A couple of weeks ago another founder here in SF that I’ve been friends with for years reached out to me, they had just raised their Series A round and were ready to buy their matching .COM.
The owner came back with a six-figure price tag which I told him was definitely reasonable for the name, it’s a one-word .COM, that’s what they sell for. He emailed me back a few days later and said, “can’t we just file a UDRP and get the name? We’re using it for our business and he’s just squatting on it.”
I did a bit of research, the current owner registered the domain name eleven years ago, at that time my friend hadn’t even picked his college major. “Nope, I told him, it doesn’t work that way, and in fact, you could get hit with Reverse Domain Name Hijacking if you try it.”
This happens all the time. You start a company but then pick a name without looking at who owns the matching domain name. Then you raise millions of dollars, maybe tens of millions of dollars. Where your thinking goes totally wrong is believing that for some reason you’re entitled to the domain, you’re not, and if you file a UDRP, expect to lose and to get hit with Reverse Domain Name Hijacking.
In fact, this just happened to a company that filed a UDRP last week:
A Pennslyvania brewery and winery has been found guilty of reverse domain name hijacking in a dispute over SpringGate.com.
Schoffstall Farm, LLC, which does business as Spring Gate Vineyard, Winery and Brewery, attempted to get the domain name in a cybersquatting dispute at the World Intellectual Property Organization.
The company has traded as Spring Gate since 2014. But the domain’s owner, Ashantiplc Limited, registered the domain name in 2006. Therefore, it could not have registered the domain name in bad faith to target the non-existent brand.(Source – DomainNameWire)
My advice to startups is, do your research before picking a name for your company, or be okay with paying fair market value for the domain, i.e. not getting it for one one-hundredth of it’s actual value. If you just pick a name and assume you’ll have the rights to it for $5,000 or less once your company takes off…think again. Just know that many people have learned this lesson the hard way, hopefully this article saves you from having to!