Protecting domain names

Domain names are alpha-numeric addresses that direct users to websites.  Unlike other rights regarding other property, domain name registration rights are limited and revocable.  As a result, protecting domain name rights is critical to any business with a web presence.  In today’s environment, that includes most businesses.

Real property has a title associated with it, and the owner of the real property has the exclusive right to use the property, sell the property and further develop the property.  The property rights never terminate.  Although the property may be subject to the rights of a lender, an easement holder or the government for taxes and assessments, the fundamental property rights vest in the owner.

Domain name rights are very different.  Domain names are registered to a registrant by a registrar, such as GoDaddy or Network Solutions.  The domain name registrant does not have property rights, but instead has contract rights.  When a domain name is registered, the registrant agrees to comply with the contractual terms and conditions established by the registrar for the use of the domain name.  The terms and conditions will include a specific time that the domain name will be registered, and it will include terms under which disputes over domain names may be resolved.

With these basics in mind, protecting domain names is different from protecting rights in real property.  Domain name rights are only as valuable as the rights of the registrant under the contract whereby a domain name is issued or registered.  Here are some practical tips on protecting your domain names:

1.  When a domain name is registered, the registrant is required to provide the name of the registrant, and the administrative and technical contacts.  These are the people who may exercise the rights of the domain name registrant.  If the name of the registrant and the administrative and technical contacts are not accurate, the domain name registrant may lose value rights in the domain name.  Make sure the name of the registrant, administrative contact, and technical contacts are persons controlled by the domain name registrant.  Failure to take this step could lead to the inability to change where the domain name is directed or to otherwise maintain the domain name.  Websites are moved from time to time to different hosts or servers.  If the registration information is not correct, the owner of the website may not be able to move the website, and may in fact, never have rights to the domain name.

2.  Domain names usually become trademarks and trademarks are used as or in domain names.  It is critical to make sure the registrant has cleared the domain name for trademark use and registration, and for potential infringement.  If a domain name infringes on the trademark of another, the registrant could be forced to shut down the website associated with the domain name, or adopt a new domain name.  Like trademarks, substantial goodwill can become associated with domain names.

3.  Obtain federal trademark registration for the domain name, or at least the domain part of the domain name.  The Anti-Cybersquatting Consumer Protection Act and the Uniform Dispute Resolution Policy both provide remedies for trademark owners where domain names are registered in bad faith in connection with such trademarks.

4.  Typosquatting is the practice of registering domain names by third parties which are off by a letter or two from the original domain name.  The typosquatter then derives traffic from the original domain name.  If the typosquatted name is infringing, the registrant may be able to force a transfer of the domain name, but another way to avoid having to take action is to register a variety of iterations of the domain name to help avoid typosquatting.  It would be impossible to avoid any potential typosquatting, but the more similar domain names that are registered, the lower the risk of typosquatting.

5.  Purchase long-term contract rights.  Not only are longer-term contracts less expensive on an annual basis, but they reduce the risk of the domain name expiring without being renewed.

Unfortunately there is no easy way to protect domain names from the many possible challenges that can arise.  Generally speaking, each domain name owner should adopt a practice for protecting domain names and avoid the potentially catastrophic results of failing to take appropriate action.

Who owns the copyright to content I create or have others create for me?

Most of us know that the words we read and photographs we see online, in books, and in other media are probably protected by copyright law. But who owns the text, images, graphics and other copyright protected works? Who may enforce the copyrights?

As mentioned in a previous post, the person who creates a work is the owner of the copyright in that work. The author of a book is the owner of the copyright in the book. The photographer of an image is the owner of that image. But there is one significant exception: when a work is created as a work made for hire.

Under the work made for hire doctrine, an employer owns the works of an employee created within the scope of his or her employment. So long as the creator is an employee and not working on a project outside of his or her normal duties and responsibilities, most likely the work created will belong to the employer. If the employee wants to retain ownership of the copyright of the work, prior to the creation of the work, the employee and employer should discuss an assignment of the copyright to the employee, and consideration should be given for the assignment. Another option is for the employee to receive a license to use the work. In this way, the employee is not prohibited from using the work he or she created.

Transfer of ownership in a work itself does not transfer the copyright. For example, purchase of a piece of original art gives the purchaser the right to own and display the artwork, but it does not convey ownership in the underlying copyright. As a result, the purchaser may not make copies of the artwork, post images of the artwork online, create derivative works or distribute copies of the artwork. Similarly, if a copyright in artwork is transferred by assignment, the assignment does not necessarily include ownership of any material objects created under the copyright. The material objects and the copyright rights are distinct and treated separately.

