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Domain Names - The Cost is Rising

Initial skeptics may have doubted the longevity of the internet. In the early years of growth, many businesses utilized a webpage like an online business card that listed little more than their contact information. Uncertain of how to brand this new resource, businesses often struggled with creating a domain name. Many URLs which included acronyms or catch phrases appeared as company names now competed across state and even country lines. Today, the benefit of maintaining a strong online presence is no longer in question. Indeed, the internet provides consumers 24/7 access to even the smallest of businesses. Legal professionals no exception and are recently discovering the high cost of cross branding their brick and mortar business with their online presence.

Domain Name Costs

URLs that include 'law' in the address have sold in the hundreds of thousands of dollars (for some of the latest sales see This is not the first time high priced domain names have made a stir. However, earlier sales of sites like in the late 90s were generated mostly on the URL name rather than content. Indeed, changed hands as ideas fluctuated about what to do with the catchy URL. The name had to be translated into a product.

The more recent trend is sites fetching a high price are not sold on name alone. Instead they are fully functioning websites that already provide resources for online customers. Investors ultimately look at these URLs as a full package. They take the services and ideas and rebranded them into something bigger and better. Investments in domain names are not just words in an address bar anymore but are more akin to investing in property with tangible assets.

What is not immediately apparent is the "real estate value" of online URLs. Recently tools like were created with an eye for applying the theories of real estate finance to understanding online properties. This particular price index tracks the trends in domain name pricing. By following domain name prices from 2006 to today, it is possible to see that the fluctuation in the URL market often reflects economic trends. However, a comparison between INDX and NASDAQ also shows that the variable of change is less in the domain market and online properties are generally maintaining their worth with a steady increase. Therefore, the investment in domain names is becoming an important consideration for business entrepreneurs and developers.

Added to the property value of domain names is the general increase of registering these names. Verisign, which manages .com and .net sites, increased URL registration fees in 2012, 7% for .com and 10% for .net sites and will increase the cost for .net sites again this July 2013 by another 10%. These increases in prices are very minimal but when combined with the costs of renewing and hosting the site the expenses to buy, keep, and activate a domain name can add up quickly. Some web entrepreneurs worry this continual increase could lead to a gradual squeezing of small businesses who often buy multiple URLs (.com, .net, .biz, etc.) to protect their trademarked names on the internet market. While even the most basic cost of domain names are rising, the potential payback for access to customers is not just maintaining but increasing the value of online property. This reinforces the need for businesses to make astute choices in how they brand themselves online.

A further option or dilemma (depending on your point of view) is the opening of gTLD (generic top level domains) by the ICANN (Internet Corporation for Assigned Names and Numbers). Since 2012, instead of creating names around established gTLDs like .com or .net, companies may register a top level domain with any extension. For example, a corporation like the BBC might buy .bbc and create addresses like and The possibilities are wide open to anyone who pays the $185,000 to apply for the name and $25,000 annually to keep it registered. Although most agree scammers will not invest the funds or pass the application process, some do worry that this again could stir battles between similarly named companies. Therefore, the prospect of owning a cheaper .com or .net with a broad interpretive address name that contains key words such as law, legal, lawyer, etc. again becomes more appealing.

Finally, after a fluctuation in practice, search engine optimization has come full circle - domain names are again an important benefit for search engine results. As filters are improved to eliminate sites that do not provide content, the domain name is still tagged by search engines. This reality has further increased the value of sites that include terms often used by consumers in their searches.

Domain Name Basics

There are three main parts of the Domain Name which make up the "address" online.

The least disputed is the Third Level Domain Names. These define where a file may be found on the Internet. The most popular is www. However, other sub domains may be used instead of www; these are set up through the Internet Service Provider (ISP) or through a personal server if owned. Once set up the subdomains may direct clients to specific areas of the site. For example: & Many people do not use this option because they are either unaware of the possibilities or they are more concerned with staying in the public mainstream of the www.

