Comments of the American Intellectual Property Law Association
on the Proposed Rule on
the Improvement of the Technical Management of Internet Names and Addresses
Published by the National Telecommunications and Information Administration,
Department of Commerce
The American Intellectual Property Law Association (AIPLA) is pleased to present the following comments with respect to the document entitled "A Proposal To Improve Technical Management Of Internet Names And Addresses," published in the Federal Register on February 20, 1998 (63 FR 8825), hereinafter referred to as the "proposed rule."
The AIPLA is a nearly 10,000 member national bar association whose membership primarily consists of lawyers in private and corporate practice, in government service, and in the academic community. AIPLA members comprise a wide and diverse spectrum of individuals involved directly or indirectly in the practice of patent, trademark, copyright, trade secret and unfair competition law, as well as other fields of law affecting intellectual property. Our members represent both owners and users of intellectual property, including many large and small businesses that make commercial use of the Internet via websites or otherwise provide services over the Internet.
Preliminarily, the AIPLA is delighted that the Administration has undertaken the veritably herculean task of crafting a proposal to improve the administration of the domain name system and to establish effective procedures for registering domain names and addressing domain name disputes. The Administration's undertaking has necessarily required it to consider many thorny and contentious issues that transcend national boundaries and affect a wide variety of interests, including the interests of United States trademark owners. Nevertheless, the Administration has had the foresight to see that dealing with these issues now is vital to the interests of the United States in maintaining a stable and thriving Internet.
The AIPLA has been actively involved with the issues explored in the proposed rule for a considerable period of time and has addressed these issues in a number of forums. Its involvement has included presenting testimony at various Congressional hearings on domain names, participating in special meetings of the World Intellectual Property Organization (WIPO) on domain names in Geneva, Switzerland, and responding to various inquiries from the United States Commerce Department and international intergovernmental organizations. The AIPLA remains eager to continue to assist the Administration in any way we can and we hope that our comments below will be helpful to the Administration.
II. DETAILED DISCUSSION.
For several months, the AIPLA has repeatedly stressed that any effort to design and implement a new Internet domain name system should include: (1) greater involvement by a more diverse and truly representative constituency of affected parties in all of the various Internet areas; (2) a recognition that the private sector, rather than the government, is best equipped to administer and maintain the domain name system; (3) strong stewardship by the United States Government in creating the framework for Internet governance and in maintaining a stable and secure Internet during the transition to the private sector; and (4) a recognition that any new framework for the domain name system must address the legitimate concerns of trademark owners. We are pleased that the proposed rule is largely consonant with these principles, although it falls short of squarely committing the United States to take such a leadership role in this area. Indeed, we note that the initial response from the United States Congress appears to be similar to the Administration's effort, as evidenced by a bill, S.1727, recently introduced by Senator Leahy that calls for a comprehensive study of the effects on trademark owners of adding new generic top-level domains. We address the particulars of the proposed rule below in the context of the aforementioned four principles.
Prior to the publication of the proposed rule, the Internet Society, the Internet Assigned Numbers Authority, and the International Ad Hoc Committee (now known as the Interim Policy Committee) (IPOC) all worked very hard to create a plan for the future of the domain name system to address the problems identified in the proposed rule without impeding Internet activity. Unfortunately, from AIPLA's perspective, the plan, while commendable in principle, contained many flaws attributable in a large sense to the failure to involve a sufficiently broad constituency of interested parties and to recognize that erecting a bureaucratic framework for the domain name system is fundamentally incompatible with the way the Internet operates.
1. The Proposed Division Of Technical Functions.
The proposed rule appropriately acknowledges that "technical management" of the Internet "should reflect the diversity of its users and their needs" with due regard given for "international input." To this end, the proposed rule identifies so called "coordinated functions" that would be subject to management and oversight by a non-profit corporation, as opposed to "competitive functions" that would reside solely in a competitive, market driven system of registrars and registries. The AIPLA largely agrees with the overall division of functions proposed in the proposed rule and, therefore, will focus its remarks on the particulars of the functions envisioned.
Specifically, the AIPLA notes with approval the proposal that a non-profit corporation with a board of directors equitably representing all Internet stakeholders should be formed to manage the four coordinated technical functions for the domain name system identified in the proposed rule. The AIPLA also agrees that the United States government should closely oversee the transition to a non-profit corporation and should continue its oversight until it is assured that the corporation is functioning as planned and in an efficient manner. The AIPLA further concurs that the new corporation should be headquartered and incorporated in the United States, at least for the foreseeable future. In our view, the proposed framework for technical functions also implicitly reflects two realities: (1) while the Internet is global in nature, it is a creation of the United States government which is best positioned to facilitate setting up a secure stable, and truly representative domain name system in gTLDs; and (2) the vast majority of users of the Internet are United States citizens.
2. Composition Of The Board Of Directors.
After listing a number of Internet interests that should be represented on the board of directors of the new corporation, the proposed rule concludes by noting that the remaining seats on the board "could be filled by commercial users, including trademark holders." (Emphasis added). The AIPLA strongly believes that the board must include representatives of intellectual property interests, including trademark owners, not to mention fair representation from the business community at large. After all, it is axiomatic that the Internet is increasingly important as a means of international commerce in which businesses rely on their trademarks to perform the very same vital functions that marks have traditionally performed via other media of communication. Many businesses also have amassed significant brand equity in their trademarks and in turn put that brand equity to work by registering their trademarks as domain names. Consumers, which often make purchasing decisions based on their familiarity with a given trademark, would also benefit from such representation.
Moreover, we note that much of the present problem with domain names for trademark owners stems from the fact that domain names were set up to be unique assets. (We discuss below our directory proposal for ameliorating this impediment). This stems from the technological fact that a domain name corresponds to an underlying unique Internet Protocol (IP) number that is used to address computers and route traffic on the Internet. If intellectual property interests had been consulted at the outset, this problem may well have been avoided or at least substantially minimized.
