Massachusetts Software Council

• Domain Names are a Unique and Valuable Asset
• Technology and Business Innovation Outpace the Law

• Traditional Trademark Infringements and Dilution Disputes
• Speculation
• Disputes Between Legitimate Users and Reverse Preemption
• Parody and Preemption

• Will There Be Differences in Procedures?
• Will the Administrative Procedures Be Final?
• Potential for Inconsistent Results and Conflicts Between Courts and ICANN

• Domain names are unique and valuable asset.
• The methods for resolving disputes about domain names illustrate how business innovation quickly outpaces traditional legal doctrine.
• The new system which began to be implemented on December 1, 1999, will change on almost an annual basis.

• Each internet address has a real internet protocol which is a string of numbers. A domain name is a hieratically structured character string that serves as the internet address.
• Network Solutions was the exclusive government contractor selected by the National Science Foundation to register top level domain names such as ".com", ".org", ".net" and ".edu".
• In 1998, ICANN was created as private sector initiative to assume responsibility for overseeing the technical coordination of the Domain Name System ("DNS") which allows internet addresses (for example, web pages and e-mail accounts) to be found by easy-to-remember domain names instead of numbers.
• ICANN is a non-profit corporation structured to make decisions on the basis of the internet community consensus. ICANN’s decisions have been controversial and the subject of widespread debate and criticism by various sectors of the internet community.
• One of ICANN’s functions has been to develop and promulgate a new system for the resolution of domain name disputes.

Under the Lanham Act, the use of a trademark that is confusingly similar to a mark, whether registered or unregistered, creates right to a cause of action for both injunctive relief and damages. In 1995, Congress passed, and the President signed, an amendment to the Lanham Act to create a new federal cause of action for trademark dilution. Where trademark infringement hinged upon the confusion between trademarks, trademark dilution does not require confusion between marks but only a lessening of the capability of the mark being dilutedto identify a product or service. The Federal Dilution Statute applies only to famous marks. Congress passed the new dilution statute in order to remedy inconsistent laws between the several states, in recognition of the investment that mark holders make in their marks, and to be in compliance with treaty obligations under the GATT.

• Speculation

The ease of registration of domain names has led to a cottage industry of preemptively obtaining the rights to domain names of persons or businesses. The speculator then attempts to sell the name back to the party who is identified with or uses the name in their business.

• Disputes Between Legitimate Users and Reverse Preemption

Under trademark and dilution laws, many parties may have the legitimate right to use a name. Many names are the subject of multiple trademarks. There have been many internet domain name disputes between legitimate users of a name, such as "Prince", "Mars" and other names. Sometimes a party may attempt to use the domain name statute to achieve reverse preemption or to prevent others from using a name on the internet when such a prohibition would not be possible under existing trademark infringement or dilution laws.

• Parody and Preemption

There are a number of domain name disputes which involve attempts by parties to parody or satirize names or causes of others. In addition, there have been efforts to pre-empt a particular person, party or business from using a name by obtaining it first.

A 1998 study by Martin Mueller of Syracuse University yielded interesting results concerning the breakdown of cases in a survey of 121 cases. The results showed the following:

As of May 1998, there were nearly 2,000,000 domain names. Of those, 2,070 involved NSI’s trademark dispute resolution policy and 1,523 were placed on hold. Only 3,903 had been the subject of a trademark complaint filed in courts. Thus, the percentage of conflicts reported is about .000104.

• The procedures were revised four times in less than five (5) years.
• Some revisions were made without notice, comment or input by the public.
• The procedures and their implementation favored registered holders of trademarks and sometimes gave rights not afforded under trademark law.
• Application of the rules varied based on whether NSI was sued.
• The typical remedy was a "hold" pending a court suit.

On August 26, 1999, ICANN adopted a uniformed domain name Dispute Resolution Policy (the "Policy") which is implemented by the Rules Uniform Domain Name Dispute Resolution Policy (the "Rules").

