Milton Mueller, Associate Professor and Director, Graduate Program in Telecommunications and Network Management. Syracuse University School of Information Studies.1
The Internet is currently in the throes of a global redefinition of its institutional framework. One of the major points of controversy in this process is the conflict between domain names and trademarks. This paper is an empirical study of the domain name-trademark interaction. It examines the conflicts that have led to trademark-based challenges to domain name registrations, and the settlements or decisions that have resulted in order to show how a new system of property rights is being forged. The paper employs a hybrid of legal and quantitative methods. The study collected information about 121 cases of conflict between domain name registrants and trademark owners. These cases were classified into four distinct types, based on the way the challenged domain name was being used. The study also categorized the way the cases were settled.
Regulating domain names to protect trademarks
A domain name is a hierarchically structured character string that serves as an Internet address. The "real" Internet Protocol (IP) address is a string of numbers that is difficult to use and remember (e.g., 128.82.75.52). Internet users rely on domain names, which take the form of memorable and sometimes catchy words, to stand in their place. The uniqueness requirement creates an exclusivity that has important economic consequences—no two users can use the exact same character string as a domain name.
Domain names are interesting—and controversial—because they are meaningful. The semantic dimension allows domain names to act not only as unique addresses, but also as slogans, billboards, or brand names.2 The business identity of many Internet firms, such as Internet guide Yahoo! or book retailer Amazon.com, is solidly linked to their domain names. Even non Internet-based businesses want domain strings that match, or are easily derived from, their corporate names.
The character strings used for domain names sometimes correspond to the character strings of registered trademarks. Often this occurs accidentally. Juno Online Services registered juno.com but the Juno Lighting Company holds a federal trademark on the brand name "Juno." Sometimes the correspondence is a deliberate result of name speculators.3 It is fairly inexpensive to reserve a name ($35-50/year is the norm), and many character strings may be perceived as more valuable than the going price. Thus, some "cyber-squatters" attempted to make a business out of the practice of reserving desirable names and attempting to resell them to others, sometimes for thousands of dollars. Sometimes the correspondence between a domain name and a trademark is part of a pattern of deliberate passing off, which is intended to confuse or deceive customers.4 There are also numerous gray areas. To the Internet, one minor difference in a character creates a completely different address but to users the difference may be hard to discern. Thus, some small businesses register domain names that are the same as a famous name but with only one minor character difference; e.g., amazom.com or micros0ft.com.
All of these conflicts over domain name rights have resulted in litigation, or threats of litigation, under trademark law. Both the users who registered the name and the domain name registry itself have been targets of such litigation. Internet registries and policy makers have responded to trademark challenges by making or proposing numerous restrictions on the way Internet domain names are distributed or used.
Network Solutions, Inc. (NSI), for example, is the exclusive government contractor selected by the National Science Foundation to register names under the top-level domains .com, .org, and .net. NSI allowed trademark holders to trigger a suspension of a user’s domain name without any court proceeding whenever the domain name character string corresponds to their registered trademark.5 Suspension can occur regardless of whether any use is being made of the name that would correspond to the legal definition of infringement. A January 30 draft proposal of the US Department of Commerce proposed a similar policy.6 An even more extreme policy was proposed by the so-called gTLD-MoU group based in Geneva.7 Their proposal for domain name reform attempted to give famous name holders a right to pre-empt all character strings similar to or corresponding to their name in all top-level domains. The gTLD-MoU also proposed that all domain name distributions be subjected to an extensive review and challenge process administered by the World Intellectual Property Organization (WIPO). If that policy had been implemented, trademark owners could mount challenges to domain name registrations based entirely upon the character string, regardless of how it was used. Although the gTLD-MoU’s attempt to assert authority over domain names failed, its attempt to regulate name registration to enhance trademark protection survives in a proceeding underway at the World Intellectual Property Organization (WIPO). Encouraged by a US government White Paper asking it to study the problem,8 WIPO is holding an international proceeding that is expected to propose extensive regulations on the distribution of domain names.9
Politically, trademark owners have been instrumental in stifling widespread demands by Internet service providers and users for an expansion of the supply of top-level domains.10 Many trademark holders opposed the gTLD-MoU because of its creation of seven new TLDs. Among corporate trademark holders, the idea that the distribution of domain names should be subjected to some kind of regulatory process in order to protect trademark rights has become widely accepted.
Many legal analysts have been critical of the linkage between domain names and trademarks. DeGidio (1997) and Hilleary (1998) have criticized the vagueness and potential for abuse of the new Federal Anti-dilution statute as it has been applied to domain name cases. Oppedahl (1997) argues that the domain name challenge procedure of NSI gives trademark holders more sweeping rights than they have under trademark law. Nathenson (1997) shows that the concept of dilution has been exploited by trademark holders in the domain name arena to engage in "reverse domain name hijacking."