Conceivably, such representatives of intellectual property interests could come from a special group formed through the combined efforts of the AIPLA, the American Bar Association's Section on Intellectual Property Law, and the International Trademark Association. On balance, we believe that representation from the intellectual property associations and trademark owners should together amount to at least fifty percent (50%) of the board.
B. Private Sector.
1. The Proposed Registrar-Registry Model.
We agree with the proposition in the proposed rule that competition in gTLD space is better fostered by having competing registries and registrars. The model proposed contemplates that there would be a separate registry for each new gTLD which would, among other things, maintain a current database of all domain names in the gTLD and of the applications corresponding to the domain names. Thus, presumably each registry would at least have a publicly accessible directory of domain name registrations in the particular gTLD, just like Network Solutions presently does in the .com, .net, and .org gTLDs. Each registry would also presumably have software enabling it to pre-screen applications in order to assess whether the proposed domain name is identical to a domain name already registered in that gTLD. The model further envisions that various registrars would provide the service of obtaining registrations of domain names in any of the gTLDs via processing each domain name application through the appropriate registry. Finally, the proposed rule also appears to contemplate that Network Solutions will retain its registry functions in the aforementioned gTLDs and ostensibly be permitted to act as a registrar with respect to any gTLD.
The proposed model has a number of redeeming qualities, including the fact that it is market oriented and intended to promote competition while simultaneously providing for a stable and secure domain name registration and maintenance. Nevertheless, we believe that a careful study should be undertaken to determine whether the particular registrar-registry model proposed, and its recommendation for up to five new gTLDs best promote competition and Internet stability, and best accommodate intellectual property and other interests. For example, it may be that one centralized domain name registry operated on a non-profit basis will best achieve these goals. This would have the highly salutary benefit of facilitating a searchable directory system such as that AIPLA has been recommending. Alternatively, each registry's database could be interlinked with corresponding registries so as to facilitate searching of domain name registrations across all gTLDs. Finally, all registries and registrars should be located in countries which are TRIPs compliant by the year 2000.
The AIPLA acknowledges that some foreign entities, notably the European Commission, have construed the proposal as an effort by the United States government to consolidate control over the Internet in the United States. To the contrary, we see the proposal as a well reasoned effort to distribute control objectively among the private sector with fair and adequate representation over technical management functions vested in all interested parties. It also constitutes a genuine effort to grapple with problems, such as dispute resolution, that are rather uniquely inherent in gTLDs, as opposed to country code TLDs. In this regard, we understand that the existing proposal only applies to present and future gTLDs, although there is some suggestion that the United States will be studying the possible inclusion of the .us country-code TLD within this framework (or even expanding the .us country code TLD to provide broader domain name registration alternatives for domain name users in the United States). Therefore, the over 200 country-code TLDs administered by individual foreign governments would not be affected under the current proposal, unless these governments consent to their inclusion. While we have not yet fully studied the matter, we believe that their voluntary inclusion would have benefits in terms of harmonized registration and dispute resolutions procedures. Nevertheless, we recognize that such an initiative may well be impracticable at this juncture.
2. Minimum Application Requirements.
The AIPLA also agrees with the recommendation in the proposed rule that all domain name applications contain sufficient information so as to minimize the difficulties presently experienced by trademark owners in pursuing domain name registrants whose activities may infringe or dilute their marks. Nevertheless, we strongly urge that the application requirements be augmented beyond the requirements listed in Appendix 2 to the Paper. In cooperation with INTA and the ABA IPL Section, we have formulated a list of statements and information that we believe must be contained in each original application and renewal application. These requirements should be uniform for every registrar and registry and all applications should be publicly accessible through prompt publication by the registrars.
We especially commend the proposed rule's inclusion of an intent to use requirement in the proposed minimum application requirements. While we have amplified this requirement somewhat in our list, we believe that it will discourage the unsavory practice of warehousing domain names for the purpose of inducing trademark owners to pay what amounts to ransom for those domain names. In particular, as discussed in Section D of our remarks, United States trademark laws presently do not provide adequate recourse against entities who merely register a domain name without any subsequent use of the domain name. On the other hand, in a number of foreign countries (e.g., Norway), intent to use followed by post-registration use is a prerequisite for obtaining a domain name in a country code TLD. The dispute polices in such instances also provide for automatic deletion of the registration absent proof of use within a prescribed period of time.
Consequently, in theory, an intent to use requirement, coupled with a statement of intended use of the domain name, could serve as a basis for canceling a registration, provided a proper binding enforcement mechanism can be established. Such a mechanism should not reside with the registrars or registries, which should not have any authority or responsibility for resolving disputes. It would also be impracticable to expect registrars or registries to make legal determinations as to what constitutes use of a domain name in a trademark sense. Moreover, trademark owners have not had success in employing third party beneficiary and other legal theories for the purpose of compelling Network Solutions to cancel registrations for misrepresentations or misstatements. See, Data Concepts, Inc. v. Network Solutions, Inc., No.3-96-0429 (M.D. Tenn 1997) (holding that trademark owner is not a third party beneficiary of Network Solutions' dispute policy); Lockheed Martin Corp. v. Network Solutions, 44 USPQ2d 1865, 1881 (C.D. Cal. 1997) (holding that trademark owner lacked legal right to control the domain name registration process). One way to accomplish this goal would be to provide trademark owners and other interested parties with standing to seek recourse in the courts or through alternative dispute resolution to cancel the registration for failure to satisfy the use or other material requirements. By way of analogy, we note that present United States trademark law gives trademark owners standing to cancel existing trademark registrations. See, 15 U.S.C. § 1064.
3. Searchable Database Requirements.
a. The Requirements.
