Chances are that by now you probably know what a domain name (a/k/a URL) is. In case you are unfamiliar with the term, a domain name is that familiar, easy to remember Internet address most often associated with a specific web site or web based resource, such as msnbc.com, google.com or premiercreative.com. URL stands for the more technical Internet term, “Uniform Resource Locator” which includes not only a domain name, but also the specific file path for a Internet-based resource such as an image, video or page of text.
Domain Names: The Principal Asset of Your Web Site
In the hyper-connected, always-on digital word in which we live, domain names have become synonymous with the businesses, products and services that consumers seek. In fact, for most businesses, once learning the business name, many customers and prospects will “look” for your business by entering your business name into their web browser address bar and adding “.com”. Therefore, it is not uncommon for a business that is launching a web site or a web-based product or service to start the process by starting with the domain name.
However, many business owners lack the time and sometimes the knowledge to obtain the domain name they desire. Often times, when a business lacks the internal staff to build a web presence, it will engage the services of a web developer or web marketing firm to help. Frequently, the outside service provider will consult with the client to identify and obtain a domain name for the client’s web site.
This can raise two separate, but related legal issues. First, who will obtain and maintain the domain name? Second, does the chosen domain name raise any trademark issues? This article looks at the first issue, ownership of the domain name registration.
To obtain a domain name one must “register” as the owner. This is done either by an employee, or the firm’s web marketing consultant. There are several “roles” that are identified in the registration process. Regardless of who registers the domain, it is imperative that you or your business is identified as the “Registrant.” The Registrant is the legal owner of the domain name. Like your business entity, registration must be maintained through the payment of periodic fees. Failure to maintain the registration may result in the loss of ownership and control of the domain.
“Ownership” vs. “Control”
One of the most frequent issues I encounter is the issue of “Ownership” v. “Control” of a domain name. A noted above, it is to uncommon for a web developer or marketing consultant to register the domain name of a client. Ostensibly, this is done in the name of efficiency. However, unless certain precautions are taken, this can lead to the risk that the consultant registers the domain name in the consultant’s name or in the name of a third-party business that is owned or controlled by the consultant. This can lead to confusion, loss of control of the domain, or even worse, having one’s domain held hostage by an unscrupulous consultant.
Think this is unlikely? Well, I am loathe to admit it, but this happened to yours truly, a seasoned, tech-savvy lawyer. When our IT consultant set up our email systems, it decided to change the REGISTRANT information, along with the technical and admin info, putting everything in the name of a web hosting subsidiary the name which my firm had never heard.
The problem for the firm was immediately obvious: not only did we no longer “own” our domain name, but we we powerless to make changes since someone other than the firm was listed as the “legal” owner. Fortunately, the IT consultant corrected this when we raised the issue.
So, what can you do to prevent the same thing from happening? First, address registration, technical administration and responsibility for payment of maintenance fees it in the services agreement. Spell out exactly who has responsibility to register and maintain the domain name. This protects both the client and the consultant since the consultant may wish to disengaged from a delinquent or irresponsible client. Second, provide a clear path to transfer admin responsibilities at the end of the relationship. Few relationships are forever. Having a clear transition plan will enable both parties to move forward with their businesses.
Tough seemingly simple, domain names are some of the most important assets of an online business. Proactively addressing the issues of ownership and control early instead relationship will prevent headaches and legal issues down the road.
This guest post was written by David M. Adler, Esq.
David M. Adler, Esq. is an attorney, author, professor, entrepreneur and partner with Leavens, Strand, Glover & Adler, LLC, a boutique law firm in Chicago, Illinois. His practice is organized around five major substantive areas of law: Intellectual Property Law, Commercial & Finance Law, Entertainment & Media Law, Corporate Law and Contract Law. For the past 15 years, he has counseled a wide range of clients in private-practice and as in-house counsel for a Fortune 500 company on legal issues in information technology, new media and ecommerce, including copyright, trademark and trade secret law, corporation and LLC creation and finance, contract interpretation, drafting, negotiation and enforcement.