Why you may want to reconsider that co.za domain name

If you are thinking about registering a co.za domain name, you may want to consider your possible liability to ZA Central Registry NPC (formerly called Uniforum), the organisation which administers the co.za namespace. It could be substantial.

If you are thinking about registering a co.za domain name, you may want to consider your possible liability to ZA Central Registry NPC (formerly called Uniforum), the organisation which administers the co.za namespace. It could be substantial.

The starting point are the warranties you give when you apply to ZACR to register a co.za domain:

Applicant hereby irrevocably represents, warrants and agrees that:

  1. its statements in the Application are accurate and complete;
  2. it has the right without restriction to use and register the Domain Name;
  3. it has a bona fide intention to use the Domain Name on a regular basis on the Internet;
  4. the use or registration of the Domain Name by Applicant does not or will not interfere with, nor infringe the right of any third party in any jurisdiction with respect to trade mark, service mark, trade name, company name, close corporation name, copyright or any other intellectual property right;
  5. it is not seeking to use the Domain Name for any unlawful purpose whatsoever, including, without limitation, unfair competition, defamation, passing off or for the purpose of confusing or misleading any person;
  6. at the time of the initial submission of the Application, and at all material times thereafter, it shall have an operational name service from at least two operational Internet servers for the Domain Name. Each server is and will continue to be fully connected to the Internet and be capable of receiving queries relating to the Domain Name and responding thereto;
  7. it has selected the Domain Name without any input, influence or assistance from UniForum.

Of these warranties, points 4 and 6 could be problematic:

Warranty 4

In order to comply with this warranty, you should ideally conduct an exhaustive search of all jurisdictions in order to confirm that your proposed domain name “does not or will not interfere with, nor infringe the right of any third party in any jurisdiction”, whether that right be rooted in “trade mark, service mark, trade name, company name, close corporation name, copyright or any other intellectual property right”. That is very, very broad.

You can’t possibly know every brand, company or trading name which you could possibly be stepping on when you register your domain. Trade marks tend to be somewhat geographically and thematically limited but copyright is pretty universal and “any intellectual property right” is a really broad catchall.

Every time you register a domain name, you take the chance that it may correspond with a brand, company or trading name and someone may contend that your domain name infringes his or her rights. If that happens, you are in breach of your warranty and it doesn’t matter whether you intentionally infringed anyone’s rights. The inquiry is a factual one.

Warranty 6

This warranty can be tricky because you not only require two operational name servers to register the domain (name servers map the domain name to IP addresses associated with actual servers) but you have to warrant that “[e]ach server will continue to be fully connected to the Internet and be capable of receiving queries relating to the Domain name and responding thereto”.

This is simply not in your control. You may register with an ISP, use its name servers to register your domain and your ISP’s servers could go offline temporarily or the ISP could go out of business without you being aware of it. Even if you are aware of this, you may have parked the domain for future use and you may forget to migrate it to another ISP in your rush to move all your other data off.

What could go wrong?

All this may not seem particularly problematic until you read a little further:

Pursuant to the above warranties, Applicant hereby agrees that it shall defend, indemnify and hold harmless UniForum, its directors, officers, members, employees and agents, for any loss, damage, expense or liability resulting from any claim, action or demand arising out of or related to a breach of the aforementioned warranties or the use or registration of the Domain Name, including reasonable attorneys fees on an attorney and own client basis. Such claims shall include, without limitation, those based upon trade mark infringement, copyright infringement, dilution, unfair competition, passing off, defamation or injury to reputation. UniForum agrees to give Applicant written notice of any such claim, action or demand within reasonable time of becoming aware thereof. Applicant agrees that UniForum shall be defended by attorneys of UniForum’s choice at Applicant’s expense, and that Applicant shall advance the costs incurred in such litigation, to UniForum on demand from time to time.

This indemnity is very broad. For starters it requires you to not only cover ZACR for any costs it incurs if you breach the warranty, you are also required to “defend” ZACR from “any claim, action or demand arising out of or related to a breach of the aforesaid warranties or the use or registration of the Domain Name”. It goes on to cover “reasonable attorneys fees on an attorney and own client basis” which is not reasonable at all. The “attorney and own client” scale of legal costs is used as a punitive costs scale in court proceedings. The attorneys who would defend ZACR from the envisaged claims will be “attorneys of [ZACR’s] choice at [your] expense, and … [you] shall advance the costs incurred in such litigation, to [ZACR] on demand from time to time.” It is a lot of text but the upshot is that you will be required to pay for ZACR’s lawyers, upfront, if there is a claim flowing from –

  • breach of your warranties (which I listed above);
  • “the use or registration of the Domain Name”;
  • “without limitation, those based upon trade mark infringement, copyright infringement, dilution, unfair competition, passing off, defamation or injury to reputation”.

A relatively cheap example is a company sending ZACR a deregister a domain name and transfer it across because the company believes your domain name infringes one or more of its rights. ZACR briefs its lawyers to consider the claim and charges, say, R1 500 (very conservative, probably more) an hour to review the demand, formulate a response, discuss the response with ZACR and send it along to the company. That exercise could cost, as a guess, R4 500 if the lawyers are working very efficiently. That cost could be passed along to you to pay. There could, of course, be further costs ZACR could pay to its lawyers for follow up communications, meetings and other action down the line. This is before you take into account possible losses the company may claim from ZACR and be awarded down the line.

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p>Suddenly the domain you pay R50 to R60 could be much more expensive. What you should ask yourself is whether you can afford to take a chance (or have a truly unique domain name)?

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