The AIPLA concurs with the notion that the policing of trademarks could be considerably eased if domain name databases were readily searchable through a common interface. Further, we recommend that these databases be functionally compatible with one another from an interface standpoint, be publicly accessible and be consolidated into one centralized database.
b. A Proposed Technical Solution.
In this regard, the AIPLA believes that presently available technology, if properly utilized, can dramatically alleviate most trademark protection and enforcement problems that inherently arise from the treatment of domain names as unique assets. Thus, we reiterate our strong support for a searchable, telephone directory-type system for domain names and the corresponding development of a centralized world-wide database of trademarks and domain names that could be correlated to one another.
The AIPLA also applauds and favors the emerging use of so called "Gateway pages" or customized directories that permit trademark owners who have identical marks or multiple identical surname holders, to avail themselves of identical domain names. Correspondingly, such directories would also reflect the reality that some trademarks correspond to common surnames (e.g., Miller or Avery), which may conceivably be used exclusively for e-mail address purposes by the holder of the surname. Significantly, the court in the landmark Lockheed decision expressly recognized that "[t]he solution to the current difficulties faced by trademark owners on the Internet lies in this sort of technical innovation." (Lockheed, 44 USPQ2d at 1881 (C.D. Cal. 1997).
In terms of a directory, we envision a telephone-type directory covering all gTLDs which would allow Internet users, as well as trademark attorneys and other interested parties, to search through multiple trademark, trade name or surname listings at a single Internet address where the users could then have direct linkage to the home page or Website corresponding to a given listing. For example, under such a directory system, an Internet user who typed in the name "United" would then be routed to a directory page where all of the listings for "United" would appear alphabetically. If the user, upon reaching the directory page, typed in "United Airlines" or clicked on the United Airlines listing, he or she would be taken directly to that company's home page or website. The domain name itself would then largely become irrelevant, because the directory would become the most common means of access. The user could also "bookmark" or save addresses for future use without having to go through the directory process a second time, much like putting the address into an electronic or conventional organizer.
Further, the use of the "Gateway Page" option permits identical trademark or trade name owners to effectively share a home page for a domain name like united.com or scrabble.com. The home page would then contain icons or links that would take the user to each trademark owner's separate website. Thus, under this option, a user would type in united.com and, upon arriving at the home page, be presented with listings of United Airlines, United Van Lines and other United companies and brands, with links to their particular websites. There is in fact growing precedent for this pragmatic solution, as recently reflected in a lawsuit settled between Mattel and Hasbro, CV-96-7635, (C.D. Cal. 1996) over the domain names scrabble.com and scrabble.org.
A related question concerning directories is how and by whom they should be developed, operated and administered. While the AIPLA certainly believes that governments should have a guiding role in establishing a secure and stable directory system, we have serious reservations about the creation of an international bureaucracy to govern the Internet. Rather, we believe the government's role should be to guide and encourage the private sector, such as domain name registrars and Internet service providers, to develop such a system which the marketplace would then self-regulate for reliability and comprehensiveness. Like existing telephone directories, this could also be done on a regional basis (e.g., each country could have its own directory) or globally. If the United States Government were to take the lead in developing a binding international framework, a directory system could be mandated as one step in reducing the conflicts and tensions we have experienced.
The AIPLA recognizes that there are famous trademarks that, when embodied in domain names, should be accorded exclusivity across the board. We are also aware that some domain name holders assert the exclusivity of their domain names, irrespective of the fame of the trademark or the extent of pre-existing third-party usage of similar trademarks, trade names and surnames. It may, therefore, ultimately be necessary for international agreements and national legislation to implement a directory system.
4. Alternative Dispute Resolution Procedures.
The proposed rule recommends the establishment of uniform, speedy and inexpensive dispute resolution procedures that "should be consistent with applicable national laws and compatible with any available judicial or administrative remedies." According to the proposed rule, such procedures would require "no involvement by registrars," although "registries/registrars will abide by the decisions resulting from an agreed upon dispute resolution process or by the decision of a court of competent jurisdiction." Finally, the proposed rule indicates that a domain name registration should be suspended during the pendency of the dispute resolution process, provided an objection to registration is raised within thirty days after the date the domain name was registered.
The AIPLA agrees in principle with the concept of voluntary alternative dispute resolution, and believes that both registrars and registries should be totally disengaged from the dispute resolution process apart from their complying with the decision of a court or other tribunal of competent jurisdiction. Nevertheless, the AIPLA believes that, especially in view of the fact that domain name disputes increasingly transcend national boundaries, any alternative dispute resolution scheme will ultimately prove unworkable in the absence of a truly binding international dispute resolution scheme that has broad international governmental support.
For example, a court in Belgium recently held that a company that had registered a domain name with Network Solutions could not be deprived of its rights to the domain name even if the domain name deliberately included a third party's company name. The court reasoned that the registration of the domain name was a business opportunity and was, therefore, outside the scope of Belgium's unfair commercial practices law. By way of further example, in the Norway country code TLD, an applicant cannot apply for a domain name that corresponds to any of its trademarks unless the applicant is only known by the trademark rather than its actual name. Such countries may be understandably reluctant to enforce the decision of any tribunal which conflicts with their national laws. These examples highlight the need to promptly pursue international harmonization of intellectual property laws relating to the tension between trademarks and domain names.
Likewise, we do not believe that the proposed suspension procedure is workable in the absence of an internationally sanctioned dispute resolution scheme, not to mention interim federal legislation in this area. This is apparent when one considers successful efforts of domain name registrants at obtaining preliminary injunctions or temporary restraining orders preventing Network Solutions from suspending their domain names registered with the company. See, Clue Computing, Inc. v. Network Solutions, Inc, (D.C., Boulder County, Colo., Division 5, No. 96-CV-694, 1996).
