Let’s say you just closed a mega-deal. You’re pretty amped because the right buyer came with the right offer, and you closed a fantastic deal on a domain name. You may or may not have signed a non-disclosure agreement covering the negotiation and purchase price, but the company that bought it announces that it acquired the domain name from a cybersquatter. Not cool.
I’ve seen quite a few news reports, first person acquisition stories, and other types of articles that discuss how a company acquired a particular domain name. While most presumably won’t divulge confidential information, the company principals might not be prevented from writing about the seller. Perhaps they were nice when negotiating for the sake of closing a deal, but behind closed doors, they are upset they had to pay a “cybersquatter” or someone who was “domain hoarding.” Whatever the case may be, you should protect yourself.
When I first wrote about non-disclosure agreements, I missed the mark a bit. Greg Shatan suggested that a non-disparagement clause is what should be added to prevent the buyer (or seller perhaps) from speaking or writing negatively about the other party (you or maybe me). This should make them think twice when they are characterizing the other party in subsequent public announcements or news.
Having someone call you a cybersquatter or domain hoarder may not seem like a big deal, but it can be problematic. It could be frustrating to someone who doesn’t want to have that negative association with their name indexed in Google or other websites. It could also potentially be damaging if a company files a UDRP or cybersquatting lawsuit on a domain name in the future and they cite the “cybersquatter” reference. Yes, that is very unlikely, but why let it potentially become a problem.
Ultimately, nobody wants to feel great about a domain sale and later learn that the buyer said something rude or disparaging. Adding a non-disparagement clause could potentially alleviate that situation, and it shouldn’t be too difficult to add to a sales agreement.
Thanks to Greg Shatan for the suggestion!