A while back there was an Internet Marketer who released a very popular ebook that extolled the virtues of building websites with product names in the domain. For example, if you were promoting the Amazon Kindle his whole deal was that you would register a domain with “Amazon Kindle” in it – say AmazonKindleToday.com. There were many people who jumped on this bandwagon but I never did because I could see legal troubles a mile away. I had never bought or built a website with a product or company name in the domain and I never would – so I thought.
How I Got Screwed Buying a Website With a Trademark In The Domain
In November 2009 I found myself buying a website with a product name in the domain. I knew the risks going in and even though my gut was telling me to walk away, I couldn’t resist. The deal was just too tempting. This particular website was promoting a very popular fitness program and ranked very well in the search engines for the product’s name. It was also generating around $400 net profit every month in auto pilot. The icing on the cake was the seller was only asking $1,200 for it. Even though I had a feeling this website was trouble and I would likely get an email from a lawyer sooner or later, my thinking was I could milk it for a few months to recoup my investment and then everything after that would be pure profit. Surely I could get away with it for at least a few months, I convinced myself.
Wouldn’t you know it one week after I sent the seller the money I got a cease and desist from the company’s lawyer! I was lucky because the lawyer was actually a pretty nice guy. After I told him that I just purchased the website and stood to lose a lot of money, he was willing to let me keep the site up for a few weeks to recoup some of my losses. How nice of him, right? Actually, it was because it allowed me to get at least $400 back from my losses.
Within a month I went from buying what was going to be an auto pilot cash machine to having nothing and losing $800 after having to surrender it due to trademark laws. I won’t bore you with the details but suffice to say, laws are in place that make it very easy for a company to take a domain from you if you are using their trademark. Of course if you have money to burn and you’re stubborn, you could put up a legal battle but is any domain at this level worth the trouble -especially when there is almost an 100% chance you’ll lose it anyway?
You’re probably thinking the seller knew this website was a legal liability and was selling it for that very reason except you would be wrong. Before I agreed to buy the website I asked him if there were any legal issues I should be concerned about and he said no. I believed him because I had known the seller for a while through a private forum we were both active members in. But as Reagan always said, trust but verify, so I asked the lawyer if he or anyone else from his company had pursued this domain before. He said no. The company was just beginning their effort to pursue people using domains with their trademark in them. I was actually one of the first persons they had busted – lucky me:)
Lessons Learned: Due Diligence 101
1. Get Permission In Writing To Use A Trademark In Your Domain
It was an expensive lesson that could have – no, should have been avoided. I knew better and my gut instinct was right all along. If you are considering buying a website with a trademark in the domain do your due diligence. Contact the company who owns the trademark and get their permission in writing that you can use their trademark in your domain before you buy anything. Some companies are actually o.k. with it but 95% are not so don’t be surprised if you get the no-go.
2. Listen To Your Gut!
Another lesson learned is you should listen to your gut. Chances are if something doesn’t feel right, it probably isn’t. There are plenty of deals out there to be had. There’s no sense wasting your time, money, and effort if you don’t feel 100% confident in the website you are buying. As another Reagan once said, Just Say No!
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