Purchasing and selling an internet domain name is frequently compared to the purchasing and selling of real estate. It is a good comparison according to the traditional law principles so that the contracting parties of a domain name transaction can understand the industry of information technology and e-commerce.

Due to the linguistic character of the domain name, it is of vital importance to take into consideration the trademark law in relation to the domain name transactions.

Anyone can buy a domain name as soon as this domain name does not infringe the trademark rights of a third party.

The domain name sellers should realise that it falls within their responsibility to make certain that the domain name they transfer to another person is free from likely trademark infringements before promoting it in order to sale it.

In this context, ignorance of law is not excuse for the domain name sellers!

From a trademark owner point of view, it must be realised that being a trademark owner does not automatically mean that the trademark owner also has a legitimate legal claim to a domain name.

Ownership of a valid trademark is only one of the three requirements that someone needs to meet in order to win ownership of a domain name via ICANN’s (Internet Corporation for Assigned Names and Numbers) Uniform Dispute Resolution Policy (UDPR), the policy governing ownership disputes for the generic Top Level Domain Names (.com, .biz, .org, .net and .info).

Equally important are the requirements that the domain name registrant have no legitimate interests in the domain name and that the domain name registrant evidenced bad faith in registering the domain name. Both requirements need to be evidenced apart from the simple registration of a domain name.

During a domain name dispute, when the one party sues and loses, the chances of this party being able to purchase the domain name from the current owner is to a great extent reduced.

It is also remarkably noted that some of the UDRP claims against domain name owners can come up with a result of a reverse domain name hijacking- practice in which the trademark owners engage in a bad faith attempt to use the UDRP to wrongfully bit the legitimate registrant and user of a most wanted domain name merely because the complainant owns a trademark in that domain name or one similar to it.

Apart from the potential trademark rights of third parties and the check of the domain name ownership, when someone has secured a deal to purchase a domain name, especially one that has significant value, it is of vital importance to go throughout the due diligence. The most important research someone needs to do is to ensure the domain name is owned by the party that he thinks owns it, and the second is to make sure traffic/Page Rank/directory listings and all other requirements can be met.

Having a Domaintools.com account allows the party who is interested in purchasing a domain name to search the Whois history in relation to a domain name.

Verifying other things like internet traffic, page rank or inbound links are other important elements of a successful domain name transaction.

Last but not least, while it can be tempting to purchase an old domain name for a plethora of reasons, the money invested must be likely to show a return in the future and that will only occur if the particular URL has prospective to bring into line with its new remit.

Aged domain names that are slightly risky will frequently disappoint at a second auction.

chryssa.tsiotsi@gmail.com

Dr Tsiotsi is a lawyer specialising in information technology and telecommunications laws.