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What's your domain name strategy?
Have you lost track of what domain names you own? Have you had problems with crucial domain names being lost to cybersquatters due to a failure to renew the domain? You are not alone. New Top Level Domains (TLDs) are constantly being introduced, and so as a company grows it becomes increasingly hard to maintain control over a domain name portfolio. A first step in the right direction is to create a well-thought-out strategy which should be reassessed regularly. Set out below are some of the most relevant issues that your strategy should contain, a brief update on the latest TLDs you need to consider and an analysis of the remedies available to combat cybersquatting.
How to gain control of your existing portfolio
The internet continues to grow rapidly. The number of internet users has increased by 17% per year during the past five years.1 The number of domain name registrations has followed suit, with worldwide domain name registrations reaching a record high of 83.9 million domains in September 2005.2 As a result, the importance of adopting a satisfactory domain name strategy cannot be emphasised enough.
The most common reason why a company loses track of the extent of its domain name portfolio is that different parts of the organisation have secured domains using different registration agencies, with no centralised management within the organisation, and therefore no control of when each domain is up for renewal. This may accidentally result in a failure to renew domains and to crucial domains lapsing, bringing down any websites that they point to. This may interrupt e-commerce, leading to a substantial loss of revenue and expensive legal proceedings to recover the domains from third parties.
To regain control it is first of all essential to carry out a domain name audit with the assistance of a reliable domain name management agency. There are several good companies that can conduct a search on your brands to see which domains are owned by your organisation and which are not. Once you have established the extent of your domain name portfolio, you need to decide what names to keep and whether to allow any names to lapse, as some may relate to brands which you no longer use. However, you should be careful not to allow any domains to lapse that you would not want a third party to pick up and use.
When you have identified those names that you wish to retain, you should transfer them into the hands of one single manager (a registrar) in order to centralise your portfolio. Your registrar will help you streamline the contact details for each of the domains that are transferred, to ensure consistency and to ensure that all queries concerning the domain portfolio are sent to a single source, rather than various contacts around the businesses. This centralisation is crucial to effective management of a portfolio and is the biggest single initiative a company can take to prevent problems arising in the future.
It is also recommended that you use generic role names, such as ‘domain admin', as the administrative and billing contacts for the domains. This will ensure that a domain is renewed even if the person who initially registered it has left the company. They may have used their personal contact details for the registration, and the domain could lapse if the renewal invoice is sent to an e-mail address which is no longer in use.
Your registrar should also be able to provide you with a proper web-based management tool. This will allow you to view the status of your portfolio, including the renewal dates for each of the domains, at any time and also helps you to plan your budget for the management of the portfolio.
New registrations
With the myriad of new extensions constantly being launched, it is important to adopt a policy on what names to register, where to register and how to manage your growing domain name portfolio to ensure that you fully exploit and protect your valuable brands on-line.
What names should you register?
In terms of what names to register, your domain name strategy should be in line with your trade mark strategy. You should look at what names you will be using, both in relation to current e-commerce activities and for any upcoming marketing campaigns. There can only be one identical domain name under a particular extension, and most domain names are allocated on a first-to-file, first-to-serve basis. It is therefore important that whoever is responsible for registering domain names within your company is communicating closely with the marketing department to ensure that any crucial domains are secured before the launch of new marketing campaigns, or new products or services.
Cybersquatting and defensive registration
The number of cybersquatting cases continues to grow. The World Intellectual Property Organisation (WIPO) saw a 20% increase in the number of UDRP cases filed in 2005, compared to 2004. In 2005, a total of 1,456 cybersquatting cases were filed, which represents the highest number of cybersquatting cases handled by the WIPO Centre since 2001 (see http://www.wipo.int/edocs/prdocs/en/2006/wipo_pr_2006_435.html).
You should therefore secure any other crucial names and, possibly, variations of your brands for defensive purposes. It is likely to be a lot cheaper to pay the domain name registration fee than having to recover the domain at a later stage from a cybersquatter by instigating expensive court proceedings or issuing complaints under any of the existing administrative procedures, such as the Uniform Domain Name Dispute Resolution Policy (UDRP), Nominet's Dispute Resolution Service (DRS) or the .eu alternative dispute resolution procedure (.eu ADR), which are discussed below.
Where to register
Businesses need to have a good understanding of how the domain name system works. There are currently around 20 generic TLDs (gTLDs), such as .com, .net, .org, .biz and .info, and 254 country code TLDs (ccTLDs), including .uk for the UK, .fr for France and .it for Italy.
Most of the gTLDs are unrestricted in the sense that anyone can register anything under the domain extension. The ccTLDs can be divided into severely restricted, mildly restricted and unrestricted jurisdictions. Both gTLD registries and unrestricted ccTLD registries tend to attract more cybersquatters because of their inexpensive registration fees and relaxed registration rules, which allow registrants to easily obtain a domain name and then make a profit when selling the name on to the owner of the corresponding trade mark or one of its competitors.
In light of this, you should seek to secure your most crucial brands under the majority of the gTLDs, and in at least the ccTLDs where you trade, or have plans to trade in the future. It may also be sensible to get your domain name management agency's view on the ccTLD jurisdictions in which your brand is most likely to be abused, and then take a cost-versus-risk balanced view on whether to make defensive registrations in any of those countries.
Introduction of new TLDs
The .eu domain
Going forward, it is essential to keep yourself up-to-date with the launch of any new domain extensions, and to consider whether to include any of them in your portfolio. This brings us to the long-awaited .eu domain, which has finally been launched. This new TLD is aimed at entities targeting the entire EU market, and is the first regional TLD in the sense that it is meant to enable the marketing of products and services to the whole of the EU without showing preference towards any particular state markets. The .eu domain is run by EURid, a not-for-profit organisation formed by the Swedish, Italian and Czech ccTLD registry operators.
