Court Order Should be Required for Domain Lock in a Business Dispute

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For the last several days, the most actively discussed domain industry topic is related to GoDaddy locking some of Brent Oxley’s valuable domain names, including Create.com. This was done as a result of a legal dispute filed in India. If you have not been following, you can read the NamePros thread or the original article on JamesNames.com to catch up on what reportedly happened.

GoDaddy VP Paul Nicks posted an update last night on NamePros, writing in part:

“As we’ve started to have these conversations, we’ve identified a couple of things that could have gone better in Brent’s case. First, we erroneously told Brent that a court order was issued when, in fact, we were served with a legal complaint, starting a lawsuit. This doesn’t change how we would have or did act, but it was inaccurate to describe it as a court order. Second, we needed to do a better job in proactively notifying Brent of the domain locks on his domains. We’re taking these learnings and applying them to our procedures going forward.

In my opinion, domain names should almost never be locked at the registrar level unless there is a court order or other legal obligation to lock them. From what I have read, that does not appear to be the case with the current situation.

Domain names aren’t a physical asset that can be hidden. Domain names are essentially entries in a database maintained by various domain registries. For instance, Verisign is the company that operates the .com registry. There is nothing a domain registrant can do with a domain name that could prevent it from being locked if a court orders that to happen.

In legal disputes, there are often legal issues at hand that could be interpreted differently by courts in different jurisdictions. Taking the rule of law out of it, there are also issues that may be interpreted differently by people of different backgrounds or cultures. Something may appear clear cut to me, but someone else may see it totally differently. One job of the court system is to figure out what happened and rule how things should be resolved. I don’t think a registrar should make a judgment on this when the result will harm its customer who is in the business of selling domain names.

If business person 1 sues business person 2 and domain names are involved, my feeling is the court system should ultimately decide what happens to the domain names. If person 2 is aware of the litigation and sells or deletes the domain names that are in dispute before the case is resolved, person 1 would have legal recourse to recover the domain names or recover adequate compensation should litigation end favorably for person 1. Person 2 would be on the hook with person 1 and whomever holds the disputed domain names if they were sold. That is a legal risk person 2 would need to manage.

My assumption is the legal language in GoDaddy’s Terms & Conditions that allows the company to lock domain names is both to protect GoDaddy and also to protect registrants to an extent. It gives the company the option to make a judgment call in the event something egregious happens to a domain name that is indisputable. For instance, if a small business customer has a domain name stolen and the theft is obvious, GoDaddy can lock the name and point to this clause to prevent it from being sold or transferred while the registrant takes the actions necessary to regain control of the domain name.

Getting back to this particular case, I am not a lawyer or a legal expert, but I don’t understand why GoDaddy needs to lock the Oxley domain names without a court order or other legal obligation. I don’t think the registrar should be tasked with evaluating the merits of a business dispute and lock the domain names while litigation is pending unless the company is legally obligated.

One of the results from this now public dispute is that it seems evident that GoDaddy will lock up domain names that are subject to litigation. This opens the door for others to do the same or threaten this action knowing it could cause harm to an investor. This may be a relatively small risk, but it could pose massive problems if an investor has valuable domain names locked up for an extended period of time.

In my opinion, I think GoDaddy and other registrars should keep the language that allows them to make a judgment call, but they should only do so when the situation is very obvious. I have read the various threads and articles about this case, and while I understand there is a business dispute, I think the legal system, which has already been engaged, should determine how this is resolved. I also think GoDaddy could have done a better job of communicating with its customer, but that is a different story and already acknowledged by the company.

26 COMMENTS

  1. Great post, Elliot! Agreed. Let’s hope that we all learn more in the days ahead. It seems that GoDaddy’s ever broad and ambiguous policies are finally coming home to roost.

    While I think we can all appreciate that Paul Nicks is taking the time to respond, I do think it’s very problematic for him passively insinuate to GoDaddy’s customers and shareholders that they’re absurd conspiracy theorists, merely on the basis that they’re concerned that there might be an ideological component to some of this mess. In this divisive climate, we’ve seen people canceled for a lot less, and without having all of the facts, it’s simply not out of the realm of possibility until we learn more. Given everything that we’ve seen over the past years, it’s a very logical and reasonable concern (not a lunatic, far fetched one). Paul also suggested that GoDaddy’s legal department, despite being directly involved and receiving communications from Brent, that they couldn’t “possibly” know who Mr. Oxley is. That’s just a gross and likely inaccurate assumption on Paul’s behalf.

    Let’s hope that differing ideologies are not any part of this fiasco and this is merely the result of terrible policy. Perhaps GoDaddy will learn from this, over time. However, as long as they’re continually and overtly inserting themselves in social justice issues, they’re going to continue to have a large % of their customer base that will accuse them of foul play or having bias against certain individuals. They’re doing this to themselves. GoDaddy (and other tech companies) truly need to stop virtue signaling while we’re simply trying to conduct business.

  2. They only way to change GD is not to do any business with them and inform others too esp small businesses to MOVE AWAY from GD.
    I have written to Wired.com,NPR, geekwire.com,Fox News about this issue and hopefully they will publish this article.
    If it comes out from Wired.com, all hell will break loose

    Never understood how someone from outside USA can get your property with just a piece of paper that is not verified…and not even in English. GD is just an enabler too and must be held accountable.

    Extortion and Scam at the finest!!

  3. Domains are Internet REAL ESTATE, your property-your house and even the President of the United States can’t just take your house without any notifications and how the hell can someone from outside USA “steal” your property without any due notice!! and not even in English and not Even in Person…..

