Legal Threats Are Unwise in a Negotiation

It is unfortunate, but I regularly see UDRP filings that involve seemingly generic / descriptive .com domain names. This is only part of the issue because there are a lot of situations that are resolved privately. I have one piece of advice for  people trying to get generic domain names from domain name owners – making legal threats is unwise.

I am fortunate to not deal with legal threats on a regular basis. I  attribute this to the descriptive nature of my domain name  and the relative size of my portfolio. When a legal threat is made or implied though, I immediately cease a friendly discussion and turn things over to my General Counsel and sometimes outside legal counsel. This isn’t good for anyone.

If a trademark owner or their representative is making a legal threat as a negotiation tactic (ie “sell me a domain name for a price I deem fair or legal action will be taken“), it is unwise. I won’t negotiate with a proverbial gun to my head. Essentially, I am removing myself from the  discussion. It obviously makes it much more difficult to close a deal when the decision maker is unwilling to negotiate directly with the other party.

The other side effect of a legal threat is related to the first part. When I get my legal representation involved in a negotiation or other type of discussion, it costs my business  money. This sunk cost will most likely be added to the price of the domain name. If I need to pay someone a few thousand dollars to deal with an overreaching attorney or trademark owner, the cost of the domain name will increase.

I don’t take legal threats lightly. I assume that every threat will be backed by a willingness to proceed via the legal route. It is the nature of doing business in the domain space. That said, I think making legal threats as a negotiation tactic is unwise. It can add undue stress and would almost certainly raise the cost of the domain name.

Elliot Silver
Elliot Silver
About The Author: Elliot Silver is an Internet entrepreneur and publisher of DomainInvesting.com. Elliot is also the founder and President of Top Notch Domains, LLC, a company that has closed eight figures in deals. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest. Reach out to Elliot: Twitter | Facebook | LinkedIn

2 COMMENTS

  1. Excellent point! It’s only right that a generic domain owner raises their price after incurring costs for an unjustified legal claim. However, if a domain is a blatant TM or the owner knowingly had the intent to profit off someone else’s TM, they should just give it back.

  2. Sound advice.

    I don’t get many legal threats. But I do get a lot of “why won’t you accept my offer which is more than fair” statements.

    When folks threaten with suits, etc — that’s when I consult counsel.

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