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By Margaret Smith Kubiszyn
Summary: Thanks to the new Uniform Domain Name Dispute Resolution Policy and the U.S. Anticybersquatting Consumer Protection Act, trademark holders have two new tools to use in domain name disputes. This article explains how these new tools work.
Author: The author of this article, Margaret Smith Kubiszyn, is a member of the GigaLaw.com Editorial Board and practices patent, trademark, copyright and computer law as an associate at the law firm Bradley Arant Rose & White LLP in Birmingham, Alabama. She is a registered member of the U.S. Patent Bar and has written on various Internet law topics. E-mail: mkubiszyn@barw.com.
Introduction
The rapid colonization of the Internet in the 1990s has brought with it many growing pains, including the development of rules to govern "Internet citizens." One of the most visible battles on the Net is over the use of domain names. As a domain name serves as a primary identifier of a source of information, products or services on the Internet, a memorable domain name can mean thousands of additional visitors to a site daily. Any business would wish to exploit its established identity on the Internet by obtaining a domain name that incorporates its trademark.
In the early '90s, many "brick and mortar" companies seeking to establish a web presence found that their domain names had been taken before they could register. While many "netizens" see the conflict between domain name holders and trademark holders as a "David vs. Goliath" struggle, the trademark holders see the control of domain names containing trademarks as an integral part of their program of trademark usage and protection.
As one court has noted, "a company's domain name is much more than a mere Internet address. It also identifies the Internet site to those who reach it, much like,... a company's name identifies a specific company." Consumers often perceive domain names as performing in electronic commerce much the same role as trademarks and trade names historically have played in more traditional modes of business.
A Brief History of Domain Name Registrations
The central registry for domain names in the United States was originally created pursuant to a grant from the National Science Foundation. From 1993, Network Solutions, Inc. ("NSI") served as the exclusive administrator of the domain name registry, with dominion over second-level domains in the the ".com," ".net" ".org," top-level domains. It is this government-granted monopoly over the domain name registry that has been a point of contention in the Internet community.
The Internet Corporation for Assigned Names and Numbers ("ICANN") was created in response to a June 1998, "White Paper" written by the U.S. Department of Commerce calling for the formation of a new nonprofit corporation by private sector Internet stakeholders to administer policy for the domain name system. In April 1999, a test program was implemented by ICANN to allow for competition among multiple registers for the ".com," ".net" and ".org" top-level domains. As a result, NSI is no longer the exclusive registrar of these top-level domains.
In September 1999, ICANN, NSI and the Commerce Department reached an accord in which NSI recognized ICANN's authority over the domain name system. Under the agreement, NSI will retain the contract for administering the domain name registry for four years, and it will offer domain names to competing registrars at wholesale prices.
The Rise of Domain Name Disputes
In 1996, NSI first adopted its Domain Name Dispute Resolution Policy. Under this policy, if a domain name was identical to a federally registered trademark, then the complainant (trademark owner) could prove written notice of the conflict to the domain name holder, provide satisfactory evidence of trademark ownership to NSI and thus effect a domain name change transfer.
From a trademark owner's perspective, this dispute resolution policy was quite limited. If the disputed domain name was not identical to the registered mark, the trademark owner would have no recourse through NSI and would have to resort to court action.
The "first-come, first-served" system of registration of domain names has spawned a host of disputes, ranging from traditional trademark infringement and dilution disputes to battles with a new breed of infringer -- the "cybersquatter." A cybersquatter registers domain names in an attempt to extort money from the trademark holder for transfer of the domain name. As NSI implemented its domain name policy, clever cybersquatters learned to add or change a letter in a registered trademark to escape the confines of the NSI dispute resolution policy, forcing a trademark holder to go to court to secure rights to the disputed domain name. While many trademark holders were up to this challenge, many found it easier to pay a few thousand dollars in exchange for the domain name rather than resort to expensive litigation.
Late last year, however, trademark owners gained two valuable tools for combating cybersquatters.
The New Domain Name Dispute Policy
On October 24, 1999, ICANN approved its
Under the UDRP, when a complaint is filed, the domain name holder is required to submit to a mandatory administrative proceeding, conducted before one of the administrative dispute resolution service providers approved by ICANN. Currently, there are three such providers, the World Intellectual Property Organization ("WIPO"), Disputes.org, and The National Arbitration Forum.
A complainant may assert a cause of action against a domain name holder under the UDRP if (1) the domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and (2) the domain name holder has no rights or legitimate interest in respect of the domain name; and (3) the domain name has been registered and is being used in bad faith. In the administrative proceeding, the complainant must prove all three elements.
The panel shall consider several elements to be evidence of the registration and use of a domain name in bad faith, including (1) circumstances indicating that the domain name holder has registered or acquired a domain name primarily for the purpose of selling, renting or otherwise transferring the domain name registration to the complainant; or (2) registration of the domain name to prevent the owner of a trademark or service mark from registering such domain name; or (3) registration of the domain name primarily for the purpose of disrupting the business of a competitor; or (4) use of the domain name to intentionally attract for commercial gain Internet users to a web site or other online location by creating a likelihood of confusion. If the panel finds that the complainant has proved all these elements, the panel may order the transfer of the domain name.
The fees charged by the administrative provider must be paid by the complainant, and all communications are made in writing via e-mail, mail or fax, and no actual hearings are held on the matter. The administrative dispute resolution is designed to cost less than $1,000, and lasts for approximately 45 days. As such, the ICANN dispute resolution policy appears to be a quick and relatively inexpensive tool to wrest an infringing domain name from a cybersquatter.
In the first proceeding under the UDRP, filed on December 9, 1999, the World Wrestling Federation successfully effected the transfer of the domain name "worldwrestlingfederation.org." Since that time, more than 40 domain names have been challenged under the UDRP.
The Anticybersquatting Consumer Protection Act
In late 1999, almost simultaneously with NSI's implementation of the UDRP, the U.S. Congress enacted, and President Clinton signed into law,
The Act provides for property-like actions where the domain name registrant cannot be located and prohibits registration of a domain name consisting of a living person's name with the specific intent to profit from that name.
Traditional remedies awarded under the Trademark Act are available in most cases. Alternatively, a plaintiff can elect an award of statutory damages between $1,000 and $100,000 per domain name, the amount of which is discretionary to the judge. A court can also order transfer or forfeiture of the domain name. Therefore, under the Anticybersquatting Act, a trademark holder may file suit in federal court under the specific provision of the Act without having to resort to a traditional trademark infringement or dilution action.
An action under the Anticybersquatting Act is certainly more expensive and time consuming than use of the procedure under the UDRP, but it does provide for money damages in the event of a finding of wrongdoing by the domain name registrant.