Who owns your domain name?

The content of this article might actually surprise a few people.

We all know that the internet is causing rapid change in many business sectors. A scan of any daily news source will reveal the consequences of the changing habits of consumers, and the businesses (particularly retail) that are suffering as a result.

All of this is making the value and goodwill in your domain name incredibly important to the future of your business.

At law you do not actually own your own domain name. This is somewhat terrifying but true.

The government has set up a body, known as auDA that legally ‘owns’ all domain names. When you register a domain name through a registrar (ie a domain name provider), you receive a right to use the domain name, and the registrar acts as a ‘broker’ between you and auDA.

Providing you pay your yearly fees, you receive the exclusive right to use that domain name. As the saying goes, possession is nine tenths of the law and this is especially the case with domain names, that is, as long as you have it you can use it.

Often people will know you by your domain name. If you’ve spent many years building up a brand linked to a domain name and then lose control of the domain name, the loss can be catastrophic, particularly if the domain name ends up in the hands of a competitor or someone that would otherwise cause your business damage.

The same applies to transferring a domain name to another person (due to business sale, insolvency, restructuring, etc) and if that transfer goes wrong, you may lose control of that domain name and all the goodwill and reputation attached to it. Because you do not legally own the domain name, you will not have any right to automatically recover it if something does go wrong causing you to lose control.

The goodwill in domain names in a management rights context is growing. This is particularly the case with short term and corporate buildings, although they still benefit permanent complexes (particularly large ones). It still surprises us when acting for a client purchasing a management rights business how many times the vendor (or their lawyer) has not procured the transfer of the domain name when the business was purchased by them.

In many cases, recovery of a lost domain name may simply be impossible. Having a registered trade mark that matches the domain name may assist in recovering the domain name or preventing anyone from using it in a way detrimental to you, but it is not guaranteed. Where the domain name can be recovered, doing so may be difficult, time consuming and costly.

The simple solution is to ensure that you treat your domain name like a child. Care for it, understand the magic dates (renewal / birthday dates) and invest in it because it is very valuable to you. The relative good news is it shouldn’t get you out of bed crying at 5 in the morning because of a bad dream!

Just make sure your bad dream isn’t the loss of control of a valuable business asset of yours.

We have a number of very experienced intellectual property and information technology lawyers if you need help on any of these issues.

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