Responding to a Domain Name Offer

Like nearly any piece of property or other asset, almost all domain names are technically for sale for the right price. There aren’t many domain owners who would pass up on a high seven figure cash offer for a domain name, with the exception of developed businesses or very few exceptional domain names. If you sincerely have the ability to pass up on a $5,000,000 for a domain name, I congratulate you, and you can probably stop reading this post and go back to your bottle of 1926 Macallan.
For those of you who have more of a Budweiser taste, please continue.
The problem I see is the way some UDRP proceedings have gone recently, where domain owners can potentially be penalized if they receive an offer and attempt to negotiate a better deal. It seems that some UDRP panels consider an owner’s contemplation of selling a domain name a sign of bad faith. This is dangerous for domain owners, and I know it causes many people to think twice whenever an offer or solicitation is received. Just about everything in this world has some sort of price, and simply because a person would consider selling a possession doesn’t mean that they owned the possession for the sole purpose of selling it.
That said, I think domain owners might be well suited to respond to certain domain email inquiries and offers with an agreement to waive the right to file a UDRP or lawsuit if anything about the domain name is discussed. The person making the inquiry or offer would have to waive his rights to any future legal action before ANY discussion about the name can take place. Any person who is interested in buying the name should be willing to sign, and if someone isn’t willing to sign, it probably means they have ulterior motives, or perhaps they are just kicking the tires.
I am not an attorney, so this isn’t a legal opinion, but the point of this post is to discuss the question of whether this type of agreement would protect domain owners and if it would be a legally binding agreement. Since most domain owners would be willing to sell names in their portfolio for a price (even though that price could be sky high), it might be something worth considering before future negotiations.

Elliot Silver
Elliot Silver
About The Author: Elliot Silver is an Internet entrepreneur and publisher of Elliot is also the founder and President of Top Notch Domains, LLC, a company that has closed eight figures in deals. Please read the 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
  1. Thank you Elliot for posting the link to that UDRP decision. I found it interesting on many levels:
    1) He lost the name because it was fairly unique and had not been developed in 10 years. I’m now wondering if UDRP is now considering all parked names as undeveloped names.
    2) He replied to an anonymous offer. We NEVER reply to an anonymous offer. Unfortunately, most parking companies encourage anonymous offers.
    3) I would be hesitant to put an agreement asking a potential buyer to not go to UDRP. To most lawyers, that’s like waving a red flag in front of a bull. It may lead them to believe that you’re worried they have a legitimate reason to go after you.

  2. This is a brilliant blog, and I am glad you brought this to my attention. This blog is probably the most worthwhile one I’ve come across in all of my readings concerning domain ownership.
    Yes, I agree with the previous comment. The respondent in this case had not made any effort to develop the name and show “interest”. I think this is the key:
    “Complainant has made out its prima facie case by showing the existence of its registered trademark, its uncontested statement that it has not authorized Respondent to use that mark, and that Respondent is not individually or in its business known by the word “Michelman”. Respondent has not provided any basis to establish any right or legitimate interest. Its claim of “free speech” or a discussion forum on abortion issues is uncorroborated by any evidence.”
    In other words, the Respondent claimed to have an interest by virtue of the fact that he intended to build a website on abortion rights by using the name Michelman, a person associated with abortion rights. However, he never did this.
    This ruling is very profound, and affects all owners of parked sites. Thanks much for bringing it to my attention.

  3. Last week we picked up a domain in the drop that was the name of a famous female celebrity. Their lawyer phoned almost instantly and was extremely menacing on the phone to my business partner. They started by saying that we must hand over the domain and that they would pay nothing for it. The negotiation ended with them paying 20X what we paid for it, PLUS (and this is the best bit) – an autographed photo of said female celebrity.

  4. great post Elliot…I have seem some owners of very expensive domains put a temporary blog on them…thus in a few minutes its developed. You can then put a forsale sign in the corner…there should be no problems with this approach

  5. “Ten years’ nonuse without a demonstrable right or legitimate interest clearly amounts to use in bad faith consistent with the reasoning of Telstra”
    The Telstra case from 2000 was a classic cybersquatter yet in 2007 panelists still use this portion for bad faith. Apparently at least parking your names show some sort of usage. If you have a domain name you should park it or put under construction or something.
    If you can’t create a parking page that doesn’t infringe then you probably don’t want to own that name.

  6. Michelman is one of those decisions probably driven by very narrow facts that can be cited for much more disturbing propositions. My sense is that the Panel did not believe that the Respondent’s claim of legitimate use was credible. As a result, if he did not register to use in connection with a pro-women’s rights site, then he must have registered it with the bad faith intent to sell it. In the process, the Panel made some findings that stretch the boundaries of credibility themselves. Michelman is a last name. Last names start off as descriptive, under the law, and should be available for registration by the general public. Whether a last name is common or not should have nothing to do with whether a registration is legitimate or not. What matters is whether the registrant knew the domain name to be a last name at the time of registration, and registered the domain name because it was a last name. Similarly, passive holding, alone, should never be enough to constitute evidence of bad faith. There is no legal requirement that a registrant must develop a domain name into a Web site. Passive holding = bad faith only makes sense in the case of known trademarks.

  7. To me, the biggest issue in this matter was the non-use of the name. I think Respondent’s case would have had a substantial chance of success if the site had displayed information about the popular pro-choice advocate, for example, or, really, anything else unrelated to the mark. The decision’s note that “Michelman is not a common or dictionary word and it is a relatively uncommon surname in the United States. Respondent has no connection of any kind to the word Michelman,” does not really impress me. I think those things are relatively unimportant.

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