Information Sheets > Domain Names

Registering a domain name relevant to the business is becoming much more difficult. This is a guide to successful registration

As the world's online population is set to pass the half billion mark within three years, the ability to trade online is going to be critical to every business's long-term success and sooner rather than later is the right time to be planning strategy. Whether a business is likely to be opening up shop online next month or next year, it should be taking the first and most important step along to road to e-commerce now.

The first step is registering a domain name. Having the right online identity - the electronic equivalent of the signage above a shop - is essential and acquiring it should be at the top of any action list. Search engine registration of key words is not only an expensive and time consuming process, but it is also far from reliable. Every business should be reserving for itself the name or names that make it as easy as possible for potential customers to find it.

Despite the fact that a business can register its company and, where applicable, several brand names for just a few hundred pounds, there seems to be a reluctance in Europe to take even this inexpensive first step. Businesses that fail to do so may find they are too late when they finally recognise that implementing online trading has become mission critical - someone else will have already taken all the best names. Nothing is more frustrating than not being able to trade on the Internet under a company or brand name because someone else has registered the preferred online identity - especially if the registered party is not actively using the name. The message must be to reserve the name or names that will help profit from the Internet.

So, why the apparent reluctance to take such a simple step when all you have to do is pick up the phone or email a naming specialist? European businesses are proving to be much slower than their US counterparts in taking advantage of this new medium for trade. True, larger companies are busy setting up their stalls, but the mass of small and medium-sized enterprises that actually account for the lion's share of trade are proving reticent.

Security is no longer an issue or an excuse and there is enough anecdotal evidence for it to be known that buying online is safer than leaving your credit card with the head waiter at a restaurant. Still more, consumers are proving themselves more than happy to buy goods and services online. The reluctance, it seems, is on the part of businesses, not consumers, to step into the unknown.

 

POTENTIAL

The pent up potential for e-commerce is huge and businesses will, sooner or later, come to realise that, if they cannot trade online, they might as well shut up shop. This realisation, coupled with the manifest fact that it is getting easier and easier to establish an online trading presence, will breach the floodgates. Then, domain name fraud could emerge as one of the greatest practical barriers to success because not enough businesses will have taken the simple precaution of registering their online names.

When it comes to choosing a good name, many businesses would prefer a "dot-net", "dot-com" or "dot-org" online address, but these can be hard to come by. Network Solutions, the US company that has for so long enjoyed a monopoly on registration of dot-com, dot-net and dot-org domains has reported that its Internet Network Information Centre has been dealing with an average of 10,000 applications per day from individuals and companies.

What is worrying is that speculators account for so many of these applications. At the beginning of this year, the company announced that it had been forced to strengthen its infrastructure to cope with an onslaught of fraudulent name registrations from speculators. The net effect is to hinder legitimate applicants from registering a name for themselves - and, in many cases, a speculator could already have reserved the selected company or brand name.

Network Solutions' monopoly on these key dot-net, dot-com and dot-org domain names is due to be broken in April 2000 and plans are in place for opening the domain name business to competition. Following a Government sponsored competition review, Virtual Internet became one of the first companies to be awarded domain name registration status by ICANN, the US Government appointed body that is implementing a new system for competition in the market for global dot-com, dot-net and dot-org domain name registration services.

The new system, which is expected to commence after a testbed phase this year, will replace the contract currently held for such services by Network Solutions with the US Government and help to ensure that European businesses enjoy a better and more readily accessible service.

Businesses that are still unable to obtain a dot-com, dot-org or dot-net name may be attracted by the generic domain names that are now becoming available, as will clever marketers. Indeed, more and more countries are lifting the restrictions on domain names, allowing foreign companies and individuals access to previously unavailable names, such as dot-co (from Colombia), dot-tv (from Tuvalu) or dot-fm (from Micronesia). As domain registers open up, the possibilities of using an email address that has a direct relevance to a business will increase the opportunities to extend the power of an online brand.

As the volume of e-commerce grows, domain names will be able to make or break a business - and there are plenty of unscrupulous people out there who are quite happy to hijack names. But, if a company or brand name has already been taken or is being abused, it is sometimes possible to get it back.

Internet domain names are granted on a first come, first served basis and it costs less than £100 to register a name. Compare that to the investment you may have made to build up the company and brand names. Fraudsters have recognised the simple arithmetic behind this and have bought key names to sell back to the morally rightful owners at a huge profit.

In a recent report from the European Association of Trade Mark Owners, Marques, a staggering 85% of companies said that their name or trade mark was infringed on the Internet. As a direct result of the fact that fraud is becoming such a problem, Virtual Internet recently added Internet policing - domain name reclaiming, infringer tracking, Internet anti-piracy campaigns and copyright monitoring - to its existing global naming, hosting and e-commerce services.

As yet, intellectual property law is largely untested but, in practice, courts are applying traditional trademarking principles in cases where domain names are being contested. Case law is building up, but prevention - a simple case of registering domain names now - is going to be a lot less expensive than fighting as a victim of domain name fraud.

 

FRAUD

But what do you do if you find that the name that the business needs for successful online trading is already in use? The problem falls into one of the following categories: abuse of the first come, first served principle; actual fraud; or domain name infringement.

Considering first come, first served, the first person to register a domain name is the owner of that name for as long as they pay their bills. In a recent situation, a US engineering company legitimately registered scoot.com. Subsequently the Scoot online directory has to use scoot.co.uk, even though it was being set up as a pan European service and the dot-com suffix would have been a valuable asset. In such a situation, there is nothing to be done, unless the domain name owner is prepared to reach some form of commercial agreement.

Actual cases of fraud, where someone tries to trade on another company's brand, are rare. But there have been some cases and one example is The Daily Planner in the US. These enterprising folks purchased their competitor's company name as a domain name and are still able to direct traffic from anyone entering www.filo-fax.com to their own web site.

If you do fall victim to such a problem you have recourse to law and, because the Internet is an international medium, can choose the country in which to take legal action - typically, this would be the country where the business is likely to suffer the most. This means that, although the business still has the initial expense of launching legal proceedings, the pirates cannot hide overseas.

In certain countries, there is no need to demonstrate a claim to a domain name. As a result, many enthusiastic and opportunistic entrepreneurs have purchased names, which they think will become valuable, for sale at a later date. In such cases of domain name infringement, the law will step in. For example, in the UK, a company called One in a Million was found guilty of fraud in a landmark High Court ruling. One in a Million bought names such as Ladbrokes.com, Marks&Spencer.com and BurgerKing.com, before offering to sell these names back to their rightful owners for thousands of pounds.

Of course, this works both ways. Trading on the Internet makes any business multinational and subject to local laws. A business could accidentally infringe another organisation's branding. Just as combinations of words, logos, colours and shapes - the Coca Cola bottle is a classic example - can be protected by existing European and US trademarking law, so too can animated GIFs, Java applets and ActiveX.

The bottom line is that brand marketers are well advised to take legal advice before investing heavily in setting up an online trading operation. Whether you are a small business or a multinational organisation, the first step along the road to e-commerce must be to register a domain name and protect online brands. This will avoid disappointment and, at worst, protect from fraud.