Are Domain Names Intellectual Property?
The Technical Expert Solution for IP Teams
In a corporate transaction, domain names are often bundled together with trademark rights. A lot of businesses, but not all, incorporate their trademarks into their domain names. For example, the brand Nike has trademarked the word Nike. As it is distinctive and not descriptive, it can be registered as a trademark. They use the domain nike.com to sell its goods, so any third party that also tries to use this domain name would infringe on their trademark.
This works differently to a domain that is less associated with one brand, such as hotels.com. Hotel is a descriptive, so cannot be registered as a trademark. If the brand were able to register this, no other hotel would be able to describe themselves as hotels. Some domain names include words that are trademarks and some domains don’t. The point is the domain name itself is not an intellectual property right.
A domain name on its own doesn’t attach to a tangible thing. It isn’t fixed. A domain name is a string of characters that directs the user to an area of the internet to find more information. This server space might be occupied by some digital works of copyright. The most well-known of these are works of copyright in the website content (such as text, pictures, graphics, and videos), and copyright in software code.
This code sits behind the website and is what allows the website to operate correctly. An example of this is the problems faced by users when internet use began to transition to smartphones. A lot of websites that were designed to work on desktops didn’t work properly and had to be modified to allow browsing on smartphones. Again, this shows that works of copyright subsists in the code and website content and not the actual domain.
Domains can be transient. They can be used to direct users to any place on the web to direct you to relevant information. In reality, the information may or may not be connected to the string of characters in the domain. The individual with technical rights can configure the space where the domain sits to direct users to the most appropriate webspace. A common practice that is used by owners of multiple similar domains is to direct a user typing in one of these domains will be directed to a single domain, often a generic top-level domain.
Commercially, you want your customer to land at relevant content. However, phishing practices, worms, and viruses do pose a significant cybersecurity risk to businesses. These shady practices can result in customers revealing personal information to a third party who can then use it fraudulently. If your customers are victims of cybercrimes, they won’t trust your business and you will suffer from some negative publicity. A cyberattack that gives away personal data and which has happened due to your poor security measures will harm your reputation and could get you a penalty from the Information Commissioner as well as claims from the individuals who have been affected.
An intellectual property right is an intangible right that attaches to its tangible expression. As an intangible right, the benefit of ownership is that its owners have a right to enforce their rights. This enforcement right is one that is not always subject to taking physical possession.
If a domain name is an intellectual property right, then it can only be an intangible asset, the expression of which can only be words or string of characters that may or may not direct a user to a particular server space containing more information. This string of characters usually, but not all the time, will fail to attract rights itself as it will not meet the requirements of being unique and distinctive. These two factors are essential to be able to register a trademark. The most valuable domain names in the industry are not trademarks. They are domain names that are not able to register as a trademark due to a lack of distinctiveness and because they are descriptive of the goods and services that they are attached to.
There is no dispute that there is value in domains that don’t have a distinctive character for trademark purposes and that take no creative skill or effort. Good examples of these include domains like hotels.com and insurance.com. The value of these domains is undisputed, but it is not in the domain itself, but in the information and data that is within the domains.