Jul
11

PROTECT THAT DOMAIN NAME!

Domain names can be extremely valuable business assets in today’s Internet-connected business world.   During the last two months, we have been contacted by two small businesses which have both encountered the unpleasant surprise of learning that they no longer have control of their domain names.  This blog discusses the steps that every business owner should proactively take to ensure their business is indeed in “charge” of their domain name(s) throughout the company’s existence, until the business no longer wishes to have an Internet presence under the registered domain name, or until the domain name is sold as an asset, e.g., in a business asset sale and transferred to the new owner pursuant to the Registrar’s domain transfer process.

A.    Domain Name Registration by Employees

An employee (“the Registrant”) registered the domain name for her company’s new website through www.godaddy.com (the “Registrar”) in her own name.  Her personal information and not the company’s is listed on the account’s contact details, payment details, and domain name registration details.  Under this scenario, there is no proof that her company has any right to it (aside from the domain itself as a potential trademark).  As the Registrant, she has administrative control over the company’s domain name.  Consider the following scenarios:

  1. Her employment is later terminated during a round of layoffs. Feeling her severance package is unfair, she disables the domain name in hopes that the company will pay her for the rights to its domain name.   The company sues the employee for conversion and trademark infringement; or
  2. She becomes ill and needs to take an extended leave-of-absence.  During her absence, she misses annually-sent e-mail notification from the Registrar reminding her that the domain name must renewed.  The domain name is not renewed and becomes available for purchase.    The company’s website and associated email addresses are subsequently disabled.

B.  Won’t the Registrar Just Grant Access to the Domain Name or Give the Company a Chance to Renew the Registration of an Expired Domain Name?

Much easier said than done.  Registrars generally require considerable proof before they will allow anyone but the original Registrant to access the domain.  They are not in the process of sorting out domain name disputes and will generally recommend that the parties seek legal advice, work it out among themselves, or use the Uniform Domain Resolution Process (UDRP), an alternative dispute resolution process which every Registrant must agree to as part of the domain registration process.  Scenario B is not a dispute per se but unfortunately can have serious legal complications unless the company is quickly able to secure the domain name rights by repurchasing the name.

C.  What Should a Company Do to Prevent Either of the Above Scenarios from Occurring?

  1. Provide clear instructions in the writing to the employee that the organization’s name and contact information are to be listed on the account as the Registrant and not just her name personally.
  2. Maintain a copy of the domain name registration confirmation from the Registrar with the company’s business records.
  3. Ensure that the email address to access the company’s account is accessible by more than one person at the company rather than one specific person. A departmental or generic, non-person-specific e-mail address is preferable, e.g., admin@yourcompany.com or info@yourcompany.com rather than janedoe@yourcompany.com.

D.  Website Developer Registration of the Domain Name

Website developers will often register the domain names for the websites they are developing.  Here, it is important to ensure that the website developer uses your company’s contact information as the account contact information.  Remember that the “contact” details help establish true ownership.  The website developer may be listed as the technical contact for the domain name, but that’s as far as it should go to ensure that your company will have primary account access and thereby be able to have a proof of ownership if it ever becomes an issue.

E.   A Final Suggestion

If the Registrar allows the inclusion of multiple e-mail addresses for account login. contact/notification and domain name registration contact, consider including an address not associated with the domain name.  Should your domain go down, e g., if the domain name expires, not only will the website no longer be accessible but no emails associated with that domain name will be received.  A backup e-mail using another domain or free account like G mail may still allow correspondence with clients until other steps can be taken to protect to address the issue.

If you have any questions about protecting your domain name or believe your situation may merit a UDRP proceeding, contact us at 305-279-4740 or complete the “Do I have a case” option at the website.

WE THANK YOU READING THIS BLOG AND HOPE YOU FOUND IT INFORMATIVE.  HOWEVER, THE CONTENT IS PROVIDED FOR INFORMATION ONLY AND DOES NOT CONSTITUTE LEGAL ADVICE.  IF YOU ARE CONTEMPLATING ANY ACTION THAT MAY HAVE LEGAL CONSEQUENCES, CONSULT WITH AN ATTORNEY.

 

©2020

Troy & Schwartz, LLC

Where Legal Meets Entrepreneurship™

(305) 279-4740