Legal Threats Are Unwise in a Negotiation

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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.

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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