One suitable forum to address these issues is WIPO which has held some preliminary meetings on these problems. While this will undoubtedly be a long term undertaking, it is essential that it begin now and, at the same time, not delay the transition of the domain name system to the private sector. In the meantime, we agree with the recommendation in the proposed rule that a special group should be formed promptly to assess the impact on intellectual property rights, and the overall efficacy of adding new gTLDs, domain name application criteria, and dispute resolution procedures to the domain name system. As indicated in the proposed rule, such a study could provide valuable input on harmonization.
5. The Creation Of New gTLDs.
The proposed rule raises the prospect of adding "up to five new registries," each of which "at the outset" would be limited to a single gTLD. The exploration of greater utilization of the .us country code TLD mentioned earlier should be explored in this connection. The creation of additional gTLD carries with it substantial perils for trademark owners with respect to the protection and enforcement of their marks. Firstly, it is highly likely that additional gTLDs will foster more cybersquatting and warehousing of domain names. While judicial decisions in the Unites States have largely stymied cybersquatters, warehousing still remains a problem and international recognition and enforcement of judicial decisions is highly uncertain. Thus, trademark owners may well feel compelled to make a "mad dash" to register domain names in as many new gTLDs as possible in order to preempt potential cybersquatters, warehousers, or even legitimate entities with identical or similar trademarks, trade names or surnames, from doing so. In this regard, there have even been reported instances where an owner of trademark that is identical to marks or names held by other entities registers domain names across all existing gTLDs in order to preempt any usage by the other entities that arguably have just as much right to hold an identical domain name. This can result in considerable inequity where one owner has far more financial muscle than another.
Therefore, the AIPLA strongly believes that it would be imprudent to add any new gTLDs without first conducting a comprehensive study of the type proposed by Senator Leahy in S. 1727. Among other things, this study would permit the assessment of the impact of new gTLDs on the ability of trademark owners to protect their interests and the implementation of more effective measures to safeguard those interests. It would also help ensure that the creation of new gTLDs will proceed in a manner that does not threaten the stability and security of the Internet. We also recommend that the study consider the efficacy of a grace period being established during which trademark owners may reserve domain names in new gTLD in advance of others seeking to register domain names for non-trademark purposes.
C. The Need For Strong United States Stewardship.
The AIPLA appreciates that political and other considerations may make the United States reluctant to assume the role of stewarding the transition to a new gTLD domain name system and the development of the binding international framework for a domain name conflicts resolution policy. However, we submit that there is no substitute for proactive and sustained United States leadership in this area for a number of very important reasons. Firstly, as aptly noted in the proposed rule, Network Solutions' United States government contract with its six month extension will expire on September 30, 1998. At this point, Network Solutions has registered over 2,000,000 domain names, most of which are in the .com gTLD and are registered to United States entities. Existing proposals developed by the IAHC do not address these existing gTLDs, particularly the .com gTLD which has been the source of so much pressure and controversy.
Secondly, the vast majority of Internet users are United States entities which have a vested interest in maintaining a stable and secure Internet such that it is manifestly in the interests of the United States to stay actively engaged until the new system is operating smoothly and effectively. Thirdly, since domain name disputes are increasingly international in scope, they create prickly jurisdictional, enforcement and other issues alluded to in the proposed rule. These issues must be addressed at the intergovernmental level.
Fourthly, no matter how well meaning, the pre-existing efforts of the IAHC (now POC) to deal with these issues have moved forward without any demonstrable input, control or oversight by the government of the United States or other countries. These efforts have also not been sufficiently inclusive of all affected interests. In fact, one needs only to look at the list of signatures for the gTLD-Mou to see that it is essentially devoid of any signatures of the United States and other industrialized countries as well as the representatives of any major industries in the United States, Europe and Japan.
Consequently, the United States government should take an active role in pursuing harmonization of intellectual property laws relating to the tension between trademarks and domain names and in designing and implementing an effective international dispute resolution scheme. Internationally, a trademark/domain dispute resolution scheme could be the subject of an agreement under the auspices of WIPO with meaningful involvement and participation by trademark owner interests.
While this undoubtedly will be a long-term undertaking, it is essential that it begin now and, at the same time, not delay the transition of the domain name system to the private sector. In the meantime, we agree with the recommendation in the proposed rule that a special group should be formed promptly to address the impact on intellectual property rights, and the overall efficacy of adding new gTLDs, the merits of further development of the .us country code TLD, domain name application criteria, and dispute resolution procedures to the domain name system. The AIPLA will participate in any way we can. We note again that Senator Leahy has recently introduced a bill that would request the National Research Council of the National Academy of Sciences to conduct such a comprehensive study.
Our urging should not be taken as a suggestion that the United States or any other government or international inter-governmental organizations, such as WIPO, should control or take over administration of the Internet. To the contrary, we strongly support the position in the proposed rule that the private sector is best equipped and motivated to handle these responsibilities. What we are suggesting, however, is that an international framework for governance of the Internet should be established with the participation of governments and in particular, the United States Government, in as rapid a time frame as possible. Technology and the Internet are evolving with great rapidity. If action is not taken in a timely fashion, there is at least some risk of fracturing of the Internet, with one system of existing gTLDs administered in the United States and a second set administered abroad.
D. The Need To Address The Legitimate Concerns Of Trademark Owners.
1. The Nature Of The Problem.
The registration and use of domain names creates significant trademark protection and costly enforcement problems for trademark owners because domain names, which often incorporate trademarks as well as generic terms, are treated as unique assets that can be held by one and only one owner. This stems from the technological fact that a domain name is an easy-to-remember word, or combination of letters or alphanumeric characters, that corresponds to an underlying unique Internet Protocol ("IP") number that is used to address computers and route traffic on the Internet.
