to disclose the fact to the buyer.

It's a question of common sense (and ethics), it would be improper to sell any asset without disclosing possible legal issues, even the baseless claims which must be dealt with in some way.

 

[Gerry]

If a car is stolen, they do not own the car to sell. You have recourse with the thief to get your money back.

If the domain is not the person's property to own, then they are not authorized to sell property they don't own.

Don't get me wrong...I think most of us fall into this category of some (ahem) questionable registrations.

So if someone sells a domain that is "not his property" to sell to begin with, if you buy the domain and it is later seized or you get a C&D, do you have any recourse? Nope. None. Good luck trying to find the seller let alone get your money back.

The funny part to all of this is...look at how many threads on this forum someone has asked if there are any TM issues and the seller says no.

By the way, what makes you think you are going to be able to get your money back from a car thief? Do you think they are running a legitimate business let alone being a legitimate business person?

 

[TheLegendaryJP]

no

 

[jstewart]

Absolutely! Anyone who thinks its OK to sell a TM domain without disclosing is selling a lemon!.

My next question would be: Why are you trying to sell a TM domain?

 

[TheLegendaryJP]

Absolutely! Anyone who thinks its OK to sell a TM domain without disclosing is selling a lemon!.

My next question would be: Why are you trying to sell a TM domain?

Ok how can I put this, you are correct that anyone selling a tm domain that has been served a C&D is doing wrong, immoral whatever you want to call it business.

However there is absolutely NO moral obligation to disclose a tm on a name that you have never been served on or warned to avoid use.

To be frank, some domainers by tm names because they are tm names, if you follow me.

If we take a generic as an example, say DOG or HOUSEWARE etc should I only sell the name after disclosing the 456 tm records that exist and point out each one to the buyer?

Sorry, unreasonable to think yes.

 

[Vanster]

No, caveat emptor. But you'd have to be a scumbag to not disclose a C&D

All buyers should ask if there have been any C&D's on a domain. If the seller lies in writing, then you've got some evidence. The burning question is are you legally required to disclose a C&D?

A C&D isn't necessarily a deal breaker if the buyer plans to use the name for a different set of wares and/or services.

 

[Gerry]

When someone knowingly sells a TM violation or a C&D served domain and the new owner subsequently has the name seized or frozen, does anyone think the seller will refund the money?

Good luck with that.

 

[TheLegendaryJP]

When someone knowingly sells a TM violation or a C&D served domain and the new owner subsequently has the name seized or frozen, does anyone think the seller will refund the money?

Good luck with that.

This is exactly what happened here at dnf roughly 4-5 year ago if I recall. Many purchasers bought what appeared to be tm names and the seller had already been issued C&D's. So the buyers quickly lost those names.

Now while I understand the buyers took a risk it was still low down and dirty of the seller, we are talking thousands upon thousands of dollars here. That dnf member was banned and after trying to return was banned again. It is an extremely dirty move!

 

[amplify]

With issues like this, you're looking for regulation of an entire industry.

What if you were to provide TM documentation, proof of C&D, previous owner information, etc. Etc. With every transaction made through a brokerage firm or escrow for the sale to take place? It would be a disaster.

For the seller, it comes down to business ethics and a strong moral backbone.

With the buyer, it's due diligence to find out as much information on the name as possible before cash is exchanged.

A deregulated market is better in this industry IMO.

Compare domaining with real estate (disclosure of Meth lab, etc) and you'll understand.

 

[Theo]

Blatant tm violations make it hard for someone to claim no knowledge of the mark.

There are several 'xbox one' sales currently at Flippa, where I raised the issue. Flippa replied that unless the tm holder (Microsoft) complains, there will be no action taken on these auctions. Of course they are aware of the mark, so anyone buying these domains cannot claim lack of knowledge. If Microsoft were to step in after a sale commenced, the seller, buyer AND Flippa would all be in trouble.

 

[amplify]

It's not only Flippa that lets TMs slip by, GoDaddy does it around the clock.

 

[Fabbstar]

There are plenty of tm domains in use, with ranking websites, so why have these not been wrist slapped? Answer, because they compliment the tm business and are not riding the tm to simply make a quick buck. tm doesnt always mean law suit, its how you use the domain that determines your fate.

In answer to your q, its up to the buyer to do the necassary research and then use the dn in a non-conflicting way. YOU JUST OWN IT, SO SELL IT!

 

[angel69]

Thanks for the comments guys, I thought about this but my buyer seems to have walked away lol, no explanation, I didn't even get a chance to decide (to tell or not to tell...about my finding) Assuming he comes back your points were all really well made. It's an LLL.net btw and all major exts are regged (all different parties w/webpages having nothing to do w/the TM guys or simply parked, and my parked page is also different from all the rest) It's not a good acronym, its 1st letter is sub-premium limiting its use. The funny thing is the co that TMd it has a name having NOTHING to do w/the acronym, by reading the TM record I can tell they offered a service at some point that could've had those initials but it's just a guess, nowhere do they say what they intended to use the TM for, or the name of the intended product/service. The Google results aren't great, all over the place pointing mainly to the owners of the com & org, nowhere are the TM guys or their prod/serv mentioned, and it's not a known mark at all (Katherine's point).

