Domain Name Wire

Domain Name Wire

  • RegisterFly Lawsuit Ensnares Demand Media

    1. BY - Mar 29, 2007
    2. Policy & Law
    3. 5 Comments

    RegisterFly collapse creates headache for eNom’s buyer.

    The Dummit Law Firm of Winstom-Salem, North Carolina is leading a class action lawsuit against RegisterFly, ICANN, and eNom after the collapse of RegisterFly left about 75,000 domains in limbo.

    This spells trouble for Demand Media, the domain company that launched last year and has collected over $200M in investments. Demand Media purchased eNom and is now on the hook for any potential liabilities. eNom is a party in the lawsuit because RegisterFly started as its life as an eNom reseller. Demand Media’s pockets are bigger than RegisterFly’s and ICANN’s, which is probably why they were included in the lawsuit.

    New domain name companies, such as Demand Media and iREIT, have found themselves on the defending end of lawsuits based on acquisitions. In the iREIT case, the former business partner of one of the domain portfolios it acquired has filed suit. The allegations in the lawsuit have nothing to do with iREIT, other than that it bought the domain portfolio in question. This is a legal risk that these companies have probably paid little attention to. Instead, they’re more concerned with the legalities of trademark domains. It’s hard to do due diligence on portfolio acquisitions other than reviewing the domains being acquired. I imagine that the lawyers for these firms write terms into contracts to state that they are only acquiring the portfolio, not the business that owns them. But this may be a tricky proposition.

    Domain portfolio buyers should write two items into contracts:

    1. They are only buying the assets of the company (i.e. the domain portfolio), not the actual company.
    2. The seller warrants that there are no trademark-infringing domains in the portfolio.

5 Comments
  • ENOM was included in the lawsuit because they knew about the crimes going on at Registerfly for years and did nothing.
    I personally started having domains stolen from me (hundreds of them) 3 years ago. The Fraudulent Credit Card charges also date way back, at least 5 years.
    ENOM never cared until it became obvious that there would be a class action lawsuit. Only then did they took action.

    They continue to be very unhelpful to Registerfly victims who need there domains transferred into ENOM.
    I have opened many tickets with them trying to save my last few domains at Registerfly. They are of no help whatsoever (And I am a ENOM Reseller!)
    ENOM support is terrible and always has been. I know for a fact that they will roll over on any domain owner when the heat is on. They are no different from Godaddy.

    Here is one personal anecdote: I was involved in a UDRP and the lawyer representing the complainant quoted Kelsey (The head of ENOM’s legal department at the time) in the UDRP. Here is what Kelsey said to this lawyer “I’ll shut the domain down but if the owner makes a lot of noise I’ll have to put it back up”

    Finally, a lot of lives have been destroyed by this Registerfly Fiasco and ENOM deserves to be sued into bankruptcy. They were extremely negligent.

  • Hi,

    I used to have a domain with RegisterFly. After failing to renew it I left numerous support tickets and Always got the reply in the form of “We’re having issues with our billing system, please try again.”
    And I tried. I kept on trying till I lost my domain.
    eNom took over and sold the domain, behind my back, to one of their agents – HugeDomains. Now, they offer my domain which was actually stolen from me, for $1,600.
    I’ve contact eNom and they didn’t care they are dealing with stolen domain names. HugeDomains didn’t care for it either.
    ICANN never replied.

    So here we are in the 21st century where stolen domains are being sold by big companies while the rightful owner is being left behind without any tools, without any ways to claim his property which was stolen from him.

    Someone needs to step up and clean this mess up.

  • In regards to having a seller warrant that his or her portfolio does not include trademark infringing domains, I find that to be a bit implausible.

    Trademarks are a bit tricky and a domain can use a trademarked term (e.g. Apple, Windows) in a non-infringing sense. Instead, I think it should be the BUYER, not the SELLER that does his or her own due diligence before acquiring a portfolio.

  • Marc, I agree to an extent. Although there’s probably not a legal term for this, there should be something about no ‘obvious’ typos. Yes, Apple and Windows are generic, but AppleLaptops.com and WindowsVista.com or WindwsVista.com are not.

  • I have 13 domains with registerfly, and they are still locked. What can I do? Registerfly have never stolen any domains from me. But I\’ve paid twice for the same domains and they denied that I\’d paid twice (2400$). 100% (edit)

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