how to prevent employees from stealing business websites ... · business websites’ domain names...

How to Prevent Employees from Stealing Business Websites’ Domain Names

January 2015

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Strategies for StoppingUnauthorized Internet Sales

The Online Reputation & Brand Protection Coalition’s mission is to help businesses protect their online reputations and brands online. The Coalition aims to fulfill its mission by educating businesses on how to protect and defend their reputations and brands online and advocating for increased protections and more effective remediation options for businesses.

Specifically, with respect to education, many businesses today are struggling because they do not understand how to best protect and defend themselves against online reputation and brand attacks, and there is presently a lack of quality educational materials and resources for businesses to turn to help understand and address these problems. To address the absence of these resources, the Coalition is committed to providing resources to businesses with the most up-to-date information designed to explain, prevent, and help businesses ultimately eradicate the problem of online reputation and brand attacks.

The Coalition provides its members with whitepapers created by the experts who regularly handle online reputation and brand attacks around the world addressing common reputation and brand problems which businesses are facing today.

Our Non-Profit Provides Educational Resources to Help Businesses Protect Their Brands and Reputations Online

The Online Reputation & Brand Protection Coalition is a non-profit organization dedicated to helping businesses protect their reputations and brands online. The Coalition is led by internet brand protection experts Whitney Gibson and Chris Anderson and includes a variety of multi-national advisors comprised of experts, business representatives, attorneys, educators, and other professionals.

To learn more about the Coalition, visit www.onlineprotectioncoalition.org

ABOUT THE ONLINE REPUTATION & BRAND PROTECTION COALITIONBOARD OF DIRECTORS

Whitney C. GibsonCo-Founder, Co-Chair of Board of [email protected]

Chris Anderson, PH.D.Co-Founder, Co-Chair of Board of [email protected]

Melissa AgnesMember of Board of Directorswww.agnesday.com

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As part of launching new company websites, employers often request that individual employees register the domains on their companies’ behalf.

As part of launching new company websites, employers often request that individual employees register the domains on their companies’ behalf. Management – not wanting to deal with the minutia of this task – may choose to delegate this responsibility to an employee who will enter his or her own name and information as the domain registrant, thereby gaining administrative control over the website and domain.

Accordingly, a number of companies are finding that entrusting their employees to create and register their websites can have dire consequences. If the proper precautionary measures are not taken, a company can find itself in a precarious situation if the employee is terminated or voluntarily leaves and does not turn over the information related to the company’s website. This whitepaper will address how businesses can avoid website domain conversion by employees and the potential legal claims they may bring.

I. Introduction

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If the employee-registrant is terminated or quits, he or she can subsequently exert control over the web domain and use it for a variety of reasons, often with a bad faith intent to profit from the domain due to his or her administrative access.

We have seem a number of cases in which a former employee essentially holds a company’s web domain hostage, exerting control over it or potentially even disabling it altogether. If the employee-registrant is terminated or quits, he or she can subsequently exert control over the web domain and use it for a variety of reasons, often with a bad faith intent to profit from the domain due to his or her administrative access. The company is then left helpless and has no control over the content displayed on the website or perhaps whether any content is displayed at all.

This can be crippling for a business in a number of ways. First, the rouge employee could place content on the website that misrepresents the company’s mission, objective, or core values, thus dissuading customers from engaging its services. Second, the employee can simply shut the website down so that potential customers cannot access the website or, perhaps worse, believe that the company has shut its doors. Either instance can have a severe negative impact on a company.

II. Former Employees Acting in Bad Faith

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An employee’s misappropriation of a domain name can result in several legal claims, including conversion, trademark infringement, and defamation.

1 Storing the registered users (or assignees) of, in this case, a domain name.

2 See Dlorah, Inc. v. Nau Holdings, LLC, 2009 U.S. Dist. LEXIS 34240 (D.S.D. Apr. 23, 2009).

3 See Fraserside IP L.L.C. v. Kovalchuk, 2012 U.S. Dist. LEXIS 28704 (N.D. Iowa Mar. 5, 2012).

4 See Atlas Copco AB v. Atlascopcoiran.com, 533 F.Supp.2d 610 (E.D. Va. 2008 (holding that a party other than that listed in the WHOIS record was owner of the domain name); and Silverstein v. E360Insight, LLC, 2008 U.S. Dist. LEXIS 36858 (C.D. Cal May 5, 2008) (stating that WHOIS information refers to the registrant’s contact information).

The good news for a business that finds itself in this unfortunate situation is that courts have repeatedly offered them protection regarding domain name ownership. For instance, not long ago a federal court in South Dakota held that what are referred to as WHOIS records1 “merely provide contact information for the administrator or registrant of a domain name, and have no bearing on ownership.”2 Moreover, a federal court in Iowa more recently held “Because domain names may be sold, leased, or licensed, it does not necessarily follow that being the registrant of a domain name equates with operational control over the website using the domain name.”3 Other courts have reached similar conclusions.4

An employee’s misappropriation of a domain name can result in several legal claims, including conversion, trademark infringement, and defamation. However, the law can be gray regarding actual ownership of the domain depending on several factors, including:

» The instructions given by the employer to the employee concerning purchase of the domain;

» The origin of the funds used to purchase the domain; and

» The employee’s actual use and control of the domain.

An experienced attorney can assist businesses in negotiating settlements regulating the use and ownership of misappropriated websites, as well as removing content from these websites.

III. Legal Considerations

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A company’s domain name is typically quite valuable, so it is critical that employers ensure their online presence is not disrupted by a disgruntled former employee.

Business owners should be aware of the pitfalls of web domain registration and the proper steps an employer should take to avoid these types of registration makes. To avoid these situations, we advise employers to consult with attorneys and cyber investigative professionals with experience in this area prior to developing and registering a web domain. This simple consultation can assist in avoiding potential negative consequences should an employee hold its employer’s web domain hostage due to a single bad experience or mal intent.

Meanwhile, if a website has already been registered by an employee, it is important to secure administrative control to their websites well before the issue of employee termination or departure arises. A company’s domain name is typically quite valuable, so it is critical that employers ensure their online presence is not disrupted by a disgruntled former employee.

IV. Conclusion

www.onlineprotectioncoalition.org

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