Daily Archives: December 7, 2009

Hamleys Toys With The Public Domain….

It’s that time of year again – Advertising Campaigns have already begun in earnest to ensure retailers’ share of the Christmas market with the usual heavy emphasis on Electronics and Toys. If the thought of taking on the Christmas rush at your local Shopping Centre fills you with dread, then there’s always the online option – in fact, online shopping (despite the postal strike) is a significant and growing part of the retail industry, with lower prices and a growth in confidence in making safe card payments online in the wake of the introduction of new security technologies.

Whilst online retail hasn’t overtaken the experience of physical shopping just yet (and won’t do for some time), the amount of money spent on “virtual” shopping increases each year and increasingly, many businesses value their website just as much as their shop front to the point where they’re virtually one and the same; the recent online re-launch of Woolworths will see the brand continue to generate goodwill (and hopefully some profit) long after its high street stores were sold, and brands such as Argos even allow stock-checking over the web.

However, just like paying rent on premises, the need to keep an eye on the registration of your website’s domain name and ensure it’s renewed means that the price of freedom to trade on the web is eternal vigilance. This was flagged up in news reports last month concerning world-renowned toy store and British retail institution Hamleys, who saw their website become inaccessible to customers and a holding page containing competitor advertisements go up in place of their own fully-functional shopping site after failing to renew the domain name “Hamleys.com”.

As it turns out, Hamleys.com was only inaccessible for a few hours on November 3rd, but this story serves as a very useful and practical reminder for any business, retail or otherwise, that has a valuable presence and who generates a significant amount of turnover through doing business online.

Hamleys.com as a domain name expired on 29th October, and thousands of shoppers were greeted by a holding page from Network Solutions LLC., a Virginia-based domain name, hosting and website design agency who had apparently originally sold the URL to Hamleys and bought it back just after its registration lapsed. Hamleys had recently reduced its headcount in IT to concentrate on sales and other parts of the business, but it’s hard to see how this deadline passed them by without raising any alarm bells.

According to Network Solutions, up to six reminders of registration dates are sent to Domain Name owners and a five-day grace period after the actual cut-off date is in place, so either the post wasn’t reaching the right recipient or Hamleys may have simply just had a major oversight.

Any business with a significant online presence will normally have a comprehensive and watertight policy and contingency plan in place when it comes to domain name renewal and the majority will more than likely hold as many domain names as possible which are relevant to their business. In this case, Hamleys also own Hamleys.co.uk, and many other online retailers will not only defensively register interntational domain names with prefixes such as .eu, .net, .biz and .tv, but many of the common mis-spellings of their business name to avoid the problem of “typosquatting”, where competitors use domains which are almost identical to the site in question but spelt incorrectly (such as the example in www.kjkrowling.co.uk).

Typosquatting will almost certainly involve, if the dispute gets that far, a claim for Trade Mark infringement (if the brand is a registered trade mark) or passing-off, on the basis that a competitor is unfairly trading upon the reputation of an existing brand. However, as far as domain names are concerned, the web operates on a “first come, first served” basis. Hamleys also own their .co.uk domain, but that address simply links back to the .com site. As and when domain names expire they’re open to anyone for registration, and in this case the Hamleys.co.uk website led customers to the Network Solutions holding page. The web rumour mill went into overdrive, with the “Blogosphere” and “Twitterverse” finding no small amount of humour in the situation.

If Network Solutions had played hardball, then there were options for Hamleys - either go to Court and seek an injunction to transfer the domain name on the basis of a Trade Mark Infringement or Passing-Off claim or go through the ICANN Uniform Dispute Resolution Policy (UDRP). The UDRP’s terms provide that ICANN will transfer a domain name if a third party can show either that the domain in question is identical or confusingly similar to the name of an existing business and/or website, if the owner has no legitimate rights or interests in the domain and if it has been registered in bad faith. That said, although it’s cheaper and can be carried out partly via E-Mail, the wheels of the UDRP can turn very slowly and do not allow you to recover any legal costs spent on resolving the dispute. Bad faith can also be complex to demonstrate and the third party who has registered the name in question can normally continue to use it in the meantime.

If you need a business-critical website back online quickly, there may simply be no alternative to going through the Court and obtaining an emergency injunction, which is extremely expensive and requires very strong supporting evidence. In this case, There are a number of lessions to take away from this situation:

1 – Register defensively – get as many domains in as many combinations and in as many different suffixes as you can.

2 – Reputation is fragile, especially in the current climate, and visitors to the site in question may have their confidence in shopping with you dented if a holding page appears.

3 – Keep on top of your registration and renewal dates and be ready to take action where necessary.

Not renewing their domain may have cost Hamleys hundreds of thousands of pounds in lost sales, as well as damage to their reputation and a loss of management time whilst they deal with the problem. Domain names tend to be relatively inexpensive to obtain, but problems with them can be very expensive to fix.

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