Domain Name Wire has a great article titled Web Designers Holding Domain Names Hostage. This is an issue our domain name dispute lawyers see all the time. The moment there is any sort of fee dispute, the web developer begins the process of holding the domain name ransom. Alternatively, the web developer doesn’t want the customer to change services and essentially leverages the domain name against the consumer. If the customer does not have trademark rights, and there is no contract which indicates who owns the domain name, there are inevitable problems.
… reminded of this problem (again) when reading a recent UDRP decision. The town of Easton, Connecticut filed a UDRP complaint against their web design firm, Lightning PC Inc. Lightning created Easton’s web site at EastonCT.org and registered the domain name in Lightning PC Inc’s name. Lightning pulled the plug on the site later when it said the town owed it money. The UDRP was denied because this really isn’t a cybersquatting case and Easton, CT doesn’t have a trademark to the EastonCT.
Regardless of who’s at fault in this case, this is one of the most common blunders I see companies make with domain names. I know of a case in Texas where someone spent tens of thousands of dollars getting a web site created. When she wanted to switch web developers, the company held the domain hostage and demanded more money to release it.