Domain names – top ten legal tips

August 6, 2012

Domain names are a key asset in protecting your brand online. If you are considering launching a new brand and registering a domain name or want to protect your domain name or reclaim a domain name from cybersquatters, there are many factors to consider. We set out our top tips:

1.    Due Diligence:  If you are looking to register new names, carry out domain name, trade mark and internet searches to make sure that you do not commit to a name which could infringe a trade mark, brand or copyright of a third party.  If you are later forced to change the name, because it infringes the rights of a third party, then, aside from being a needless expense, the need to re-brand could damage any goodwill which you have built up.

2.    First-come, first-served: No-one has a right to a domain name and they are registered on a first come, first served basis.  As domain names are case-insensitive, take care your name cannot be misinterpreted. For instance, Experts Exchange, a programmers' discussion site, for a long time used expertsexchange.com, but later changed the name to experts-exchange.com.

3.    Protect the brand:  Registering domain names is one element of protecting a brand.  However, it is also crucial to think about registering your brand as a trade mark in the territories where you plan to do business.  Domain names do not offer any legal ownership rights as such, only a right of use of the name for the period of the registration.  Trade marks provide the best legal protection for a brand, and are also valuable if someone (e.g. a “cybersquatter”) registers a domain name which conflicts with yours.  Cybersquatters register domain names either with a view to reselling them for a profit or as a means of securing pay-per-click advertising revenue from internet traffic (so-called "parked domains").  With a registered trade mark, it is much easier to defend your domain names under the Universal Dispute Resolution Procedures (“UDRP”).

4.    Avoid typosquatters:  Make sure you register all the main likenesses of the name (e.g. hyphenated and non-hyphenated names), in all the key domain registries (eg .co.uk, .com, .eu etc).  You can also register common mis-spellings of your name to minimise the risk of “typosquatters” (registering a domain name similar to the name of a known brand but with deliberate typographical changes). Initial registration of domain names is relatively inexpensive, but if a malevolent third party or a competitor acquires a variant on your domain it can be difficult or expensive or even impossible to unseat them. For example, Google lost its fight with the typosquatter site goggle.com.

5.    Make sure you are the registrant:  Make sure your domains are registered in your own name (or the name of your company) and not a third party service provider (such as your website developer or ad agency).  If they are not in your own name, then this can be highly problematic when – for example – you want to sell the company and the registered owner will not co-operate or is no longer contactable or sees an opportunity to leverage a payment to transfer the name.  It is common for employees to register domain names in their own name. Usually this will not be an issue - until the employee leaves.  Most employees would not have an issue transferring the domain name over to the employer. But if the (former) employee refuses, is not contactable or simply does not respond you will have to take proceedings to recover the name.  You may be able to succeed in this if you can 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).  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.

6.    Keep contact details up to date:  Make sure your administrative contact details are correct and kept up to date so that you can maintain the registrations and do not overlook renewal reminders.  If the renewal reminder is sent to an old email address that is not in use, the renewal may be overlooked.  You could then lose your web site and email services.  Or worse, a third party could legitimately register the domain name when it expires.  You may then have a difficulty in recovering the name. If you have a large number of domain names, it is advisable to engage a firm to manage your domain name portfolio for you.

7.    Dealing with cybersquatters:  If you find that a third party has registered your brand as a domain name, the first step may be to issue a “cease and desist” letter asking the other party to stop using the name and to transfer it to you.  You may need to offer to make a payment for the name to avoid legal costs of further action. Failing that, where the third party registration can be said to be in bad faith, domain name disputes can often be cost-effectively and speedily resolved using the UDRP without the need to go to court.

8.    Beware the scammers:  You may receive an email (or even a telephone call) from a domain name registration agent informing you that a third party is interested in, or just about to purchase, an internet domain name similar to that of your business.  Many of these come from China referring to .cn domain names.  They will tell you that they want to give you first refusal on the domain name but you must act quickly if you wish to secure the name. The scam is that they will demand an excessive fee for a domain name when in reality no interested third party exists and you may not need the names in China!  If you want to register the names, use your own local agent.  Another scam, known as “domain slamming”, seeks to trick domain owners into switching from their existing domain name registrar to the scammer under the pretence that it is simply a renewal of the subscription to the current registrar.

9.    Buyer’s beware:  If you have no legal claim to the domain name, then you could seek to buy it from the third party.  Great care needs to be taken when purchasing a domain name from an unknown third party as frauds can occur and there is a risk that you can pay over money and not actually acquire the name.  In such cases, it is important to have a properly drafted legal agreement and make use of an escrow agent such as a law firm or escrow service to handle the deal safely.

10.    Keep up to date with changes in domain name policies, opportunities and threats:  For example, new generic top-level domain (gTLD) expansion program, as approved by the Board of the Internet Corporation for Assigned Names and Numbers (ICANN). The program allows public and private organizations to register any term to the right of the dot, such as, .canon, .luxury or .bank.  Operating a registry and setting the qualifications for registration in the gTLD allow a company to effectively control who can register domain names in the gTLD and what may be registered as a second-level domain.  However, many brand owners and industry organizations have voiced concerns that the gTLD expansion will lead to a significant increase in cybersquatting.  Companies should monitor applications for at least their most important brands to ensure they are able to timely raise objections during the application and evaluation period.


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