The hidden value of a name

There could be gold hiding in section 8(c) of the Property (Relationships) Act 1976.

All lawyers will be familiar with the requirement to ensure full disclosure of all assets and liabilities when advising parties involved in the resolution of their property division following a separation.

Where the stakes are high, financial advisers will be instructed to assist in the identification and valuation of property. At times, there is even a need for investigators to search for hidden assets. Retirement funds are scrutinised, business ventures are thoroughly appraised, and the accountants are on speed dial.

What we don’t often hear about is the consideration of the value of a .nz domain name.

It’s easy to overlook a domain name. Domain names in the .nz space are relatively cheap, at around $40.00. However, the inherent value of the name can far surpass the annual fee.

Consider the following three scenarios:

In 2008 a couple agreed to register their surname, “anyname.nz”. One of the pairings is listed as the registrant. At that time, it was not worth much. However, when they split up in 2020, a TV programme called Anyname Adventures Aotearoa was purchased by Netflix and became a global hit. The value of “anyname.nz” skyrocketed. The person who registered the name knows this. The other person is unaware.

While together, Sam decides to start a business. Sam is a creative and knows nothing about technology, yet the business is totally reliant on web sales and email orders. Sam’s partner, Jordan, works at a telco and, to be helpful, registered the chosen domain name, “cre8te.nz”. As time goes by, the relationship disintegrates, and Sam finds a new partner. Jordan, hurt and angry, blocks Sam from receiving all email traffic and diverts the website to a blank page. As the registrant (owner of a domain name), Jordan can do this - Jordan can even sell the domain name. The business flounders; Sam can’t sell any stock or email clients. 

A matriarch has passed away, and her three daughters are disputing the will. The mother, well ahead of her time and a lover of the sea, purchased the domain name “threewaters.nz”. Eventually, the daughters reach an agreement as to the estate. As part of the settlement, one daughter agrees to manage all the outstanding tech-related things for the estate, as this daughter works in the IT sector. The other daughters breathe a sigh of relief as they don’t like to deal with IT. This daughter now becomes the registrant (owner of a domain name) of a now highly valuable domain name. The other daughters are oblivious.

Only one person can be recorded as the registrant for a .nz domain name. The registrant has decision-making power for the domain name, and it makes no difference if the domain name annual fee is being paid by someone else.

Disclosure of assets spreadsheets for a newly separated couple may evolve as we start to recognise the potential monetary value of .nz domain names, particularly highly sought after names. With technology often one step ahead, we must be proactive in considering how the value of intangible assets in the digital world impacts the clients we work with. 

The Domain Name Commission has policies and procedures in place to protect people and businesses, including providing free mediation via Online Dispute Resolution for domain name disputes that pertain to “ownership”. However, without the awareness of the value that can come from a domain name, people may be completely unaware of any remedy available to them.

Below are some of the types of disputes we regularly seek to resolve:

• A newly established business sets up a website providing the same services as a well-established business with a very similar domain name. The well-established business owner believes they are now losing customers.
• A person failed to re-register their domain name, and now a competitor has it. They’d like to get it back.
• A person purchased a business and understood the domain name was part of the agreement. However, the domain name did not transfer to their ownership.

It will be obvious that these disputes can be both complex and involve many parties. We are fortunate to have an adept panel of mediators working with people to see these matters reach a resolution.

Who is the Domain Name Commission?

The Domain Name Commission regulates the .nz domain namespace. We help individuals, businesses, and communities have an online presence that is unique to Aotearoa New Zealand. We are appointed by InternetNZ.

As an impartial umpire in the .nz domain name market, we’re responsible for ensuring that industry and consumers ‘play by the rules’. When they don’t, we step in.

This article was first published in the Family Advocate, Volume 24 Issue 4 (Winter 2023). The Advocate has kindly given permission for this article to be republished.