Domain names: don’t underestimate the value of these IP outcasts

The commercial registration of domain names is now more than 35 years old, having begun when symbolics.com was first registered in 1985.

Today there are more than 400 million domain names registered, with thousands more being registered each day. Although there are other means of creating an online presence (such as Facebook, Instagram, and LinkedIn), no platform gives a user greater control over its identity than a registered domain name which points to a website with useful content.

In February, I read an interesting article about companies that own trademarks in a specific colour (eg, ‘Tiffany blue’, ‘UPS brown’, ‘Post-It Note yellow’). The substance of the article was interesting but what caught my eye was this simplistic graphic attempting to explain each of the different types of IP assets, listing trademark, copyright and patent.

“No-one wants to lose, for even a minute, the online connection with valued customers, business partners, and fans.”

Notice anything missing? Far too often I’ve seen the lack of reference to domain names as an IP asset. How can the chief navigational tool of the global internet, registering in numbers that exceed 340 million, and on which billions of dollars of e-commerce are conducted every day, not be considered an IP asset on par with trademarks, patents and copyrights?

Think of how much commerce is transacted through Amazon.com alone. While there are differences between domain names and the other types of IP, these differences don’t diminish the value of domain names but rather add to them, making them just as valuable as other forms of IP.

The important differences

Domain names are different from other forms of IP which makes their status as an IP “outcast” understandable. Let’s look into some of these differences:

1. Domain names are created by commercial contract rather than by filing a registration with any national patent and trademark, or copyright office. The right to use a domain name is a contractual right created by a series of multiple contracts between the domain user, the registrar (or domain name “seller”), the registry of the top-level domain (the manager for the database for the top-level domain), and the

Internet Corporation of Assigned Names and Numbers

1. (ICANN), a non-profit organisation entrusted with the security, stability and interoperability of the domain name system.
2. The act of registering a domain name is much simpler than registering other forms of IP. A domain user or “registrant” doesn’t need to submit proof of use to get a domain name or go through a multi-year examination process. All users need to do is pay a registration fee and sign an agreement to abide by the registrar’s terms of use.
3. Domains can be registered to one entity only. Patents and copyright can be co-owned by multiple inventors or artists. Generally, under trademark law, multiple parties can register and use the same trademark as long as it’s not registered in the same class or used in the same channel of trade. But when it comes to domains, this is very different—there can be only a single registrant.
4. Domain names don’t expire, as long as a domain user pays its registrar the annual registration fee. Patents last only 20 years (with a few exceptions) after which the invention is in the public domain, and copyright lasts 70 years before entering into the public domain. Trademarks may not expire but in the US and some other jurisdictions, trademarks may be cancelled if they are not used in connection with the sale of good or services. Domains will last in perpetuity so long as the registration terms of use are not breached, and payment is made.

What are the similarities?

Despite these notable differences, there are actually more similarities between the four forms of IP than variations.

1. Trademarks, copyrights, patents and domain names all give the registered owner a bundle of rights, including the right to use the IP asset, assign it to others, and protect and defend it against infringement in courts of law around the world.
2. They are a commodity that can be bought, sold, or licensed, which adds to their value as they each create a market for buyers and sellers who can profit from the transfer of the assets.
3. They give the owner a commercial advantage over competitors in the marketplace. Also, each asset allows its owner to preclude other parties using the same asset to promote their own business interests.

All these forms of IP have created their own industry, comprising experts and practitioners that help the IP owner secure, manage, optimise, evaluate, and protect these valuable assets.

There are patent, trademark, copyright, and domain name industry associations with corresponding events in cities around the world, each one an opportunity for experts to gather and discuss policies, issues, changes, and innovation that impacts each form of IP.

Underestimating the value of domain names

Individuals and companies that fail to invest in their domain name portfolio as they do their trademark and patent portfolios could be taking on additional risk and or not capitalising on the value of their domain portfolio.

After all, a domain name is the core of an online presence and having several domain names is important for driving user traffic, boosting search engine visibility, and protecting a valuable brand.

A failure to have the same diligence for renewing and maintaining domain names as one has for patent or trademarks can mean inadvertent expiry and the loss of a valuable asset. In recent years, there have been several stories of companies that have failed to renew their domain name, including the case of the Dallas Cowboys and Foursquare.

While the cost of recovering an expired domain name is relatively low, no-one wants to lose, for even a minute, the online connection with valued customers, business partners, and fans, because that could have a much more costly impact.

Companies don’t leave patent, trademark, and copyright registration and renewals to laypeople, so why would a company trust the management of its domain name portfolio to a non-expert?

In this age of e-commerce, e-news, e-advertising, e-gaming, and e-whatever, managing a company’s internet presence is critical and a domain name portfolio is the strongest and most valuable IP asset a business can leverage to promote and protect its online identity.

Opinions of actual values may differ but one thing is clear, domain names need to be managed with just as much attention and care as other recognised IP assets.

Statton Hammock is head of IP strategy, government and industry relations at Clarivate Analytics. He can be contacted at: statton.hammock@markmonitor.com