The new TLD is expected to become one of the most popular domain extensions, and with over 300,000 applications already and many more expected with the introduction of the land rush period launched on 7 April, this may well become reality.
Hopefully, you have already managed to secure the .eu domains that correspond to your company's valuable trade marks during the sunrise period, which served to protect owners of intellectual property rights (IPRs) within the EU. The sunrise period has just ended, opening the floodgates to anyone with a presence within the EU. If you have applied for a .eu domain corresponding to one of your brands but the name has been allocated to a third party, you may be able to recover that domain by using the .eu ADR described below.
Recently approved gTLDs
Most IP owners would probably prefer it if no new TLDs were introduced at all - they are seeking to reduce their annual budgets, not increase them. However, the Internet Corporation for Assigned Names and Numbers (ICANN), the governing body of the internet, is currently assessing ten new gTLD applications, and has already approved:
- .jobs (for the recruitment industry);
- .travel (aimed at the travel industry);
- .cat (to promote the Catalan culture and language);
- .mobi (for the mobile phone industry); and
- .xxx (for the global on-line adult entertainment community).
The operators of each of these new gTLDs have adopted varying degrees of protection for IPR owners, and you should consider whether to include any of these new extensions in your domain name portfolio.
How to recover infringing third-party registrations
Once you have gained control of the names you own, it is essential that you put in place a domain name monitoring programme. This will allow you to discover, at an early stage, any third-party registrations that abuse your valuable brands and to take immediate action to terminate such abuse. It is important to consider the appropriate proportionality of the action to be taken. It may be enough to continue to monitor the infringing domain name rather than immediately incurring expense. If the situation is more urgent or the infringement is likely to cause serious harm to your IP rights, it may be necessary to:
1) initiate further investigation or negotiation;
2) file a complaint under any of the existing administrative procedures, such as the UDRP (for disputes involving gTLDs and some ccTLDs), the DRS (for .uk domains), or the eu.ADR (for .eu disputes); or
3) instigate court proceedings.
Administrative procedures
An administrative domain name procedure allows a complainant to submit a complaint on-line to a dispute resolution provider, which notifies the registrant of the domain name and gives the respondent the opportunity to file a response. Thereafter, the case is referred to a panellist or an independent expert for determination, and a decision as to the transfer or cancellation of the domain name is rendered within a relatively short period.
The majority of the administrative procedures, including the UDRP and the DRS, require the complainant to show that the respondent carried out the registration of the domain name in bad faith and/or is using the domain name in bad faith. The UDRP is the strictest of the existing policies, requiring complainants to establish that:
1) trade mark rights are identical or similar to the domain name;
2) the respondent does not have any rights or legitimate interests to the name; and
3) the respondent both registered and is using the domain name in bad faith.
The DRS is less strict as a complaint can be based on any rights, and includes an alternative bad faith criterion in the sense that you only have to establish either that the domain name was registered or is used in bad faith.
The .eu ADR policy provides a remedy exclusively to owners of rights within the EU, and appears to be even more relaxed than the DRS. It only requires the complainant to show either that the respondent does not have any legitimate rights to the name or that they registered or are using the domain name in bad faith.
Decisions under both the UDRP and the DRS have been substantially in favour of complainants (IPR owners), and normally provide a cheaper and quicker remedy than instigating legal proceedings, at least in the case of straightforward cybersquatting cases. At the time of writing, we are still waiting for the first decisions under the .eu ADR to be published. This procedure is likely to be even more favourable to IPR owners, as it does not require complainants to establish bad faith on behalf of respondents, as mentioned above. On the other hand, the lack of homogeneity in rights recognised or established by the national laws of EU member states is likely to cause confusion in the application of the .eu ADR and could result in different results, depending on the jurisdiction in which a right is claimed.
Instigating legal proceedings
In more complicated domain name cases it may be necessary to instigate legal proceedings. A series of UK court judgments confirm that it is possible to instigate proceedings against a cybersquatter based on both passing off and infringement of a registered trade mark.
The most important decision to date is the Court of Appeal's decision in British Telecommunications Plc and others v One In A Million Ltd and others, which, in relation to the law of passing off, established that the registration of a domain name which consists of a third party's well-known trade mark and which the registrant has attempted to re-sell to make a profit, is an instrument of fraud and constitutes passing off.
This was followed by Global Projects Management Ltd v Citigroup Inc and others. In this case the High Court went even further than One in a Million and explained that even passive holding of a domain name, which leads people to believe that the holder of the domain name is linked with a company, can be enough to make the domain a potential ‘instrument of fraud' and therefore constitutes passing off. This is good news for trade mark owners in cybersquatting cases, as now they do not have to provide evidence that a registrant has tried to sell the domain name to make a profit.
Conclusion
With the rapid growth of the internet and the substantial increase in e-commerce, a lack of control over your domain names can have catastrophic results. However, by following the recommendations set out above and by getting assistance from a professional domain name management agency, you will soon have regained control.
British Telecommunications Plc and others v One In A Million Ltd and others [1998] EWCA Civ 1272
Global Projects Management Ltd v Citigroup Inc and others [2005] EWHC 2663 (Ch)
Notes
1) See Internet Growth Statistics, www.internetworldstats.com/emarketing.htm.
By Simon Chapman and Jenny Holmén, partner and assistant respectively at Field Fisher Waterhouse Solicitors, London, and members of the ffw proTECHt programme, a specialist group that safeguards intellectual property on-line. For more information on the programme, please visit www.brandslaw.com.