ChipMeade/Vanster, you're right, sellers are actually not required (legally) to disclose this, it's a 'buyer beware' marketplace and the onus is on buyers to ask the right questions, there's also the point of so much overlap of IP used by so many people concurrently, and for all kinds of purposes, and on all kinds of platforms, cyber or brick. And most of it is not used with malice. Especially in the acronym space, they can be names of people, companies, products, etc, and in all languages. I bought the domain on Sedo in Nov 2008 and no one warned me there was some TM on it which was actually obtained in July 2008 (but the domain itself was first regged in June 1997 so when that co applied for a TM they had to know the domain had been in existence 11 yrs, biggedon's point) No one has ever contacted me for any TM issue, let alone send a C&D, and I knew before this thread I was legally required to disclose any C&D for any domain before I sold it, no matter how frivolous the C&D was. I just wasn't sure of my legal exposure if this guy bought the domain from me and found out later about the TM.

To biggedon's point also, any domainer might feel some guilt about not revealing this, and you would not like to be on my buyer's side and have me withhold any info at deal time... but where do we draw the line ? Who exactly is at fault here ? Sedo for selling me the thing when I was a noob ? (it was probably my first LLL.net and prices were high, mid $XXXs) Or the guy in Russia who was the actual seller ? (I still have the WHOIS snapshot lol, but no TM search record, we dropped the ball on that....) Or is it ultimately my buyer's fault because he simply never asked if there were any TM issues I was aware of ? BTW he still doesn't know I did this TM search after agreeing on a price and that it was done just by chance, and I also assume he has no knowledge of the TM but, he just may...and that's why he's stalling... ? funny, the day I started this thread I was to hear from him for escrow and he went MIA, a fluke ...? or is he a domainer in sheep's clothing who actually read this and put 2 & 2 together.... good thing I haven't lied here lol, what I said is all true. And no, I would not bid on a name knowing there was a TM on it, unless I was an IP expert knowing how to use a name w/o getting in trouble, too hard to do for anybody.

I wish I had sold him the domain not knowing there was a TM and then if he had confronted me w/this (if he found out) I would've been 100% clear but....that's not what happened. As I said had it not been for that other buyer talking about Estibot I wouldn't have done any searches at all, TM or valuation. I normally do not do a TM search before I sell, I do it before I buy but now I know I should do both. Like ChipMeade said there is nothing illegal (or even unethical) about not disclosing such things, because where would that stop ? Am I to search the Russian guy who sold it to me thru Sedo making sure he was 100% clean ? and all registrants since 1997 so I can close a perfect deal now ? David made a great point also, that the last thing we need is more regulation in domaining. I had enough in real estate in real life, it gets to a point of being nauseating what you have to do to exchange property in the US, Jesus.... ChipMeade also made a point about typos, if a noob buys a typo domain and gets in trouble who's to be blamed ? The seller ? or the buyer for being too green ? Or the auction site for listing it ? It doesn't end. It simply does not.

Most of you would fall in the middle, you'd feel better disclosing it but may decide the burden was on the buyer to ask the right questions. One thing is to own TMd domains and another is to buy a name when you're a newb and 4 yrs later you see this AFTER you've sealed a deal. So, JP/Vanster/Fabbstar, I'm all on board 100% of what you said. In fact (Vanster + others) you're right, even knowingly owning a domain where the term may be TMd doesn't mean you'll be sued, it's what you use it for, but in my case I couldn't even get that far ! lol, I was just not aware there even was any TM, as simple as that. The point the overlapping is just too much to control by any entity was also great

Theo/Gerry, I agree, good examples, and David, yeah, tell me about those marketplaces allowing listings containing TMs, and they sell, and a few sell well, noobs probably, lol. I remember recently seeing domains containing eBay and Facebook in them on GD, just to name some. And last, JStewart, I get your point but it is much more complicated than you make it sound, bro (why am I selling a TM domain, and anyone who doesn't reveal what I know now is selling lemons...), point taken but, what would you do if Sedo (of all places, high and mighty Sedo) had sold you a pricey LLL.net when you were a noob and you had found out there's a TM on it only after sealing a deal, and by pure chance, 4+ yrs after ? I know where you're coming from but of all comments this is the only one that says what I might be doing is plain wrong, maybe you'd tell the guy, and if he resurfaces or another offer comes along I just might decide to... but it's the sequence of how things happened, and how common it is for others to own these 3 letters (apparently w/o ANY conflict and for many yrs) in other exts, and seeing that the co that got the TM does not even have these initials, etc...aren't these mitigating factors in your book ...? and all others mentioned in both posts, think about it, you may find yourself in my shoes one day...things aren't always black or white....