Small businesses make a key mistake when selecting web design firms.
Here’s a common mistake small businesses make.
They know they need a web site, so they contact a couple web design firms in town. The web designers pitch them on a project that includes site design, web hosting, and registering the domain name. The small business signs on the dotted line and everyone is happy.
So what’s the problem? The domain is registered in the web design firms’ name.
I was reminded of this problem (again) when reading a recent UDRP decision. The town of Easton, Connecticut filed a UDRP complaint against their web design firm, Lightning PC Inc. Lightning created Easton’s web site at EastonCT.org and registered the domain name in Lightning PC Inc’s name. Lightning pulled the plug on the site later when it said the town owed it money. The UDRP was denied because this really isn’t a cybersquatting case and Easton, CT doesn’t have a trademark to the EastonCT.
Regardless of who’s at fault in this case, this is one of the most common blunders I see companies make with domain names. I know of a case in Texas where someone spent tens of thousands of dollars getting a web site created. When she wanted to switch web developers, the company held the domain hostage and demanded more money to release it.
Unfortunately there are no easy ways to spread this message to small businesses. We can’t expect them to be sophisticated about the web. After all, that’s why they called the web design firm in the first place: to outsource their web presence.
David J Castello says
Very true. I hear about this nightmare all the time from our advertising clients.
Jason Lavigne says
We see this all the time through our registrars and unfortunately there is nothing we can do when contacted by the company that hired the design firm. Legally they do not own the domain and any request to give them access to it must be denied. This is a very common mistake and can be very costly to correct.
When we see this happen we always try to educate both the small business owner and web design firm on how they should be handling this.
Brad says
Interesting topic, Andrew.
We recently sold a domain to a dentist via a third party web design company he hired to build and promote his site. (The web designer initiated contact with us re the domain.)
Since both parties wanted the name was transferred to the web designer’s registrar account, we made sure to use a contract that was structured in such a way to clearly indicate that the dentist was the buyer and the web design company was his representative. Although we didn’t foresee legal problems on our end, at minimum it may help us avoid involvement in any future problems between the dentist and designer.
A couple of UDRP decisions in the last few months have touched on this issue. The first case linked below concerns a group of resort domain names between two parties with prior commercial relationship, including web development, seo, and affiliate program. Panel found against Complainant for RDNH.
The second involves the same complainant and similar domains held by another former partner.
http://www.wipo.int/amc/en/domains/decisions/html/2008/d2008-1149.html
http://www.wipo.int/amc/en/domains/decisions/html/2008/d2008-1133.html
Alan says
Spot on – we see this quite often. Solid advice which will need to be told until the end of time 🙂
fizz says
This October 10 WIPO case involved 25 domains:
http://www.wipo.int/amc/en/domains/decisions/html/2008/d2008-1133.html
Mike Maddaloni - The Hot Iron says
As a Web developer, I have seen too many cases of where a client’s Web site was held captive by whoever created it for them. As well, within some companies, an individual will register the domain name into their personal account!
With all of my clients, I have explicit contracts with them on all aspects of their Web site, including the domain names. There is nothing wrong with a design or development firm managing domain names for clients, as long as the client directs what happens to that domain name.
Many clients prefer me to manage their domain names, but I never require it. Providing they can manage the DNS settings, I am all set. Though I do monitor domain names I do not personally manage to ensure they are properly renewed.
mp/m
Denver Web Design says
It’s really a shame when this happens. I’ve seen it happen quite a few times, and it pisses me off because it gives a bad name to designers. Recently we had to buy a domain for a client from his former designer for $100. Not a huge sum of money, but the it’s the principle.
We would never do this, and when we register something for a client we always let them know we’ll transfer it to them whenever they want.
Rob Sequin says
Details are in the contract. Who owns the content? Who owns the domain?
Don’t forget no one OWNS any domain. They are all rented from registrars.
In the Easton case it sounds like the client did not pay the bill. Why then is the web designer obligated to hand over his work and registration of the domain when his client hired him to create a web presence.
Just playing devil’s advocate. I have never been in a similar situation.
Andrew says
Rob, it sounds like there was some dispute between the city and designer, but it wasn’t included in the decision.
My guess is nine times out of ten when this happens the design firm is holding the client over the fire.
Rob Sequin says
I understand but is it extortion or holding back services for non-payment?
It sounds more like a non-payment issue. If that is the case then I don’t see why the client is entitled to the content or the domain.
Again, just posting a different view.
Dan Root says
This is very common, and unfortunate.
When clients call me, the first thing I have them do is transfer the domain(s) into an account placing them as the registrant if it isn’t already.
London gigs says
This is so wrong on behalf of dvelopers.
Shlomi Khutoretsky says
Sad, i have seen it before, owner of a website needs to control is property in his own hands.
Andrew says
More details on this particular case that just got published.
In this case the web design company says it registered the domain before the city came to it to use its services.
The most frightening thing is the city has its employees email out using the .org, even though responders must change the email to .gov to send back. That’s dumb. Just email out as .gov.
Enrico S. says
Andrew: I get calls almost every week on this exact issue. many times, there is actually a trademark, but the only option after a threat letter is a costly UDRP.
Check out the link included in this comment for an article we wrote about this very issue.
Mark says
Well, this is a little harsh, isn’t it?
I register domains for my clients, but they sign a contract where it states that although the domain is in my name, they can transfer the domain whenever they want, and have all the rights to the domain.
Don’t go scaring off clients to sign up with a design agency!
Enrico S. says
Mark: If they own a trademark, then you can not legally own the name. We advise clients NOT to do business with any company that claims ownership of a domain. When you say “although the domain is in my name” you are suggesting a business model which does not and will never make sense for any customer (assuming they are smart enough to know better).
