What's in a business name the importance of domain names

Sam and Michael set up their new business, registered the company and designed their logo. During the start-up phase they used a generic Gmail address to receive all of their business-related emails.

The business was doing well in their area, which proved to them that their business model was working. They decided to invest in a website, have a more professional profile, specific email and contact addresses, to move the business to the next level.

They tried to purchase a domain name for their website. It was then that they discovered they had problem. There was no relevant domain name available in the same or similar name as their business and branding. They were left with the decision to rebrand or to find another way to gain access to the domain name they wanted.

The Problem

Company names in New Zealand must be approved by the Registrar of Companies before a Company may be incorporated. The Registrar checks that there are no other names that are close to the name being applied for and historically this has been sufficient to ensure that a new Company’s name is sufficiently original.

In more recent times with the internet changing the way we all do business, there are a number of other factors to consider, for example:

• Is the Company name available?
• Is the domain name available? If the domain name is not available are you able to purchase it from the owner or alternatively lease it from them?
• Are there any other businesses using similar domain names, but with perhaps a plural or alternative spelling?
• Is the name you have chosen actually both original and marketable?
• Is anyone already using that name on Twitter, Facebook or Youtube?

Whilst your company name can differ to your trading name, it’s a good idea to fully search the internet to ensure that there isn’t already someone doing what you previously thought was original. Because the internet is a “world wide web” of information, you really need to look much broader than your own neighbourhood because all of a sudden your internet neighbourhood might be all the English speaking world.

The Law

Whilst there is an element of legal uncertainty with domain names, they are recognised as a form of intellectual property right. There is also a growing body of law in and around domain names. Indeed the Courts in New Zealand have ordered holders of domain names to hand over the domain name to the owner of the business who has the actual rights to, but not ownership of, the name. Sometimes the Courts have ordered that domain names be cancelled or have provided an injunction to stop them being used.

The law is becoming clear that in a case of passing off (where one person uses another’s reputation for gain) the Courts will ensure the behaviour is stopped. There are also both New Zealand and international dispute resolution bodies that are resolving disputes over domain names.

The Tip

To be ahead of the game, a new business owner should undertake internet research as part of their start-up due diligence. This check will help avoid breaching this new and constantly developing area of the law.

Remember that the internet is constantly changing, one day something isn’t there, the next it is. New businesses should obtain ownership of their desired domain names as soon as they can to avoid the dilemma Sam and Michael found themselves in.