GoDaddy sued over expired domain purchase clawback

Company clawed back the domain nearly two months after selling it to winning bidder.

A Swedish company has sued GoDaddy after a domain it purchased in an expired domain auction was clawed back by the registrar nearly two months after it bought it.

Crisby Studio AB bought calor.com (heat/hot in Spanish) in an expired domain auction at GoDaddy in early April this year. It immediately set up a page on the domain.

The following month, it entered into a joint venture agreement with a company to develop the domain. As part of that agreement, it warrantied to the joint venture partner that it owned the domain.

Crisby also received an inquiry through a GoDaddy broker for the domain, to which it responded that it already had plans to develop the domain and that it would take a substantial offer to change its plans.

Then, on June 4, the company received a surprising email: GoDaddy said the domain was auctioned in error. It was taking the domain back, refunding Crisby’s purchase price, plus giving it a $350 credit for the inconvenience.

Needless to say, Crisby was not happy with this. It filed suit (pdf) in U.S. District Court in GoDaddy’s home state of Arizona last week.

Auction clawbacks sometimes happen on GoDaddy, but these mostly occur before the domain is transferred to the buyer. In this case, not only was the domain transferred, but it was clawed back nearly two months after Crisby bought the domain and made extensive plans to use it. Also, the domain had expired at a registrar that GoDaddy owns, not a third-party registrar.

On Tuesday this week, the judge overseeing the case issued a temporary restraining order to prevent the domain from expiring or otherwise being removed from GoDaddy or sold to another party.

Attorney Jeffrey Neuman is representing the plaintiffs, along with local counsel Messner Reeves LLP.