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Responsibility of Auction Houses & Domain Registrars Regarding Legal Threats


As many of you read yesterday, the non-profit organization, Goodwill Industries International has sued the owner of Goodwill.com for alleged trademark infringement, after he won the name in a Namejet auction for north of $55k. This doesn’t come as a surprise to me at all. Case in point, one of my clients was a bidder in that auction, and when it was in the $25,000 range, he asked my opinion on the value. My reply was, “there’s a thrift shop like salvation army… could be TM risk if monetized that way.”

The surprise to me in this situation was actually what was found in the lawsuit pdf (also found on DNW). According to Goodwill Industries’ complaint, “Upon learning of the auction from Radia Holdings, Goodwill contacted the registrar of the domain name, Network Solutions, to attempt to prevent the auction from going forward, but was unsuccessful.”

Whether Network Solutions passed this information to its partner Namejet is something we probably won’t know. It also might be possible that the information may not have been sent through the appropriate channels at Network Solutions, and the issue died in the customer service queue. Whatever the case is in this situation, it bothers me that Goodwill Industries claims that Net Sol had information that would have rendered this domain name even more risky for a domain investor to monetize.

I read a post on Namepros where Snapnames VP of Engineering, Nelson Brady reached out to bidders on the JeniferLopez.com auction to inform them that Snapnames had received a notice from Jennifer Lopez’ lawyer regarding the name. Although the domain name later appeared to be registered to “domainqueue@gmail.com,” a company allegedly linked to bidder Halvarez, one has to wonder if Snapnames had or has a policy of informing bidders of potential legal threats.

As far as my client recalls, he didn’t receive any notice from Namejet while bidding on Goodwill.com. Of course one could argue that there are plenty of proper uses for Goodwill.com that would not infringe on Goodwill Industries’ trademark. Why would Namejet or other auction house risk dampening interest in an auction when there are plenty of ways it could be used without any problems? That wouldn’t make a lot of fiscal sense.

My question is this: what responsibility should a domain registrar or auction house have when they receive a legal threat for a domain name that is going to be listed for sale by them or a partner? I am sure domain registrars and domain auction houses receive legal notices all the time. They aren’t a judge or jury, so it’s probably not their place to provide legal advice, but should they make bidders aware of a potential legal threat?

Photo: http://www.flickr.com/photos/joegratz/ / CC BY-NC 2.0

Now’s a Good Time to Watch Snapnames & Namejet


I don’t really keep tabs on drop auctions, unless I am bidding on them. I also don’t generally place a bid on a domain in auction to watch it, even if there are many other bidders involved. However, Mike’s post, which has little to do with drop auctions, should make us more aware of what’s dropping.

With PPC down, companies are less cavalier about spending significant money on dropping domain names because they simply won’t be able to maximize the value with a parked page. For domain investors that develop or that buy and then target end users to re-sell, this is a big opportunity. Names that were selling for 4 figures are now selling for 3 figures, and there is less competition – especially for longer tail keywords. Some can even be picked up for registration fee after the auction ends.

In addition to the PPC slide, domain tasting has been virtually killed. This is causing more domain names to drop than ever before, allowing domain investors with a sharp eye to get deals. IMO, there are many great domain names that would be perfect for niche businesses, but they don’t get much type-in traffic. These types of names can be perfect for a quick flip to a targeted end user buyer.

I talked about a good deal I got on CabCompanies.com a while back, and every day, there are dozens of great domain names like this that would have sold for much, much more several months ago – or would never have even dropped. If you haven’t been paying attention to Snapnames or Namejet auctions, now is a very good time to do so.

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