Domain names, the marquee signs for organizations on the World Wide Web, are a viable asset purchased and traded legitimately or in bad faith like any other commodity . Despite the existence of several governing bodies and laws, enterprises must look out for their own interests when it comes to domain names.
How Domain Names Get Lost
Reasons for lapsing domain names vary from negligence to victimization by dot-com no-goodnicks.
Costs Associated With Losing Domain Names
It could be argued that the cost of a lost domain name has the same cost as a shut-down of an enterprise’s Web site – since without its domain name, external clients are not likely to find the organization’s IP address.
- Disruption of business and loss of sales. Web sites are essential for taking sales orders, and for client communication. Depending on the industry and company’s reliance on its site for business, even a temporary loss of a company’s domain name could cost the company several weeks worth of sales. Pure play sites offering digital content are especially vulnerable.
- Blacklisting. Spam sent from cyberjacked sites means a potential blacklisting of company e-mails.
- Legal costs. Even with legitimate trademark claims, re-assignment of domain names to rightful owners could result in expensive legal fees.
- Goodwill. The redirection of a company site to pornographic Web sites or intentional slandering of the company name can result in damage to a company’s reputation.
- Ransom. Where a clear case cannot be made to intellectual rights, a company may be forced to pay up for Web speculator fees. For example, a fictional company selling aprons that forgot to re-register its site may be forced to pay the speculators who acquired the domain name www.WorldsBestAprons.com upon expiry. Since apron is a common word, it is difficult to prove it represents a trademark name in a court of law.
Domain Names Don’t Guarantee Trademark
While domain names are available on a first-come first-serve basis, the ownership of a domain name does not cover the owner’s rights to trademarked names. There is little accountability on the part of name registries to ensure that no trademarked names are used as domain names; for this reason, a registered name may not always be usable.
Domain Name Speculation Versus Cybersquatting
According to the Anti-Cybersquatting Consumer Protection Act (ACPA), a relatively clear definition exists on what qualifies as inappropriate domain name registration.
- Cybersquatting refers to the intentional acquisition of a trademark or person’s name with the intention of profiting from their good-will. Practices such as domain name tasting and kiting involve the acquisition of temporary rights to millions of names on a temporary five day basis, allowing squatters to benefit from site traffic. Expired corporate sites could easily wind up on a cybersquatters temporary portfolio if they are not re-registered in a timely manner.
- DNS - Domain Name Speculation. Domain name speculation is the purchase of a common word domain name such as toys.com, SaaS.com, or any other domain name from which the purchaser anticipates to profit. This type of speculation is becoming less and less popular; as one might imagine, most of the good names are taken.
- Typosquatting is the registering of common misspelled variations of popular site names. The legality of these sites is questionable with court-rulings going in both directions.
ACPA Really Sucks
In the year 2000, Verizon Wireless helped uncover some loopholes in the US’s Anti-Cybersquatting Consumer Protection Act. The Bell Atlantic/Vodaphone joint venture took a preemptive strike at potential critics by acquiring the name Verizonsucks.com, bell-verizonsucks.com and other variations of Verizon-bashing names. Lashing out at the corporation’s efforts to quell criticism, hacker magazine 2600 registered the site verizonreallysucks.com. Verizon soon learned that they had little legal recourse as the courts ruled that 2600’s intention did not involve profiting from the Verizon name. ACPA is designed to protect both trademark names and the First Amendment freedom of expression. The courts ruled that it was 2600’s Constitutional right to voice their opinions.
ICANN
ICANN, The Internet Corporation of Assigned Names and Numbers, has a much broader definition than ACPA for what qualifies as improper domain name registrations. The resolution of disputes through ICANN is also more cost effective than filing formal legal claims through federal courts. Claimants file their grievances through the UDRP Uniform Domain Name Dispute Resolution Policy; however, any action by ICANN is still subject to a legal court decision, so the law of the land ultimately has the last word on ownership.
WIPO is Weak
Established under the mandate of the UN, the World Intellectual Property Organization (WIPO) offers similar arbitration and dispute resolution to ICANN. WIPO can only serve as an intermediary; it cannot in itself make or enforce any rulings. WIPO cases usually involve international disputes involving corporate claims on international copyright violations.
Litigation: A Last Resort
Counting on the law, as part of a domain name protection strategy is not highly recommended. First off, the associated costs of losing company domain names are too high to risk losing the domain name even temporarily. Even for companies with deep pockets, there’s no guarantee of a favorable decision by the courts. Most malicious re-registration of corporate sites is illegal, but some cases are less clear cut. There is no real international court with the power to back its decisions, and offenders are often harbored in countries with weak national copyright laws.
Recommendations
When it comes to the law, seek professional advice from copyright lawyers. To avoid the costs of legal counsel follow these basic recommendations:
1. Use a reputable full-service registrar. These offer multiple year deals, high levels of security, and features such as Registrar-Lock which protects names from being registered by third-party registrars.
2. Develop a policy on corporate domain names. Limit and monitor the access points and e-mail accounts used to register, and keep inventory of all corporate domain names. Set the procedures for renewing domain names in writing.
3. Verify trademark of names before registration. To avoid international disputes, due diligence must be taken in the way of research before registering new domain names to ensure they do not conflict with other international enterprises’ trademarked names.
Bottom Line
A domain name is a valuable asset that must be managed and protected like any other corporate holding. When it comes to domain names, US law and international bodies can only go so far in protecting the intellectual rights of organizations.
