More commerce takes place online today than ever before. Yet many business owners have been slow to realise the importance of their domain names as an intellectual property asset.
Domain names are vital to a business’s online presence, because its domain name is the basis for a website and for promoting its brand. But as a Melbourne company found the hard way, they can also be taken advantage of by rogues who lurk in the shadows of the internet, ready to inflict untold damage on a brand if they can get away with it.
Melbourne mother Cinzia Cozzolina founded Smoothie Bombs, an organic, pre-portioned product in a tube designed to take the hard work out of preparing a nutritious smoothie.
Regularly active on social media, Smoothie Bombs decided to move into online retail and bought the domain name “thesmoothiebombs.com” for a website. Cinzia took all the right steps, and her business quickly built up a global reputation and customer base.
However, when Smoothie Bombs moved into the US market, she found that a so-called “competitor”, Blender Bombs, had emerged and registered the similar but shorter domain name “smoothiebombs.com” and directed the internet traffic it to its own online store.
The problem for Cinzia was that her potential customers who were looking for Smoothie Bombs would type the competitor’s simpler domain name into their computers and land in the rival’s online store rather than Cinzia’s. For a while, it looked as if all of her time and effort in building up the brand had been wasted and that Smoothie Bombs was about to bomb. Worse, this was mainly because Cinzia had not registered the simpler domain name “smoothiebombs.com” which the rival had then been able to register, a straight copy of Cinzia’s domain name and brand.
However, all was not lost. Cinzia had had some good advice and had registered Smoothie Bombs as a trademark, first in Australia and then in the US, EU and Korea. She could therefore use her trademark to put an end to her rival’s cybersquatting.
Luckily for Cinzia, there is a straightforward and economical way out of the clutches of cybersquatting through the efficient online arbitration service for cybersquatting cases that saves victims from the frustration and expense of going to court; it simply assesses complaints against a process embedded in every contract to buy a domain name.
Armed with a lawyer and a newfound understanding of IP law, Cinzia submitted her complaint to WIPO, one of the providers of arbitration under this service. The competitor was a cybersquatter as it had clearly taken advantage of her trademark, the offending domain name was identical to the trademark and the arbitration panel found in Cinzia’s favour. It ordered the competitor to hand over the domain name. Now, regardless of which domain you visit, you will end up at Smoothie Bombs online store.
Cinzia’s legal victory is reassuring, but businesses can avoid this trouble by registering as many domain names as are feasible. It is tempting just to register, say, “bigidea.com” but this leaves the door is wide open for cunning operators to register “thebigidea.com” or “bigidea.net”, and trade off your reputation. Give them half a chance and cybersquatters will steal your name, use it in a domain name, pretend they are you and try to ruin your business while they make money.
So, instead of just registering one domain, think of a list of words, including personal, company, product and brand names that cover everything you are likely to be known by. Then, register as many of these as domain names as possible. The registration costs can add up, but it is cheaper and easier than being dudded by a cybersquatter, giving in to blackmail or navigating through a legal dispute.
Register early and register often. As Cinzia and Smoothie Bombs have found, the internet can be a lucrative, but extremely competitive place. Your intellectual property matters, and like any asset it is worth protecting.
Neil Brown QC, a Melbourne arbitrator, has arbitrated 1170 domain name disputes and runs the website www.domaintimes.info.