Missing from both sides of this debate is a sense of the quantitative dimensions of the problem. The legal literature about domain names has already recognized that there are distinct types of domain name conflict and that the applicable law may hinge upon what type it is.11 We submit that it is important and useful to know the frequency with which the different types occur. The quantitative information affects our identification of the problem, our assessment of its significance, and our conception of what might be an appropriate policy response.
Suppose, for example, that there were a half a million known instances of domain name conflict and that 80 percent of them could be readily classified as cases of clear and intentional infringement. On the basis of such quantitative evidence, it would be reasonable to conclude that trademark infringement using domain names was a major problem on the Internet. But suppose that the number of cases of conflict is much smaller and that the vast majority of domain name-trademark conflicts arise from name speculation. Such an outcome would lead to an entirely different conception of the problem and suggest different policy responses. Perhaps the profitability of name speculation depends upon current artificial limits on the number of top-level domains, and public policy should be focused upon the need to expand the name space. Or perhaps registries should impose a "use it or lose it" policy and/or require immediate payment to prevent speculators from hoarding names. Alternatively, suppose the data suggest that most of the conflicts arise from innocent attempts to use the same word by businesses with no intent to deceive or infringe. If this type of conflict was most common, the notion that domain name conflicts are primarily a trademark problem is powerfully undermined.
Method
Ideally, a study of domain name trademark interactions would be based
on a comprehensive list, or a representative sample, of all domain name
trademark conflicts. In an attempt to get this data, researchers first
approached NSI to request a list of all domain names that had received
complaints from trademark owners or, barring that, a list of all domain
name conflicts which had invoked the NSI dispute resolution policy. NSI
refused to make this data available. Other registries were contacted and
none of them could provide comprehensive data. Most of them do not collect
and record such data. NSI did, however, agree to provide aggregate data
about the number of complaints and dispute resolution proceedings.
The unavailability of comprehensive registry data at the individual domain name level meant that it was impossible to perform a statistical sample of the real population of interest: all domain name trademark conflicts. The best that could be done was to gather information from publicly reported cases, which included court cases, reports, and news reports (in English). There was no need to sample this group, because it was possible to count nearly all of them.
The following method was used:
In the search for cases the method had to determine what should and should not be counted as an instance of domain name-trademark conflict. Inclusion was based upon the case’s ability to meet three criteria: i) there must be a challenge; ii) the challenge must be focused on the domain name itself; iii) the challenge must be based on trademark rights. Challenges could take the form of a letter, a telephone conversation, or any other form of notification that was reliably reported; it did not just include lawsuits.
Categorization of Case Type
Once cases were included in the database they were categorized according to two parameters. The first parameter classified the type of conflict. We identified four distinct categories of conflict:
Infringement
Infringement refers to domain name conflicts in which the original registrant intentionally attempts to trade off the resemblance between the domain name and another company’s trademark. Also included under this category are so-called dilution cases in which the value of a mark would be tarnished or devalued by its association with the site of the domain name user. In short, these are uses of a mark that would be illegal under existing trademark concepts, regardless of whether they occurred as Internet domain names or in any other context. Such cases can be readily identified by the application of a standard checklist for identifying infringement that has emerged from case law.
The standard factors pertinent to a finding of trademark infringement include: (1) the strength of the trademark; (2) the similarity between the plaintiff's and defendant's marks; (3) the competitive proximity of the parties' products; (4) the alleged infringer's intent to confuse the public; (5) evidence of any actual confusion; (6) the degree of care reasonably expected of plaintiff's potential customers.12 The new federal anti-dilution law also creates a cause of action for the owner of a famous mark where there is no competition between the parties and no confusion as to the source, but when the use of the name would diminish the distinctiveness of a mark.13 The name in question has to be nationally "famous" and there still must be "usage in commerce."
Speculation
Name speculation occurs when a domain name bearing a resemblance to a registered trademark is registered as an act of speculative arbitrage. In this type of case the name is not used by the speculator, but is held in reserve in the hope that the trademark owner will eventually buy it from the person who registered it. Name speculation is treated as a distinct category of domain name conflict, one that should not automatically be grouped with cases of infringement. Because speculators generally do not use the name and because of their obvious intent to resell the name, name speculation cases are generally easy to identify and categorize.
