Domain name

license

A domain name is an alphabetical label associated with an IP (Internet Protocol) address and identifying a computer or a group of computers, which are connected to the Internet. The alphabetical presentation of the domain name allows better recognition and memorization of the Internet domains leading to a given site, unlike the IP address which is presented under a simple sequence of numbers.

Due to the importance of the development of e-commerce, the ownership and operation of domain names is becoming essential for businesses.

However, there may be an interest in separating the ownership of domain names from their operation. It is in this context that domain name licensing agreements have developed. These are contracts by which the holder of a domain name grants to a third party, in return for remuneration usually consisting of a royalty proportional to the income from its operation, the right to operate the said domain name.

Since the domain name holder is also the holder of a trademark included in the domain name, the domain name license will often be associated with a trademark license. These contracts are often linked to distribution contracts with brand licenses, such as franchise agreements.

This is all the more true since it is impossible to prevent a distributor from operating its own website for the resale of the products covered by the distribution contract. On the other hand, it is possible, and relevant, to regulate the use of such a site and provide in particular, to ensure image consistency while maintaining the ownership of domain names, that if the distributor intends to operate a site it does so by using a domain name belonging to the licensor, through a trademark license.

In the context of a domain name license agreement, several clauses are essential, in order to ensure its effectiveness and to precisely define the obligations of the parties: the identification of the domain name of course but also who has control of certain technical or administrative aspects related to the operation of the domain name, the obligation to respect certain technical or site presentation constraints, the existence of exclusives or not, the extent of the permitted use, the ability to conclude sub-licenses or the responsibilities for the content of the sites concerned.