Despite what many think, it is perfectly legal to buy and/or sell a domain name. Domain name transfers are commonly conducted as part of the sale and acquisition of businesses and business assets. A domain name is a form of intellectual property, like a trademark or copyright. As such, a domain name can be bought, sold, used as collateral for a loan, etc.

However, like all forms of property, there are some unique features of domain names that require experienced legal assistance when you are trying to buy, sell, and/or transfer a domain name. There are also some practical considerations. We discuss some of those below. First, a bit of background. A domain name must be registered with a “Registrar.” These are companies that are authorized to register domain names. In any given case, the Registrar may be the same company that also “hosts” the website. But, many times, the Registrar company is different from the Hosting company. Generally, a fee — annual or monthly — must be paid to the Registrar company.

Thus, the first practical and legal issue is to gather the details about the Registrar, including who specifically is listed as the person/business registered, the status of payment, and related details. As part of the due diligence, the supporting documentation must be carefully reviewed. Some Registrars also have rules and regulations with respect to how a domain name is transferred, and some charge fees for the transfer. Payment of potential past-due fees or other Registrar fees should be matters subject to negotiation.

Often, this aspect of the process is non-problematic. However, occasionally, problems arise because the domain name was registered to a long-gone employee (or another person), rather than to the company’s name. This raises the legal question of whether the company has the ability — legal right — to transfer the domain name. Obviously, if this problem arises, the problem will require a solution. This might be as simple as finding the long-gone employee and obtaining a signature. Or it might be as complicated as filing a UCANN proceeding or a lawsuit.

There are also some practical and legal issues to be considered at the Closing. Like a real estate or business sale transaction, the best practice is to use an escrow service for the sale/transfer of a domain. Use of such a service will be automatic if the domain name is being transferred as part of a business sale/acquisition. The legal issue here concerns the successful transfer of the domain name and proof of that successful transfer. With a house or other real estate, transfer is accomplished by the transfer of keys. But, generally, there is never a requirement that there be proof that the keys work.

However, it is a bit different for a domain name. There are administrative names, codes, and other things that might be called “keys.” To accomplish a successful transfer of a domain name, at the closing (or shortly thereafter), there must be some proof that the “keys” function correctly. Usually, this involves access to the main Registrar file and a change of passwords or other security codes/processes.

A few other legal issues include:

• Verifying that the domain name is not violating or potentially violating existing trademarks
• Checking on questions like existing or threatened domain name disputes
• Exploring any history of cybersquatting or hijacking with this domain or related domains
• Examining domain names with alternative extensions to check for conflict or other potential risks
• And more

Contact the Internet Law Attorneys at Revision Legal

For more information, contact the experienced Internet Law Lawyers at Revision Legal. You can contact us through the form on this page or call (855) 473-8474.