How To Overcome A “Cease & Desist” Demand

Solution DFCIn my domain investing career of many years, I’m proud to say that I have NEVER had a formal dispute over a domain name. By “formal dispute”, I mean an auDRP or a UDRP. For those not in the know, auDRP means .au Dispute Resolution Policy. This is where a complainant generally engages legal representation and files an application seeking transfer of the domain to them. This costs them a minimum of $2000 plus legal fees for a single member panel. You know you’ve got a serious situation if you get involved in one of these.

Next Level Down

Then there are auDA complaints. These are free to lodge; and generally get filed “anonymously” by people who don’t want to invest money in purchasing a particular domain from existing registrants. They also don’t want to spend any money in filing an auDRP. I wrote about this process here. I’m also pleased to say that I’ve never lost a domain this way either!

The Cease & Desist Letter

I’ve only had two of these over the years. When I say two, I mean “professional” ones. I’ve also had a couple of amateur ones where people have obviously “cut and paste” something they’ve taken from an online source.

The important thing about C & D letters is not to ignore them.

They are a shot across the bows, and how you initially react to them will go a long way to determining the ultimate outcome. To my mind, they also represent an opportunity.

I got one a few weeks ago from the legal department of an overseas company, so I thought I’d share the entire process.

Summary:

  • Received an almost overwhelming (in terms of length) C & D from a European based company. I had never heard of them before. The domain in question was a 3 letter com.au that was parked with Fabulous (I purchased it on the expired auctions almost 4 years ago).
  • The complainant had the dot com and a few other extensions. Plus a trade mark for the 3 letter term.
  • Unfortunately, upon investigation, I did have a potential issue in that one of the links on my parking page referred to their business. Even though I was unaware of that, it could have been a problem.
  • I responded quickly and politely – but left them in no doubt that I would defend any claim they made. I’m not a lawyer, but I’ve read enough cases in my time to ensure that my response contained the “right words” i.e. not registered in bad faith; legitimate interests etc. It’s also important to remember that you are “writing for the record” (if the C & D escalates to a dispute).
  • They ended up purchasing the domain from me. Win / win scenario.

Here is my response to them (identifiers removed).

Dear “Unnamed person in the Legal Department”,

We are in receipt of your template “Cease and Desist” letter.

All allegations and imputations contained therein are strenuously denied.

In particular:

  1. Until yesterday, I had never heard of your company. Do you trade in Australia?
  1. Until yesterday, I was not aware that you had a registered trademark for the term “- – -”.
  1. Having said that, a TM does not preclude other legitimate usage of the acronym – – -.
  1. We purchased this domain name for a specific project, however it has been simply “parked” until other projects get completed.
  1. We therefore assert that we have rights or legitimate interests in respect of the domain name; and
  1. The domain name was NOT therefore registered in bad faith.
  1. We were not aware what links our parking page showed – after all it is an acronym domain.

Please note:

a. By way of immediate response, and as a gesture of goodwill, we have taken immediate steps to ensure as best as possible that the parking page has no links to you (see screenshot below).

b. I have expedited work on an interim holding page for our new project – “——- ———- —–”. This should be published shortly.

c. I decline to transfer the domain name to you for reasons mentioned above.

d. Notwithstanding the above, we would consider you purchasing the domain from us for the equivalent of our “out of pocket expenses” – approximately $1260.

Should you still have concerns, please advise. We will then engage our lawyer to respond more formally.

Ned O’Meara – Director – Domain Syndicates Pty Ltd

Conclusion

The penultimate line regarding them purchasing the domain for my “out of pocket expenses” was the winner imho. It also contains good auDRP language.

Thus they had an easy commercial decision to make – take me on and spend a lot more money with no guarantee of success; or acquire the domain name quickly and easily.

I’m pleased to say that they purchased the domain via escrow ($USD was an added bonus); and we ended up “friends”.  🙂

Please note: All circumstances are different, and therefore you should consider seeking legal advice if you receive such a demand. Particularly if the domain is valuable to you.

Ned O’Meara – 7th July 2016


Disclaimer

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17 thoughts on “How To Overcome A “Cease & Desist” Demand

  • July 7, 2016 at 10:27 am
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    I think the secret is to never park domain or use a parking company the few pennies you earn cost alot more down the track when a business see an ad on that domain page linked to the domain in question promoting another business this gives them ammo to use against the domain holder the secret i have found just dont park names saves alot of trouble

    • Ned O'Meara
      July 7, 2016 at 11:19 am
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      @Shane – unfortunately, with .au domains, as a domainer I have to monetize them to comply with auDA policy.

    • July 8, 2016 at 12:31 am
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      What Ned said, and I’m sure we’ve told you this before, Shane.

  • July 7, 2016 at 1:14 pm
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    How do you work out the right number for the ‘out of pocket’ expenses? Think you could have pushed that a bit higher for a three letter domain?

    • Ned O'Meara
      July 7, 2016 at 4:17 pm
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      @James – thanks for the comment. It’s like I said to Richard above – it’s a balancing act between pragmatism and greed. Push the envelope too hard, and I may end up with nothing (except a potential fight).

      There is also that magical figure of $2k to consider – the application fee for a single member auDRP.