A "Top Level Domain" (TLD) registry presently exists for each country. There is also a registry in the United States which is responsible for registering domain names that are sometimes referred to as international TLDs (iTLDs) or as generic TLDs (gTLDs). These include the TLDs .com, .org, and .net. Unlike most TLDs which are country specific and cannot, therefore, accept registrations on a worldwide basis, gTLDs can accommodate registrations from anyone in the world. Over eighty percent (80%) of gTLD registrations by United States entities occur in the .com gTLD and there is extensive non-U.S. use of this gTLD. Network Solutions, Inc. is currently the exclusive registry for the .com, .org, and .net gTLDs under a contract with the National Science Foundation which is scheduled to expire in March 1998, with a possible one-time, six-month renewal.
When an Internet user inputs "http:\\www.aipla.org", the domain name "aipla.org" is correlated by appropriate software to an IP number and the user is then routed to the appropriate designation. Moreover, the very fact that the Internet is a global medium makes the AIPLA's website accessible throughout the world by inputting the above-mentioned domain name. On the other hand, some marks designate the source of goods or services for more than one entity but in different commercial fields. This fundamental difference between domain names and trademarks is what creates the difficulties. The problems are exacerbated in the situation of famous marks which, by virtue of their fame, may be afforded some protection even in jurisdictions where they have not yet been registered.
Some examples will illustrate the difficulties with domain names. First, consider that there are many trademarks that include the word "United," including United Airlines, United Van Lines, and United Bank. At the same time, only one of these entities could exclusively hold the domain name "united.com" even though each entity in theory has a right to claim that domain name. Nevertheless, since domain names are registered on a "first come first served" basis, only the first of these trademark owners to register united.com will get the exclusive right to hold that domain name.
Secondly, ownership rights in many trademarks are globally divided. For example, the Scrabble trademark is owned by one entity (Hasbro) in the United States and Canada and another entity (Mattel) throughout the rest of the world. Here again, each entity could legitimately claim rights to the scrabble.com domain name and argue that it should be available only to that entity.
Third, some trademarks in fact correspond to commonly used surnames, such as Miller and Avery, that are legitimately used by other entities as their surnames. Here, problems can arise for a trademark owner, such as Miller Brewing Company, when an individual registers his or her surname as a domain name (e.g., miller.com) for an e-mail account or for some other purpose. Courts similarly recognize the dual nature of domain names as addresses and trademarks. See, Lockheed Martin Corp. v. Network Solutions, Inc., 44 USPQ2d 1865, 1871 (C.D. Cal. 1997).
The above mentioned examples generally involve instances where trademark owners or individuals using their surnames at least theoretically have some legitimate claim to a domain name. However, the treatment of domain names as unique assets has also given rise to the registration and use of domain names by entities for illicit purposes. An infamous example of illicit use is that by so-called "cybersquatters," a coined word used to refer to entities who register another's trademark as a domain name and then try to sell the domain name back to the trademark owner. Panavision Int'l., L.P. v. Toeppen, 938 F. Supp. 616 (C.D. Cal. 1996); Intermatic, Inc. v. Toeppen, 41 USPQ2d 1223 (N.D. Ill. 1996). There are also other instances, Planned Parenthood Federal of America, Inc. v. Richard Bucci, 42 USPQ2d 1430, 1432-33 (S.D. N.Y. 1997) where entities register a trademark as a domain name primarily to make a political or other statement. Some entities also warehouse a trademark owner's mark as a domain name and then avoid putting it to use so as to effectively hold the domain name up for ransom. Finally, there are more classic cases of trademark infringement or trademark dilution where an entity registers another's trademark as a domain name for the purpose of trading on the goodwill inherent in the trademark, Cardservice International, Inc. v. McGee, 42 USPQ2d 1850 (E.D. Va. 1997).
2. Pre-screening Domain Name Applications.
The paper stops short of proposing so-called waiting periods (i.e., pre-screening measures) for domain name applications, noting that these requirements could significantly limit the flexibility of the Internet. We believe that the proposed rule is correct in not recommending pre-screening. Some have suggested a review process for domain name registries akin to that which the United States Patent and Trademark Office (USPTO) undertakes in determining whether to issue a trademark registration. Such a review process includes a determination as to whether a trademark, if registered, would be likely to cause confusion as to source of origin, sponsorship, or affiliation with another previously-registered or used trademark. The AIPLA believes that pre-screening of applications for domain name registrations, other than the automatic computer-generated rejection that ensues when an entity attempts to register a name identical to one already registered, is neither desirable nor feasible for a variety of reasons. Even a streamlined review process for domain name applications could significantly delay the registration of domain names which, unlike trademarks, cannot be used until registered. This is rather self evident, when one considers that Network Solutions presently registers over 125,000 domain names per month while the USPTO issued less than 80,000 trademark registrations in FY 1996. The pendency of a domain name application, virtually all of which are electronically processed by a computer is a matter of minutes or a few hours, while that of United States trademark applications is more than a year. Also, the USPTO has a core of experienced attorney examiners familiar with the intricacies of the likelihood of confusion test.
In addition, pre-screening domain name applications prior to registration would necessarily increase the expense of obtaining a domain name registration many fold, (although some additional care to make it more difficult to circumvent the system by, for example, merely including a dot or removing a space between two terms otherwise taken, e.g. Coca-Cola or Coca.cola, may be warranted).
Since the vast majority of Internet domain name registrations do not conflict with any trademark rights, there would be insufficient practical enforcement benefit to justify pre-screening domain names prior to registration. Less than 4,000 domain name registrations out of the more than 2,000,000 registrations to date have resulted in complaints by trademark owners to Network Solutions. However, not all complaints are brought to Network Solutions' attention and each occurrence has the possibility of significant litigation expense.
3. Adequacy Of Existing Trademark Law.
The proposed rule states that the domain name system must provide trademark owners with at least the same rights and remedies that they presently have "in the physical world." The AIPLA fundamentally agrees with this statement, although the AIPLA believes that domain names have characteristics that require further adaptation and harmonization of the law on an international basis to provide effective and affordable remedies for trademark owners.