Second Level Domain Names (SLDs) have become the major identifying factor of businesses over the Internet. This would be the mysite of These distinct address names are often the best way to brand your business and make a memorable impact on clients. However, they are also the center of domain name disputes as various trademark companies claim ownership of any representation of their names.

Finally, there are the Top-Level Domain Names (TLDs). There are three main categories:

There are national TLDs (nTLDs) which are created from country codes; for example .us = United States and .uk = United Kingdom (for a complete list of nTLDs click here). These domains are usually restricted to citizens only. However, some have been sold on the international market for various reasons. For example, Turkmenistan at one time allowed international use of its nTLD .tm for many companies interested in its similarity to trademark (™).

Grouped into this category are .gov (government), .edu (educational), and .mil (military). These are commonly recognized as domains with restricted use in the United States. However, a few other countries have used them. These domains are now restricted for government and established school use only.

Next, there is the International TLDs (iTLDs) that are reserved for entities which are truly international in character. The most common would be the iTLD .int which is commonly used by international intergovernmental organizations. However, iTLDs are not used for businesses which market internationally. Instead businesses use gTLDs.

Finally there are generic TLDs (gTLDs). These are sometimes looked at as international because almost anyone may register. Examples of gTLDs would be .com (commercial), .net (internet service providers, large network sites, etc.), and .org (organizations). These are the most commonly used because of their easy recognition in advertising.

Other Alternatives
The increase in conflicts and overall flooding of the courts has created the need for alternative solutions. The Generic Top Level Domain Memorandum of Understanding (gTLD-MoU) proposed that new gTLDs be adopted to better suit specific businesses and ease the rush for .com addresses. The proposed additions were: .firm (for businesses or firms), .store (for businesses offering goods to purchase), .web (for entities emphasizing activities related to the World Wide Web), .arts (for entities emphasizing recreation/entertainment activities), .info (for entities providing information services), and .nom (for those wishing individual or personal nomenclature).

Some have argued that if clientele are not following the uses of .com, .org and .net properly to begin with, why would they use the new gTLDs correctly. Another fear is that businesses will just wish to stay with the popular .com regardless, as they have not been extremely tempted to use other alternatives such as .us or other country codes.

ICANN has been responsive and issued as test run in 2000 with gTLDs like .info and .biz. In 2008 nineteen new gTLDs were released and ICANN established the New gTLD Program to work on creating more domain name solutions.

At first glance one may assume there to be an abundance of Domain Name possibilities. However, in reality, most groups want the gTLDs but only one person in the world may actually use online.

Domain Name Disputes

Jane Doe of Cedar Rapids, Iowa has a graphic design business called ArtzDezign. As she also began to design web pages, she went to acquire the URL She hoped to set up the site with examples of her work and basic contact information. However, the URL is already used by Jan Lane of Seattle, Washington. Ms. Lane owns a shop which crafts and decorates handmade books. Her shop is also called ArtzDezign and she has used the URL for the past three years. Both are legitimate businesses. However, only one may use the URL -- Welcome to the dilemma of domain name disputes.

When reviewing the domain name disputes brought to court, the evidence points that the majority of conflicts are surrounding .com addresses. The .com gTLD has been made popular by strong commercial sites and general propaganda promoting the Internet to new users. Thus everyone wants the most popular gTLD.

One reason for increased tension over .com is that many users are assuming that they should be using this gTLD. However, not everyone should be using .com. Non profit organizations and personal web pages have been resorting to the popular trend. This gTLD was made for commercial sites in mind.

The real reason for domain name disputes centers around SLDs. Anyone with a name wants to have the SLD which identifies them online. This is especially the case for established businesses. Although different businesses in different geographical locations may use the same business name, only one may use the name on the internet which does not recognize geographical boundaries. Add the similarities of names with the popular "hunger" for .com and what was a list of possibilities is dwindled down into one address of choice.