Sometimes authors or other creators of original works collaborate on a project, such as computer software. If the contributions of two or more creators are integrated into the overall work and are inseparable, the authors become joint authors and co-owners of the entire work, regardless of the amount of their individual contributions. One software developer may code 10 percent of the program and another may code 90 percent, but both are equal owners of the entire software program. Joint authors may use the work as if there were no other owners, even if the other owner objects to the use. One of the joint owners may, without the consent of the other owners, grant licenses to third parties to use the work. One co-owner may sue for infringement without bringing the other co-owners into the litigation. However, co-owners must account to each other for any profits earned from use of the copyrighted work.

Joint ownership is distinguished from authors making a contribution to a collective work where each individual work remains distinctive and stands alone. Collective works have two different levels of ownership. Authors may own the individual articles or elements of the collective work, and another author may own the copyright in the collection of works.

Ownership in copyrights and the material objects created under copyrights are complex and need to be carefully analyzed before proceeding to exercise rights under the copyright in a work or in the material object created under the copyright. As with most intellectual property rights, caution is the word!

Copying on the internet

Easy is not always better.

Before online marketing, using content in marketing was a deliberate process of finding content, making sure that rights of use were granted, working through multiple steps of proofs and review and ultimately, generating expensive glossy printed material.

That has changed: The world of online marketing has given Internet users the ability to copy and paste content through very simple, no-cost procedures. It’s essentially as easy as right-clicking a source page, opening a destination page, and another right-click to copy content to a destination page. However, easy can lead to some unfortunate results.

Debates continue over the rights that content owners should have online. Some argue that because the content has been posted online, it should be available for use by others, with very few, if any, restrictions. Despite the rapid rate of change in technology, there are fundamental principles that have not changed.

Copyright law protects original works of authorship and original content, regardless of where it is posted or displayed. Original works may include stories, blog posts, articles, graphics, photographs and other images, marketing materials, drawings and plans. Usually, originality is not difficult to find in a work. As a result, as soon as a work, such as an article or photo, is created, copyright rights exist. Copyright registration is not necessary to claim fundamental copyright rights, but registration is necessary to pursue an infringement claim in litigation, but there is a procedure for expedited registration, so the lack of registration does not need to bar a copyright owner from pursuing his/her rights in a copyrighted work.

The person who creates a work is the copyright owner. The concept of work made for hire is confusing to many. If a third-party service provider is engaged to take a photo or create content, the work is not a work made for hire. With a few exceptions, a work is only a work made for hire if it is created by an employee within the scope of his/her employment. If an outside firm or service provider is used to create a work, the user needs to get an assignment or license from the firm that created the work.

The owner of a copyrighted work has several exclusive rights: the rights to copy, reproduce, distribute, publicly display the work or create derivative works from the original.

What about fair use? Fair use is very limited and does not apply for most commercial uses. If the work is being used in an educational or nonprofit environment for purposes of commenting on the work, it may be fair use. If fair use is a possibility and it is critical to use the work, contact legal counsel to help work through the maze of fair use.

Failure of a copyright owner to include a copyright symbol, whether inadvertently or intentionally, does not change the need for permission to copy, use and display copyrighted works of others.

Infringement occurs when one of the exclusive rights has been violated. Not all copying is intentional. If there is inadvertent copying, courts will consider whether the new work is substantially similar to the original work. Through a series of tests, courts will make this determination. If the two works are substantially similar, and the copyright owner can produce a certificate of copyright registration, it is likely there is infringement and liability and then the courts will determine damages.

It is tempting to say, “I will never get caught,” or “If I am caught, what damages could the copyright owner assert?” It may be true that the risk of getting caught or a copyright owner establishing substantial damages is low. But it only takes one time. Getty Images and other image providers are aggressively pursuing websites that post images that have not been licensed. Further, copyright law provides for statutory damages. In litigation, a copyright owner may elect to recover statutory damages, which are damages unrelated to the amount of actual damages. Statutory damages of up to $30,000 per work may be awarded. For willful infringement cases, the amount of statutory damages is up to $150,000 per work.

One final issue: if an article is posted online, may a user make copies of the article and distribute them? Technically, it is distribution of the work, and a violation of one of the exclusive rights of the owner of the work, but the work is already available publicly. The safe course is to distribute the link to the content and have the recipient of the link directly access the materials.

Copying and using online content is deceptively easy. To avoid potential liability, the best strategy is to create original works. If that is not an option, always seek permission or a license to use the creative works of others.

How well are you managing your legal risk?

