Intellectual property lawyers are all to familiar with the phone call from a new client ambushed with the news that a business domain name can no longer be used.
This unhappy client has invested thousands, tens of thousands or more on brand development. Included in this is time, energy and money spent on a business name, a domain name, logo and brand design, labelling and packaging.
This is a very common area of intellectual property legal work. It is commonplace for people to seek registration of a domain name unaided, and as a first step for a business start-up or expansion. This deceptively simple DYI task is assumed to provide protection or legal title to a name.
Those who fail to seek professional advice before registering and using a domain name are far less likely to build a legally strong brand. They are also far more likely to face future expensive risks. When professional searches are not conducted these risks are hidden from view in the early days of a venture in Australia or in expansion abroad.
What you get with a domain name registration
It is a fact, registering a domain name can be a cornerstone for brand building. However, in the legal arena by itself a domain name registration (or two or three of them), supported by a bit of use, provides neither complete protection, or considerable proprietary rights, or monopoly rights.
Registration of a domain name secures a contractual licence to the domain name from the registrar which accepted the registration, such as melbourneit.com.au or godaddy.com. Each in turn has a licence to operate from the Internet Corporation for Assigned Names and Numbers.
From a registration a domain name licensee enjoys certain rights to use the name and transfer the name. Those who do no more than register a domain name and use it online a bit can remain exposed to significant legal risks.
What you don't get from a domain name registration
These risks arise from the fact that there are additional laws relevant to names. This is the case in all countries.
In Australia the following five different laws affect legal claims or rights to names:
registered trade marks are governed by the Trade Marks Act 1995 (Cth);
reputation and goodwill in names and other identification are governed by passing off law (part of Common Law, ie judge made law);
misleading or deceptive conduct is regulated by the Competition and Consumer Act 2010 (Cth) and the Fair Trading Acts of the States;
registration of business names is governed by Business Names Acts of the States; and
registration of company names governed by Corporations Act 2001 (Cth).
The role of those last two are often misunderstood. The case study client we’ve referred to will be on a long learning curve about all of the above five laws intermixed with the emotions triggered by uncertainty, doubt, counter-claim and confusion.
All that is part and parcel of legal disputes and litigation arising from clients ambushed by selecting names and using them without experienced, professional advice.
Building the perfect brand
Obtain professional advice: In the commercial world, there is generally no point to developing and investing in a brand if it isn’t a legally strong one. The most effective way to avoid this is to seek professional legal advice before adopting a domain name to use, before spending a lot of money, time or energy building a sand castle. Successful businesses are rarely built on legally weak brand names. They do exist, but they are exceptions.
Make consistent use: One way to build a legally strong brand is to make consistent use of it. As a venture moves forward it gets name work done or chipped in by various people and therein lies many risks of inconsistency:
Client self-registers the domain name
Accountant creates the company, eg the Pty Ltd business structure
Client, lawyer or trade mark attorney registers the trade mark
Graphic designer designs with input only from the client
Package designer designs with input only from the client
From the above you can end up with five different versions of the name. Because they are different from each other they don't perfectly support each other in the legal arena. Brands are used inconsistently when they differ as between each of the areas we’ve discussed:
Use in a domain name
Use on stationery, packaging, labelling or website banner
Use in company name or business trading name
Use in a trade mark registration
Use in social media handles
The greater the inconsistency the larger the holes in a legal claim to monopoly or proprietary rights to a name.
To achieve consistency integrate the following areas of knowledge or find experts who can do it:
Design knowledge – how to design a mark or logo that increases the level of legal monopoly
Management knowledge – how to use the mark in practice
Legal knowledge – how to protect a name
When there is a lack of consistency across a brand, it is not only sub-optimal from a consumer perspective but it is often something which is damaging to parties in disputes over names and associated rights.
For happy endings what’s needed is a high level view about branding at the venture conceptualisation and naming stage, not when a demand letter is received.