Name speculation is often equated with trademark infringement, both in the press and in the courts. This equation stretches trademark protection beyond its traditional limits, however. The hallmark of name speculators is that they do not use the names; that is, the domain names are not part of a commercial product or service offering that might confuse or deceive customers or undermine the distinctiveness of a mark. Thus, the most important criteria of trademark infringement—use in commerce, likelihood of confusion and dilution—are completely absent from speculation cases. No one can be confused by a blank screen. The distinctiveness of a mark cannot be devalued by a non-existent web site. Name speculators never make any pretense of being the company whose name they control. They are simply trafficking in the name resources themselves.
Admittedly, the contention that name speculation is not infringement per se runs counter to the general thrust of recent legal decisions. As the "Results" section will show, court opinions regarding name speculation in the USA, UK, and New Zealand have uniformly declared it to be an illegal form of trademark dilution.14 This does not affect the validity of our categorization scheme. Name speculation constitutes a distinct type of trademark-domain name conflict, one that is clearly distinguishable from the traditional form of infringement contemplated by pre-Internet trademark law. Indeed, the classification of name speculation as trademark infringement constitutes a novel and expansive interpretation of trademark protection, and all legal decisions regarding name speculation have been forced to recognize this. The court in Panavision v. Toeppen, for example, stated "Registration of a trademark as a domain name, without more, is not a commercial use of the trademark, and therefore is not within the prohibitions of the [Dilution] Act."15 The UK court was forced to acknowledge that name speculation itself was not infringing, but ruled it illegal because it created an "obvious threat" of some form of infringement in the future.16 In short, even the courts that ruled against speculators found it impossible to classify their actions as a form of simple, classical infringement; they had to recognize its unique status and develop novel (often spurious) rationales to declare it illegal. Thus, it is important to retain a separate classification for such cases.
Character string conflicts
"Character string" conflicts occur when there is more than one legitimate, non-speculative user of a given character string as a domain name. In string conflicts, there is no apparent intention to trade off a trademarked name and little or no potential for confusion between the products of the conflicting companies. Both parties either have a trademark of their own or a valid reason to use a particular character string (e.g., the string corresponds to a non-trademarked company name, product name, or personal name). String conflicts often involve company names based on generic terms (e.g., disc, prince or perfection) which may be trademarked in many different industrial categories or jurisdictions. String conflicts occur because domain names strip away many of the unique characteristics of product names and logos, and because the global reach of the Internet transcends many of the jurisdictional and geographic limitations placed on traditional trademarks. For example, Oppedahl (1997) notes that the word "glad," which formed the basis of a domain name dispute, is a trademarked name of over 200 businesses in the United States, plus numerous foreign trademarks, in industries ranging from cosmetics to electrical apparatus to detergents. It is evident that a trademark holder may claim trademark infringement or dilution in order to win a string conflict. Such a claim may be sincere, but is more likely to be a way of stealing a desired domain name from someone who registered it first. Generally, it was not difficult to distinguish real infringement cases from string conflicts because of the standards developed by traditional case law. Whenever there was any doubt about whether to classify a case as infringement or a character string conflict, we tried to err on the side of infringement.
Parody, preemption and other
This category turned out to be a small minority of cases, but as a group most of them bore a distinct family resemblance. These cases generally involve uses of domain names for acts of parody, preemption, or expression. In this type of conflict, the domain name deliberately invokes or resembles a company name or trademark in order to make a political or satirical point. Someone registered the name british-telecom.com in order to post information critical of that company, for example. Or the domain name itself may make a comment upon the organization (scientology-kills.net). Perhaps the most famous parody case is the peta.org conflict, in which the acronym for "People for the Ethical Treatment of Animals" (PETA) was registered by a critic who set up a satirical site for a fictitious organization called "People Eating Tasty Animals." In a slightly different vein, domain names can be registered in order to prevent someone else from using them. In some cases, these preemptive registrations are not used at all; in other cases the domain name will be used to redirect traffic to a completely unrelated site. Thus, for example, the domain name ringlingbrothers.com is registered to PETA, which at first used it to post information critical of circuses’ treatment of animals, and later to redirect traffic to an environmentalist site.
