Illegal to resell a domain name?

[Jaiem]

Can someone clear the air:

Is it or is it not illegal (at least in the USA) to sell for profit a domain name that you previously purchased?


Thanks.

[JTY]

It's legal, hence there are sites like Afternic.

[GregS]

No, it's not illegal...........but just to clarify things.......your not selling the domain to them, your giving them the right to use the domain until the next registration date. When we register them, we don't own them, we're not even leasing, because that would mean we could buy them for a lump sum at the end.

All we are really doing is renting the domain names for 1-10 years at a time......and your selling someone the right to rent that domain.

Yes, I know people are listed as "owner", but that is just the "owner" of the rental agreement.....and if you ever break their TOS (rental agreement), they can take their domain name back from you.

[Jaiem]

But if you transfer the domain to someone else, that is change the admin, billing and tech contact entries, isn't that a total sale?

[GregS]

Well, most people will call it a "sale"......i'm just saying that they won't "own" it, they will still have to renew their registration every year.

Oh, and your missing one huge contact, the owner contact!

There are 4 contacts:

Person or Organization Contact

Technical Contact

Billing Contact

Administration Contact


The Registered Owner is the most significant one......if I put you as a tech, admin and billing contact, I would still "own" it because i'm still the Registered Owner.

[yourdomainhost]

Originally posted by Jaiem
But if you transfer the domain to someone else, that is change the admin, billing and tech contact entries, isn't that a total sale?

What you're selling is your rights to use/modify/renew/cancel/etc. the domain name. That qualifies as a sale, same as if you sold a right-of-way, easement, or mineral rights on somebody else's property -- you don't own the property, but you own certain rights to use the property.

James

[akashik]

I liken it to software...

You can sell your second hand software to other people as long as you relinquish the right to use it yourself. It's not the program you buy, but rather the licence to use it. By selling software you don't use anymore you accept that the license is tranferred, and even though you *may* have it on your system, you no longer have the right to use it.

Domain names aren't a real product. They're little more than street addresses when it comes down to brass tacks. If you look at it more along the lines of paying 'rates' for your home then domain buying makes a lot more sense.

Hmm.. maybe that's two totally separate anologies but I think they work :D

Greg Moore

[Jaiem]

I've always seen it as buying prime undeveloped real estate intending (hoping) to resell it. You're under no obligation to develop the land before selling it. As long as you haven't registered a well known company or band name I don't see anything wrong with registering a name and trying to sell it.

[James]

I think your safe unless you registered an existing business name. If you then try to sell for a profit you will have a problem.

There have been recent examples in Europe where people have set up domains that are very similar to the other larger companies:

e.g www.lessbuyit.com instead of www.letsbuyit.com the courts forced the smaller company to give up the domain.

[binaryman]

Under the AntiCybersquatting Consumer Protection Act (and consistent with most Registrar's stated policies) if you register a domain name in bad faith, or if you have no right to the name and you register a name for the purpose of hijacking the domain from its rightful owner and profiteering on the transaction, it is ilegal.

However, if without bad faith, you unknowingly and unintentionally register a domain name that you later decide to sell, you can make a profit.

Even large companies like Proctor & Gamble do this (in June 2000, P&G placed nearly 100 domain , names including dry.com, nails.com, and beautiful.com for sale through the Great DOmains Site.

Notwithstanding, persons who register large numbers of domains and who offer to sell them for more than was paid have been viewed as cybersquatters in many reported WIPO Arbitration decisions, on the basis that such action amounts to bad faith.

For more information, visit our site:
http://www.namesavers.net

[James]

When you can spare some time, check out http://www.dnlr.com/ there are some excellent cases listed. You wouldnt believe some peoples nerve :)

[Jaiem]

Clearly if you try to register www.Coke.com and you don't do anything with it (no site developed), I think it's clear you're trying to hold it so Coca Cola will pay big bucks for it.

OTOH, does a business have an automatic ownership right to their business and/or product names as domains even without having registered them? Under all possible extensions?

And consider a company like Procter&Gamble. They have registered all kinds of names like soap.com, handcream.com, etc etc and I've heard fight hard to get similar names from others who own them, claimin they descibe their products and therefore infringe on them.

[Phoenix]

makes the rules...

When it comes to who among more than one organization that use a similar trade name has the right to use the domain name, it's usually the company with the most money and the better lawyers.

Some years ago, an obscure pub in a village somewhere in the UK owned by a family called McDonald that had been in business for hundreds of years under the name McDonald's, registered a domain name- mcdonalds.com, and put up a home page about the pub.

They were soon taken to court by of a much newer but much larger company named after a clown.

Both businesses used the same name to trade under, one had been using it for much longer, and should have had a stronger claim to it, but the other had the vast financial resources of a global corporation to draw upon.

As in many other arenas, big business doesn't fight fair when they perceive a way to increase their revenues or market share with a domain name that might pay off in the future.

[dotcomguy]

Originally posted by Jaiem
<SNIP>
OTOH, does a business have an automatic ownership right to their business and/or product names as domains even without having registered them? Under all possible extensions?

If they hold the trademarks, then yes.



And consider a company like Procter&Gamble. They have registered all kinds of names like soap.com, handcream.com, etc etc and I've heard fight hard to get similar names from others who own them, claimin they descibe their products and therefore infringe on them.

This is subjective. What is bullying? Paying $1000 instead of $1 Million? I'm not saying I agree with it, but I'm not saying I disagree with it either. Considering that most of us can open our bathroom cabinets and see that everything (toothpaste, soap, deodorant, shaving cream....the list goes on....) in there is made by P&G, I can probably understand their position. ;)

[Jaiem]

I was just using P&G as an example.

Suppose you own the domain BestPizza.com and someone comes along and says "That's our slogan! Give it to us!". Assuming you didn't know (and IMO they would have to prove that you did), do you/should you have to give it? Or you own SoftSheets.com and a bed sheet or blanket company says it's too much like their product name. Again, do you have to give it up?

The point is, registering a well known brand name is one thing. But registering a conceptual name, their is IMO no possible way for you to know if some company somewhere has a product or description similar. If the other party feels it's so important to their business image they should have splurged for the $20 to register it themselves! First-come, First-servered should be the law of the land on it.

[dotcomguy]

For the most part, I do agree with you. It is difficult for somebody to know every slogan out there. And yes, if it was so important to the company, they should've registered it themselves.

The problem I see, is too many people claiming they have been bullied by "big business" to hand over domains, when in reality that is what they were hoping for all along (well maybe not exactly, they were most likely hoping to get rich and retire - but that didn't happen so now it's time to whine about how big business always gets their way, blah, blah, blah.....). If you look at a lot of these situations, most of these people weren't doing anything with the domain, they knew what they were doing when they registered it.

Anyway, this is a topic for another post. I think were getting off the original topic here.