BUSINESSES risk losing one of their most valuable assets because they have not been diligent about their domain names, commercial law firm Kelly & Co has warned.
The advice comes as a failure to renew a high-profile domain name resulted in it later being sold to a new registrant for a record price at auction.
Kelly & Co intellectual property partner Luke Dale said the proliferation of online auctions for expired domain names meant the brands of unsuspecting businesses may become available for sale to the highest bidder.
“Many businesses are unaware of the true value of the domain names they hold,” he said. “Some companies may also have a suite of domain names which they originally registered a long time ago, before the internet increased its commercial importance.
“They therefore may lack the procedures needed to ensure these don’t fall into the hands of competitors or online speculators.”
The domain name of investmentproperty.com.au was recently sold for $125,000 when its previous licence holder unwittingly let the registration expire.
Sales of other .com domain names have sold for up to $US13 million ($A12.96 million).
When a business registers a domain name, it receives exclusive licence to the name for a set time. But it does not own the domain name and the licence must continually be renewed.
Licences last for two years for .com.au domain names, while others can range from one to 10 years.
Domain name registrations that are not renewed will be cancelled and become available to the market.
“A domain name can form an integral part of a brand, particularly as commerce moves increasingly to the online market,” Mr Dale said. “For example, domain names such as carsales.com.au and realestate.com.au effectively constitute the trading names of those businesses. The loss of a domain name can hurt not only the brand equity of a business but also have significant practical implications.
“Customers looking for your website may instead end up at the website of a competitor.”
A common occurrence is where a staff member who originally registered a domain name leaves and renewal notices end up in the “email abyss”.
“In light of the minimal cost involved in renewing registration, domain name holders should remain vigilant in monitoring the status of their domain names and ensure their registrations do not lapse,” he said.