These parody and preemption uses of domain names were not classified as infringement unless the domain name user pretended to be the organization that is being criticized, spoofed or preempted. If deception was intended or confusion was likely, we classified the case as infringement.17 Also, most of the cases of parody and expression are noncommercial uses and therefore would not be liable to infringement claims under traditional law. The cases in this category do not qualify as a string conflict either, because the resemblance between the domain name and the affected company’s name is not innocent or unintentional. Of course, to be included in the study at all domain name conflicts in this category had to be challenged on trademark grounds. There are some known cases of parody use of famous names that have not (yet) been challenged.18
Categorization of Outcomes
In addition to classifying the type of case, we classified the results. Results were categorized according to the schema shown below. We were interested primarily in whether the original registrant or the challenger retained the right to use the name after the challenge. This determination could occur in one of four ways.
| Court decision | Registry Action | Settled dur litigation | Settled w/o litigation | |
| Original registrant retains name | A | D | F | |
| Challenger wins name | B | C | E | G |
| Pending/unknown |
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Results
According to NSI, of the nearly 2 million domain names it had registered
as of May 1998, only 3,903 had been the subject of a trademark-related
complaint. Of those, only 2,070 invoked NSI’s trademark dispute resolution
policy, and only 1,523 were placed on hold as a result. This means that
a very small fraction of all domain name registrations (0.00104) created
a trademark conflict.20
The results of the classification exercise were surprising. We entered into the study with the expectation that name speculation would be the chief cause of trademark conflicts. We were wrong. "String" conflicts, wherein two companies with a roughly equal claim to a name contest the right to a domain registration, was by far the most common type of case. Forty-nine percent (49%) of the cases we found were string conflicts. Conflicts arising from name speculation came in a distant second, at thirty-five percent (35%) of the cases. Cases of infringement constituted only 12% of the cases. Parody and preemption cases made up only four percent (4%) of the cases. Given this miniscule percentage of demonstrable infringement cases, it is truly remarkable that trademark interests have been able to portray trademark infringement as a pervasive problem that should be one of the primary drivers of domain name distribution policies.
Table 1: Conflict types
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String
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Speculation
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Infringement
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Parody / Preemption
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If these proportions are projected into the NSI figures about the total
number of trademark disputes it has handled, one could estimate that of
the 2 million or so domain names registered, there are about 257 cases
(2,070 x 0.124) of infringement. This amounts to only 0.0128 percent of
all domains.
Given our limited access to data, however, it is impossible to know
whether these proportions would be the same throughout the entire population
of domain name trademark cases in all parts of the world. One can reasonably
suppose that the characteristics of publicly reported cases differ in certain
respects from those of cases that are not publicly reported. One could
argue, for example, that many cases of name speculation are handled privately,
and therefore that the results understate the proportion of name
speculation. One could also argue that cases of real infringement are more
likely to be litigated and reported, and that the study results overstate
the amount of infringement.
Any such speculation on these lines is pointless until further studies are done. What we do know is that of the 121 documented domain name trademark cases for which we have adeqate data, the picture is very different from the one presented to the public by the trademark interests.
Note the dominance of string conflicts in the results. Disputes over character strings involve second-level domain names such as clue, disc, pike, newton, glad, compassion, and apparently innocuous acronyms such as dsf or dci. That such cases constituted the largest single category of domain name-trademark disputes has important policy implications. String conflicts are the type to which the application of trademark law is least appropriate. Trademark law permits concurrent use of the same or similar marks in different industries or different geographic regions. Traditional trademark protection accords generic terms much less protection than fanciful, invented names. Clearly, trademark claims are being inserted into conflicts over Internet resources where they do not belong. Indeed, so-called "dispute resolution policies" such as NSI’s actually create legal conflict by encouraging trademark owners to claim names they did not get first. The possibility of trademark litigation, or name suspension by a registry, allows parties with greater legal resources to take desirable names away from legitimate prior registrants. These conclusions are reinforced when the typology of cases is connected to the outcome categories.
When domain names are used in a way that conforms to traditional notions of infringement, the data show that traditional legal remedies provide strong and relatively quick protection. We classified 15 (12.4%) of the 121 cases as infringement. In 14 of the 15 cases (93%), the trademark holder who challenged the domain name succeeded in winning it back or preventing the infringing party from using it. In none of these cases was it necessary to utilize the registry to put the name on hold. Ten (10) of the cases were decided in court. Two (2) were settled in favor of the challenger immediately after a lawsuit was filed, but before any court decision was necessary. Two (2) were settled in the trademark holder’s favor prior to any litigation.
Table 2: Infringement cases: Outcome categories
| Court decision | Registry Action | Settled dur litigation | Settled w/o litigation | |
| Original registrant retains name | 0 | 1 | 0 | |
| Challenger wins name | 10 | 0 | 2 | 2 |
| Pending/unknown |
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The one case in which infringement was present but the original party retained the domain name did not represent a defeat or diminution of the rights of the trademark holder. A settlement between the trademark holder (Digital’s Alta Vista Internet search engine) and the domain name holder (a software company called Alta Vista, holder of the altavista.com domain) prevented the defendant from pretending that its web site was an affiliate of Digital’s Alta Vista search engine (altavista.digital.com). It required that a disclaimer be added to the defendant’s home page. Digital’s settlement thus recognized that there was no inherent infringement in the Alta Vista company’s use of the domain name itself, even though user confusion existed and the defendant company had been exploiting it. The settlement merely prevented infringing behavior.