      And with my advanced years, I’ve learnt not to be greedy. It gets me many more deals. 🙂

  • July 7, 2016 at 1:57 pm
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    Nicely done, although I’m surprised you didn’t ask for more money.

    Getting soft Ned?

    • Ned O'Meara
      July 7, 2016 at 4:05 pm
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      @ Rich – pragmatism and lack of greed generally make for a successful recipe. 😉

  • July 7, 2016 at 8:46 pm
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    For a true domainer, the line “We purchased this domain name for a specific project, however it has been simply “parked” until other projects get completed.” is probably not completely honest, even though they can never prove otherwise. I’m not implying that you were lying in this situation, but if I had purchased a domain purely for the purpose of holding & reselling (ie investment), I would not feel comfortable saying this unless it was true. Everything else sounds perfectly reasonable, and well written.

    • July 8, 2016 at 12:41 am
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      I’m not with you here at all Alex, I have to say. A “true domainer” to me, always feels that the domain names they purchase are for a specific project and are simply parked until other projects are completed, because of just that. ONE DAY we ARE going to get around to turning each and every name into the greatest business ever created in its particular industry. That’s why we buy particular names. Because they’re awesome and WILL become amazing businesses. It’s just a matter of time!

      There are just so many awesome names and businesses to create though, and not enough time…

      So… every now and then, we have to sell some of our amazing names to lucky buyers who are taking advantage of us for having too many names and not enough time. I must say that in this case, I think Ned was too kind with his price.

    • Ned O'Meara
      July 8, 2016 at 7:17 am
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      @Alex – I thought a lot about your post overnight (and thank you for making it).

      So here is my considered response as a professional domain investor / domainer in the Australian market.

      1. This domain is my property. It was legitimately purchased; and subsequently used as per auDA policy (monetization).

      2. It is an acronym domain with thousands of potential meanings and uses.

      3. The writer of the C&D (who I’d never heard of) made a number of claims (some very extravagant) as to why they have the sole right to this domain.

      4. I rebutted their claims with my own arguments as I am entitled to do.

      5. Just for a moment, consider how civil litigation works (in general terms). The party (applicant) making the claim will generally outline every possible reason under the sun as to why they should succeed; the respondent will counter with every possible argument as to why the applicant’s claim has no basis. The respondent will probably have a number of counter-claims as well. Initial posturing versus end result can be quite different! That’s not dishonesty.

      6. If I use the argument that I purchase domains simply for “holding & reselling” (as you put it), then I believe I would potentially be in contravention of auDA policy (and possibly in danger of losing them). Before I buy any domain, I always think “what could I do with this domain”? It has to have potential. If it doesn’t, I don’t buy it. Simple as that. Who knows if I will be the person to exercise that potential? Who can categorically say that I won’t? However, someone else may see that potential and want to buy the domain from me. In the meantime, I will monetize the domain so as to comply with policy.

      7. This particular domain definitely had potential for development. 🙂

  • July 8, 2016 at 12:42 am
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    Absolutely awesome article, response and outcome, Ned. A true professional (even though you were too kind with your price!)

  • July 8, 2016 at 1:38 pm
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    Thanks Ned

    A great post and very well explained. I have only ever had one name challenged about 14 years ago when I did not what I did not know! LOL and I very quickly transferred that domain but I have not had any issues (touch wood) since then.

    I think you handled this one very well and I think I would have done the very same things that you recommend.

    Good outcome for all.

    Cheers

    Ed

     

  • July 8, 2016 at 3:24 pm
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    Thanks for your detailed response Ned! I certainly hope you didn’t take offense, as it wasn’t meant that way at all.

    I certainly wasn’t having a go at you, in fact the opposite, it’s like the perfect response to the claim made. When you’re challenged like this, I do think it’s perfectly legit to use all the reasons at your disposal to defend your claim.

    The thought just occurred to me when I thought about some of the domains that I hold…and for some of them I could not hold my hand to my heart and honestly say that I bought the domain for reasons other than reselling. Morally I don’t think there’s actually anything wrong with this, as most people would buy any type of commodity or property, if they thought they could sell it for more. But because we’re bound by auDA rules, we need to find other reasons to justify our purchases. What those reason are to us personally, and what the reasons are that we would state publicly to defend a claim, may not be entirely the same.

     

    • Ned O'Meara
      July 8, 2016 at 3:39 pm
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      No offense taken Alex. Your post was great because it allowed me to flesh out my rationale.

      With regards this statement of yours:

      “I could not hold my hand to my heart and honestly say that I bought the domain for reasons other than reselling”.

      As much as you may mean this, never, ever admit to it! The simple fact is that we have some “rules” that we all have to play by. Some of them may seem ridiculous in a free enterprise economy, but it is what it is until it is further changed. You should have seen the restrictions in previous years! Prior to 2008, you couldn’t easily sell a domain; and then they introduced a 6 month rule; and then that was eventually relaxed.

      http://www.flyingsolo.com.au/forums/index.php?threads/auda-abolishes-6-month-rule.16320/

  • July 8, 2016 at 5:58 pm
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    Thanks Ned, good advice indeed!

Comments are closed.