Digitalisation has turned the business landscape into a truly global economy. One of the repercussions of this is that market conditions have become tougher, with companies and individuals from outside Europe dealing in digital assets and competing with their European counterparts. This has created a challenge for European companies, as they no longer face competition just from players in the same market but must now think about their plans and actions from a global perspective.
One impact of this development is that, more than ever before, legal trademarks® are closely connected to the digital world. At the center of this connection is the relationship between trademarks and domains. Whereas they may have previously been seen as two different worlds, domains and trademarks have been inseparably linked through digitalisation and the global marketplace. The challenges and problems associated with both legal trademarks and digital trademarks (in other words, domains) are remarkably similar, and proactive strategies and solutions often require an approach that addresses both areas simultaneously.
There are many pitfalls facing companies that don’t take an integrated approach to domains and trademarks. Below we describe two typical examples.
MegaBrand AB intends to expand into Germany. The company’s marketing department contacts their trademark attorney for help protecting their trademarks in the country.
When their trademark registration has been submitted and their application for international protection is being processed, the marketing department ask their colleagues in IT to register a domain – they want to draw-in more German web traffic and build confidence in their brand by using Germany’s national top-level domain (TLD) .de. The IT team try to register the domain, but soon discover the domain is already in use. They decide to investigate further and find out that a number of potentially important domains have suddenly been registered with TLDs such as .com and .co.uk – the national TLD of Great Britain. MegaBrand had intended to branch into the British market in the next two years, so the British TLD is of great interest to them. MegaBrand’s marketing department know that the .se TLD doesn’t count for much in the British and German markets, so they have to ask the management group for more resources, so they can, as far as possible, buy the in-use domains that are now worth hundreds of thousands of Swedish kronor.
Let’s take a look at a second example.
SuperBrand AB have had enormous growth with their online digital platform but haven’t updated their procedures for managing their domains. They’ve continued with the same process since their early years – the IT department register domains at the request of the marketing unit as part of their attempts to draw in traffic. All domains are renewed automatically – the previous marketing manager made advance payments for all current renewals with his credit card at different domain registrars. The credit card expires after two years, so superbrand.de isn’t renewed automatically and the registration runs out.
After the registration expires, the domain is quickly picked up by what appears to be a cybersquatter – someone who speculatively registers domains with the aim of selling them for a profit. After a couple of days discussion, SuperBrand decides to contact a domain consultant for help in regaining their domain. The consultant’s first suggestion is to reclaim the domain through a dispute resolution process, and they direct SuperBrand to their trademark attorney to proceed. The lawyer, however, advises that they must have a registered trademark in Germany or the EU for the dispute resolution to have any chance of succeeding. Registering trademarks has never been a priority for the company – at a price of 20,000 SEK, protecting their trademarks was seen as too big an investment when the company started out. Since then, as the company rapidly grew, it was simply something they didn’t have time to think about. Ultimately, the marketing department had to request extra resources from the management team, because they had no choice but to buy the lost domain from the cybersquatter for several hundred thousand kronor.
With this in mind, you can see that both companies made a mistake in regarding domains and trademarks as two separate worlds. In reality, trademarks and domains are both company assets that help establish and protect the brand’s exclusivity, desirability and reliability.
Here are five reasons why you should ensure domains and trademarks are managed side-by-side:
- Comprehensive creative control over how your trademarks are used and protected, legally and digitally.
- More effective co-ordination during expansion reduces risk and unnecessary expenditure.
- Faster reaction in the event of digital fraud or trademark infringement.
- Coordinated strategy and knowledge in the approach to legal and digital issues creates better conditions for expansion.
- Help to maintain a consistent strategy for establishing new trademarks – both digitally and legally.