What are your long term plans for your domain name? Do you expect to convey the name and the goodwill associated with it to an interested buyer or bequeath it your heirs? Perhaps you intend to use the domain name to secure a loan for a business expansion or for your child’s college tuition. You may be in for a surprise. The intellectual property community asserts that domain names, as source indicators, are akin to trademarks. However, trademark law cannot be effectively grafted on to domain names because of the discrepancies over geographical boundaries and context-sensitive use.
In order for a trademark registration to issue, the mark must be used in interstate commerce to identify the source of a class of goods or services. Identical trademarks can co-exist so long as they are associated with non-competing types of goods or services or are used in different geographic areas. Domain names are registered on a first-come, first-served basis. The first individual or company to complete the registration template for an available name gets the sole right to be associated with it. For a reasonable fee, currently hovering at $10 a year, the registrant can brand and propagate the name in a worldwide marketplace.
The registrant receives the exclusive right to use that name for a website presence, global e-mail, and network file transfers. But every domain name must be unique, and it is this technical requirement that makes domain names potentially valuable resources which are substantively different from trademarks. Compaq Computer Corp paid $3. 35 million in July 1998 for rights to ALTAVISTA. COM, purchased from a California start-up called Alta Vista Technology. The transaction included existing traffic of a half million visitors a day who were already expecting to find the Alta Vista search engine at that domain name.
As the price bar for domain names rises, NSI’s customers may resist being subject to the vagaries of the registrar’s feudal regime. Simple and unencumbered ownership endows the registrant with a type of predictable, if limited, sovereignty. Through legislation and judicial acknowledgment, registrants who meet certain individual responsibilities should be allowed a perpetually renewable and assignable right to enjoy this new source of wealth. Many domain names have become the cornerstone of multimillion-dollar business plans. In the fall of 1999, VirtualVineyard of Palo Alto, California, acquired Wine.
Com of Napa, primarily for its domain name. While the $3. 3M-plus acquisition included an operating business, the CEO of Wine. Com estimated that about 70 percent of his company’s value was its name. The current controversies over domain names highlight the interplay of technology, law, economics and politics. Court opinions trail society’s changes and conundrums resulting from technology of recent vintage. Yet, nearly everyone agrees on one point: domain names are caught in a legal thicket. If domain names are property, then existing contracts such as NSI’s harsh Service Agreement must be rewritten.
Although the implications of the Umbro decision are yet to be fully assessed, and NSI’s appeal remains to be heard, the magistrate recognized that each knotty domain name dispute before the court may be breaking new legal ground. References Unknown (1999). ‘Mortgages’ for domain names. BBC Sci/Tech News. Retrieved November 26, 2006 from http://news. bbc. co. uk/2/hi/science/nature/533455. stm Oppedahl, C. (1997). Remedies in Domain Name Lawsuits: How is a domain name like a cow? Patents. com. Retrieved November 26, 2006 from http://www. patents. com/pubs/jmls. htm