    • From a legal perspective, I do not believe you are correct stating that domain names are considered property in most US jurisdictions.

      • Is your car your property? Is your microwave your property?
        You bought them with your hard earned money.
        So what the difference with Domains?
        Does it have to be a physical asset to be considered a property?
        Is your blood your property? How about your DNA, your saliva , your poop?

          • Many domainers including you refer domains as the “Real Estate” of the internet.
            If domains are not your property, then what it is…then who owns it?

            You bought it, you own it, it is your property, legally you own it!!

            What so difficult to understand…Capiche!!!

          • Saying a domain names is “like” real estate is different than saying a domain name is actual property in the legal sense. Suggesting domain names are like real estate is a way to draw connections to something many people are familiar with. You seem to be talking in the legal, property-rights sense, and when I have mentioned it I am using it more as an illustrative comparison.

  4. If lawyers did not get involved – domains would have no value.
    the more that lawyers get involved – the more valuable the domains that cannot be strong armed away.

  5. did not see your comment BullS***
    Every deal with GD – I mean every deal – they always figure out a way to fuck it up in some capacity with all their bureaucracy complemented with their exceptionally soft and small genital areas !!!

  6. I want to thank JamesNames and DomainInvesting for opening up this “unprofessional erratic ” issue dealing with GD and others like DG,DSAD and..you know who you are…won’t dare to express their opinions because they are directly/indirectly “paid” by GD affiliate marketing…..you are being sold out!!

  7. I think Godaddy is messing with wrong guy by messing with Brent Oxley. I hope he uses some of his cash to bring a solid legal defense on GoDaddy. Hope this brings a lot of media attention so GD or any other registrar doesn’t try to pull something like this again on their users.

  8. What I am afraid of and you all too is that if GD can take Brent’s million $$$$ domains, GD can take away my intellectual property of my billions$$$ domain “BullS” in the middle of the nite while I am sleeping.
    What goes around, comes around to bite you in your A**ss even though it is covered.

    Be careful what you wish for…

  9. Agree. GoDaddy is very much in the wrong to be locking names just because a lawsuit was filed. If a judge has not ordered the names to be locked then they should not be locked.

    I wonder if Brent Oxley will now sue GoDaddy for damages relating to that.

  10. By the time you realize what GoDaddy really is.. it will be too late. This might be the dumbest planet in creation to not recognize the degree by which conservatives and Republicans are being actively targeted. When they are chopping your heads off in the street, reflect on those who chanted conspiracy theory and marginalized your voice all along the way. Nothing to see here folks… when even our President can’t remember his wife’s name. I’m ashamed of America and what it is rapidly becoming.

    • While right now I do not know how your comment fully relates to this matter because I have not yet gotten up to speed on all the particulars, I would like to say this:

      1. In general, aside from this entire matter involving GD itself, you couldn’t be more right.

      2. But, and this is a very big “but”: I want you and others to know that the vastness and depth of the “cancel culture” suppression that has long been underway now and has been turned up past “10” to the “11” setting since Biden and the Democrats took over Congress and the White House extends FAR beyond only conservatives, Republicans and the “right.” In fact, from the quantitative perspective it may even greatly exceed what is being done to suppress so-called “conservatives.” That’s the part you normally don’t hear about unless you know where to look.

      And here’s where the ugliness takes an ironic turn: when it comes to issues both sides of the aisle care about the most, such as never ending war and foreign policy, even the so-called “right” has similar censorship and suppression goals despite what you see now.

  11. GoDaddy did the right thing in locking the domains, as there is a dispute. It makes it much more difficult to get domains back to the rightful owner when domains are transferred out to another registrar.

    When we receive a report of a domain name theft, we usually get in touch with the registrar where the domain is currently located–and request that it be locked until the issue is resolved. That’s the right thing to do in most cases.

      • Agreed, doesn’t look like there’s no theft. But if there is a dispute, wouldn’t it be better to just lock those domains temporarily until the dispute is resolved?

        The point of the lock would be to make sure that they’re not transferred out to another domain registrar or sold to someone else. If changes are made (sold to someone else or transferred out), it become more of a mess since more parties become involved.

  12. I’ve been too busy to find out the details of this matter lately, but off the cuff it sounds like GoDaddy is in the wrong and should be sued as Snoopy mused above. When I get a chance I will get up to speed on the particulars and probably weigh in some more.

    • PS: And I don’t say that lightly either. It sounds like GoDaddy is really, really, really (yes – really) so egregiously in the wrong…

  13. Okay, Okay – I think I’m sufficiently up to speed on what happened now, and as a person with considerable relevant life experience, here is my assessment:

    Everyone at GoDaddy responsible for this disgusting Kafkaesque action has to be, at best, some of the most idiot imbecile, and at worst, some of the most idiot imbecile sociopath – people – on the face of the earth, in matters of this kind.

    And this, sadly, is just the time in American history where unfortunately you can’t even be completely surprised this kind of deplorable reprehensible evil and folly would be taking place.

    Oxley should be suing for far more than just unlocking the domains, and I sure hope he does (or is).

    Do make sure to see the Mar 4 JamesNames post among other things if you haven’t yet.

  14. GoDaddy’s behavior – in this, and other actions relevant to domain portfolio owners – ie latest lack of responsiveness: failing to provide/fix whois lookup records absence in domain manager for over a month ! (“our developers aware/working on it” excuses for over 30 days) – has entered the ‘Big Tech’ league – treating its customers and other stakeholders with the disdain of other ‘Big Tech’ players currently under much greater, and welcome scrutiny by regulators and legistlators ….Marketplace solutions may more likely to have an impact; perhaps time to follow Brent over to NameCheap?

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