If you are the one coming up with the domain name, charge them for that effort.
If you are doing the design, you can retain rights in the design and license it to them, but should not retain rights to the domain name (as registrant or otherwise) or “word” trademark.
Let’s face it. It cost $12 to register the domain. If the client already has trademark rights, you are screwing them by making your company the registrant.
Just my two cents.
Seth says
We’ve had some experience with this ourselves, though it was when we just started out and didn’t even think of it. Of course, we didn’t blackmail anything like that, but it was an awkward situation to say the least.
We’ve since added a clause in the contract (as well as specifically talking to the client about it) to ensure that if for some reason we do technically own the name, the client retains all rights to it and the right to demand it to be transferred whenever they want.
Jason Lavigne says
@ all the web designers who have commented
My question to you is this, if you are registering the domain for your client you are also probably creating the account at the registrar which means you have the login information you would need to then administer the domain for your client. So why would you place yourselves as the owner? This isn’t needed to be able to administer the domain on behalf non technical clients.
I have always understood the need for design firms to administer domains for non technical clients but I do not understand the need to place the domain in your name when registering it.
David says
Some web designers do that to protect their interests as well. I’ve dealt with some cases where the webmaster’s client doesn’t want to pay their dues for whatever reason, then tried to pull a fast one over them.
Will post more later as I just passed by and am rather pressed for time. Maybe even blog about it and link here for reference.
Sergio Igartua says
I run an marketing and advertising firm in Los Cabos, Mexico, and while we develop sites, host and register domains for our clients, we see these domains as belonging entirely to our clients as they paid for the work in the first place.
When a client requests that we release their domain, we simply transfer it back to the client at cost if anything at all.
It’s important to point out that an agency’s money should come from development, design, advertising services or marketing expertise it provides, not from holding someone else’s brand name or property hostage.
We’ll host it if you want us to, and if not, we will show you how to host it yourself.
Enrico S. says
If you register a domain on behalf of your customer, you should list the registrant as “[your company name] on behalf of [your customers name]”. This way it will be clear and you will not impact your client’s trademark rights.
Jason Lavigne says
Enrico,
This would be fine for gTLD’s such as .COM where you can easily change the domain ownership at anytime without any fees having to be paid however many ccTLD’s charge for a change of ownership. Our registrars have a very large .CA customer base and more often than not it is the domain owner that ends up having to pay in order to correct the registration to list their name.
Johnny says
This is an interesting blog that I stumbled across.
One of the most common mistake by smaller organizations is to allow employees to renew their Domain when it expires. Although registrant is stated as the “company”, the “administrator” (in this case the “employee”) is able to change this for a few meagre $$$ or even free.
Who then holds ownership of the domain? This poor company has been using the domain for the past 10 years, with email and web apps hosted on it. Is there an avenue for going after a “vengeful ex-employee” in this case?
Edo Heinrich-Sanchez says
Help! We are being held hostage by our ex-webdesigner. If you google oicbc you will know that the contents http://oicbc.org has been “deleted”. Several attempts have been made to ask for the designer to tranfer the username and passwords in order for the new webmaster to work on the site. Now I found out that the oicbc domain has been extended for another year. The designer is still using our pages in her portfolio and until last May had a self promoting plug on the front page chihi.ro “Supporting the Okinawa International Clean Beach Club”
This is like an ex-staff that decides not to return the master key to the office. We are locked out. The OICBC (clean beach club is being re-organized and will be re-released in the future). What can we do? This is frustrating as she has no right to do this.
The contents was taken down by her without consultation. In Japan, if you google oicbc, it is the first page that comes out.
Isn’t this an attempt to strangle the organization’s web presence? I am very, very frustrated and would like to take legal action that does not put us underground.
Any advise would be helpful.
Thank you.
Enrico S. says
Edo: Happens all to often. Feel free to give us a call. http://www.traverselegal.com.
rl_ward says
Here’s what happens frequently:
Client hires new designer, then fires old designer, then tells old designer to work with new designer (without pay) to make the transfer happen. New designer tells client it’s a five minute job.
What’s wrong with this picture?
Memories By Michelle says
I can see both sides of this issue…
If a client contacts me for a website, and they do not already have a domain, I will purchase/register one for them, either using my own credit card, and passing those charges on, or preferably using their credit card (so that auto renews get billed to them). The domain is always registered to my client, but I do not initially give them the login info.
I also establish an appropriate hosting account for their site’s functionality, using the same terms, in the name of my client. While designing, testing, modifying, and adding/subtracting the elements of the site, I alone have the login information to the site.
When the site is fully complete and approved by the client, I send a one-time invoice for my time in designing it. Once my invoice has been paid, I will provide the login information to the domain registrar or the hosting company upon request, without a problem. However, I make it clear that if anyone gets into the site and breaks anything that is currently working and functional, I will not take responsibility for fixing it (if one of my websites is ever found to not be working as desired, I have no problem remedying the issue, unless someone else caused the problem). If changes are requested down the road, I’ll do those and bill for my time, of course.
I do not ever feel as if I am holding anyone somewhere they do not want to be. However, I take pride in my work, and refuse to devalue it by allowing it to be taken without compensating me for my time to create it. On the flipside, I really do not approve of those web designers that do self-hosting at exorbitant prices for sites that do not need bells and whistles, and refuse to let the site move anywhere else. Or those who charge ongoing annual/monthly fees and really don’t have to do anything to earn them.
And if my client’s neighbor’s son fancies himself a web designer and offers to change their website for free, then screws up my work…well, you get what you pay for.