The New Zealand government has admitted that it paid NZ$1 million for the domain name newzealand.com after Trade New Zealand's unsuccessful attempt to claim legal ownership of the name.
Following a question from MP Rodney Hide, its tourism minister Mark Burton admitted New Zealand Way - owned by the Tourism Board, Trade New Zealand and Industry New Zealand - spent $US500,000 to buy the name from US-based Virtual Countries.
The government had originally tried to secure the rights to the name newzealand.com using the World Intellectual Property Office (WIPO's) dispute resolution, however a WIPO panel found that "New Zealand" is not a "trade or service mark".
"Indications of geographical origin are not of themselves trade/service marks. They are not trade/service marks for precisely the reason that they serve to indicate geographical origin. Trade/service marks on the other hand indicate a very precise trade origin. They identify the specific trader, the source of the goods/services."
The panel went on to label the New Zealand government's attempt to take the name as "reverse domain-name hijacking".
Part of Virtual Countries' defence centred around a report written for the Ministry of Economic Development which suggested that countries should not do what New Zealand then did.
"New Zealand law, custom or practice does not preclude the use of country names under any circumstances. New Zealand does not see any reason why the domain names should be excepted from this general rule," says the report, prepared by George Wardle, an advisor on intellectual property for the MED.