• The purpose of the Policy, which is incorporated by reference into Registration Agreements, is to set forth the terms and conditions in which a dispute over the registration use of an internet domain name will be determined.
• In submitting an application to register a domain name, ICANN requires that the applicant make the following representations:

1. The statements made in the Registration Agreement are complete and accurate;
2. To the applicant’s knowledge, the registration of the domain name will not infringe upon or otherwise violate the rights of any third party;
3. The applicant is not registering the domain name for an unlawful purpose; and
4. The applicant will not knowingly use the domain name in violation of any applicable laws or regulations.

• ICANN will cancel domain name registration in the following circumstances:

1. Electronic instructions by the holder or its agents;
2. Receipt of an order from a competent court or arbitration panel requiring such action;
3. Receipt of a decision of an Administrative Panel requiring such action under the Dispute Resolution Policy and Rules if the losing party does not file a copy of a lawsuit seeking to appeal the decision of the Administrative Proceeding; and
4. ICANN reserves the right to cancel registration for other reasons set forth in the Registration Agreement.

• The Policy establishes a mandatory Administrative Proceeding in the event of a third-party complaint if the following grounds are established:

1. A domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights;
2. A party has no rights or legitimate interest in respect of the domain name; and
3. A domain name has been registered and is being used in bad faith.

• Types of evidence which may be used to support a complaint include:

1. Registering or acquisition of a domain name, primarily for the purpose of selling it or renting it to the rightful owner.
2. You have registered the domain name in order to prevent the owner of a trademark or service mark from using the mark in a corresponding domain name.
3. Registering the domain name primarily for the purpose of disrupting the business of a competitor.
4. Using the domain name to intentionally attract, for commercial gain, internet users to your web site or other online locations by creating a likelihood of confusion with the complainant’s mark.

• Proof of rights and legitimate interests may include:

1. Before any notice of dispute, use of the name or demonstrable preparations to use the name was used in connection with the bonafide offering of goods and services.
2. An individual, business or other organization has been commonly known by the domain name even if you have acquired no trademark or service marks.
3. A party is making a legitimate non-commercial or fair use of a domain name without intent for commercial gain to misleadingly divert customers or to tarnish the trademark or service mark at issue.

• The proceeding do not involve ICANN. ICANN will make a list of suitable Dispute Resolution Providers ("Providers"), among whom the complainant will select.
• The only remedies are the cancellation of a domain name or transfer of the domain name to the complainant and the publication of the decision. The mandatory administration proceeding shall not prevent either party from seeking court resolution and either party may seek a stay of a court resolution pending outcome of the administrative proceeding or stay of the administrative proceeding pending outcome of the court resolution. A panel decision will be implemented unless within ten (10) days after its publication, the provider receives copies of an action filed in court, contesting the issue.
• No transfers of a domain or change in Registrations will be allowed until an administrative proceeding or a court or arbitration proceeding has been concluded for fifteen (15) days. The status quo will not be changed during Administrative Proceeding and there will be no interim remedies.
• ICANN had adopted Rules for Uniform Domain Name Dispute Resolution Policy.

1. The process parallels a court or arbitration proceeding.

• A complaint is filed with a provider.
• A response is due within twenty (20) days.

• The complainant must specify a court to which an appeal may be allowed.
• The language of the proceeding shall be, unless otherwise agreed by the parties or specified in the Registration Agreement, the language of the Registration Agreement, subject to the authority of the panel to change the circumstances. However, the panel may order any document submitted in languages other than the language of the administrative proceeding be accompanied by a translation.
• In person hearings are not allowed unless the panel determines it is an exceptional matter. This includes hearings by teleconference, video-conference or web conference.
• Fees shall be determined by the Provider.

• Will differences in Registration Agreements produce differences in results and procedures?
• Will the authority that Providers have to enact supplemental rules result in different outcomes of the same cases?
• Will the decisions of the Administrative Proceedings be final and what standards will courts adopt in reviewing them?
• How will potential conflicts between Administrative Proceedings or courts be handled?
• What weight will be given to precedent of Administrative Proceedings or court hearings.

The rapid pace of technological and business change has overcome the capacity of the existing legal structures. The new ICANN policy and procedures are an attempt to catch up. Luckily, statistics show that less than one-tenth of one percent of all trade names are the subject of disputes.