I think I have got about 6 calls in the last day from large portfolio owners. They want to know how to clean their portfolios. This is a hard question to answer because there is no good way to clean house. If you think you own a TM domain and don’t want the liability of owning it even if you delete it you can be sued. Domain Tasters sometimes own a domain for less then 5 days and get lawsuits months after they owned the domain. So if you have a portfolio and owned the domain for 2 years and delete it you are not sitting in the clear. Registering the domain is enough is to cause someone to sue you. So if deleting the domain doesn’t resolve all the conflicts how does a portfolio owner get clean. Let’s say you own 100,000 domains. You are likely to have at least 0.5% of the domains that can conflict with someone else. There will always be conflicts. The best advise is don’t sell off your trademark domains, delete them. The penny pitchers inside the portfolio companies really want to do this but it can really bite a portfolio holder in the end. When you are trafficking in TM domains and may bite the company in the end just as hard has holding them long term.

Mitigating liability is something that all portfolio owners should be doing. When one of the domains in that 0.5% percent hits you with lawsuit they can use your registration history, deleted domains, sold domains, and your current 0.5% of domains to paint a picture that you systematically target Trademark holders. If you park directly with Yahoo they have a tool that allows people to run domains against their trademark system. There can be false positives but at least it flags some of the domains and a human can walk through those instead of the whole portfolio.

Some portfolio owners are addicted to the cash of the TM domains. They transfer the domains to off shore sister companies. What a mistake, smart lawyers are not fooled by shell companies. If a portfolio holder always transfers to the same company the lawyer knows there is a good link between the two companies and can subpoena evidence to prove the theory. So don’t trick yourself to think you are clean if you divide your portfolio into two holding companies (Good Guys, Inc and Bad Guys, Inc.). They share money, they share assets, then the corporate veil can be pierced.

Offshore? There is no offshore. This is a myth. For Taxes, Yes. For lawsuits, No. Virgina is where the registry for DotCom is and a lawsuit in that federal court can get all assets both Good and Bad. So if you value your DotComs and don’t want to loose them you have to be completely clean and not hold bad liabilities.

When you delete a domain it can cause untold havoc. You are now putting a TM domain into someone’s Domain Tasting queue. It also makes the domain available to anyone to register. A newbie is going to pick up the domain and get struck by the lightning that you feared. In the ideal situation if you think you have a possible TM domain that you want to delete it would be nice to have a 501c3 charity like Mr. Peppler started called CarryOn.com that would hold possible TM domains. CarryOn.com doesn’t hold TM domains just adult domains. But a new charity could hold TM domains. The goal of the charity would be to direct domains to the rightful owner and try to give those domains back to the owners. The charity would not monetize the domains while they hold them. It would be great if Verisign was willing to be a major donor because a majority of the money the charity would operate would be for registrations paid directly to Verisign.

I would recommend any portfolio owner that has over 20,000 domains to get an outside audit on domains that they own every 6 months. If you get caught in a lawsuit that audit trail would be helpful to show good faith. When you judge and evaluate your own domains there is no outside balance and perspective.