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A couple of years ago I entered (as a silent partner) into a business. I was asked if I could get a website up and running, which included registering the domain. We have since parted ways but the original partnership and subsequent dissolution failed to consider ownership of of the domain and hosting. It is all a part of my personal hosting plan and I registered the domain.

I no longer want to host their site as I don't feel I should have to. Why should I? I have nothing more to do with the business. I also do not want to let go of the domain names without compensation. Am I able to sell the domain(s) back to the remaining partners for a profit?

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Who owns the trademark and service mark rights? –  Fiasco Labs Mar 16 '13 at 3:01
    
I would assume the LLC. –  Will Mar 16 '13 at 3:12
    
Are you willing to let go of the domain and hosting at the rate at which you bought it/market rate. –  Prasad Mar 16 '13 at 4:29
    
No I am not. I am willing to let it go for its current value, which is quite a bit more than the original value when we didn't even have a brick and mortar establishment. –  Will Mar 16 '13 at 11:10
    
What "compensation" do you refer to? Have you personally been paying for the domain registration and hosting during this time? –  w3d Mar 16 '13 at 13:35

2 Answers 2

If they own the trademark to the name, then by withholding the domain from them for the explicit purpose of profiting off of their trademark you are effectively violating the Anticybersquatting Consumer Protection Act. If you live in the U.S. or a country with a trade agreement with the U.S., then you could be fined up to $100,000.

If you had purchased the domain on your own to use for your own unrelated site, then it could be argued that you aren't cybersquating. But knowingly withholding a trademarked domain name in order to extract money from them (some might consider it blackmail) clearly demonstrates a bad faith intent to profit from the mark.

I mean, if they didn't pay you initially for the hosting or domain registration, then just get those expenses reimbursed. But if you're not providing any additional value to them, why should you turn a profit for returning to them what rightly belongs to them in the first place?

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You said that the LLC owned the trademark. If they do, then that is the definition of cybersquatting. You're squatting on someone else's trademark in order to sell it to them for a profit. Just because you registered it does doesn't mean you deserve to profit from it. That's precisely the mentality that drives all domain squatters, who make money without providing any value to society. Unfortunately, there are no laws preventing most acts of domain squatting. However, the ACPA specifically protects trademark holders from cybersquatters who use their trademark. –  Lèse majesté Mar 16 '13 at 11:28
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The difference between is: 1.) brands and trademarks aren't commodities; you can't just replace a trademarked domain with another without renaming your company and rebranding; 2.) the domain is an intangible goodwill asset; the company can't sell it to pay you your share, especially as the domain's whole value to the company is in continuing to operate it; 3.) if you're going to claim that this is just dividing up company assets to dissolve a partnership, then that has to be done cooperatively and systematically, splitting all tangible and intangible assets as well as liabilities; –  Lèse majesté Mar 16 '13 at 12:03
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This is more akin to selling a vital account password back to the company. Which again, is essentially blackmail. Yes, the password has value, but the value is based on the threat you've created of losing the domain. If they'd simply not had a shady person register their domain originally (which should have been done in the company's name if it's for their company site and their trademark), then the value of the domain would continue to simply be whatever they pay their registrar to renew it each year. –  Lèse majesté Mar 16 '13 at 12:15
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I need to backtrack. I misspoke earlier. There is no registered trademark. I was an owner who is no longer an owner. I have not received ANY compensation as a result of the split - nothing. I was a silent partner. My name was not on anything aside from the domain and hosting. In my estimation the people who are not acting in good faith are the ones who did not recognize my part in the ownership of the company. We're not "business" people. We didn't know anything about trademarking. We thought it would be fun to start a business and did. And once it took off, so did the egos. –  Will Mar 16 '13 at 14:54
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It changes things to the extent that the LLC will probably feel they've been shortchanged by the people who sold the business. You've entered lawyer territory. Be prepared to spend money proving your case. –  Fiasco Labs Mar 16 '13 at 21:36

Unless you signed something that basically says "Your paying the company's web hosting and domain bills" then, it's your web hosting and domain. I'm not sure what the situation would be if the name of the domain is trademarked but, if it is in fact your domain and web hosting then, you can cancel your web hosting, and try to force the company to buy the domain from you.

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We never made such an agreement. We needed a site and I took care of it. –  Will Mar 16 '13 at 3:36
    
Well, you should have 100% control then. –  Corvin Mcpherson Mar 16 '13 at 3:42

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