Why should a company register more than one domain name and trade mark? What are the pros and cons?

In the field of domain investment, having a basic understanding of trademarks is crucial. Many individuals, not being legal professionals, have conducted research by tracking UDRP filings and various domain-related litigations. It's important to note that the following content should not be considered legal advice.

Recently, there was an article introducing a domain for sale on Sedo, and a reader in the comments mentioned the number of trademarks associated with the term and the potential risks involved. From the perspective of a domain investor purchasing single-word .com domains, having multiple trademarks for keyword .com domains has both advantages and disadvantages.

Pros:

Some companies own a considerable number of single-word .com domains, many of which come with associated trademarks. This helps demonstrate that the entity holding the domain has certain rights due to its extensive usage. It's challenging for a company to prove it has more rights to a single-word .com domain than another entity. Additionally, the UDRP expert panel respects investors who purchase dictionary and generic keyword .com domains for investment purposes. Proper use of domains also contributes to supporting cases.

Cons:

On the other hand, having multiple trademarks for single-word .com domains may increase challenges in selling them. While many companies may desire to upgrade to such domains, the multitude of trademarks across different sectors may make startups or companies reluctant to invest heavily in domains during brand restructuring. This is because the use of domains could face challenges. For instance, a cybersecurity startup might be unwilling to spend $100,000 on a domain with a trademark related to computer services owned by another registrant. They may not necessarily infringe, but they also don't want to spend $100,000 on the name, incur additional marketing costs for brand restructuring, and deal with cease and desist (C&D) issues.

I have sold many single-word .com domains, some serving upgrading companies and others catering to startups and entrepreneurs with various projects. Prolonged negotiation processes have been involved in some deals, and in some cases, transactions fell through as potential buyers grew increasingly concerned about the potential infringement due to the number of trademarks.

Like any legal issue, consulting with an intellectual property lawyer to understand any issues related to trademarks and domains is essential. These are just two factors to consider when assessing the risks associated with domain acquisitions.