​​​​​​​Albert Agustinoy

Cuatrecasas, Madrid

albert.agustinoy@cuatrecasas.com

Introduction

It has been more than 20 years since companies, organisations and individuals began to build their digital identities around a domain name. That made sense in the late 1990s, when domain names were the natural extension of well-established brands and search engines and other digital tools were not as developed as they are now. Regardless of this, we still find that domain names constitute a critical element for online visibility and we are not surprised, therefore, to see that very large sums are still paid to obtain the registration of domain names at public auctions.

Digital asset value

In this context, ‘.com’ domains remain the most in demand category. According to the most recent statistics, of the some 500 million domain names in existence, 35 per cent correspond to .com registrations. Runner up is the ‘.CN ccTLD’ (corresponding to the country code top-level domain for the People’s Republic of China), with a ‘humble’ percentage slightly above five per cent of global registrations. Similarly, regardless of the Internet Corporation for Assigned Names and Numbers (ICANN) having approved more than 1,200 new generic top-level domains (gTLD), .com still represents 85 per cent of the overall registrations of gTLDs.

Bearing in mind these figures, it is obvious that domain names remain attractive digital assets. As such, they attract attention not just from regular users but also from third parties which reap large benefits for trading them. Sophisticated experts (usually known as 'domainers') manage large portfolios of domain names- with big rewards.

Registration disputes

Speculation over domain names should not trigger legal issues but, if the registration corresponds to a legally protected denomination owned by a third-party other than the registrant of the domain, then it is likely that registration and/or use of the corresponding domain name will lead to a dispute.

In the case of trademarks ( the most relevant example of legally protected denomination owned by a given person/organisation), this kind of conflict has been efficiently addressed through the Uniform Domain Name Dispute Resolution Policy (UDRP) which ICANN approved on 20 October 1999.

This policy aimed to provide a simple solution to the most obvious (and damaging) cases of domain name speculation: the registration and use in bad faith of a domain that is identical or confusingly similar (a behaviour known as ‘cybersquatting’) to a trademark held by another person or entity. The UDRP has been dealing with cases of this nature for more than 20 years and has proven to be a very efficient tool.

But, aside from cybersquatting, speculation on domain names may also be focused on registrations that do not correspond to legally protected names. Indeed, domain names may be based on combinations of generic or descriptive terms without necessarily being connected to a registered trademark or other type of legally protected denomination. In fact, at present, the most valuable domain names relate to such generic combinations – for example, ‘candyshop.com’ was recently acquired for more than $112,200.

Panels of experts enforcing the UDRP considered that this type of speculation would not constitute a breach of the said policy, as long as the domain name in question is clearly connected to a generic term and meaning, without being related to a commercial and unconsented use of a trademark. Hence, any conflict deriving from this sort of domain registration and use will require a case-by-case analysis of the circumstances under which the domain was registered and how it has been used since.

Conclusion

Regardless of having been in existence for more than 25 years, domain names are still a critical element for organisations and persons aiming to ensure they have a solid digital identity. This valuable nature also implies that disputes will continue to arise and, therefore, lawmakers, technical authorities and attorneys will be required to offer workable solutions for solving disputes surrounding the registration and/or use of domain names.