Domain Industry

Not surprisingly I have received a lot of comments about the recent article on what to pay for domains and most notably TradeMark (TM) related domains.

A lawyer asked whether the figures quoted were what I paid for trademark related domains. The figures quoted were what I observed in the marketplace. I don't think that the reader went further than the table and how I wrote that TM domains have considerable risk associated with them.

Obviously if you are purchasing a domain name with an average 12 months payback then the returns will be outstanding. This is the reason why the TM infringing area of the market flourishes so much. Whether we like it or not TM domain names are a valuable cashflow for many domainers that are prepared to take the legal risk.

Here's the other problem. Since most domainers would be infringing TMs somewhere in the world (you wouldn't believe what is TMed in some tiny little country) if the ICA (Internet Commerce Association) creates a policy of "no trademarks" then they are likely to have very few members. This is not a good outcome for domainers or the ICA.

So how do we overcome this impass? Here's my proposal that has no legal basis and many people will tell me that it is a fantasy that will never happen but here it goes anyway.

My suggestion is to create a market for TM infringing domain names. Gulp, take a deep breathDomains and their traffic figures are published in the marketplace for all members that agree to relinquish their "suing rights". A fixed price is allocated to each domain which would be under $1500 and set in a number of tiers which are dependent upon traffic levels. This figure will be substantially lower then any legal/UDRP action. The reason why the price relates to traffic levels is to create an incentive not to park the domain name.

It is important to note that any domains that are placed into the marketplace are not parked and the current owner does not earn any revenue from the domain name.

Companies with trademarks can enter the marketplace and see the list of domains for their own trademarks and quickly determine which ones are worth purchasing for their traffic. In the great majority of cases only those names with any sort of traffic will be purchased but domains with no traffic can still be acquired for a nominal fee per domain.

This would mean that both large corporates and small business owners could protect their TMs at a reduced cost. It would not discriminate on who has lots of money to push legal cases and who doesn't.

Lawyers that use and recommend the system to their customers will also receive a percentage of the sales price. We don't want lawyers to determine that they will receive greater fees via suing rather than using the system.

If it worked, what would be the impact of this? Domainers and TM owners would be working together rather than against each other. Domainers have developed a lot of skills in sourcing domains and this could assist TM holders enormously. Domainers would get rewarded for their efforts and TM holders would get the domains they want rather than not knowing which "typo" is actually generating traffic that makes it worth chasing. Lawyers would also get their fees.

I think that the network would be flooded with domains and domainers would scour the world looking for TM domains. Not only that, it is now in the domainers interest to contact TM owners and encourage them to look into the database for their TMs. A whole new marketplace and incentive system would open up. Rather than us all trying to ignore the TM domains issue it will now be out in the open in a positive manner.

I know that this is a fantasy but it would be an elegant solution to a very perplexing problem. I always believe that it's better to create than litigate. I'd love to get some legal comments on this, but if you do so then try and keep an open mind.