As more alarm dealers establish Web sites to promote their busi-nesses, the legal issues surrounding the World Wide Web are becoming increasingly important.

Many companies have done business for years in their commu-nities without worrying about reg-istering their trade name. With the advent of business Web sites, the definition of the marketplace has changed and a whole new set of policies and practices are in place.

Using a Trade Name First Gives You Priority

A trade name is any name you use for your business. In the United States, the general rule is whoever uses a name in commerce first has superior rights to anyone using a confusingly similar name in the same marketplace.

If you use the name in commerce first, you are allowed to stop any other company from using it. These rights also cover any name that is so similar it may confuse the average consumer if it is being used in the same marketplace.

Finally, the rule does not require you to register a trade name, merely use it in commerce.

Domain Name Rules Create Quagmire

Now, with the Internet and do-main names, old U.S. trade name rules have become a part of a con-fusing quagmire.

Many companies are choosing descriptive domain names so people can find them online more easily. With millions of domain names granted in just a few years, the definition of the marketplace has also expanded. If you hope to gen-erate business using Web searches, having any conflicts may be more confusion than you care to tolerate.

NSI’s Lack of Monitoring Leads to Dirty Pool

Network Solutions, Inc. (NSI) assigns most domain names in the United States. NSI doesn’t check business licenses or phone listings. Say your main competitor regis-tered your company name as a do-main name. When you want to start up your Web site and try to get the domain name, you would be told it was taken.

By and large, NSI wants a court to decide who has the right to the domain name. However, there is one instance in which NSI will actually take some action without a court order.

Under NSI’s current policy, the owner of a federal trademark regis-tration in the United States or a registration in a foreign country may challenge use of an identical domain name.

The reason for this kind of chal-lenge was created because NSI’s policy is at odds with traditional U.S. trade name law in that the concepts of “confusingly similar” and “marketplace” are eliminated.

For example, you’ve used the name “American Alarms” for 40 years. Your company has never registered it as a trade name. You get americanalarms.com as your domain name. Your competitor, Universal Alarms, goes to NSI and gets american-alarms.com, because it’s not identical to your domain name.

Then, using its domain name as proof that it uses the name in com-merce, Universal decides to register American Alarms as a trade name. The registration is granted because the U.S. Trademark Office only looks at conflicting registered marks. Universal can then go to NSI and request a hold on your americanalarms.com domain name.

The fact that you will probably be able to remove this restriction by going to court and arguing the tra-ditional “superior rights” rule is of small comfort to you.

Many Factors Weigh into Deciding to Register

Your decision to register your trade name must be based on sev-eral issues, including competition in your area of commerce and the amount of time and money you’re investing in both your name and your Web site.

The domain name/trade name is-sue is also under examination by various groups looking for solu-tions. The only way to really deter-mine whether registration is worth your while is to talk to an attorney.

Edward B. Driscoll, Jr. co-authored “How to Become a Master of Marketing.”

Nina C. Yablok is an attorney in San Jose, Calif. who specializes in trademark and domain name issues.

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