Purchasing a domain name?

So, picture this scenario that we recently came across.  You've got an idea for a product, you've thought of a really clever name for it and you've tracked down who owns the domain name reallyclevername.com.  You've even negotiated a deal with the domain name owner for the sale of reallyclevername.com, and have a contract ready for signature.  You're virtually ready to launch the product, right?  Wrong.

It's easy to forget that using a domain name could infringe someone else's trade mark, even if you had no intention of taking unfair advantage of that trade mark. 

Under ICAAN's Uniform Domain Name Dispute Resolution Policy (UDRP), to succeed in an action against a domain name owner, the complainant must show that (a) the domain name is identical or confusingly similar to a trade mark in which the complainant has rights, (b) the domain name owner has no rights or legitimate interest in the name, and (c) the domain name is being used in bad faith.  Now we'd imagine that you're not going to use the domain name in bad faith, so you should be able to defend an action under the UDRP.

However, if someone else has registered really clever name for goods or services that are identical to those you wish to provide, your use of reallyclevername.com will almost certainly infringe their trade mark and entitle them to damages, an account of profits and/or an injunction requiring you to stop using the reallyclevername.com domain name.  Your reallyclevername.com domain name could also infringe another person's trade mark if it is similar to the trade mark, is used in connection with similar goods or services and its use is likely to confuse the public into believing that there is a link between your reallyclevername.com domain name and the other party's trade mark.  That would be quite annoying if you'd paid a substantial amount for reallyclevername.com, and so our advice when you are looking to purchase a domain name is to always check the trade mark registry in your jurisdiction (in the UK, this is the Intellectual Property Office) and to carry out an internet search to see if the really clever name is being used by any other entities before you go ahead and buy reallyclevername.com.

Comments

[Emil A. Georgiev]

Fully agree with what you write.
But doesn't the research you describe anyway form a part of the process to set up a business nowadays?

[Paul]

At the moment, it is possible to set up a company in the UK without investigating whether any relevant domain names or trade marks are owned by a another party (so the research described isn't a prescribed part of the process to set up a business in the UK), but it is certainly good practice to do so.