As Congress considers cutting trillions of dollars from the federal budget, waste and fraud detection will certainly be part of the plan for finding precision dollars.  Regulatory agencies are likely to increase their focus on compliance, and a new culture of compliance is likely to emerge in business in general.  Managing legal risk, in particular, is part of strategic planning and corporate compliance.  Unmanaged legal risk can lead to potentially significant adverse consequences.   Legal risk management is designed to help business managers improve future earnings of the company by identifying and appropriately managing legal risk to minimize potential losses.

What is legal risk management?

It is a systematic way of identifying legal risk in business, establishing programs for eliminating, avoiding, transferring, or mitigating the effects of such risk, developing a plan for conflict resolution, and educating business leaders and employees on how to manage such risks in the future.  There are five stages or steps:

  • identify  key issues and documents relevant to risk management through the use of a questionnaire
  • assess legal risk through an interview with key management personnel and a review of the documents
  • analyze legal risk by prioritizing and determining what risk can be eliminated, mitigated, or otherwise managed, and specifically how it will be done
  • manage legal risk and conflicts by developing a plan based on the risk analysis, including the use of available resources, establishing a conflict resolution plan, and providing appropriate training
  • implement, review, and follow up on the plan

What will I have at the completion of this process?

You should have a much better idea of what legal risks you face in your business, and a plan and process for managing that legal risk.  You should have comfort knowing that you have taken steps to manage your legal risk.  You will have sent a message to other members of your management team, and your employees, that you value corporate integrity and compliance.

How is legal risk management implemented?

The concept is a menu approach, and each step is unique.  Although all steps should be implemented, after the first two, you can choose to retain legal counsel to continue to assist and guide the process, or use internal personnel only for the remaining steps.  There is no outside legal cost for the first step.  The cost for legal counsel for the second step will be determined after review of the questionnaire and will fixed.  The cost for legal counsel for each additional step will likewise be fixed and determined from the information provided in the questionnaire and interview.

Who should be on the team for implementation?

Most businesses react to legal risks, and many attorneys are probably very good at addressing legal risks as they arise.  Legal risk management, however, seeks to avoid unanticipated risk, and potentially “bet the company” risks, and requires the involvement of team members, both business executives and lawyers who both understand and have implemented these concepts.

Is it possible to eliminate or even effectively manage all legal risk?

No, the objective of legal risk management is not to eliminate all legal risk.  That would be impossible. In fact, there is much legal risk that cannot be eliminated, and there are legal risks that business managers will consciously accept because the cost of eliminating them is too high.  However, legal risk management can help reduce the possibility of facing unexpected expenses in the future by dealing with legal issues now.  It is not about trying to find skeletons in the closet, but it is about looking forward and creating a plan to manage manageable risk.  It is about finding solutions, not just identifying problems.

How is legal risk management different from other compliance functions?

There is an overlap between corporate compliance functions and legal risk management.  Corporate compliance focuses on business and legal risks in a regulatory environment, while legal risk management focuses on how well the business is managing legal risk in general.  Legal risk management seeks to provide business managers and compliance officers with the tools and concepts necessary to help them manage and reduce legal risk and costs, and thereby improve the bottom line, and corporate integrity and compliance within the organization.

Principles-based business management

The businesses that will be most likely to implement legal risk management will be principles-based businesses, meaning they are motivated by core principles that positively impact stakeholders over longer periods of time.  Although they recognize the need for task-orientation, and acknowledge the new world of compliance in which they operate, they also seek to operate on time-tested core principles.  For example, a principles-based business will implement employment policies and procedures consistently applied not only to comply with law or a regulatory requirement, but because they want to be fair to their employees and create a positive working environment.  They will develop polices to avoid infringing on the intellectual property rights of others, because they value their own intellectual property rights and expect others to respect their rights.  Corporate integrity is important to principles-bases business, meaning that if policies are implemented based on principles, the executive management team not only talks about compliance with those policies and principles, but seeks to embrace and manage based on those principles.  Employees do not hear one thing, and see something else from their leaders.  The executive management team understands and buys into the need for consistency and compliance.

Outside general counsel

Most small and mid-sized businesses cannot afford the benefits of inside general counsel.  Some of the benefits of inside counsel include easy access to legal advice, cost controls on the cost of legal services, and legal focus and expertise in a specific business and industry.  What if it were possible to have at least many of the benefits of inside general counsel, without the fixed overhead of inside counsel?

Here are some things outside counsel can do to provide some of these benefits:

  • Manage legal risk, including annual compliance and legal reviews
  • Conflict resolution management.
  • Be readily available to respond to routine legal questions
  • Attend board meetings
  • Coordinate the delivery of all legal services
  • Gain industry knowledge by attending industry conferences
  • Work as a member of the management team
  • Review legal bills and work on alternative billing arrangements