A quick definition here…
By a trademarked domain, what I mean is a domain name that is clearly the name of another company. For example, if I registered facebooknews.com, then it is clear that I am taking advantage of Facebook‘s brand and actually misleading visitors into thinking that I am in some way associated with Facebook.
The general advice given is not to do it. Putting moral issues aside, you can get sued by the domain name holder. They can also bring a UDRP (The Uniform Domain-Name Dispute-Resolution Policy) which means that they appeal to ICANN to take ownership of the domain name.
So, if you register another company’s name or similar to another company name then there is a real risk that you will end up losing money on your domain name investment.
However, the company bringing the complaint needs to prove that they own the rights to that domain and that you registered it in bad faith – ie. to make money by selling it back to the company.
Needless to say, I have simplified the whole process and law and this should NOT be taken as legal advice…
Often, it isn’t so obvious. For example, I may have registered a domain name in 2010 in order to use it for my website. At the time, there was no company with that name. Then a company comes along and names itself that name in 2015. They can fight for that name. However, there is a strong likelihood that they would not win even if they have the trademark as you are already doing business or have a genuine intention to do business under that name.
If a company files a UDRP under false pretenses, then that is called reverse domain hijacking.
As always, with the law, there are many grey lines.
I have personally sold a number of domains which are the name of a company that ceased doing business. If they are no longer doing business, then does the law still apply that they have rights (or the liquidator has rights) to that domain name? How about if they have spent time and money building up that brand which you are then going to use for your own company?
The domain I recently sold was similar in concept to greatshoes.com (different words and products). The company name was Great Shoes (conceptually) and had been liquidated a couple of years earlier and its stores were shut. It is likely that the domain expired due to the fact that no one was now working at that company and any company that had acquired items in liquidation may not have even been aware of the domain name expiration.
A few months after I purchased it, I had a BIN on afternic for $x,000. I don’t know who the buyer was. It could have been the current owner of the brand. Or someone totally different who wanted to use the credibility of the brand in order to apply to their own shoe business.
I am assuming that if the new owner is from the original company, then they either didn’t know about UDRP or they realized that it was probably cheaper just to purchase the domain name at the BIN price rather than get into a potential legal battle (even though they would probably ‘win’).
Neither the .com (which I sold) or the .co.uk (it was a UK business) are currently active. Will report back if anything changes….
Lastly, how do you value a Trademarked domain name?
The positives is that it has brand value and probably existing SEO value. The downside is it can be seized from you.
Unless you are pretty certain that it won’t be seized from you, I would be very cautious building out a website that you could potentially lose.
If you are buying it as an investment hoping that someone else may purchase it from you, then there is a reasonable chance that you will sell it or hold it long enough that your fear of seizure will be reduced. So, it depends on how much money you are prepared to risk. I also think it depends on how much a company would willingly pay rather than having to go through a potential legal hassle.
My personal limit would be about $1,500-$2,000, depending on the multiple you are going to sell it for and the percentage chance that it will be seized.