While there have clearly been difficulties for trademark owners created by domain name registrations, the AIPLA believes that, with a few important exceptions, existing United States law has been up to the task of allowing trademark owners to fairly resolve domain name disputes within the United States. This is not to say, however, that United States law has been up to the task of permitting domain name disputes to be resolved inexpensively. In addition, while some foreign countries have adequate laws in place, the protection and enforcement of trademark rights relating to domain names needs to be bolstered in a number of foreign countries through harmonization and an internationally sanctioned, effective and affordable, enforcement and dispute resolution scheme.
Specifically, in the United States, trademark owners have successfully employed the United States Anti-Dilution Statute to terminate use of their marks as domain names by cybersquatters and garden variety trademark infringers. Panavision Int'l, L.P. v. Toeppen, 945 F. Supp. 1296, 1304 (C.D. Cal. 1996); Intermatic v. Toeppen, 947 F. Supp. 1227, 1235 (N.D. Ill. 1996); Cardservice Int'l, Inc. v. McGee, 950 F. Supp. 737, 740-741 (E.D. Va. 1997). They have also been successful against cyber-jesters (i.e., entities who register domain names consisting of another's mark in order to mock or criticize the owner's activities). See, Planned Parenthood Federation of America, Inc. v. Bucci, 42 USPQ2d 1430 (S.D. N.Y. 1997). Moreover, while the United States Anti-Dilution Statute on its face applies only to famous marks, some courts have expansively construed "famous" to include even locally famous trademarks. Tele-Tech Customer Care Management, Inc. v. Tele-Tech Co., 42 USPQ2d 1913, 1916-1918 (C.D. Cal. 1997).
It is, of course, true that those trademark owners who do not possess a famous trademark will need to rely on other statutory provisions of the Lanham Act, notably the trademark infringement, false description and false designation of origin provisions. In practice, this has proven to be more arduous for trademark owners than maintaining a dilution claim, because a dilution claim does not require proof of likelihood of confusion. The reason is that claims made under these statutory provisions for trademark infringement and the like involve application of a likelihood of confusion test that may well prove quite nebulous to apply with regard to Internet activity. Compare Interstellar Starship Services v. Epix, Inc., 1997 U.S. Dist. LEXIS 18873, *17 (D. Ore. 1997) (finding no infringement) with Cardservice Int'l, Inc. v. McGee, 950 F. Supp. 737, 742 (E.D. Va. 1997) (finding infringement). On the other hand, this is no different a legal recourse than such trademark owners would have with respect to non-Internet related infringement, dilution or unfair competition. Nevertheless, as aptly indicated in the proposal, the unlawful use of a domain name inflicts considerable unnecessary and costly litigation as well as other expenses on trademark owners who must increasingly police and protect their rights on the Internet.
In this regard, the AIPLA believes that the proposed rule rather understates the magnitude of trademark related domain name disputes on the Internet. While "only" 4,000 complaints have been directed at Network Solutions by trademark owners about a particular registration, most trademark owners endeavor to police their marks against domain name registrants without involving Network Solutions. This is likely attributable to decisions holding that Network Solutions does not have any duty to police the Internet for infringing uses of marks or any general duty to investigate whether a given registration of a domain name is improper. See, Lockheed Martin Corp. v. Network Solutions, Inc., 44 USPQ2d 1865 (C.D. Cal. 1997); Panavision Int'l, LP v. Toeppen, 41 USPQ2d 1310 (C.D. Cal. 1996).
More recently, a Court has ostensibly indicated that Network Solutions could not be held accountable for the infringing of a domain name registrant (i.e., for contributory infringement) absent unequivocal knowledge that a domain name was being used to infringe a trademark. Lockheed, 44 USPQ2d at 1877 (C.D. Cal. 1997). The Court based its determination on the fact that a registrar's involvement with potentially infringing uses is remote. In a related opinion, the Court also opined that a similar or even more stringent standard would apply to a contributory dilution claim, even if the law were to recognize such a claim. Lockheed Martin Corp. v. Network Solutions, Inc., 44 USPQ2d 1521, 1525 (C.D. Cal. 1997). These decisions are consistent with the proposal's position that "infringers, rather than registrars, registries, and technical bodies, should be liable for trademark infringement."
Moreover, a growing number of United States Courts have allowed the Lanham Act (e.g., Mattel, Inc. v. Hasbro, Inc., CV-96-7635, (C.D. Cal. 1997)) to be asserted against foreign domain name registrants whose Internet websites are accessed by entities in the United States. Some of these courts have also permitted United States trademark owners to bring a claim in the United States under foreign trademark law. In doing so, these courts have applied pre-Internet law which permits such claims to be brought under limited circumstances. See, Steele v. Bolova Watch Co., 340 U.S. 280, 285-286 (1952); Ocean Garden, Inc. v. Mark Trade Co., 953 F.2d 500 (9th Cir. 1991); Timberlane Lumber Co. v. Bank of America, 549 F.2d 597, 616 (9th Cir. 1976); Vanity Fair Mills, Inc. v. T. Eaton Co., 234 F.2d 633, 639 (2d Cir. 1956).
It nevertheless remains to be seen whether foreign courts will recognize and enforce such decisions or will consider them an affront to their jurisdiction. Further, we expect that, in the absence of an internationally sanctioned enforcement scheme, United States courts will be quite reluctant to effectively sit as "world courts" in which they adjudicate fundamentally international claims. See, Playboy Enterprises, Inc. v. Chuckleberry Publishing, Inc., 939 F. Supp. 1032, 1039 (S.D. N.Y. 1996). In Chuckleberry, the Court declined to enforce a permanent injunction barring the defendant from operating its foreign website anywhere in the world merely because the website was accessible from within the country (i.e., the U.S.) in which the products were banned. This case underscores the need for a concerted effort at harmonization and implementation of an effective and affordable international enforcement and dispute resolution scheme.