In short, when real trademark infringers utilize domain names as part of their tactics, empirical evidence suggests that litigation provides a nearly 100% effective remedy. The evidence also shows that these disputes have been resolved rather quickly, except in one case.
The exception is important. A clear infringer has managed (for the time being) to retain a domain name despite an adverse court decision. A Spanish-language search engine posted at the domain ozu.es sued an imitator using the domain ozu.com. The infringing site, ozu.com, ran the exact same type of business as ozu.es and even posted an exact reproduction of the logo of the other site. A lawsuit was filed and a Spanish court resolved the case in favor of ozu.es.21 But as of mid-May, 1998, the ozu.com domain remains in the hands of the infringing party. For reasons known only to itself, NSI refused to comment on whether it is aware of the case or whether it has received an order from the Spanish court to transfer the domain. British court decisions ordering name transfers in NSI’s .com and .org TLDs, however, appear to have been implemented quickly by NSI.
This problem does not appear to be a major one. According to NSI, of the 3,903 complaints it has received of domain names, only 45 involved trademarks from foreign (non-US) jurisdictions. Rather than making domain name registries miniature trademark courts, problems such as this could be addressed by international agreements among registries to respect the court decisions of other jurisdictions. Another point to keep in mind is that cross-jurisdictional intellectual property enforcement is imperfect outside of cyberspace as well.
Table 3. Name speculation: Outcome Categories
| Court decision | Registry Action | Settled dur litigation | Settled w/o litigation | |
| Original registrant retains name | 0 | 0 | 3 | |
| Challenger wins name | 18 | 8 | 7 | 0 |
| Pending/unknown |
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Name speculation fared poorly among courts and registries. Of the 36 cases for which outcomes were known, 33 of the contested names (92%) ended up in the hands of challengers. Only three of the cases of speculatively registered names remain in the hands of name speculators; these are also three cases that have not yet been challenged in court. We therefore classified them as "settled" because we concluded that the businesses affected do not care enough about the problem to pursue litigation. Eighteen (50%) of the names were taken away by formal court decisions. Not a single court decision in the sample upheld the right of name speculators to profit from their prior registration of a company name. Another 8 cases (19% of the total) nullified the domain names through a suspension of the name by the registry. Seven cases were settled in favor of the challenger after a lawsuit was filed; i.e., the speculator caved in without a legal battle. (In the remainder of the cases the outcome is unknown or unresolved.)
An earlier section noted that it is difficult to classify name speculation as trademark infringement. Despite this fact, trademark owners who challenge name speculators, either in court or in name registries, have won every single case. The courts have not merely enjoined the use or sale of the names by the speculators, they have also transferred ownership of the names to the challengers. This has happened in the USA even though the federal dilution statute, which specifies detailed remedies for dilution, does not authorize the transfer of a domain name as a remedy. The fate of name speculation provides one of the clearest examples of the way in which trademark rights in cyberspace are being expanded beyond their normal meaning in law.
The domain name bt.org provides a poignant example of this process. Name speculators in Britain registered bt.org and several other names related to British Telecom. The British court did not merely enjoin the speculators from using the names, it also ordered that the bt.org name be given to British Telecom. This occurred despite the generic character of the acronym bt, despite the fact that British Telecom already had numerous domain names corresponding to its trademarks, despite the fact that the .org TLD is generally used for the registrations of noncommercial organizations.
Table 4. String Cases: Outcome categories
| Court decision | Registry Action | Settled dur litigation | Settled w/o litigation | |
| Original registrant keeps name | 15 | 10 | 7 | |
| Challenger gets name | 7 | 5 | 7 | 2 |
| Pending/unknown |
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Table 5. Parody Cases: Outcome categories
| Court decision | Registry Action | Settled dur litigation | Settled w/o litigation | |
| Original registrant wins | 0 | 0 | 0 | |
| Challenger wins | 0 | 1 | 2 | 1 |
| Pending/unknown |
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Conclusions and Analysis
Real trademark infringement using domain names is a rare and not very significant problem. Nearly all infringement activity has been quickly stopped by lawsuits. Trademark protection is important, but it need not be one of the primary considerations in developing policies for domain name registries.
