We are seeing a large number of sales for domain names containing Trademarked brands on eBay and other site that offer domain names for sale or auction. Most of these names are positioned as “premium domains”, which typically sell for a premium price. Be aware that if you buy one of these domains, you could end up losing it.
Some of the hottest products on the market today are the iPhone and iPad. These innovative products are selling rapidly and as the demand for anything increases, so does the number of web sites trying to cash in on the buying frenzy.
We are seeing a lot of domain names on the market that include the iPhone and iPad names, which are trademarked. What unsuspecting buyers are not aware of is that any company who holds the rights to a trademark can use a legal process to confiscate any domain that uses their trademark.
While most of the prices for domains with trademarks are in the $500 or less range, we see some where the asking price is over $20 million. That leads us to wonder whether or not anyone is foolish enough to pay that high of a price for a domain name that can be taken away without compensation.
The part that is important is that no one actually owns a domain name. You pay for the rights to use it. While those rights can be transferred to another entity for a price, you do not have the absolute rights to a name if it infringes upon another company’s intellectual property rights, i.e., a trademark. An organization named ICANN (Internet Corporation for Assigned Names and Numbers) controls the distribution and assignment of domain names. You pay a fee to this organization whenever you purchase a domain name from any approved registrar. ICANN has a series of Domain Name Dispute Resolution Policies that allows a company with legitimate rights to a trademark to petition for the transfer of an infringing domain name to their possession.
When it comes to trademark disputes, the trademark owner almost always wins unless the issue is over a very generic use of words in a domain name. In other words, if a company managed to trademark “Soft Water”, they probably would not be able to go after every domain name owner who has those words in their domain. But in the case of Apple’s iPhone and iPad, their use in a domain very specifically refers to Apple’s products.
Here are few of the recent articles that we found regarding domains that have been confiscated by Trademark owners.
Microsoft Seizes 23 Domain Names
More companies are actively enforcing their intellectual property rights, so if you are thinking about registering a domain name that uses an embedded trademark for a hot new product, just keep in mind that when a domain name is confiscated due to trademark infringement or any other reason, the domain name hold does not receive any compensation or reimbursement for the price they paid for the domain.
Also be aware that there are several scams on the web where you receive an e-mail that looks like a legal notice that you are infringing upon someone’s trademark and demands that you transfer the domain to them immediately without compensation. The first thing to do if this happens is to verify that a trademark does exist and is assigned to the company making the claim. In the USA you can to that at the US Patent and Trademark Office web site. If there is any question about the validity of a claim, contact an intellectual property rights attorney.