In addition to international disputes, warehousing remains a nagging problem that existing United States laws are ill-adapted to deal with. Specifically, under the Lanham Act, proof of trademark infringement and trademark dilution requires that the trademark owner prove that the domain name registrant has used the owner's mark in commerce. See, New West Corp. v. NYM Co. Of Cal., Inc., 595 F.2d 1194, 1201-1202 (9th Cir. 1979). Further, the United States Anti-Dilution Statute requires that the use in commerce be a commercial use. Panavision Int'l, LP v. Toeppen, 41 USPQ2d 1310, 1314 (C.D. Cal. 1996). The use requirement thus has jurisdictional (i.e., "in commerce") and substantive (i.e., "use") components.
Establishing a website on the Internet fulfills the jurisdictional component because the Internet operates over interstate phone lines and is, therefore, "in commerce." See, Planned Parenthood Federation of America, Inc. v. Bucci, 42 USPQ2d 1430, 1434 n.7 (S.D. N.Y. 1997). However, merely registering a domain name and then warehousing it for potentially future use is not, without more, activity "in commerce" or a commercial use. See, Juno Online Services LP v. Juno Lighting, Inc., 44 USPQ2d 1913, 1920 (N.D. Ill. 1997); Lockheed Martin Corp. v. Network Solutions, Inc., 44 USPQ2d 1865, 1871 n.3 (C.D. Cal. 1997); Lockheed Martin Corp. v. Network Solutions, Inc., 43 USPQ2d 1056, 1058 (C.D. Cal. 1997). For example, when Juno Lighting registered "juno-online.com," Juno Online was unsuccessful in its infringement claims under the Lanham Act because Juno Lighting had only registered the name, and had not used the name "in commerce."
The substantive component requires use of the mark in connection with the sale, distribution, or advertisement of goods or services, in a manner that identifies the source of the goods or services or otherwise suggests sponsorship or affiliation. See, Planned Parenthood. Without such trademark use, there can be no infringement or dilution; therefore, something more than registration of a domain name is necessary before the appropriation of a domain name can be infringing or diluting. See, Lockheed Martin Corp. v. Network Solutions, Inc., 44 USPQ2d 1865, 1872 (C.D. Cal. 1997).
Correspondingly, it has been held that a registrar's acceptance of domain names is connected only to the technical function of the domain name, which is to designate a set of computers. Id. at 1871. This use of the domain name has been labeled a purely nominative function that is not prohibited by law. Id. at 1872. Thus, a domain name does not function as a trademark if it is used only to indicate an Internet address or only to identify a business entity. Id. at 1871. Consequently, existing United States law places accountability for direct infringement or direct dilution on the registrant, not the registrar.
Nevertheless, under existing United States law, an entity with no legitimate claim to a trademark can effectively appropriate a domain name identical to the mark with impunity by simply warehousing it. Indeed, even legitimate trademark owners can stockpile domain names to the exclusion of other legitimate trademark or surname owners who legitimately used identical marks or surnames in the physical world.
In the absence of federal legislation or uniform international law, the AIPLA believes that the adoption of minimum application requirements, together with easily searchable and accessible consolidated domain name data bases, would dramatically reduce or perhaps even eliminate the warehousing problem. As discussed earlier, however, there needs to be a binding protection and enforcement scheme adopted that would permit the expedient cancellation of registrations for failure to meet the minimum requirements.
4. Trademark Clearance.
The proposed rule also suggests the development and implementation of a trademark clearance process "for clearing trademarks, especially famous trademarks, across a range of gTLDs." As we understand it, the proposed rule is not proposing that domain names be pre-screened for potential conflicts with trademarks by application of the likelihood of confusion standard. Instead, we understand the rule to be proposing the adoption of a streamlined process to determine whether a proposed domain name is in fact identical to a famous mark. To this end, we support the development of searchable and correlated domain name and trademark data bases which would permit interested parties to determine whether a domain name registration is identical to an existing trademark. Nevertheless, with the possible exception of reserving domain name space for trademarks which are truly famous, the AIPLA does not support any pre-registration clearing of domain names against existing trademarks.
5. Personal Jurisdiction, Choice Of Forum And Choice Of Law.
Initially, there was considerable consternation that, because the Internet is effectively everywhere, courts would assume personal jurisdiction over disputes involving domain name registrations in virtually any forum where a lawsuit was brought. Subsequently, however, this concern has proved to be unwarranted both in the United States and abroad, although we acknowledge that the law is still in its nascent stages in certain foreign countries. See, e.g., Bensusan Restaurant Corp. v. King, 937 F. Supp. 295 (S.D. N.Y. 1996), aff'd 126 F.3d 25 (2d Cir. 1997); Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997); Prince PLC v. Prince Sports Group, Inc.  FSR 21 (Eng. Ch.) (Neuberger J.). Despite a few minority decisions, United States courts have applied traditional precepts of personal jurisdiction to ascertain whether a domain name registrant is subject to jurisdiction in a particular forum. Id. The application of these precepts is rooted in pre-Internet decisions that applied these precepts to electronic communications, including communications over what really amounted to a company's intranet. See, California Software, Inc. v. Reliability Research, Inc., 631 F. Supp. 1356 (C.D. Cal. 1996). Thus, in the United States, there is very little probability that a foreign domain name registrant, whose use of the domain names does not give rise to a sufficient level of contacts with a forum in the United States and which does not otherwise satisfy due process considerations, will be hauled into a United States court.
This means that United States trademark owners will still have to seek recourse in a foreign domain name registrant's forums under certain circumstances. Certain of these foreign forums do not even recognize that domain names can function as trademarks, much less confer the degree of protection provided by United States trademark law. Therefore, in such instances, an aggrieved trademark owner would be unable to register and use its trademark as a domain name in the subject gTLD. In contrast, the locus of the registry typically determines the forum for resolving domain name disputes in the country code TLDs. Of course, the trademark owner could consider less palatable alternatives like adding more information to the domain name (e.g., kodakfilm.com). Or, a trademark owner could use an Internet content or service provider's second level domain and place its trademark in the third level domain (e.g., kodak.msn.com). These, alternatives, would not, however, avoid harm to the trademark owner's brand equity and to consumer interests flowing from illicit domain name registrations.
