Buying a disputed domain name: price

Many domain name disputes settle by agreement: the domain name registrant agrees to transfer the domain name to the person making the complaint, often in exchange for payment. I am sometimes asked what price should be paid.

My answer usually depends upon three factors: (i) the probability of being able to recover the domain name through arbitration (or court) proceedings; (ii) the probable costs of doing so; and (iii) the value of the domain name to the complainant.

For example, suppose that a competitor of ours had registered <seqlegal.co.uk>.  We might assess our chances of recovering the domain name through the Nominet dispute resolution services as very good (say 90%).  We would know that the costs of recovering the domain would likely be the basic Nominet fee (£750 plus VAT) plus our own time spent preparing the complaint (which for the sake of argument we can value at £750 plus VAT). Taking into account each of these factors, we would be investing £1500 plus VAT in a 90% chance of recovering the domain name.  So, subject to my comments below, £1500 plus VAT would seem to be a reasonable price to pay for a purchase of the domain name (i.e. a 100% chance of recovering the domain name).  If however the chance of recovery was lower, or the costs of arbitration proceedings were higher, the level of a reasonable price would rise. The value of the domain name may also be relevant.  If <seqlegal.co.uk> was critical to our business, I might not want to risk a 10% chance of not recovering the domain name.  In those circumstances, I might pay a premium for the 100% chance of recovering the domain name. Of course, in many cases settlement may be undesirable irrespective of price.

Brand owners may be reluctant to reward a cybersquatter, and a payment may encourage other cybersquatters to try their luck.

Comments

Hello, I am interested in buying a domain name lets say from http://www.sedo.com where you place bids for the domain name. If i bid for 500$ (dollars) and the seller pick me, what's the final amount i am going to pay with the vat and taxes?? Looking forward for your answer, Thank you, Averkios

That will depend upon where you are, where the seller is, the tax regimes in each of those jurisdictions, and SEDO's T&Cs.  You should speak to your accountant or tax advisor about this.

I don't understand this argument.  If a name is so important to a client, why dont they first try the Nominet approach and then try litigation?

Hello Alasdair, I know this is an old thread but it is of interest to me. A friend of mine owns a tea & coffee shop & just recently opened a second much larger one. They are pending trademark approval for their company logo which is smart & unique designed by a good design agency. The business is 3 years old & the website i am looking into (.co.uk) was bought 7 years ago. My friends website has some representation of his brands name in it but the person that owns the short TLD has bought many many dozens of 3 & 4 letter (.co.uk) domain names and have no content or servers on any of them. Can my friend apply to Nominet and dispute this and does he have a good chance (ie above 90%) of acquiring it or should he first approach the cybersquatter himself with a reasonable offer? I hope this covers most of my issues & thank you 4 your time Alasdair. Andrew

Thanks Andrew for this comment.

It can be difficult to show that a domain name amounts to an "abusive registration" (one of the criteria for a successful complaint using the Nominet DRS) if the domain name registration pre-dates the complainant's business and trade marks. To have a good prospect of success, you would usually need to show some abusive change in use in the domain name post-dating the establishment of the complainant's rights.  See:

http://www.nominet.org.uk/disputes/resolving-domain-disputes/drs-guidanc...

To sensibly opine any further on this, I'd need to know a little more about the trade marks / domain names in question. You are very welcome to send details via the website contact form, and I will get back to you by email.

http://www.seqlegal.com/contact-form

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