Registering a Domain Name Before a Startup is NOT Cybersquatting! | DomainInvesting.com
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Registering a Domain Name Before a Startup is NOT Cybersquatting!

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If a startup uses a “hack” or some other creatively spelled domain name because the correct spelling is previously registered, the owner of the correctly spelled domain name is NOT a cybersquatter! I don’t care how popular a startup becomes, if the domain owner had his domain name first, it is NOT cybersquatting! The only way it may become cybersquatting is if the domain owner later monetizes the domain name in a manner that infringes on the marks of the startup (as long as it is not descriptive).

I understand that some startups and companies cannot afford to spend a lot of money for a domain name. It is perfectly acceptable to be creative when it comes to branding. However, they can not and should not expect to build a brand on a confusing domain name and be able to get the previously registered exact match domain name for anything less than fair market value. Using the legal system or UDRP system to try and “steal” a domain name is reverse domain name hijacking.

I also understand that some people do not like the business of domain name investing. I would imagine many of these people have tried to register a domain name that has been registered for many years, and the owner of the domain name was unwilling to sell it for a “reasonable” price. You are welcome to disagree with this business, but calling domain investors cybersquatters is likely inaccurate. It could also potentially be legally actionable since cybersquatting is an illegal act and calling a legitimate investor a cybersquatter is likely damaging (in my non-legal opinion).

I think domain names are similar to undeveloped real estate. Many years ago, people settled on land or bought tracts of land that were not worth much money at that time. As time went on, the land became much more valuable. It isn’t unheard of for a person to sell a piece of property for millions of dollars when they spent thousands of dollars for it decades ago. Just like desireable land and property grows in value, desireable domain names also increase in value.

When a prospective domain name buyer tells me that my price is ridiculous (or something along those lines), I want to ask them if they would sell one of their unused domain names for much less than the market would bear because I want to use it to make money for my business. I would also like to ask if one of their ancestors had owned 5 acres of undeveloped land in Beverley Hills, would they sell it inexpensively because it was once free and it is being unused. Of course they wouldn’t.

A startup or business makes a conscious decision to use confusing branding or spelling when they don’t want to (or can’t afford to) buy the exact match .com domain name for their brand. There are various options to secure the domain name (financing the purchase, option to buy in the future, lease to own…etc). Their business decision may be short sighted if they don’t secure it, but it does not make the owner of that domain name a cybersquatter.


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 sold seven figures worth of domain names in the last five years. Please read the DomainInvesting.com Terms of Use page for additional information about the publisher, website comment policy, disclosures, and conflicts of interest.


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Comments (20)

    Elliot Silver

    Bill Sweetman shared this with me last week: http://www.digitaljournal.com/pr/2723636

    November 2nd, 2015 at 9:31 am

      Aron

      I wouldn’t let articles like this frustrate you.

      First, it’s just a press release that was likely NOT picked up anywhere.
      Secondly, the owners of Congo (dot io) look like idiots for offering $3000 for a 5 letter one-word branding name. They are the ones that are out of touch with reality no matter how badly they want to paint a “David vs. Goliath” portrait.

      Their lack of research in determining fair market value for a one word dot com name makes them look incompetent in any venture they undertake.

      In reply to Elliot Silver | November 2nd, 2015 at 10:39 am

      Elliot Silver

      It’s not just this one… there have been quite a few others I have seen.

      In reply to Aron | November 2nd, 2015 at 10:43 am

      Aron

      I hear you.
      People are uninformed.

      As you said, it’s similar to someone that bought a plot of land along the beach in California, and hasn’t developed that piece of property yet. If I have a good idea for that location, am I entitled to the piece of land for cheap? After all, the current owner isn’t technically using it. They should just give it to me. It’s crazy that people think this way about domain names.

      The ONLY thing different is that domains deal with branding – and people fall in love with company names/brand names/words etc. For these people, there isn’t another option (or another piece of land)… they want THEIR name that they dreamed up, and not another one.

      What they don’t realize is that 100 people before them thought Congo.com would be a great business name – they weren’t the first or last to dream it up. It’s ignorance to think they are the first people to fall in love with the idea of branding their business on Congo.com.

      In reply to Elliot Silver | November 2nd, 2015 at 10:56 am

    Tony

    Nice rebuttal to that article, Elliot.

    November 2nd, 2015 at 9:50 am

    Steve

    Cira.ca the registry that handles .ca names won’t even let a complaintant file a case if the trade mark was registered after the domain name.
    Until this kangaroo arbitration system is fixed opinions of entitlement like these will prevail.
    Squatting?? Whoever wrote the article is obviously an idiot.

    November 2nd, 2015 at 10:30 am

      Steve

      Is = with
      Voice type, oops.