In light of the above, we recommend that the applications for registrations of domain names in all gTLDs should include a provision that the registrant consents to personal jurisdiction and venue in the forum where the registry is located with respect to any dispute affecting trademark owners. In this regard, the United States general venue statue provides that an alien may be sued in any district. See, 25 U.S.C. § 1391(d). (We assume a U.S. locus for registries for the reasons discussed below, although any foreign countries with equally robust laws that are or become TRIPs compliant will suffice). Such a jurisdictional clause would not necessarily mean that the dispute would ultimately be heard by a United States court, since United States courts may still invoke the well-established doctrine of forum non-conveniens and decide not to hear the dispute. See, Vanity Fair Mills, Inc. v. T. Eaton, 234 F.2d 633, 645 (2d Cir. 1956); Wells Fargo Co. v. Wells Fargo Express Co., 358 F. Supp. 1065, 1178 (D. Nev. 1973), rev'd on other grounds, 556 F.2d 406 (9th Cir. 1977); Timberlane Lumber Co. v. Bank of America, 549 F.2d 597, 616 (9th Cir. 1976); King v. Allied Vision, Ltd., 24 USPQ2d 1278, 1283 (S.D. N.Y. 1992), rev'd on other grounds, 976 F.2d 824 (2d Cir. 1992).see also, Prince PLC v. Prince Sports Group, Inc.,  FSR 21 (Eng. Ch.). United States courts have shown adequate restraint in both applying foreign trademark law and in applying the Lanham Act to extraterritorial use of a United States trademark owner's mark. See, Vanity Fair Mills, Inc. v. T. Eaton Co., 234 F.2d 633 (2d Cir. 1956) (no extraterritorial application); accord, Star-Kist Foods, Inc. v. Rhodes, 769 F.2d 1393, 1396 (9th Cir. 1985); Majorca S.A. v. Majorica Int'l Ltd., 687 F. Supp. 92 (S.D. N.Y. 1988) (declining to apply foreign law) but see, Steele v. Bulova Watch Co., 344 U.S. 280 (1952) (extraterritorial application of the Lanham Act). They have further exercised similar restraint in fashioning relief for extraterritorial infringement and unfair competition. See, Playboy Enterprises, Inc. v. Chuckleberry Publishing, Inc., 939 F. Supp. 1032, 1039 (S.D. N.Y.
1996). Foreign domain name registrants would, of course, still be free to urge that the lawsuit be dismissed or transferred to their home forum under the doctrine of forum non-conveniens.
We also suggest that the technical solutions that we have been advocating, if implemented, can greatly assuage any concern that the United States courts would operate as "world courts" or otherwise interfere with the sovereignty of foreign courts. For example, the Mattel lawsuit involved an effort by Mattel, a foreign owned entity, to invoke the trademark laws of over 170 foreign countries against Hasbro which had registered the domain name scrabble.com and scrabble.net. Ultimately, the establishment of a Gateway Page allowed the parties to resolve their differences without the United States court having to grapple with foreign law.
It is imperative that any new gTLD registries not be located in any foreign country that does not provide trademark protection and enforcement which is commensurate with the level of protections and enforcement accorded by United States law. Consequently, only registeries who are situated in foreign countries that are TRIPs compliant and offer commensurate, effective protection and affordable enforcement should even be considered. A fundamental reason for our position is that the laws of certain foreign countries are not yet up to the task in protecting United States trademark owners and other interested U.S. entities. Moreover, United States citizens, who constitute the vast majority of Internet users and registrants in the present gTLDs, should not be subject to the vagaries of the laws in such countries or be left without legal recourse. Indeed, we note that, although Network Solutions' most recently revised domain name dispute policy (Rev. No. 3), effective February 25, 1998, suggests that Network Solutions will abide by a decision of a court "of competent jurisdiction," Network Solutions has itself been equivocal over what courts will constitute a court of such jurisdiction. See, Prince PLC v. Prince Sports Group, Inc.,  FSR 21 (Eng. Ch.). Registars and Registeries can, of course, hardly be expected to themselves decide whether a foreign court (e.g., one in Tonga) is a court of competent jurisdiction to decide the rights of a United States trademark holder to hold a domain name corresponding to its own trademark.
Even assuming arguendo that the issues of personal jurisdiction and choice of forum can be resolved, there still remains the very knotty problem of choice of law. There is in fact no bright line test which courts use to determine which law will supply the rule of decision in the context of international disputes. Instead, courts look to a number of rather nebulous factors, including the place where the allegedly illegal activity occurs, the effect on United States commerce, the nationality of the parties, the existence of a conflict with foreign laws, and each sovereign's interest in applying its laws. See supra, Vanity Fair, 254 F.2d at 639 (2d Cir. 1956); Steele v. Bulova Watch Co., 344 U.S. 280 (1952); Wells Fargo, 358 F. Supp. 1065 (D. Nev. 1973); Timberlane Lumber Co., 549 F.2d 597 (9th Cir. 1976); King, 24 USPQ2d 1278 (S.D. N.Y. 1992); Majorca, 687 F. Supp. 92 (S.D. N.Y. 1988). This demonstrates the need for harmonization and internationally sanctioned dispute resolution, not to mention for choice of forum clauses that ensure that the forum best suited to protect the interests of United States trademark owners will have the primary role in deciding which law will apply the rule of decision.
Overall, our thoughts on these procedural issues are still in their formative stages and we, therefore, welcome further study along the lines of that advocated in Senator Leahy's bill.