Yesterday, I wrote about the PHHH.com UDRP that is currently being mediated at the World Intellectual Property Organization. One of the interesting aspects of the case is that PHHH.com is listed for sale at Afternic with a $7k BIN price. I think domain names should temporarily be removed from domain marketplaces pending the outcome of the UDRP.
From my perspective, it does not make sense that a domain name in an active UDRP proceeding is listed for sale. Should the domain registrant lose the UDRP, the domain name would be transferred to the complainant unless a lawsuit was subsequently filed. With the outcome unknown, it doesn’t seem to make sense that the owner could sell the domain name in the meantime.
When two parties come to an agreement on a domain name sale, they are contractually bound to follow through. I don’t see how a domain owner could follow through with a sale if the domain name is lost in the UDRP. If the buyer doesn’t know there is a UDRP proceeding pending, they could take legal action against the seller.
Perhaps someone is willing to take a risk on a domain name that is subject to UDRP and buy the registrant’s stake in the domain name (and of course the risk/costs associated with the UDRP), but that type of deal wouldn’t be covered in a standard domain marketplace sale. I am sure this type of thing has happened, but I would imagine a contract for this is more complicated than most.
Interestingly, if a domain name is sold via marketplace while a UDRP proceeding is ongoing and the domain name is awarded to the complainant, the marketplace is likely the biggest loser. The deal could not be struck, and they would lose out on their commission.
In my opinion, it doesn’t make sense that domain names that are the subject of a UDRP proceeding can be listed for sale on a marketplace. It should be easy enough for the marketplaces to put those sales on hold temporarily until the UDRP is over.