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Domain Name Basics for your Business

Skeptics initially doubted the utility of the internet and, in the early years of growth, many businesses utilized a webpage like an online business card that listed little more than their contact information. Many were uncertain how to promote their brand online which included the dilemma of creating a domain name. New URLs that included acronyms or catch phrases as well as company names now competed across state lines and even international borders. Today, the benefit of maintaining a strong online presence is no longer in question. Indeed, the internet provides consumers 24/7 access to even the smallest of businesses. Legal professionals are no exception as they discover the new challenges of translating their brick and mortar business with an online presence.

Domain Name Costs

URLs that include 'law' in the address have sold in the hundreds of thousands of dollars (for some of the latest sales see Domaining.com). This is not the first time high priced domain names have made an impact on the market. However, earlier sales of sites, such as business.com in the late 1990s, were generated mostly on the URL name rather than developed content. Indeed, business.com changed hands as ideas fluctuated about what to do with the catchy URL. The name had to be translated into a product.

The current trend indicates that sites fetching a high price are not sold on name alone. Instead they are fully functioning websites that already provide resources for online customers. Investors ultimately look at these URLs as a full package. They take the services and ideas and rebranded them into something bigger and better. Investments in domain names are no longer just catchy words in the address bar but akin to investing in property with tangible assets.

What is not immediately apparent is the "real estate value" of online URLs. New tools like INDX.com apply the theories of real estate finance to understand online properties. This particular price index tracks the trends in domain name pricing. By following domain name prices from 2006 to today, it is possible to see that the fluctuation in the URL market often reflects economic trends. However, a comparison between INDX and NASDAQ also shows that the variable of change is less in the domain name market—online properties are generally maintaining their worth and steadily increasing. Therefore, the investment in a domain name remains an important consideration for business entrepreneurs and developers.

Added to the property value of domain names is the general increase of registering these names. Verisign, which manages .com and .net sites, increased URL registration fees in 2012, 7% for .com and 10% for .net sites, and will increase the cost for .net sites again this July 2013 by another 10%. These increases in prices are very minimal but when combined with the costs of renewing and hosting the site the expenses to buy, keep, and activate a domain name can quickly add up. Some web entrepreneurs worry this continual increase could lead to a gradual squeezing of small businesses who often buy multiple URLs (.com, .net, .biz, etc.) to protect their trademarked names on the Internet. While even the most basic cost of domain names are rising, the potential payback for access to customers is not just maintaining but increasing the value of online property. This reinforces the need for businesses to make astute choices in how they brand themselves online.

A further option or dilemma (depending on your point of view) is the opening of additional gTLD (generic top level domains) by the ICANN (Internet Corporation for Assigned Names and Numbers). Since 2012, instead of creating names around established gTLDs like .com or .net, companies may register a top level domain with any extension. For example, a corporation like the BBC might buy .bbc and create addresses like news.bbc and sports.bbc. The possibilities are wide open to anyone who pays the $185,000 to apply for the name and $25,000 annually to keep it registered. Although most agree scammers will not invest the funds or pass the application process, some do worry that this could again stir battles between similarly named companies. Therefore, the prospect of owning a cheaper .com or .net with a broad interpretive name that contains key words such as law, legal, lawyer, etc. remains more appealing.

Finally, after a fluctuation in practice, search engine optimization has come full circle—domain names are again an important benefit for search engine results. As filters are improved to eliminate sites that do not provide content, the domain name is still tagged by search engines. This reality has further increased the value of sites that include terms often used by consumers in their searches.

Domain Name Basics

There are three main parts of the domain name which make up the "address" online.

The least disputed are the Third Level Domain Names. These define where a file may be found on the Internet. The most popular is www. However, other subdomains may be used instead of www; these are set up through the Internet Service Provider (ISP) or through a personal server. Once set up the subdomains may direct clients to specific areas of the site. For example: information.mysite.com and links.mysite.com. Many people do not use this option because they are either unaware of the possibilities or they are more concerned with staying with the public habit of typing www.

Second Level Domain Names (SLDs) have become the major identifying factor of businesses over the Internet. This would be the mysite of www.mysite.com. These distinct address names are often the best way to brand your business and make a memorable impact on clients. However, they are also the center of domain name disputes as various trademarked companies claim ownership of any representation of their name.

