DOMAIN NAMES . . . USE THEM OR LOSE THEM?

In today’s global economy coupled with the continued growth of e-commerce, businesses no longer exist only as brick and mortar locations, but instead must maintain an active online presence in order to gain and maintain a customer base. For better or worse, a business is associated with their online presence through their domain name. In most cases, a business has no issue in securing an appropriate domain that represents their interests, and assists with their search engine rankings. For instance, Company ABC, would most likely desire to register a domain for their business such as www.abc.com, however what happens if this domain is not available.

Given the need for businesses to create an online presence in order to compete in the marketplace today, most new businesses when starting out will look to ensure that their proposed business name is available, and if so, secure the Trademark rights in the name, along with the domain name and Twitter handle. However, in some instances, the domain for the business name may not be available, and at that point, the business may choose to move forward with a different domain name but keep the business name, or they may simply go in another direction to secure a domain name that more closely matches the business name.

In some cases, domain names are not available because they are already in use by another company, and other times, domains are not available because they have been purchased by a third-party, but are not currently in use, rather the owner of the domain name is simply sitting on the domain without any intention of using the domain in commerce. After conducting some due diligence, a business may decide to keep their business name in light of the fact that the domain is not available because a third-party is simply holding onto the domain with no intention of creating an active site under the domain.

Based on the above, the question then becomes whether a use requirement should be placed on the owner of a domain name who has no intention of utilizing the domain in commerce. There are several options for a business to secure a domain name that they had not previously registered, where the business has legitimate trademark rights in the domain, including the Anticybersquatting Consumer Protection Act and through a Uniform Domain Name Dispute Resolution Policy (UDRP) proceeding. However, the majority of the remedies available to a business who owns the Trademark rights in the domain name, require that the registrant exhibited some level of “bad faith” in registering the domain. While establishing bad faith may be somewhat easier when the owner of the domain registered it after the business established trademark rights, and then offers to sell the domain name to the business owner at a substantial price, a more complex problem arises when the domain name was registered prior to the business establishing trademark rights.

As Trademark rights and domain names are coupled together on some level, given that in order to secure a US Trademark registration, and then ultimately renew the registration the owner of the mark must demonstrate use in commerce in the United States, it may make sense to explore whether some type of use requirement be applied to the owner of a domain name. Under this scenario, a domain owner who fails to operate a legitimate website that is in the stream of commerce within a set period of time, would lose the rights to the domain name, and the domain would then be returned to the general population for purchase. Additionally, it is important to keep in mind that this usage requirement would not affect domain owners who operate websites and conduct business in the United States. The above proposal is put forth with the idea of furthering commerce, not impeding the actions of businesses who possess valid Trademark rights looking to secure a corresponding domain for their business name. One other point to consider is that the value of a domain name that is not in use will be limited when a business owner has Trademark rights in the name, since any subsequent use of the domain name may constitute Trademark infringement.

In summary, the existing system of domain name registration and the ability to maintain ownership for several years without actually operating a website under the domain needs to be updated, as the options available to owners with valid Trademark rights in the domain are extremely limited without a showing of bad faith by the registrant of the domain. As discussed above, one option may be to require a usage requirement similar to the US Trademark process in order to keep a domain name beyond a set period of time.