When two people want the same .com address, it is usually given on a first come - first served basis. When there is a trademark involved this is usually not the case. If the trademark is not proven to be misused by the original owner then sometimes first come - first served is the rule (for an example see Fuji Photo Film Co Limited and Fuji Photo Film USA Inc v Fuji Publishing Group LLC). However, many times the trademarked businesses have been receiving the upper hand in courts. This seems to be related to the use of popular names for SLDs by those only out to generate profit.

When it comes to deciding who has the right to a domain name, trademark law is often brought in. This is mainly due to the fact that some names are distinct and strictly for a type of product (e.g. Tylenol). Another reason trademark law is used is that there is a long developing history of trademarked businesses being exploited by non-affiliated parties for profit.

When a business has an established trademark in the US, it is generally good for 10 years at a time. No one may infringe upon an established trademark by selling goods or services which may cause confusion with the original holder. Nor may one reproduce the trademark without express permission of the original owner. It is illegal to claim to be another business and use their trademark to market to an established clientele. The most common way this is done online is the adoption of recognizable names as SLDs to set up scam operations. For example, customers of an ISP server with the address were sent the address by a unaffiliated scam artist who informed customers to pay their bills there instead.(Full article) This proves costly to the company as well as the customers.

Another threat to trademarked businesses online is the registering of the SLD with the intent of offering it for sale; this is commonly known as cyber-squatting. In the past many sites were registered by various unaffiliated users which would then contact the owners of the trademark and attempt to bargain a resale. Since the enactment of the U.S. Anticybersquatting Consumer Protection Act (PDF) this is beginning to cease. However, some users are still registering SLDs which are the same as a trademarked name and waiting for the trademark holders to contact them. In most cases the users then ask for a reimbursement fee for efforts they put into a bogus site.

Finally, some users are using misspellings of popular names to attract an established clientele. For example, the case of Microsoft Corporation v. Global Net 2000, Inc. was centered around Global Net 2000, Inc. reregistering many variations of popular Microsoft sites. These included such address as:, and This case was ruled in favor of Microsoft Corporation. Under the Trademark Act of 1946 (Lanham Act), one cannot cause trademark dilution by being deceivingly similar in attempt to receive business or cause confusion which may hurt a trademarked name.

The race for .com addresses has created a clash by businesses which may operate in different markets and geographical areas but are faced with the dilemma of a borderless online world. In addition, the misuse of trademarked names has caused increased litigation surrounding trademarks. In the first instance it is usually given to first come - first served. However, when trademarks are involved, because of the character of some users out for profit, the courts have the tendency to rule in favor of the trademarked business.

Currently when a domain name dispute arises there are four accredited dispute resolution providers approved by the Internet Corporation for Assigned Names and Numbers (ICANN). The ICANN is a non-profit corporation which controlled various assignments on the Internet from IP address allocation to domain name management. The ICANN website has a wealth of information about who are the accredited registrars to register domain names and where to go to settle domain name disputes (see list of Resolution sites in the links to the right).

Although the ICANN does not handle dispute resolution, it does accredit the organizations which do. The ICANN has enacted the Uniform Domain-Name Dispute-Resolution Policy (UDRP) which is used to file a complaint to an accredited dispute resolution provider. In this policy, the ICANN takes a "leave us out of this" type stance by stating that customers are responsible to see if a Domain Name infringes upon another's rights/trademark. All accredited dispute resolution providers follow the ICANN's Rules for the Uniform Domain-Name Dipsute-Resolution Policy. However, it is important to look at the different dispute resolution providers' policies as they have also implemented their own supplemental rules.

Three main points must be proven to the court:

  1. The domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and
  2. The respondent has no rights or legitimate interests in respect of the domain name; and
  3. The domain name has been registered and is being used in bad faith.

Based off the evidence proving or disproving the above, the court decides who gets to have the domain name for good.

Choosing a Domain Name for your Business

Just a few pointers to consider as you narrow your search for a domain name:

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Domain Name Cases:

Domain Name Resolution:

Register a Domain Name:
There are many sites out there - here are a few.

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