Finally, there are the Top-Level Domain Names (TLDs). There are three main categories:

nTLDs
There are national TLDs (nTLDs) which are created from country codes; for example .us = United States and .uk = United Kingdom (for a complete list of nTLDs click here). These domains are usually restricted to citizens only. However, some are sold on the international market for various reasons. For example, Turkmenistan at one time allowed international use of its nTLD .tm for companies interested in its similarity to trademark (™).

Grouped into this category are .gov (government), .edu (educational), and .mil (military). These are commonly recognized as domains with restricted use in the United States, however, a few other countries use them as well. These domains are now restricted for government and accredited school use only.

iTLDs
Next, there is the International TLDs (iTLDs) that are reserved for entities which are truly international in character. The most common would be the iTLD .int which is used by international intergovernmental organizations. However, iTLDs are not used for businesses which market internationally. Instead these businesses use gTLDs.

gTLDs
Finally there are generic TLDs (gTLDs). These are sometimes looked at as international because almost anyone may register. Examples of gTLDs would be .com (commercial), .net (internet service providers, large network sites, etc.), and .org (organizations). These are the most commonly used because of their easy recognition in advertising.

Other Alternatives
The increase in conflicts and overall flooding of the courts has created the need for alternative solutions. The Generic Top Level Domain Memorandum of Understanding (gTLD-MoU) proposed that new gTLDs be adopted to better suit specific businesses and ease the rush for .com addresses. The proposed additions were: .firm (for businesses or firms), .store (for businesses offering goods to purchase), .web (for entities emphasizing activities related to the World Wide Web), .arts (for entities emphasizing recreation/entertainment activities), .info (for entities providing information services), and .nom (for individual or personal nomenclature).

Some argue that businesses are not following the uses of .com, .org, and .net properly to begin with and they will not use the new gTLDs correctly either. Additionally, in the past businesses have not used other alternatives such as .us or other country codes and will likely stay with the popular .com despite these alternative choices.

ICANN tested these options in 2000 with gTLDs like .info and .biz. In 2008 nineteen new gTLDs were released and ICANN established the New gTLD Program to work on creating more domain name solutions that work for and entice businesses.

At first glance one may assume there to be an abundance of domain name possibilities. However, in reality, disputes arise as businesses who do not normally compete find only one person in the world may use a-specific-name.com online.

Domain Name Disputes

Jane Doe of Cedar Rapids, Iowa has a graphic design business called ArtzDezign. When she also began to design websites she went to acquire the URL www.artzdezign.com. She hoped to set up the site with examples of her work and basic contact information. However, the URL www.artzdezign.com is already used by Debbie Lane of Seattle, Washington. Ms. Lane owns a shop which crafts and decorates handmade books. Her shop is also called ArtzDezign and she has used the URL for the past three years. Both are legitimate businesses. However, only one may use the URL www.artzdezign.com—welcome to the dilemma of domain name disputes.

When reviewing the domain name disputes brought to court, the evidence suggests that the majority of conflicts are surrounding .com addresses. The .com gTLD was made popular by companies whose strong ad campaigns promoted this gTLD as the "go to" address online. Thus everyone wants the most popular gTLD.

One reason for increased tension over .com is that many users are assuming that they should be using this gTLD, however, not everyone should be using .com. For example, nonprofit organizations and personal websites have been following this popular trend but this gTLD was made for commercial sites.

This popular desire for .com addresses complicates the selection of SLDs (second level domain names) and further dwindles the possibilities into one "choice" address. Anyone with a name wants to have the SLD which identifies them online. This is especially the case for established businesses. Although different businesses in different geographical locations may use the same business name, only one may use the name on the Internet which does not recognize geographical boundaries.

When two people want the same .com address, it is usually given on a first come, first served basis. When there is a trademark involved this is usually not the case. Names that are distinct and strictly for a type of product (e.g. Tylenol) are often readily resolved for the trademark owner. Courts are more favorable to trademark owners since non-affiliated parties tried to make a profit by buying these SLDs early on. If the address that includes the trademark was not misused by the original owner then sometimes first come, first served remains the deciding principle (for an example see Fuji Photo Film Co. Limited and Fuji Photo Film USA Inc v Fuji Publishing Group LLC).

When a business establishes a trademark in the U.S. it is generally good for 10 years at a time. No one may infringe on an established trademark by selling goods or services which may cause confusion with the original holder. Nor may one reproduce the trademark without express permission of the original owner. It is also illegal for a business to use another's trademark to market to an established clientele. Online this is commonly done by adopting recognizable SLDs to set up scam operations. For example, customers of an ISP server with the address www.value.net were sent the address www.valuehelp.net by a unaffiliated scam artist who informed customers to pay their bills through the false site (full article). This proves costly to the company as well as their customers.

