Intellectual property is a business tool. We know it, and our client’s know it. Generally speaking, trademarks are associated with branding, patents with the protection of inventions and the right to a legal monopoly for a fixed period of time, and copyright with the rights associated with the creation of original, dramatic, musical, artistic, and literary works (including computer programs).
Domain names are commonly put into the “intellectual property” bucket and yet they are often not given the same consideration given to protecting other forms of intellectual property. Arguably, similar issues arise with copyright, as you’ll see below.
Every day domain registrars, Internet service providers, and lawyers, to name a few, get calls and e-mails from frustrated clients looking to reclaim rights in domain names that have been allegedly hijacked or are being held hostage by a third party. I was more than a little surprised to find out that while some of these hijackings are completely outside the control of the client, many more are simply result from poor judgment.
Take the politician who registers a .ca domain of his name. His term runs out, his domain name expires, and some creative genius picks up the now-available domain name and turns it into an opportunity. Or take the outspoken radio talk show host that everyone loves to hate: same deal. What is so striking about these stories, apart from the obvious fact that these individuals should have been savvy enough to register (if not use) and maintain their names (indeed, their brands) as domain names given they are recognizable public figures, is the public response to how they reacted.
What I’m talking about, is the court of public opinion. In many of these cases, it has cost far more than an initial $40 domain-name-registration fee to try and reclaim the lost rights. It has, in some instances, created a fascinating negative backlash. Forget the lost domain and whether or not it is being legitimately used or not: Lashing out is clearly not the best approach. Unless of course you want the publicity, regardless of the form it takes.
To his credit, in 2009, when Fredericton Conservative MP Keith Ashfield let his domain name lapse and it was immediately picked up and used in association with a site providing information about buying prescription drugs without a prescription, Ashfield publicly acknowledged his lesson learned. Others have not been quite so quick to acknowledge responsibility.
Legally speaking, with reference to the specific cases linked to this column, each one of these individuals was likely to face a not inexpensive uphill battle trying to assert rights in these lost domain names. Alberta Premier Ed Stelmach came under fire for being too “thin skinned” about the whole affair, because he threatened to sue rather than settle amicably from the outset. In Stelmach’s case, his might be a difficult legal battle in any event because it would probably be hard to prove the site owner stole his likeness and was holding it out as somehow belonging to the premier — the legal test being the misappropriation of someone’s personality for commercial gain.
In Lowell Green’s case, among other things, the privacy rights asserted by the new owner of the .ca domain would necessitate a court order to find out who is behind the domain that was at the time pointing to an abortion clinic’s site.
As of the date of this column lowellgreen.ca and keithashfield.ca appear to be caught in domain name purgatory; edstelmach.ca now points to a subscription page, apparently belonging to the premier himself; and rogercruzner.ca and rogercruzner.liberal.ca, point to the liberal MP for Cape Breton-Canso’s site.
Now consider the start-up. Funds and resources are limited, it wants to get a web site up as quickly and cheaply as possible, so it pays a designer/host to register a domain name for them, throw up some design work and content and voila, a recipe for future disaster.
The start-up starts generating revenue. The relationship sours with the designer/host of the site and the start-up finds out it can’t change service providers/hosts because the designer/host “owns” the domain name and has rights in the content of the site and won’t transfer any of it to the start-up. It really doesn’t matter what the reason might be, the point is, if the start-up doesn’t sort it out, the web site could get turned off and the business may go under.
Overlooking the fact that in all likelihood the start-up never had a trademark pre-clearance search done, and so could also find itself facing serious problems (and costs to remedy) for infringing the rights of a trademark owner, the first mistake the start-up made was to have the domain name registered under someone else’s name. The second, and probably bigger mistake, because it could have prevented the first, was not having a contract in place before the designer/host started working on the development of the site.
In addition failing to put in writing clear ownership of the domain name for the purposes of registration and the terms regarding administration going forward, the failure to recognize that copyright arising out of the development of the site (which in this case was created by a consultant without a contract) is proprietary to the author unless assigned (and waived moral rights) in writing, effectively means the author, and not the start-up, owns the content (including in the designs/logos).
So what might have cost the start-up at most a couple of thousand dollars to get an agreement and assignment in place, is now going to cost a whole lot more to settle, assuming that settlement is possible.
So what’s the solution? Be informed. Be strategic. Act early. Put it in writing. Pretty basic stuff if you ask me.
You don’t have to register domain names yourself. You can get a domain name registered in your name by a reputable registrar of domains. The .ca domains are valuable in terms of branding (and the goodwill associated with a .ca being tied to Canada) and protection (including privacy and application of Canadian law to .ca-related transactions) because their owners must meet the Canadian presence requirement (no, legal advisers cannot register domain names for foreign clients who do not meet the requirements).
Do spend the time and money having the necessary agreements with your service providers (especially web designers) in place. Domain names — and more than ever .ca domains — are important business tools and clearly can be very valuable, so it makes good business sense to take the time to make sure ownership is clear. You wouldn’t put a stranger’s name on the deed to your house and hand over the keys would you? At least, not without a contract. . . .
Sarah Dale-Harris is corporate counsel at Accenture Inc. and can be reached at email@example.com or at 416-641-3151. I would like to thank both Stuart Hodge and Jennifer Austin for their generously agreeing to take time out of their very busy schedules to answer my questions. If you are interested in finding out more about domain registration, web site hosting, dedicated servers and all other manner of web related services, you can contact Stuart Hodge at www.koallo.ca. If you are interested in learning more about .ca domains and the many services that the Canadian Internet Registration Authority provides, you can contact CIRA at www.cira.ca. The opinions expressed in this article are those of the author alone.