The business of selling domain names

Domain names are really important branding tools. They enable businesses to direct consumers to their products and services and as a result, a good domain name is a really valuable asset. 

As with any valuable assets, there is also business associated with trading that asset. There are thousands of domain names for sale through platforms such as godaddy.com, as these platforms seek to capitalise on business owners seeking the perfect domain to associate with the sale of their product or service. 

Registering a domain name with the sole purpose of selling it on is acceptable practice. However, procedures and policies exist to prevent the registration of domains that may be similar to an existing trade mark registration. When a party registers a domain name featuring another party's registered trade mark, either with the sole purpose of selling it on or to benefit from the reputation or well known-status of that trade mark, this is known as cybersquatting.

In the case of obviously well-known trade marks such as Coca-Cola, it is highly unlikely an unrelated third party would be able to defend a complaint against a domain name featuring ‘coca-cola’. However, there is more uncertainty where registered trade marks are also descriptive or non-distinctive terms. Generic, descriptive, or short domain names can be for resale without violating any policies.

A recent WIPO decision has suggested that for these generic, descriptive or short domains, even if they do comprise a registered trade mark, a third party could successfully defend a domain name complaint if the domain's landing page indicates the possible descriptive uses of the domain. This is only the case where the domain name is obviously for sale, rather than a case of true cybersquatting where the third party might be using the domain to pass off another party's products or services. 

Brand owners and companies should be mindful of this when filing any complaints against for-sale domain names as even if they feature a registered trade mark, if they are generic, short or descriptive, then they may not fall foul of policy.