Businesses that fail to register their company or brand names for online use could be in for quite an expensive shock. Meg Carter reports
Many businesses are failing to register their company and brand names for online use, placing themselves at the mercy of Internet pirates who license familiar brand names for just pounds 50, then offer to sell them to their rightful owners for anything up to pounds 10,000. To combat this, City solicitors Davies Arnold Cooper (DAC) have launched a one-stop protection service.

Brandprotect, to be run by DAC and the Internet service provider U-Net, offers advice on choice of brand names, trademark law, clearance searchers and domain name registry. It also advises on how businesses can respond if they find their brand name has already been licensed by an unauthorised third party.

"Numerous companies, when asked if their brands are protected, say they have things covered. In fact they don't, as they've not had their domain names registered," says Catrin Turner, a DAC solicitor. "It's difficult for them to accept that your Internet site or e-mail address are part of your brand."

Businesses already online, planning to go online or even merely considering future options, are advised to register their preferred names for online use now.

"What can be registered is the domain name," DAC solicitor David Deakin explains. To register you simply approach the UK registry Nominet and pay pounds 50 per brand per year. This stops anyone else using the same name. However, for the time being, in the UK, and in most other countries, it's a matter of first come, first served."

Should a company find its name is already registered, it has a number of options. It can challenge the other party's use of the name by approaching Nominet and issuing a writ against the third party. It can approach the other company to strike a deal. Or it can reconsider its chosen name and adapt it - perhaps by adding a hyphen or an underscore.

It's possible that the other party is legitimately using the name, Mr Deakin points out. The law divides trademarks across 42 different product and service categories, which means lesser known, smaller brand names could be used by different companies in different areas of business.

However, it has also been known for a rival to register a competitor's brand name, according to Ajaz Ahmed, partner at new media marketing consultancy AKQA, whose clients include BMW, Durex and Virgin Radio. "This has happened with at least one of our clients. Almost every other has faced problems with unauthorised online use of their name."

Registering your name as a trademark is the best protection, Mr Deakin says. If your preferred domain name is not already trademarked, he advises you do the same.

If all this is too late and you're sure you have right on your side, you can issue a writ, he adds. To date, there's been only one test case in the UK - concerning Harrods, which settled its dispute out of court in January.

When the London department store came to register Harrods.com as an Internet address, it found that someone else had got there first. Harrods issued a writ claiming trademark infringement and passing off. The dispute was finally resolved in chambers, where the judge decided that the courts would step in to apply trademark law on the Internet - the first UK ruling of this kind.

Others have also been caught out in this way. Coca-Cola and McDonalds were among the first to face third parties using their brands online. Coke found coke.com was already registered; McDonalds found ronald@ mcdonalds.com already registered. Companies facing this problem risk not only losing the chance to use their trading or brand names online, but also the possibility of impostors setting up bogus Web sites in their names.

Harrods' victory is a step towards clarifying the situation. However, Mr Deakin notes: "The fact that this was not heard in open court means it is not a binding precedent. Although it is a persuasive argument and a positive development for other brand owners, it by no means resolves the situation."

Nominet is now considering changing its disputes procedure. One plan involves a one-month "consultation process" during which time other businesses would have time to contest a domain registration application. This, however, presupposes businesses can be constantly vigilant to potential applications.

Meanwhile, the industry awaits the first UK test case to go all the way to court.

For information on Brandprotect e-mail Davies Arnold Cooper at dac@daclondon.co.uk

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