FlipWebsites.com is all about buying and selling websites so normally I wouldn’t write about a domain-only purchase. However, the purchase of iPadAccessories.com recently on Flippa.com can provide a lesson for website buyers. The lesson being that you should be very careful about buying websites (or building and selling websites for that matter) that have a trademark in the domain.
The domain auction on Flippa.com for iPadAccessories.com ended on February 3, 2010 with 42 bids and a sale price of $9,000. You can view the auction listing here. I’ll give the seller props for being forward-thinking and for being a very shrewd speculative domain investor. He likely snagged the domain for less than $10 and made over $8,500 on the deal after his listing fees. However, I’m not so sure the buyer did so well in the deal.
TechCrunch.com reported on January 7, 2010 that Apple had filed a complaint with the ICANN UDRP (Uniform Domain-Name Dispute-Resolution Policy) back in November 2009 against Daniel Bijan, who owned 16 domains with Apple trademarks in them. One of the domains Bijan owned was iPodAccessories.com. On January 6, 2010, Apple won the rights to all of his domains.
Do you see where I’m going with this? What are the chances that Apple will file a complaint against the “lucky” buyer who purchased iPadAcessories.com? I don’t know about you, but I’d be sick to my stomach if I lost $9,000 over a simple domain name. I hope the buyer doesn’t get nailed but I’m not holding my breath.
How does this apply to website buyers? As I wrote about in my due diligence 101 article, you need to tread very carefully when buying websites with trademarks in the domain. Unless you have explicit written consent from the trademark owner that you can use the trademark, I would avoid any website with a trademark in the domain.
At the very least, you should do some digging around the Internet to see if the owner has a track record of pursuing people who use their trademarks in domains as Apple clearly does. I would also be looking to see if there are a lot of other websites ranked in the top ten on Google, Bing, or Yahoo! with trademarks in them. If there were, I would check to see if they were owned by the trademark owner or not.
Personally, after my experience buying a website with a trademark in the domain I would never do it again with or without written permission. Owners of trademarks can change so even if you have permission today, there are no guarantees for tomorrow. Imagine spending a couple years building up an authority site on a domain with a trademark in it only to find out down the road that you can no longer do that. You could potentially lose everything overnight!
The best thing to do with trademark domains is to stay away from them no matter how tempting they are. I hope the buyer of iPadAccessories.com never hears from Apple but I won’t be surprised if he or she does. I just scratch my head and wonder why anyone would take a $9,000 gamble on such a risk in the first place.
Would You Feel Comfortable Buying This Domain?
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