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IP in the digital space

Due to Covid – 19 many businesses have been forced to transform and go digital. Most businesses are now selling or marketing their products and services through new digital information technologies, such as the Internet. In such transactions, IP is the main component of value because the goods and services of value that are traded through e-commerce platforms must be protected, using technological security systems and IP laws, or else they can be stolen or counterfeited and thus lead to the business being destroyed.

Because of nostalgia and people being used to doing business the traditional way, customers are naturally cautious in an online environment. As a result, branding for companies trading online is even more important than for traditional businesses. A trademark is the face of a product, recognizable by customers and indicating qualities the customer has come to expect and trust. Trademarks are therefore an essential part of e‐commerce business because branding, customer recognition and goodwill are protected by trademarks and unfair competition law.

Other forms of IP, such as copyright and domain names (the part of a network address that identifies it as belonging to a particular domain) have a huge role in the success of an e-commerce enterprise.

The Internet domain name system facilitates users’ ability to navigate a business’ website. Domain names, because they are easy to remember, also perform a function as business identifiers, in a manner like trademarks.

In light of the above the selection and protection of IP assets plays a crucial role in the success of an enterprise trading online.

The most important criteria that must be considered when selecting or creating a new mark is that it must be capable of distinguishing the goods or services produced or provided by one enterprise from those of other enterprises. A business must also consider factors such as the culturally determined meaning of the colours or language. A trademark can be invalidated, and money will be lost if the selected mark has a negative meaning or connotation in the jurisdiction it is being registered. It is therefore recommended that advice be sought from an IP attorney when selecting a trademark for your business.

Diligence and guidance must be sought from IP professionals when selecting a domain name. A domain name may be available and registerable, but that does not necessarily make it legally safe or practically useful. For example, the chosen domain name may conflict with the trademark rights of someone else.

Due to size and lack of expertise, most businesses contract independent website developers to create their website design and/or content. Most businesses usually assume that they own the IP rights in the website created for them because they have paid for the work. Alas, this is not always the case!

Unlike employees, independent contractors usually own IP rights in the works they create – even if you have paid for it, unless otherwise agreed in a written contract. Without a valid, written agreement transferring the IP rights a business may end up owning nothing except perhaps a non‐exclusive license to use its own site. The company may be required to pay additional fees and to secure authorization from the web designer to refresh and update its website.

Therefore, it is especially important that business-people seek assistance from IP & Technology experts when engaging web designers to ensure that their interests are well secured.  

Businesses trading online must prioritise the protection of their IP so as not to lose their legal rights in them.

We strongly recommend that businesses, including the traditional ones should do the following:

1. Select a strong trademark and register the same;

2. Select and register a domain name that reflects the trademark, business name or character of the business. The domain name must also not be offensive. We urge business owners if it is possible, to also register the domain name as a trademark. Trademark registration gives a business a strong position at law to enforce its rights against anyone else who tries to use the mark to market similar products and services. Further, with a registered trademark, the owner of the mark has the right to prevent others from registering the same or confusingly similar mark.

For assistance with trademark and domain name issues contact our IP & Technology Team.