Domain names are hugely important and valuable to businesses who require them for their email addresses and websites.
The problem is that many companies have lax policies in relation to the management of their domain names. For example, it is common for employees to register domain names in their own name. Usually this will not be an issue until the employee leaves. And even then, often the company does not know about it until the domain name expires because it has not been renewed. In worst cases, the name can then get taken up by a third party and can be difficult to retrieve.
Most employees should not have an issue transferring the domain name over to the employer. But what if an employee refuses, is not contactable or simply does not respond ?
The majority of disputes over the ownership of domain names are resolved through one of the agreed dispute resolution procedures known as the Uniform Dispute Resolution Procedure (UDRP). Where there is a dispute, then the UDRP may be invoked by the employer to secure a transfer of the domain name.
However, a company does not have an automatic right to recover a domain name. In order for a claim to succeed you need to show that :
• The employer has a registered trade mark for the name;
• The employee did not have a legitimate interest in it (for example, it is not their surname, as it might be for a founding director of a company); and
• The registration and subsequent use of the domain is in bad faith (for example, it can be shown that the employee registered the domain only for the purposes of selling it back to the employer for profit).
In the recent case of Eli Lilly and Company v David Clayton a claim against an ex-employee succeeded and the tribunal ordered that the domain name be transferred from the former employee to the employer where it was shown that the employee had no reasonable reason to be registering the domain name and the intent was to block the domain name from being available to the company.
However, you can’t always be certain that you will be able to prove all of these things and, even if you can, there will be the unwelcome time and cost of having to bring a UDRP case. As is often the case, prevention is better than cure and companies should actively manage their domain name portfolios.
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