“Buying Tesla.com took over a decade, USD11 million & amazing amount of effort. Didn’t like TeslaMotors.com even when we were only making (cars).” – Elon Musk, 9 December 2018.

That was undisputedly a hefty sum of money paid by Elon’s company! The reason being is quite obvious; a domain name is part of your company’s trademark, and it should be. A truly good lesson learn that reflects the importance of trademark search in Malaysia.

A trademark reflects the identity of a brand. It can be in various forms that include your company’s logo, word, name, numeral or even tagline, among others. Hence, doing a prudent trademark search is arguably imperative that should take precedence before you decide the brand of your company.

[Read also: The importance of trademark registration in Malaysia: the case of Shell Out Seafood Restaurant]

The abovementioned is only one of the many critical examples.

World’s top e-hailing ride-sharing company Uber swapped its equity with Universal Music Group (UMG) in order to obtain the domain Uber.com from the latter.

That’s because when Uber first started in 2010, it was called UberCab. However in fall 2010, the San Francisco Municipal Transportation Agency and the California Public Utilities Commission told UberCab it couldn’t have “cab” in the name because it wasn’t a properly licensed taxi company. So UberCab became Uber. Suddenly, it needed to own uber.com – which was owned by UMG at that time. Uber then gave UMG a 2% stake in exchange for the domain.

UMG later sold its 2% back to Uber for USD1 million just a couple of years after the initial deal. This was actually a grave mistake by UMG as that 2% by now worth hundreds of millions USD by taking into account the current equity values of the Uber company. But, this has become history for another day to talked about.

The Malaysia experience

One of Malaysia’s startup jewels FashionValet was also not spared from this mistake.

In the early days of its startup, co-founder Fadzarudin shared that the team wanted to try and be special. So, when it came to choosing the domain name of their website, they went with the FashionValet.net option, in a hope that it would make them stand out in the sea of dot coms out there.

This instead backfired in more ways than one. First, whenever there were writeups about them, their linkback would wrongly be published as FashionValet.com instead of the “.net”, leading to some confusion. After this happened too many times, and the team got tired of explaining the reasoning behind choice, they decided to acquire the “.com” address – that was already owned by someone else.

The previous FashionValet.com owners asked for USD50,000 for a domain name they had paid a pittance for. It was only through intense negotiation that the FashionValet company managed to negotiate to lower that down to USD9,000. They decided to fork out the cash, but it was a lesson that they would remember.

Therefore, the key takeaway from this article is that one must not only validates the business model, but also, it is strongly advised that a diligent trademark search in Malaysia to be conducted before anything else. And we in Primus IP is ever ready to professionally assist any aspiring entrepreneurs out there to embark on this process.

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