Think smartly about your domain name (not only if it is available on godaddy.com)

Nearly every company now has a website – it is a standard practice to reach potential customers, employees, and partners through the web. Today’s technology companies utilize features like blogs, comment boards, and e-commerce to create interactive forums with their customers. Many technology companies rely on the web as their first (and sometimes only) sales tool.

Your first step in developing a web presence is selecting your domain name – and this choice does raise certain intellectual property issues. For some companies, their domain names represent one of their most valued assets. Domain names are unique designations used to identify a particular computer on the Internet. In order to communicate with each other on networks, computers must have individual identifications. A domain name is a way to identify and access a computer to a unique site on the Internet. Domain names typically consist of letters, numbers and hyphens. An example is www.google.com or www.yahoo.com.

Domain names can be registered with any one of the over 150 registrars accredited by the Internet Corporation for Assigned Names and Numbers (“ICANN,”) a non-profit corporation that manages the Internet domain name system. Anyone can register a domain name in the .com, .info, .net or .org scheme. Registering a domain name does not, however, give one trademark protection over the domain. Domain name registrars are not liable for trademark infringement, dilution, or contributory infringement merely because they issue a domain name that is claimed to infringe.

Because a domain name on the Internet is a unique address designating an Internet site, it may be a trademark or service mark, and have legal protection. However, the Patent and Trademark Office has stated that if a domain name is used solely as an Internet address, and not to identify a source of goods and services, it is not protectable as a trademark. A business may be wise to include its domain name in advertising its goods or services in order to obtain trademark protection.

Various state and federal laws, including the Anticybersquatting Consumer Protection Act (“ACPA”), help form a body of legal protection of domain names. ACPA in particular prohibits the registration of, trafficking in, or use of a domain name with a bad faith intent to profit from the goodwill of another’s trademark. ACPA also allows a business to protect their domain names from infringement, tarnishment and dilution and to bring actions against cyberpirates and cybersquatters. Dilution and tarnishment are the weakening and sullying of the brand value of a domain name.

Cyberpirates appropriate and register well known and distinctive trademarks as their own Internet domain names without permission from the trademark owners’ permission. Cyberpirates seek to profit from the goodwill and recognition associated with those marks to direct or misdirect consumers to the cyberpirates’ websites. Cybersquatters register trademarks in Internet domains with no intention of developing a website with that domain, but instead, seek to resell the domain name to the trademark owner or a third party. A variant of cybersquatting is typosquatting, in which a domain name registrant will register a variant of a famous trademark. Courts vigilantly forbid cyberpiracy and cybersquatting because both acts sap brand strength, sully trademarks, foster consumer fraud and incite consumer confusion.

Numerous cases have also dealt with competitors registering their adversary’s trademark as a domain name. This sort of behavior is almost always illegal. When non-competitors register a trademark as a domain name for a legitimate use, however, the law is more complex. Because trademark use is territorially and industry based, many times the same trademark may be simultaneously used with legal issues. In cases of non-competitors suing over another business’s use of a trademark as a domain name, courts have emphasized that mere registration of a domain name without more (such as an offer to sell or the intent to block the trademark holder from using the name) is perfectly legal.

As with other forms of intellectual property, trademark rights are subject to fair use. First Amendment liberties also allow a person to use another entity’s trademark for purposes of commentary or parody.   Fair use and the First Amendment do not protect all uses of another’s trademark.  While most free speech and parody cases have been settled outside of the court system, the law that has developed suggests that registration of the exact trademark as a domain name is generally disallowed by courts, while registration of a name that incorporates the trademark such as “www.business.X.is.terrible.com” may be upheld.

This article is an excerpt from my new book What Every Engineer Should Know About Starting a High-Tech Business Venture, available now.