The intersection of domain names and trade marks has become a complicated area of the law that you should have some familiarity with when selecting and registering, or buying, a domain name. The complications arise from the fact that (i) registered domain names are unique and can only be used by one company at a time, (ii) registered domain names are automatically useable on a worldwide basis, and (iii) domain names can be registered and maintained without being actively used.

The same trade mark can be registered by two or more different companies if the mark is being used with respect to different goods or services. But only one company can have a domain name that contains that trade mark. This has led to some famous conflicts over domain names, such as the one between Sun Photo, Sun Oil and Sun Microsystems. There is only one sun.com, however, which Sun Microsystems registered first and has the right to use to the exclusion of the others.

While domain names have a global reach, trade marks are registered in the country where goods or services are being sold with the use of the mark. As a result, a company that uses a domain name that is the same as a registered trade mark, and also sells the same goods in the same country as the trade mark holder, may be liable for infringement. In general, the test will be whether the domain name registrant intended to offer products for sale to persons located in the country in question. But the issue is complicated and should be examined thoroughly if a potential conflict exists.

The final source of friction between the owners of domain names and trade marks occurs where a person registers a domain name and then sits on it with the intention to sell to the highest bidder. When domain names were first introduced, this was possible subject to claims by trade mark holders that they held a ubiquitous worldwide interest in their mark, e.g. McDonalds, and therefore use by anybody for any commercial purpose constituted infringement.

However, ICANN has now adopted a uniform dispute resolution policy that applies to all registered domain names using generic TLDs, and the registrant of a domain name agrees to be bound by this policy. In general, the registration of a domain name can be challenged if it is registered in bad faith and the registrant has no genuine interest in using the domain name. However, if the registrant is using the domain name to sell goods or services, then their right to use the name will be protected.