Domain Names

Domain Names

Domain names, like trade marks, are assets to any business and it is thus essential to have a domain name strategy in place.

Considerations for domain name strategies

Protecting a domain name is important to protect the company brand. A domain name is registered in order for a website to exist online (for example, “companyname.co.za” and “companyname.africa”) and this forms the basis of the online brand. A domain name can only be registered to a company if it is not already registered to another proprietor. If a company’s preferred domain name has already been registered by another party, it is necessary to think of a different domain which still reflects the brand or alternatively, to consider purchasing the existing domain name from the other party.

It is also important to consider registering domain names with a defensive strategy in mind, to ensure that others do not register a domain name that could be linked to your company or cause any user confusion. For example, although a nursery could register a primary domain with their company name (for example, “plants.co.za” if available), the company can also consider registering derivatives (for example, “plantsSA.co.za”) so that no one else uses this domain name. It is not uncommon for a competitor or a domain name trader to register a domain name which has the effect of limiting a company’s ability to register a specific domain name.

An interesting example took place in 2007 when Brian Sharples purchased the domain, VacationRentals.com, for the price of $35 million. He bought the domain for his online vacation rental business, HomeAway. It is reported that the only reason he bought the domain was so that Expedia (the direct competition) couldn’t have the URL. It is important to note that a domain name can exist without a website on it. Therefore, registering a domain could be for different reasons:

• To be used as the primary “address” for a company’s website.
• Not to be used as the primary “address” but rather to point to the primary “address” of a company’s website.
• Defensively, in order for competitors not to use or acquire the domain. The domain can be registered but then parked so that others do not register or use it.

If a company has sub-brands/products, it may be necessary to register domains for these as well. These domains do not have to point to individual websites but can rather point to the primary website. For example, the nursery can consider registering the domains “potplants.co.za” or “outsidefurniture.co.za” if available, and have these domains direct to the primary domain and hosted website (plants.co.za).

It is also important to consider in which geographic areas a company/product will be rolled out as it may be necessary to register domain names in these countries. For example, if the nursery wanted to open an office in the UK, that would be a good reason to register the domain “plants.uk”. Thinking about future expansion and/or competition is necessary in order to protect domain names before they are taken by someone else.

Ownership of a domain can be transferred from one proprietor to another. This would be applicable to mergers and/or acquisitions, and should also be considered when trade marks are assigned from one proprietor to another. In certain instances, a moratorium period post-registration or post-prior transfer may be applicable. A domain name transfer can also occur where a domain is changed to a different domain name registrar. Before transfer, it is important to ensure that the domain names have in fact been registered, are owned by the seller and that the seller is willing to transfer ownership. A domain name strategy for these acquired domains is essential in the full commercial exploitation thereof.