Author: Christopher Hamel-Smith
To make our mark in e-commerce over the Internet, we must communicate our messages to prospects and customers. We need to build our brand by providing customers with efficient and friendly service, quality products and value for money. In cyberspace, as elsewhere, we must therefore invest in business practices and marketing campaigns that build our reputations and the goodwill associated with our products and services.
Over time, as a result of our investment and efforts, our company's precious reputation and goodwill becomes inextricably linked in the customer's mind with our trademarks, which many refer to as our brand names. This is one reason why many of the most valuable business assets in the world are trademarks such as "Coca Cola", "McDonald's", "IBM" and "Microsoft".
As companies use the Internet to breakdown traditional barriers of distance and time to compete in a truly global and virtual marketplace, our trademarks become even more critical assets than they have always been. This is also true of our domain names, such as "amazon.com" or "yahoo.com", used to identify and locate our web sites on the Internet. This is because trademarks and domain names serve not only to identify the source of products and services but also as certificates of the reliability of the source of supply and of the quality of the products and services.
For example, if you are considering whether to purchase a computer from a local supplier, you can visit the store and make judgements about the facilities, and the persons you meet, that either reinforce or undermine your confidence in doing business with that company. However, if I hope to sell computers to customers across the globe from a virtual store on the Internet, then I must expect them to rely almost entirely on such assurance as my trademarks and domain name can provide.
In order to conduct e-commerce on the Web companies need to secure domain names that are easy to remember and that relate to their products, services or existing trademarks. For example, the supplier of computer equipment might consider the domain name "computer.com" to be very valuable. So too, the owner of a well known trademark such as "IBM" will consider it essential to be able to use the domain name "ibm.com" as the address of its web site.
It is hardly surprising therefore that some domain names have changed hands at high prices. For example it has been reported that "business.com" was sold for US $150,000. And, in another famous example, McDonald's agreed to make a charitable donation in return for "mcdonalds.com" after it was registered and used by a journalist who published an article that highlighted the fact that the owners of many famous trademarks had failed to register them as domain names.
Because of the significant long-term implications of our selection of trademarks and domain names as we move to conduct e-commerce over the Internet, and the potential value of such trademarks and domain names, careful thought and analysis are required in selecting them. Fundamentally, the creative thought and analysis must be market-oriented. What types of name or symbol will serve as a badge that will help sell your product or service in the target e-markets? Will the trademark or domain name being considered reinforce the image that you wish to create for your business, product or service in the minds of customers who you hope to attract over the Internet?
However, such thought and analysis must be informed by an appreciation of the legal rules that affect trademarks and domain names. This is particularly so, since as we saw in my last article, most of the early litigation concerning Internet use and e-commerce has arisen in connection with disputed claims to trademarks and domain names on the Internet. Informed judgements will have to be made if we are to achieve our business objectives while avoiding the risk of becoming involved in expensive legal battles or even of being forced to abandon the use of our trademarks and domain names after we have invested heavily in developing them as symbols of our goodwill and reputation. Perhaps in this area more than any other, an ounce of legal prevention will be worth far more than a pound of cure.
Whether we are selecting new trademarks or domain names for use in e-commerce, or considering how to adapt our existing trademarks for use on the Internet, we need to maximize our rights through the proper selection, use and registration of such trademarks and domain names. And we also need to ensure that our new or extended use of these trademarks and domain names does not infringe on the rights of others in a way that may involve us in legal disputes. In my next article, I will try to provide practical tips for businesses that must address this important challenge as we prepare to conduct e-commerce and to make our mark on the Internet.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
