Domain auctions : Don’t rely on the seller’s disclaimer

Domain auctions on several venues, such as Sedo and Flippa, come with a detailed description by the seller.

Typically, a domain listing’s description might contain information on the domain’s qualities.

Such details could be age, marketability, comparable sales figures, or statistics about the metrics for the domain (traffic, revenue etc.)

For the most part, this type of information can be verified, or taken at face value.

A recent auction for a domain that caught my attention, contained a disclaimer per below:

“There will be no conflicts with other businesses as the name [x] ceased to be used in 2004.”

Running a WHOIS history check via DomainTools, I saw that the domain changed hands not too long ago; its current use is rather unrelated to what it represents, most definitely intentionally.

A check at the USPTO, however, revealed that the seller’s disclaimer was far from bullet-proof: the live trademark exists since 1981 and it’s actively renewed by a rather large securities institution.

The auction ended with the domain being unsold. I’m sure that the expectations of the seller far exceed the monetary risk involved; being hit with a UDRP for a trademark violation after this domain changed hands, is almost a certainty.

Always verify the seller’s disclaimers related to conflicts of interest, especially if the domain is not a generic and can only be used in direct infringement of an existing trademark.