Will I have to give up domain name? HELP!

[Creative Guy]

OK, firstly I'm in Canada so I am not sure if the advice here will be 100% but here's the background on my problem.

Back in December "a client" came to me to develop 2 new company logos, a Powerpoint presentation, business cards and letterhead. While developing the material, I secured 2 domain names through a DirectNIC.com in my name. I supplied the Powerpoint presentation to them, which they used, and they currently use the b-cards and letterhead. Now, 4 months later and and still no payment, I get a letter from thier lawyer instructing me to transfer the domain names to the company. I replied back that I would, but only after payment of the outstanding amount is made. I just got a letter back today stating that they would only pay for the domain names and if I did not transfer the names they would sue me for the companies legal fees.

My question is, do I lay down and just transfer the names or do I use them as leverage and hold out. Am I squatting? Any advice would help. I'm not a rich guy so getting a lwyer over this might be costly. HELP!

 

[davezan]

Back in December "a client" came to me to develop 2 new company logos, a Powerpoint presentation, business cards and letterhead. While developing the material, I secured 2 domain names through a DirectNIC.com in my name. I supplied the Powerpoint presentation to them, which they used, and they currently use the b-cards and letterhead. Now, 4 months later and and still no payment, I get a letter from thier lawyer instructing me to transfer the domain names to the company. I replied back that I would, but only after payment of the outstanding amount is made. I just got a letter back today stating that they would only pay for the domain names and if I did not transfer the names they would sue me for the companies legal fees.

My question is, do I lay down and just transfer the names or do I use them as leverage and hold out. Am I squatting? Any advice would help. I'm not a rich guy so getting a lwyer over this might be costly. HELP!

I'm not an attorney. But I deal with domain names, and this is another field I
continually study.

You're considered a cybersquatter if you registered the domain name with the
intent to sell it to the trademark holder. You can also be considered to have
registered the name in "bad faith" if you're using it to gain commercially by
exploiting their mark.

Some questions:

1. How have you used the domain name/s since then?

2. Does the other party have a trademark, especially a registered one?

It appears they're just bullying you, especially if they haven't paid you what is
due. But here's a site which provides free legal assistance regarding domain
name disputes (although you might have to shoulder filing and court fees, if
any): www.internetjustice.org .

Additionally, if the domain names have no active websites, you might want to
put some actual "content" in them.

By the way, was there any written agreement made between you and them?

 

[Creative Guy]

OK. To answer a few more questions:

"1. How have you used the domain name/s since then?"

The .com domain names don't have an active website. However, they are using the domain name in their email addresses. I have instructed DirectNIC.com to redirect name servers which will allow a local internet company to provide email to them. So "The Company" has email which reads "johndoe@thecompany.com"... I have never said they couldn't use the domain names. But as far as I am concerned, if I give them the names, I will not get paid for the rest of the work. How can that be seen as squatting? Note: Phase 2 was to be the development of the websites. They asked me to research and find out if the names were available after work begain.

"2. Does the other party have a trademark, especially a registered one?"

No, I know for a fact the niether the company names are trademarked. I still have all the electronic artwork for the logos etc. All that has been provided to them is actual hard copy - letterhead, Biz cards, fax and invoice templates.

And finally, NO. This whole project was done without a PO from the client. As a small freelancer, I'm hoping this isn't a "once bitten, twice shy" scenario. All I do know is that they have been using everything for a few months.

Here is something else: Would it be illegal to shut down the redirect on DirectNic.com ?

 

[davezan]

But as far as I am concerned, if I give them the names, I will not get paid for the rest of the work. How can that be seen as squatting?

It's not. If the attorney of the other party said that, s/he's either ignorant or
is just calling your bluff.

Here is something else: Would it be illegal to shut down the redirect on DirectNic.com ?

Here's something you might not know: whoever is listed as the registrant of
the domain name is the legal owner, no ifs ands or buts. So if you're listed as
the registrant, you're the legal owner and can do anything you want with
them.

 

[MetaJeffB]

Ok, here's what I would do....

I would utilize the domain to create a site that would contain a blog that documents the continuing activities related to the matter. Be only factual. No slander or opinions. My guess is that they will soon prefer to pay than have that there. I suggest this because I believe that you cannot just hold a domain name without using it. This would clearly be doing that and the content would be relevant to the domain name itself.

Just make sure that they don't have a TM on the name.

On a side note, have you thought about a copyright infringement suit against them? They are using your artistic creation without any legal claim to do so. Send the a notice to cease and desist.

Just my thoughts.


Good luck!

 

[Creative Guy]

Well thanks everyone who replied to my question. It seems the cards are stacked in my favor. Since my first post I have recieved a letter from my clients lawyer saying that I had until this past Friday to surrender the domain names and that they are refusing to pay for the other design work. In addition, they also stated that if I didn't sign over transfer consent that "thier client" has instructed them to seek reimbursment for the legal fees. I've nicely replied that proceeding with legal action was of thier own doing and that I would not accept any responsibility. By the way, this laywer gave me such a short deadline to reply it was nearly impossible to do so, but I did get it there! In addition I told them I have given them a deadline of Tuessday, April 12 @3pm to recieve a certified check or bank draft for the full amount or the redirect of MY domain names would be terminated.

Any of you think I've opened up a big can of worms? Should I really pull the plug on the redirect which means they won't be able to get email?

Any thoughts.

 

[davezan]

By the way, this laywer gave me such a short deadline to reply it was nearly impossible to do so, but I did get it there!

LOL! Many lawyers do that a lot of the time, giving articial deadlines.

Any of you think I've opened up a big can of worms?

To be fair, you already opened up a can of worms the minute you agreed to
do their work.

Should I really pull the plug on the redirect which means they won't be able to get email?

Let me repeat this: you can do anything you want to the domain names as
long as you're the listed registrant. The listed registrant is the legal owner, no
ifs ands or buts.

Capish?

What MetaJeffB posted is another good suggestion. You'll show the domain
names have content and you're using them in a non-commercial way.

Keep us posted. Think of it this way: it's a learning experience on an esoteric
matter of domain names.