Domain Names : what they are, why they are important, and how rights in them are obtained.

What is a domain name?
A domain name is the world-based label used to identify one or more numeric Internet Protocol (IP) addresses. Domain names are the essential component of .com, and .org names (to name just three) under which websites operate.

Why are domain names important?
The right domain name is a gateway to opportunity: if a business doesn't have the right domain name, it can miss significant growth opportunities.

The 'right' domain name can be a distinctive word which is the same name as a business rather than a descriptive term (for example, or rather than or a catchy acronym (for example, for James & Wells and for this publication).

The right domain name will be more memorable to Internet users who may or may not yet be customers. In addition, if a dispute arises concerning a domain name registered after yours which is identical or similar to yours you will stand a much better chance of establishing rights in the subject domain name and therefore in recovering the registration. Descriptive or generic domain names, such as, are very difficult to establish rights in and therefore recover.

The more memorable a domain name, the easier it will be recalled
For online businesses the right domain name is critical. Amazon, Trademe and Fishpond are good examples of online traders which each use a short, distinctive domain name. A descriptive domain name is less likely to be memorable leading to a greater amount of marketing and promotion to attract customers. The more memorable a domain name, the easier it will be recalled and the more likely customers will disseminate it by word of mouth.

How are rights secured in domain name?
Rights in domain names are initially secured by registration on a first-come, first-served basis through a Registrar (such as Freeparking).

Registrants of domain names do not 'own' their domain names
Unlike trade mark registrations, domain name registrations are not 'owned' by registrants. The act of registration grants a person a licence to use a particular domain name; the licence being granted by ICANN, the global body responsible for administering the domain name system.

As with all licences, a domain name 'licence' can be transferred or cancelled. In New Zealand, a .nz domain name registration will be transferred or cancelled if it is deemed under the New Zealand Dispute Resolution Service Policy to be an 'unfair' registration. Broadly speaking, a domain name registration will be 'unfair' if its mere registration or the manner in which it has been, or is likely to be used, took unfair advantage of or was unfairly detrimental to a person's rights.

A person other than the registrant of a domain name may have rights in a particular domain name provided that person had pre-existing rights in an identical or similar name. A person cannot successfully claim rights in a domain name registered by a third party if they started using an identical or similar name after the subject domain name was registered.

In short, domain names are a fundamental piece of the commercial landscape. If you are considering starting up a new business, you should think first – not last – about the domain name you want. If your research reveals your preferred domain name is not available, you may well have to re-think your trading name from the top as well as your branding strategy.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

James & Wells Intellectual Property, three time winner of the New Zealand Intellectual Property Laws Award and first IP firm in the world to achieve CEMARS® certification.