Website-law.co.uk

Documented domain name management policies are exceptional. The rule is ad hoc registration of a range of domain names across a range of extensions, the domains being chosen by different people within an organisation at different times and for different purposes. The result: chaos.

If you have been asked to, or have decided to, formulate a domain name management policy for your organisation, this post should help. I have set out below details of what I consider to be the main principles and considerations which should inform any domain name management policy:

• Individually, domain names are not expensive (costing only a few pounds each per year).

• Providing domain names are all registered through an efficient domain name registrar or registration agent, managing even large portfolios should not be a significant administrative burden.

• There are usually many variations of any trade mark or name (including plurals, misspellings, derogatory variations, domains with common prefixes and suffixes, and hyphenations); and there are hundreds of possible domain name extensions (e.g. .com, .org, .de, .cn, .tv). For these reasons, there may be many thousands of domain names that are of (at least theoretical) interest to a trade mark owner.

• There are three main reasons for registering a domain name (or maintaining a domain name registration): first, because the registrant wants or may want to use the domain name to point to a website; second, because the registrant wants to stop others from registering or using the domain name; and third, as an investment.

• Domain names are typically registered for one or two or a few years at a time, and they lapse on a regular basis.

• It is possible to set up a watching service on domain names that “drop” off the register, so that they can be automatically registered when this happens. This practice is sometimes called “drop catching”.

• It is also possible to set up a watching service to monitor third party domain registrations that may trespass upon the watcher’s rights.

• Domain names purchased in the secondary market are much expensive than new registrations. During 2007, the average reported price of domains sold via Sedo (one of the main marketplaces for domain sales) was £1,253.

• Domain name arbitration proceedings are special contract-based administrative proceedings that can be used by trade mark owners to obtain domain names registered by others which trespass upon their rights.

• Domain name arbitration procedures are generally perceived to be complainant-friendly: around 70%-80% of complaints that go to a decision result in a transfer of the domain name to the complainant.

• Notifying a domain name owner in advance of commencing arbitration proceedings may lead to the owner taking actions which could prejudice those proceedings (e.g. transferring the domain to a new owner such that it becomes harder to prove that the domain was registered “in bad faith” (in UDRP proceedings)).

• Domain name arbitration proceedings are not inexpensive, but they are a lot less expensive than court proceedings. Typically, a complainant in a domain name arbitration involving one domain name might expect to pay between £800 and £900 in official fees, and (if professionally advised) £750 to £2,500 in professional fees.

• Domain name arbitration proceedings are much quicker than court proceedings, typically taking 7 to 9 weeks from start to finish.

• Shortly after the commencement of a domain name arbitration, the domain name will be “locked” so that it cannot be transferred by the owner during the course of the arbitration.

• In domain name arbitration proceedings, pre-complaint inter-party correspondence may be disclosed to the panel or expert decision maker – there is no equivalent to the “without prejudice” rule that applies in court.

• Where a trade mark owner purchases a domain on the secondary market in circumstances where that trade may have been able to recover the domain by means of domain name arbitration or or court proceedings, then that purchase may have the effect of encouraging others (professional cybersquatters and “domainers”) to register and use domain names which trespass upon the owner’s rights.

• Where a domain name is to be transferred, and the transferee is not entirely satisfied as to the bona fides of the transferor, then the consideration for the transfer will usually only be paid after the domain name is in the control of the transferor or (if this is not acceptable to the transferor) the domain or consideration will usually be held in escrow.

• UK litigation involving domain names will typically take the form of trade mark infringement and/or passing off proceedings. These kinds of proceedings call for specialist legal representation, and can be very expensive. It would not be uncommon for one party’s legal fees in a case taken all the way to trial to exceed £250,000 or even £500,000.

• In a trade mark infringement or passing off case, between 12 and 24 months may elapse between the date of issue of the proceedings and the trial (even longer in some cases).

• It is helpful to a complainant in domain name arbitration proceedings – and very helpful to a complainant in court proceedings – to be able to ground a complaint or claim in registered trade mark rights (rather than unregistered rights).

• One major advantage of litigation over domain name arbitration is that, in court proceedings, the successful party’s legal costs (or a portion of them) will usually be payable by the unsuccessful party. However, where domain name litigation is undertaken against individuals or companies without significant UK assets, recovering legal costs is likely to prove problematic.

There are of course other factors, but these seem to be to be the critical ones.

In yesterday’s post, I considered the basic legal information that most commercial websites are required by English law to disclose. Many of these basic disclosure requirements are contained in the Electronic Commerce Regulations (EC Directive) Regulations 2002 (the “Ecommerce Regulations”).

The Ecommerce Regulations also contain a number of (widely ignored) provisions that apply where contracts are entered into online.

This post considers those provisions. (It does not, amongst other things, consider the requirements of the Distance Selling Regulations which will affect consumer contracts concluded online.)

Technical steps to conclude a contract

Prior to the conclusion of an electronic contract, the service provider must provide to the service recipient in a clear, comprehensible and unambiguous manner details of the different technical steps to follow to conclude the contract.

The easiest way to do this is to include, somewhere on the website – e.g. in the legal documentation – a step-by-step guide to the contracting process.

Filing and accessibility of contract

Prior to the conclusion of an electronic contract, the service provider must tell the service recipient in a clear, comprehensible and unambiguous manner whether or not the concluded contract will be filed by the service provider and whether it will be accessible to the service recipient.