That the problem has been blown out of proportion is highly significant. It reflects the disproportionate political power of intellectual property holders. Trademark owners have been able to claim property rights in Internet domain names that go far beyond the rights they have under existing legislation and case law governing trademarks. They have been able to project into the "green field" of cyberspace a new conception of what they think their property rights in names ought to be. That conception, which extends trademark protection to "string" conflicts, name speculators, and even satirical and parody uses that under normal circumstances might invoke first amendment protection, provides them with broader and stronger rights than they currently have in the physical world. Because the economic characteristics of Internet-related resources are new and unfamiliar, the courts have often (but not always) acquiesced in these extra-legal claims.
More disturbing than the court decisions is the attitude of key Internet policy makers in the United States and Europe. They have shown a marked tendency to use the centralized institutional mechanisms of Internet administration to preserve and advance extra-legal conceptions of trademark rights. So-called "dispute resolution procedures" are essentially ways to exploit the bottleneck power of domain name registries to aid in expanding the scope of trademark rights and to socialize the costs of policing trademarks. In order to reduce their transaction costs, the trademark interests have opposed any attempt to create new top-level domains. The entire market for Internet domain names, in other words, is being artificially constrained at the behest of trademark owners.
This expansion of trademark rights sets a dangerous precedent for the evolution of the Internet. It indicates that the central organizations used to allocate key Internet resources (domain names and numerical addresses) can be captured by business interests with a predominantly regulatory agenda. When Internet governance incorporates a "regulatory agenda," the distribution of Internet domain names is no longer a matter of simply coordinating potentially conflicting claims. Rather, the distribution of these essential resources gradually becomes linked to control of conduct. Reacting to strong political pressures, the organizations governing the Internet are threatening to exploit the leverage they obtain from their control of domain names to extend public regulation into broader areas of Internet activity. The process is directly analogous to the early stages of radio broadcast regulation in the 1920s, when governmental control of the allocation of radio frequencies became the entering wedge for comprehensive controls on broadcast ownership, content, and conduct. In the immediate case, the distribution of domain names is being used to gain leverage over Internet users and suppliers, leverage that is then used to broaden the property rights of multinational corporate trademark holders. The domain name-trademark conflict thus has relevance that goes far beyond intellectual property rights. The decisions being made now about how to handle that conflict will have a decisive impact on the future of global computer networking. The domain name-trademark conflict is not a minor sideshow, but a watershed moment in the evolution of this global medium.
Policy and Legal Proposals
Important revisions need to be made in the policies and laws regarding domain name-trademark conflicts. Current law and policy clearly recognize that domain names can be used to violate legitimate trademark rights. That recognition must be balanced with an explicit recognition that trademark claims can be used to abuse legitimate domain name usage. Law and policy must also recognize that there are important freedom of expression issues implicit in our handling of domain names. With these principles in mind, the following proposals are advanced.
First, and most important, name registries should be confined exclusively to the registration and transfer of domain names, and registries must be indemnified against legal liability for trademark violations by their customers. This is important, because if they are not so indemnified, they will be forced to adjudicate and police trademarks. If that happens, the rational course of action for domain name registries will be to implement conflict resolution policies that presumptively favor large trademark holders. Famous trademarks tend to be held by multinational corporations with the legal resources to create a great deal of trouble for registries. Smaller businesses and individuals cannot mount such a threat. If the third-party legal responsibility for trademark violations is thrust upon registries, the methods they choose to resolve challenges will be designed to minimize their costs. The easiest way to minimize costs is to let the big trademark interests win at the expense of all other Internet users.
Second, in order to protect the rights of domain name users, the Federal Dilution Statute should be clarified to prevent attempts to resolve string conflicts via trademark litigation. The law must explicitly recognize that the character strings used as Internet identifiers do not and cannot reflect many of the distinguishing characteristics of real trademarks, such as geographic scope, jurisdictional differences, or typographical differences. String conflicts among legitimate claimants are therefore inevitable. In the resolution of these conflicts, trademark law does not provide appropriate criteria for the resolution of a conflict; it merely fosters needless legal conflict and unfair outcomes. Trademark or dilution concepts should not allow mark owners to assert a blanket right to control a character string regardless of how it is used.
Name speculation poses a more difficult problem. There is little doubt that certain forms of cyber-squatting have no redeeming social value. On the other hand, many innovative and successful Internet-based businesses are dependent on the ability to buy, sell, or arbitrage names. It may not be possible to prevent the former without also interfering with the latter. Consider the activities of Free View Listings, Ltd., a Canadian firm that registered hundreds of common surnames and resold them on a shared basis to individuals who wished to use their family name as an Internet address. This small company was sued by Avery-Dennison on trademark violation grounds because it registered the names avery.net and dennison.net, both ordinary surnames in English. No real infringement was proven. The Avery-Dennison company already had a well-known, well-established domain at avery.com. A benighted US District court, caught up in the irrational frenzy against name speculators, classified Free View’s registration and reselling of names as a form of cyber-squatting and ruled it illegal. Unless it is overturned on appeal, the decision will destroy a perfectly legitimate business. Trademark law was never intended to grant mark owners such sweeping, indiscriminate rights over the use of words. In name speculation cases as in string conflicts, any application of trademark rights to cyberspace must be balanced. Name speculators can abuse trademark owners, but trademark owners can and do use trademark claims to abuse legitimate forms of Internet trade.
