A domain name wrangle between a small business and a Web design company has exposed the danger of not having a watertight contract when using third parties for Web development.
Companies may believe they own a domain name that has been registered for them, but they had better check the small print. The risk was highlighted this week by a dispute centred on ownership of the domain name clarkesonline.co.uk.
The domain name was chosen in May by Sussex based Clarkes Stationers when it decided to develop a Web site. The company contracted Web services company Access Internet to register the name and design its Web site.
Access Internet then registered clarkesonline.co.uk with Nominet, the national registry for domain names ending with .uk.
However, when the relationship between the two broke down, Clarkes Stationers was dismayed to discover that Access Internet then claimed ownership of the domain name, rendering useless more than 1,500 catalogues printed with the URL.
Kiren Patel, manager of Clarkes Stationers, said: "I spent over £30,000 on catalogues which are spoilt and am now being asked for the sum of £3,000 by Access Internet before they release the name."
"It's been a nightmare. I didn't know how to register a name and wanted the hassle taken away but it's been a hundred times worse," he added.
Patel said he believed he had documents from Access Internet saying the name was his for the registration cost, even if he did not continue with Access Internet's Web design services. After the relationship broke down Access Internet denied Clarkes Stationers could have the domain name for the registration fee, saying Clarkes Stationers would have to pay a sum for work already carried out.
A letter from Access Internet, dated 22 July 1999, stated: "I confirm that should you wish to cancel the agreement then the domain name www.clarkesonline.co.uk will remain the property of Access Internet and will only be released on receipt of full payment for works carried out."
John Mawhood, a partner with solicitor Tarlo Lyons, said that Internet address registration required good contract procedure to avoid misunderstandings or even being held to ransom.
He said: "It's happening more often than it should that people taking registration are using it as a business lever. Companies should stipulate that they own the name irrespective of anything else done by the contractor. Otherwise it can be as expensive as getting the name of your company wrong."
When VNU Newswire interceded, pointing out to Access Internet that the company seemed to have made contradictory demands, a spokesperson for Access Internet agreed that Patel could have the site for the original registration fee of £49 plus Vat "as a gesture of goodwill", but denied it had contravened any agreements.
"We do not accept Mr. Patel's complaints," said a spokeswoman for the company.
The Internet Service Providers Association (ISPA) of the UK recommends that companies looking for an Internet Service Provider should make sure they chose a member of its organisation.
Nicholas Lansman, secretary general of ISPA, said: "We have a code of practice and disputes are settled quickly…cyber-squatting and being held to ransom do happen."
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