A domain name is the part of a URL (the address through which a website is accessed e.g. myerson.co.uk) which is unique to a particular website. Each domain name must be unique so that no two are identical.
Resolving Domain Name Disputes
When the domain name server system was established, it was not predicted that domain names would have any value. However, as the internet became more commercial and widely used, companies began to realise the value of domain names and began suing each other for the right to use a particular domain name. Conflict arises when:
- Someone deliberately registers a domain name which another party needs or would like and then seeks either to sell it to that party or use it in order to damage the other party (this is known as cybersquatting); or
- Different parties have competing legitimate interests in the same domain name; or
- Large companies have used their legal and financial resources to prevent legitimate domain name holders from registering valuable domain names.
The Relationship Between Trademarks and Domain Names
As a domain name is often used to identify the source of information on a website, in effect, a domain name can be used as a trade name or trademark. Therefore, domain names can be capable of being registered as trademarks.
Domain names may also infringe prior trademarks or common-law rights of others. This can be a particular problem for global domain names as they may potentially infringe trademarks which have local scope in a particular country.
Valuing a Domain Name
A domain name may be valued by reference to:
- The cost of obtaining a domain name from a registrar;
- The amount of income or other economic benefit the holder of the domain name receives from the use of the domain name; and/or
- The amount of income or other economic benefit a third party could derive from a domain name.
Most domain names are not unique and therefore tend to be valued using the first of the three methods above. However, any domain name linked to a trademark will be valuable to the holder of the trademark as will any generic domain names which allows someone to exploit the name commercially – in such a case, the last of three methods above will be used to value the domain name.
There are a number of specialist companies who can provide valuations for domain names. As the internet becomes more important, the value of domain names will only carry on increasing and there will be a rise in domain names being bought and sold.