Law360 Guest Article: Domain Name Collateral And Trademark Tangles
For a business involved in digital distribution, a domain name and the services offered through that domain name are often responsible for a large portion of the business value. A lender to a business with a valuable domain name typically looks to take a security interest in the domain name to secure its loan against a valuable asset of the business.
If the business does make the required payments, the lender may try to seize and sell the domain name at auction to satisfy the debt. However, due to the unique characteristics of a domain name as both a property right and a trademark right, a judgment creditor or receiver may have a difficult time auctioning a domain name to a new purchaser because of cybersquatting and other concerns.
Excerpt from Law360, Jan. 19, 2012. To view the full article, click here (subscription required).