      In reply to Steve | November 2nd, 2015 at 11:12 am

    Acro

    They can always get a Chinese premium letters domain like cngxxxz.com.

    November 2nd, 2015 at 10:43 am

    Andrea Paladini

    Ironically, their site helps “finding an attorney”, but they have no idea what “cybersquatting” is … LOL! 😀
    And no offense, but a 3k offer for Congo.com is just laughable … :)

    November 2nd, 2015 at 11:07 am

    John Poole

    Elliot you are right, of course, but you are “preaching to the choir.” It was recently revealed that ICANN has become a member of INTA (international trademark lobbyist organization)–which I asked the ICANN Board about at the ICANN 54 Public Forum in Dublin. RPM (Rights Protection Mechanisms)–UDRP and URS–are fertile areas for future ICANN policy-making and changes which would be detrimental to domain investors. ICANN staff is already “encouraging” extension of the URS, which was intended only for new gTLDs, to legacy gTLDs in Registry agreement renewals. In the case of UDRPs, Attorney Gerald Levine has written “owners of trademarks acquired after (and sometimes years after) domain name registration receive hot comfort from some UDRP panelists who take the position that registration renewal is a triggering event for determining bad faith.” See http://iplegalcorner.com/overreaching-priority-of-rights-to-domain-names/ . Caveat Emptor!

    November 2nd, 2015 at 11:59 am

    Leonard Britt

    On Sundays sometimes I will cross the bridge and walk from West Palm Beach to Palm Beach. There are many wealthy individuals on Palm Beach and real estate is at a premium. I have noticed one vacant beachfront lot which is in a prime location and thought it was unusual. I am sure the owner has had inquiries about the property but apparently noons has offered the right price. I do not even recall a For Sale sign :)

    November 2nd, 2015 at 1:24 pm

      Acro

      Leonard – Someone from Palm Beach considered my $15k quote for a 1997 two-word .com “outrageous.” I don’t know if there’s still money left down south.

      In reply to Leonard Britt | November 2nd, 2015 at 1:27 pm

    Jen

    Just today, I received an email from someone who had offered $150 for a geo (river) 6-letter palindrome, no TM on USPTO.gov or on Trademarkia.com.

    The offer occurred over six months ago (I declined and offered the auction link).

    Today’s email asked me to offer a rationale for my pricing policy.

    Oh, it was tempting to engage in a bit of snark, but I just explained that this was a real-word geo domain, etc., etc.

    Sometimes one just has to bite one’s tongue because one never knows.

    Also, one needs to choose words carefully because emails can be used against a seller in a UDRP.

    :)

    November 2nd, 2015 at 1:38 pm

    Logan

    I’ve let them know that Dongo.com is available as a $60,000 alternative. Would save them thousands!

    November 2nd, 2015 at 1:49 pm

    Kylo

    Most startups would be delighted if they could get domains for fair market value, the problem is they often cannot.

    Domainers have their own unique idea of ‘fair market value’. Normally it means, offer a little bit more than anyone else is willing to pay, and you get the item.

    But many domainers can only be bothered to sell if the offer is so good that is clearly blowing all other offers out of the water.

    The fact that many only sell a very small proportion of their domains each year – and probably will never sell the majority of their domains – tells us that their pricing is actually well above fair market value.

    November 2nd, 2015 at 5:38 pm

    steve brady

    Laymen #1 at what they do in the private sector have domain investors to thank for fair market value lets the most profitable companies have a fair chance to refuse the best domains.

    Without domain investors, more businesses can find their horizontal competitor undervaluing the front end of the domain deal and gaining enormous leverage.

    November 3rd, 2015 at 5:10 am

    Danny Pryor

    Interesting that their contest calls for a domain that uses the .com TLD. That tells me they know a great deal and, perhaps, that $3,000 offer was a deliberate insult. Either way, it looks like the baby crying over a lost lollipop me.

    November 3rd, 2015 at 12:43 pm

    Todd B

    I suggest everyone fill out their submission form with entries like:

    WeDontKnowSquatting.com

    November 3rd, 2015 at 2:09 pm

    GRISS - Greek Realty Integrated Solutions & Services

    Excellent article Elliot. Simple and accurate, right to the point ! I totally agree!!! I also liked a lot the phrase “… Using the legal system or UDRP system to try and steal a domain name is reverse domain name hijacking…” you used.

    As a real estate expert (primarily) and as a domainer (secondarily) find the example with real estate and early land investments very inspired.!

    November 5th, 2015 at 7:47 am

    Kevin Fink

    I’ve always thought the analogy to land is the best response and I’m surprised it’s not mentioned / utilized more in this world. Great piece, Elliott…

    November 7th, 2015 at 4:52 pm

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