By: Lee Hodgson

December 5th, 2001

Reader Rating: 7.5

Imagine this: you wake up one morning to find that your Website has disappeared, your email has stopped working and a person you've never heard of is now listed as the owner of your domain name.

Such a Kafka-esque loss of digital identity is actually surprisingly common. The main cause is not the well publicised phenomenon of "domain hijacking", but something much more mundane. It's this: for one reason or another, the domain was simply not renewed at the end of its expiration period. When this happens, the sponsoring registrar issues a delete command to the registry, and the name is quickly made available for any party to register.

If the domain is for personal use, then it's no big deal. You learn from the experience and register a new name instead. But what if the name was an integral part of your business strategy? Losing it could cause untold damage to your business.

Success Increases Risk

So what exactly are the chances that other parties might attempt to register your name if it ever did get deleted? Don't be naive and believe that your name is only worth something to you. This is truly not the case. Perversely, the chances of the name being valuable to other parties -- domain speculators in particular -- increase in proportion to how successful you've been in building up your online business.

To understand the reasoning behind this statement, you have to get inside the mind of a typical domain speculator. A year or two ago, most speculators simply registered "virgin" domain names, in the hope that they could sell them on to site developers. In other words, they gambled on the value of the name itself. As it turned out, most speculators were awful at inventing good domain names, and many lost their shirts employing this methodology. "Hurrah!" you say. However, when the dot com bubble burst, speculators came up with a new strategy: the re-registration of "used" domain names. In particular, they like to re-register used domains with "built-in" traffic -- i.e. domains that have incoming links from other Websites, search engines and directories.

With these types of names, speculators are not the slightest bit interested in the actual value of the name itself -- it could be rat-splat-drat.org for all they care. If a name produces traffic, an averagely intelligent reptile could make money from it. Just put up a one-page pay-per-click (PPC) search engine, or any decent (or indecent) affiliate program, and the revenues will roll in.

So, given that domain speculators are now looking for domain names with traffic rather than branding value, you can see that any Website that's been successful, and has built up tens or hundreds of incoming links, is a prime candidate for domain speculators should the name ever be deleted.

How To Get Your Name Back

Now that you know why a speculator might re-register your domain name, let's move on to the crux of the matter: just how do you go about getting your name back should the nightmare come true, and your name be deleted? The first thing to get out of your mind is the notion that this is still "your" domain name.

While you'll undoubtedly feel that the name's still yours, the harsh truth is that your rights expired along with the domain name. Most people will naturally contact their domain registrar first, on the assumption that somehow the registrar will be able to "sort it out" for them. But every registrar will give you the same response. If you didn't pay the renewal fee and the name was deleted, there's nothing they can do, and they certainly don't have any way to get the name back for you.

Given that reality, what other methods can you use to get your name back? You could sue the new registrant, but this is often a hugely complicated, time-consuming and costly affair, especially as the new registrant is just as likely to reside in Korea as in California. The two more practical methods are detailed below, these are:

• ICANN Arbitration and
• Domain Purchase.

Method A: ICANN Arbitration

If you have a trademark on the name in question, you have a chance to get it back through ICANN's "Uniform Domain Name Dispute Resolution Policy" (UDRP for short). This arbitration mechanism has proved to be an effective way to gain control of domains for many trademark holders, but success is by no means certain. In order to successfully win a UDRP case, you need to convince the arbiter(s) of ALL of the following three elements:

1. The domain name must be identical or confusingly similar to a trademark or service mark in which you have rights.
2. The current registrant must have no rights or legitimate interests in the disputed domain name.
3. The domain name must be being used in bad faith.

The fact that the current registrant has re-registered "your" domain is not relevant to this process. And in fact, most cases brought by trademark holders that do fail, will fail on point (3) -- showing the domain is being used in bad faith. In effect, this means that you must demonstrate that the registrant has offered to sell the name -- either by emailing you to offer you the name, or by putting up a "For Sale" Website etc. Simple registration of the name without using it is not normally seen as "bad faith" by most arbitration panels.

If you're interested in this course of action, take a look at the full text of the UDRP [1]. To file a dispute, legal counsel is not required, though it is recommended. It typically costs in excess of US$1000, and can be done through several services, such as WIPO [2], or eResolution [3]. Also, bear in mind that many of the most professional domain speculators will have more experience with the UDRP than you, and will try to use this to their advantage.

Method B: Domain Purchase

If you don't think you can win a UDRP case, then purchasing the name from the new registrant, however unpalatable that may sound, is the other option worth pursuing. Before you contact them, consider the following:

1. What is the name worth to you?
How much money will you lose if you don't have the name? How much money can you make with the name? Will your business fold without the name? Once you answer these questions and probably several more, you will have a good idea of just how much money the name is worth to you.

2. What is the name worth to the speculator?
As explained above, there are two components to a used name's value -- the brand value and the traffic value. The brand value is hard to calculate, though domain appraisal companies will give you a fair idea. The traffic value is somewhat easier to calculate. If you estimate the traffic (which shouldn't be difficult because, after all, this was your traffic a few weeks ago) you should be able to take a guess at how much money the speculator might make through a PPC search engine or affiliate program. As a rough example, a domain that gets 100 visitor per day can expect to generate about 10 clickthroughs in that time -- and each clickthrough might earn then $0.03 to $0.10, so they might earn $0.30 to $1.00 per day, that's $100 to $365 per year.

3. What is the psychology of the negotiation?
Having estimated the value of the domain to you and the speculator, it's true in nearly all cases the speculator is hoping to sell it to YOU, i.e. the original site owner. Sure, he might earn $200 a year or so from an affiliate program, or more if the name has some brand value, but what he really wants is to make a quick high-value cash sale by selling the name back to its original owner. So in his mind, you are the ONLY potential customer. What this boils down to is a classic game of brinkmanship. If the sale happens, both parties gain. If it doesn't, both parties lose. Bearing that in mind, here are a few tips to help you succeed in the negotiations:

• Avoid conveying any sense of "desperation" to get the name back. If you do, the speculator will take you for every penny you can afford. So don't rush to reply to emails, and most importantly, always give the sense that you are prepared to walk away from the deal if pushed too far.
• Most speculators will "try it on" to start -- they may ask for 10 times what they're willing to accept eventually. Be calm and patient in the knowledge that you can get the name for much less than the speculator says he is looking for.
• Stay polite and be professional. Even though you may be overwhelmed by negative feelings about the speculator, they will believe that what they're doing is legitimate. If you start to insult them, chances are they'll walk away and you'll lose the name forever. This is particularly true of speculators from Eastern countries who will not tolerate direct conflict in business situations.
• Remember at all times - the speculator has as much to gain from the deal as you do.
• Considering employing an experienced negotiator or domain broker.

Prevention Really IS Better Than Cure

Having said all this, it should be noted the best way to avoid the nightmare of the loss of a domain name is to take proper care of your domain names in the first place, and not let them expire at all. Keep a list of the names you own, which registrar they are registered with, and most importantly, what the renewal date is. Renew them at least a couple of months in advance, and consider renewing them for a period of at least two years. Why risk your whole future over a few bucks?

[1] http://udrp.domainguru.com
[2] http://arbiter.wipo.int/domains/
[3] http://eresolution.ca