Another threat to trademarked businesses online is the registering of the SLD with the intent of offering it for sale; this is commonly known as cyber-squatting. In the past many sites were registered by various unaffiliated users that would contact the owners of the trademark and attempt to negotiate a resale. Since the enactment of the U.S. Anticybersquatting Consumer Protection Act (PDF) this is beginning to cease. However, some users are still registering SLDs which are the same as a trademarked name, developing a fake and nonessential site, and then waiting for the trademark holders to contact them. In most cases the users then ask for a reimbursement fee for "efforts" they put into a bogus site.

Finally, some users are using misspellings of popular names to attract an established clientele. For example, the case of Microsoft Corporation v. Global Net 2000, Inc. was centered around Global Net 2000, Inc. reregistering many variations of popular Microsoft sites. These included addresses like: hotmaill.com, otmail.com and homail.com. This case was ruled in favor of Microsoft Corporation. Under the Trademark Act of 1946 (Lanham Act), one cannot cause trademark dilution by being deceivingly similar in attempt to receive business or cause confusion which may hurt a trademarked name.

The race for .com addresses has created a clash between businesses which operate in different markets but are faced with the dilemma of a borderless online world. In addition, the misuse of trademarked names has caused increased litigation surrounding trademarks. In the first instance it is usually given by the principle of first come, first served. However, when trademarks are involved, because of the character of some users out for profit, the courts have the tendency to rule in favor of the trademarked business.

Currently when a domain name dispute arises there are four accredited dispute resolution providers approved by the Internet Corporation for Assigned Names and Numbers (ICANN). The ICANN is a non-profit corporation which controls various assignments on the Internet from IP address allocation to domain name management. The ICANN website has a wealth of information including a list of accredited registrars to register domain names and where to go to settle domain name disputes. Although the ICANN does not handle dispute resolution, it does accredit the organizations which do (see the full list of resolution providers in the links to the right). The ICANN has enacted the Uniform Domain-Name Dispute-Resolution Policy (UDRP) which is used to file a complaint to an accredited dispute resolution provider. In this policy, the ICANN distances itself from disputes by reiterating that those purchasing a URL are responsible to see if a domain name infringes on another's claim or trademark. All accredited dispute resolution providers follow the ICANN's Rules for the Uniform Domain-Name Dispute-Resolution Policy. However, it is important to look at the different dispute resolution providers' policies as they also implement their own supplemental rules.

Three main points must be proven to the court:

The domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and
The respondent has no rights or legitimate interests in respect of the domain name; and
The domain name has been registered and is being used in bad faith.

Based off the evidence proving or disproving the above, the court decides who gets to have the domain name for good.

Choosing a Domain Name for your Business

A clear domain name that reflects a company's brand or services is a valuable commodity. The savvy business can take advantage of new gTLDs and avoid disputes with companies in other geographic regions that share a similar name. Consider a few of these pointers as you search for your new domain name:

Use your Name Brand: If you have a trademarked name, see if you can acquire this name first. If not, you may also use your firm name or professional name and title and try to stay as close to this as possible. Use what you have been using in brochures and other advertising so you do not have to rebrand. Be careful using a domain name that describes a service. For example, a name like "DUI-Buster" can be limiting and, well, may not appear as professional or appeal to all potential clients. However, if you specialize in one service over others and want something your clients will remember better than your firm name, then by all means be creative!
Keyword Search: Consider trying several keywords in a couple search engines to see the results. A test run like this can help you see if a certain key term is overused. This does not mean you cannot use the term; just realize that you may have to spend more time and money for search engine optimization.
Consider Location: If you are certified or licensed to work in only one state or region, you may want to consider a more localized nTLD like .us which can include state or city.
Check the Domain Name's History: Using sites like the Internet Archive you can look at the history of a domain name that was used before. Check out screenshots and history to make sure the previous owner did not create any bad press that could be associated with your new site.
Keep Trying: If you find that someone has your domain name see if there are other variations that will work for you business. You can also check to see if other gTLDs are available. If you still want your first choice do some research before you contact the other business. Does the other business have a legitimate trademark and presence or is it a squatter waiting for a paycheck? In the first case you may have to settle for another name, in the second you may have a good case—just be patient and do the research first!