Domain name agreement

There are two main kinds of domain name-related legal agreement: domain name assignments and domain name licences.

A domain name assignment should be used in connection with the transfer the ownership of a domain name from one registrant to another.

A domain name licence is used to rent or lease a domain name for a period. Domain name licences can be used by start-ups to gain access to domain names that would otherwise be out of their financial reach, or in connection with wider trade mark licences (e.g. for a franchise). A domain name licence may include an option to purchase.

Domain name assignments should be in writing so that, if the assignor does not transfer the domain as agreed, or the assignee does not pay the agreed consideration, the party that is not in breach has solid evidence of the breach (to use, ultimately, in domain name arbitration or court proceedings).

Domain name licences should also be written down. Licensors will want to ensure that licensees do not damage the value of the domain name by the use they make of it or, worse, risk the loss of the domain through court or domain name arbitration proceedings, or the cancellation of the domain name by the relevant registry. Licensees will want to ensure that their rights to use the domain name and any option to purchase are fully enforceable.

Common issues to consider when drafting an domain name licence are:

• content standards of the website to which the domain name will point;
• the basic obligation of the licensor;
• warranties from the licensor;
• trade mark licensing (where the name is not generic);
• the calculation of charges and payments procedures;
• an indemnity for the licensor, or both parties;
• consequences of breach; and
• rights to terminate and the consequences of termination.

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