Name speculation is really an economic issue and is best addressed by economic means. Its roots lie in the gap between the low price of reserving a name and the high value of certain names. The problem is exacerbated by the artificial limits on the number of generic TLDs and the privileged position of names under .com that result from this artificial scarcity. The creation of many additional top-level domains would expand the supply of second-level domains, thereby reducing the profit and increasing the risk of name speculators. Such a course of action would also make it more difficult for trademark owners to control all uses of the character strings they are interested in. But in this regard, trademark owners may be seeking a level of control over words that the Internet, by its very nature, renders impossible.
2 Burk, Dan L. 1995. Trademarks Along the Infobahn: A First Look at the Emerging Law of Cybermarks. Richmond Journal of Law & Technology 1:1. discusses some of the legal dimensions of identifiers and the similarities and differences between domain names and other identifiers, such as telephone numbers. See also Brunel, Andre. 1996. Trademark Protection for Internet Domain Names. In The Internet and Business: A Lawyer's Guide to Emerging Legal Issues, edited by C. L. Association: The Computer Law Association. and Dueker, Kenneth S. 1996. Trademark Law Lost in Cyberspace: Trademark Protection for Internet Addresses. Harvard Journal of Law and Technology 9 (Summer):483.
3 Quittner, Joshua. 1994. Billions Registered: Right now, there are no rules to keep you from owning a bitchin' corporate name as your own internet address. Wired, July 1994.
4 INTA. 1997. INTA White Paper: Trademarks on the Internet. New York, NY: International Trademark Association.
5 NSI dispute resolution policy has now gone through five iterations. The earliest versions allowed NSI to suspend a domain name registration 30 days after presentation of a trademark registration by a challenger. See http://www.patents.com/nsi.sht for a discussion of various versions of the policy and their legal and economic consequences.
6 “If an objection to registration is raised within 30 days after registration of the domain name, a brief period of suspension during the pendency of the dispute will be provided by the registries.” Appendix 2--Minimum Dispute Resolution and Other Procedures Related to Trademarks, National Telecommunications and Information Administration, 15 CFR Chapter XXIII, Improvement of Technical Management of Internet Names and Addresses, Proposed Rule, Federal Register: February 20, 1998 (Volume 63, Number 34) Page 8825-8833.
7 The so-called gTLD-MoU group was the product of a political alliance between the Internet Assigned Numbers Authority (IANA), the Internet Society (ISOC), the International Telecommunication Union (ITU), and the World Intellectual Property Organization (WIPO). In addition to its elaborate domain name challenge procedures, the gTLD-MoU proposed to create 7 new generic top-level domains as an alternative to the exclusive government contract held by Network Solutions, Inc. over .com, .net, and .org. See http://www.gtld-mou.org/. For an analysis of the historical background of its emergence, see Mueller, Milton. 1998. The battle over Internet domain names: global or national TLDs? Telecommunications Policy 22 (2): 89-108.
8 White Paper on Management of Internet Names and Addresses, UNITED STATES DEPARTMENT OF COMMERCE, National Telecommunications and Information Administration, Docket Number: 980212036-8146-02 (June 5, 1998).
9 See WIPO RFC-2, “Request for Comments on Issues Addressed in the WIPO Internet Domain Name Process,” September 14, 1998. http://wipo2.wipo.int/process/eng/processhome.html
10 See, for example, the June 8, 1998 news release of the International Trademark Association, which states “The creation of additional gTLDs is an issue the Association has fought since the debate on the Internet began several years ago.” Sally Abel, Vice Chair, INTA Issues and Policy Committee, June 8, 1998, PR Newswire.
11 Nathenson, 1997, for example, develops a three-category classification scheme (squatters, twins, and parasites) that has some similarities to the one proposed here. Oppedahl, 1997, lays out a list of factors regarding the type of name and its use that affect legal remedies.
12 Anheuser-Busch, Inc. v. Balducci Publications, 28 F.3d 769, 774 (8th Cir. 1994); see also Centaur Communications, 830 F.2d at 1225. Duluth News-Tribute, 84 F.3d at 1096.