Given that online T&Cs may be regularly amended, the simplest way to deal with this requirement is to state, in the T&Cs, that the contract will not be filed and therefore may in inaccessible!

Correcting input errors

Prior to the conclusion of an electronic contract, the service provider must provide to the service recipient in a clear, comprehensible and unambiguous manner details of the technical means for identifying and correcting input errors prior to the placing of the order. The service provider must also actually provide such appropriate, effective and accessible technical means, prior to the placing of the order.

The usual way to fulfil this requirement is to have a pre-order web page detailing the information submitted and asking the customer to confirm whether they would like to amend that information or place the order on the basis of that information.

Languages

Service providers must also, strangely, provide service recipients with information about the languages offered for the conclusion of the contract.

This requirement can be met by stating in the website legal documents that the contract is only available in Esperanto (or whatever).

Codes of conduct

A service provider must indicate which relevant codes of conduct he subscribes to – and give information on how those codes can be consulted electronically.

T&Cs: storage and reproduction

Where the service provider provides terms and conditions applicable to the contract to the recipient, the service provider shall make them available to him in a way that allows him to store and reproduce them.

In my view, an HTML page or .pdf file can be stored or reproduced with ease, and so should fulfil this requirement. However, a cautious website operator might include a “print now” button on the terms and conditions.

Acknowledgement of order

Where a recipient of the service places his order through technological means, a service provider must acknowledge receipt of the order to the recipient of the service without undue delay and by electronic means.

However, the acknowledgement of receipt may take the form of the provision of the service paid for where that service is an “information society service” (e.g. a subscription to a website).

Exceptions

Where a contracts is concluded exclusively by email, the only requirements that apply are those set out under the “T&Cs: storage and reproduction” heading.

Businesses contracting online with other businesses may agree that the above provisions – other than those set out under the “T&Cs: storage and reproduction” heading - do not apply.

English law requires that most business websites supply certain information.

The basic information requirements are set out in:

• The Electronic Commerce Regulations (EC Directive) Regulations 2002 (the “Ecommerce Regulations”). These Regulations implement into English law Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information society services, in particular electronic commerce, in the Internal Market (the “Ecommerce Directive”); and

• The Companies Act 2006 and the Business Names Act 1985.

The application of each piece of legislation, and the detailed information that will be required where the legislation applies, is considered below.

Ecommerce Regulations: application

The Ecommerce Regulations basic disclosure requirements apply to “…a person providing an information society service…” (Regulation 6).

“Information society service” means “any service normally provided for remuneration, at a distance, by means of electronic equipment for the processing (including digital compression) and storage of data, and at the individual request of a recipient of a service” (Recital 17 of the Ecommerce Directive). This requirement should be broadly construed. For example, although a simple “brochure” website might not be an information society service, a website that earns money through advertising almost certainly will constitute an information society service, even if it is completely free to users.

The Ecommerce Regulations only apply to service providers established in the UK. However, service providers established elsewhere in the EU will have to comply with equivalent requirements under the national law of the state in which they are established.

“Established service provider” is defined in the Ecommerce Directive as follows: “a service provider who effectively pursues an economic activity using a fixed establishment for an indefinite period. The presence and use of the technical means and technologies required to provide the service do not, in themselves, constitute an establishment of the provider;”

So, the location of the servers hosting a website do not determine the place of establishment.

Where there are multiple “fixed establishments” in relation to a given service, then Recital 19 of the Directive provides guidance: “… in cases where a provider has several places of establishment it is important to determine from which place of establishment the service concerned is provided; in cases where it is difficult to determine from which of several places of establishment a given service is provided, this is the place where the provider has the centre of his activities relating to this particular service.”

Ecommerce Regulations: requirements

A person providing an information society service must make available to the recipients of the service (and any relevant enforcement authority) in a form and manner which is easily, directly and permanently accessible, the following information:

• the name of the service provider;

• the geographic address at which the service provider is established;

• the details of the service provider, including his electronic mail address, which make it possible to contact him rapidly and communicate with him in a direct and effective manner;

• where the service provider is registered in a trade or similar register available to the public, details of the register in which the service provider is entered and his registration number, or equivalent means of identification in that register;

• where the provision of the service is subject to an authorisation scheme, the particulars of the relevant supervisory authority;

• where the service provider exercises a regulated profession: (i) the details of any professional body or similar institution with which the service provider is registered; (ii) his professional title and the member State where that title has been granted; (iii) a reference to the professional rules applicable to the service provider in the member State of establishment and the means to access them; and

• where the service provider undertakes an activity that is subject to value added tax, the relevant identification number.

In addition, where a person providing an information society service refers to prices, these must be indicated clearly and unambiguously and, in particular, must indicate whether they are inclusive of tax and delivery costs.

Companies Act 2006 and Business Names Act 1985

Every UK company should list on its website:

• its name;

• its company registration number;

• its place of registration; and

• its registered office address.

Sole traders and partnerships who carry on a business in the UK under a business name (very roughly, not the names of the trader/partners) must also make certain website disclosures:

• in the case of a sole trader, the individual’s name;

• in the case of a partnership, the name of each member of the partnership;

• in either case, in relation to each person named, an address in the UK at which service of any document relating in any way to the business will be effective.