Domain names: the foundation of online business
Wednesday 1st March 2017
Domain names are an essential element to creating a strong online brand identity. How should you go about selecting the right domain name and protecting yourself and your business against cybersquatters? Our trade mark experts share some tips:
As the World Intellectual Property Organization (WIPO) points out, “the choice of a domain name has become an important business decision”. More widely, a multitude of business decisions are impacted by the Internet and an important consideration for all businesses is the overall presence of their brand online.
Customers’ first exposure to a business is increasingly online. This exposure can result from a targeted Google search for particular goods or services or simply from stumbling across a business’ website while browsing the net. Further, the dissemination of information about one’s goods or services is no longer restricted to local customers through shop fronts or word of mouth. The Internet enables businesses to connect with a large and global marketplace. However, in order to positively connect with this potential consumer market, businesses need to ensure a strong and coherent brand identity exists both offline and online.
Domain names are an essential element to creating a strong online brand identity. Through an authorised registrar, businesses can register their company names or products and/or services, or even future products and services, in a number of top and sub-level or country code domains, for example .com, .co.nz, or .nz. Strong domain names allow customers to remember websites and ensure credibility by connecting the online brand with the rest of the branding the customer may see elsewhere. Registering a domain name is also a relatively low cost way to generate greater website traffic due to visibility on the Internet and therefore reach more potential customers.
Choosing the right domain name(s)
Domain names are designed to serve the function of enabling users to locate businesses in an easy manner. A domain name should be concise and easy to spell and pronounce. This ensures the domain name is typed correctly by potential customers and customers can refer others to the right website. Second, a domain name needs to be memorable and make an impact. A domain name is the first thing website visitors will notice, which not only creates an initial impression but is important to the long-term success of the website. Before registering a chosen domain name, it is important to research existing domain names and registered trade marks. It is crucial that a domain name does not infringe other parties’ intellectual property rights.
Is your business vulnerable to cybersquatters?
Registered domain names can protect a business’ brand and prevent others utilising the exact same domain name in a derogatory way. However, this only goes so far because others can, and do, register similar domain names or domain names with slightly different suffixes. The registration or use of a domain name with bad faith intent to profit from the goodwill of a trade mark belonging to another person or company is known as cybersquatting. Cybersquatters take an opportunistic look at existing or emerging businesses and their brands. They will register these brands or trade marks as domain names in order to sell the domain names back to the business that rightfully owns the trade mark at a later date, and at an inflated price. Alternatively, cybersquatters will attempt to keep the registration and use the name of the associated business to attract more website traffic and business to their own sites.
Recent examples of cybersquatting disputes show just how common cybersquatting is and something that is becoming prevalent due to the expansion of top-level domain names. In 2016, big name brands Nike, Jimmy Choo and eBay recovered ‘confusingly similar’ domain names registered by individuals who were found to have registered in bad faith and have no rights or legitimate interests in the domain names. The recovered domain names included nike.mx, jimmy--choo.org, jimmychoooutletsale.org, ebaypro.com and ebaypixel.com. Confusingly similar domain names such as these can detract customer traffic from a company’s website and also cause confusion as to whether the legitimate company has endorsed the cybersquatter’s website and its content.
Nike, Jimmy Choo and eBay recovered the domain names following an arbitration procedure known as ICANN’s Uniform Domain Name Dispute Resolution Policy (UDPR), a procedure available to all domain name registrants and owners. The three requirements for establishing a UDRP complaint include:
- the domain name is identical or confusingly similar to a trade mark or service mark in which the complainant has rights; and
- the registrant has no rights or legitimate interests in respect of the domain name; and
- the domain name has been registered and is being used in bad faith.
However, filing a UDRP arbitration is only one way to prevent cybersquatters taking advantage of a business’ name and brands. It is necessary to weigh up whether domain name recovery through the ICANN UDRP system is the most effective option in the circumstances, or whether to pursue another intellectual property action such as passing off or a claim under the Fair Trading Act 1986. Where the cybersquatter has used a registered trade mark in a domain name and is using that domain, a trade mark infringement claim may also be considered. As a priority, business owners should register their trade marks and corresponding domain names to prevent cybersquatters taking advantage of these. Alternatively, businesses can monitor for possible infringing domain names, although this may be an onerous task given the sheer numbers of domain names being registered daily.
Protecting your business and your reputation online
Baldwins provides expert advice on the registration and management of domain names for you or your company. We are also able to help if you find a cybersquatter owns a domain name which rightfully belongs to you, and advise on the best way to resolve domain name disputes. If you would like further information please visit our domain names webpage, or contact us today.
This article was written with assistance from Vicky Mullins.
This article is intended to summarise potentially complicated legal issues, and is not intended to be a substitute for individual legal advice. If you would like further information, please contact a Baldwins representative.