13 Federal Trademark Dilution Act of 1995, 15 USC 1125 (c )
14 Panavision International v. Toeppen, 46 U.S.P.Q.2d 1511, 1998 WL 178553 (9th Cir. April 17, 1998); Intermatic Inc. v. Toeppen, 947 F. Supp. 1227 (N.D.Ill. 1996); Cadbury Confectionery & Ors v The Domain Name Company Ltd & Ors (New Zealand). In the New Zealand case consent orders were given but no written judgement was issued.
15 Panavision Iinternational, L.P., a Delaware Limited Partnership, Plaintiff, v. DENNIS TOEPPEN, an individual, Network Solutions, Inc., a District of Columbia Corporation, and DOES 1-50, Defendants. Case No. CV 96-3284 DDP (JRx) November 1, 1996. Nathenson, 1997, writes that name speculation cases are “more legally problematic than the courts have made them appear” and DeGidio, 1997 criticizes the Intermatic court’s classification of name speculation as “use in commerce.”
16 Deputy Judge Jonathan Sumption QC said in the UK case that mere registration of a name was not, in itself, passing off or infringement of a trademark, but that injunctions should be granted against name speculators “to restrain the threat of passing-off.” BBC News, November 28, 1997
17 Thus, the plannedparenthood.org case was classified as infringement rather than parody, because the web site run by the anti-abortion activist claimed to be the “home page” of the Planned Parenthood organization.
18 For example, the domain micr0soft.com (the first “o” is the numeral 0) is registered to the “Microsoft Sucks” organization, and its home page is emblazoned with the slogan, “What do you want to hack today?” As far as we know, Microsoft has not mounted a legal challenge to it.
19 Suspension was classified as “challenger wins” because it prevents the original registrant from using the name at the behest of the challenger. Technically, however, NSI does not transfer the usage right from one party to another without a court order, so in cases of suspension the challenger is not actually awarded the name. However, suspension can coerce a registrant to surrender the name to a challenger.
20 Email from David Graves, NSI, to Milton Mueller, 4 May 1998.
21 JUZGADO DE PRIMERA INSTANCIA Nº 13 BILBAO Lerkundi, 20 Procedimiento: Medidas Cautelares De: Advernet, S.L Contra: OZUCOM, S.L y Don E.
22 See for example Pike et al v. Network Solutions et al US Dist Court for North Dist of California (S.F.) 96-CV-4256 11/25/96. The court took pike.com away from Peter Pike, a real estate consultant in California, and awarded the name to Floyd Pike, an electrical contractor who repairs power lines in North Carolina. The trademarked logo of the electrical contractor used stylized letters that cannot be reproduced in a domain name. It is difficult to understand the legal rationale. How can a real estate consultant in California be confused with an electrical contractor in North Carolina?
Burk, Dan L. 1995. Trademarks Along the Infobahn: A First Look at the Emerging Law of Cybermarks. Richmond Journal of Law & Technology 1:1.
Davidson, Stephen J. and Nicole Engisch. Applying the Trademark Misuse Doctrine to Domain Name Disputes 1996 [cited May 21], 1998 .
DeGidio, Anthony J. (Jr.). Internet Domain Names and the Federal Trademark Dilution Act: A Law for the Rich and Famous 1997 [cited . Available from http://www.lawoffices.net/tradedom/sempap.htm.
Dueker, Kenneth S. 1996. Trademark Law Lost in Cyberspace: Trademark Protection for Internet Addresses. Harvard Journal of Law and Technology 9 (Summer):483.
Hilleary, Shawna. 1998. Cyber-Dilution: Protecting Domain Names Under the Federal Dilution Act of 1995 1998 [cited May 1, 1998]. Available from http://www.gte.net/shawnah/cyberdln.htm.
INTA. 1997. INTA White Paper: Trademarks on the Internet. New York, NY: International Trademark Association.
Maher, David W. 1996. Trademarks on the Internet: Who's in Charge? Paper read at CIX/ISOC Workshop.
Mueller, Milton. 1998. The battle over Internet domain names: global or national TLDs? Telecommunications Policy 22 (2):89-108.
Nathenson, Ira S. 1997. Showdown at the Domain Name Corral: Property rights and personal jurisdiction over squatters, poachers, and other parasites. University of Pittsburgh Law Review 58.
Oppedahl, Carl. 1997. Remedies in Domain Name Lawsuits: How is a domain name like a cow? John Marshall Journal of Computer & Information Law 15:437.
Quittner, Joshua. 1994. Billions Registered: Right now, there are no rules to keep you from owning a bitchin' corporate name as your own internet address. Wired, July 1994.