Number: 394



August 4, 1997

Ms. Patrice Washington
Office of Public Affairs
National Telecommunications and
Information Administration (NTIA)
Room 4898
14th Street and Constitution Avenue, NW

Washington, DC 20230

Dear Ms. Washington:

The International Trademark Association (INTA) is pleased to provide you with its response to the "Request for Comments on the Registration and Administration of Internet Domain Names" [Docket No. 970613137-7137-01], as published in the July 2, 1997 Federal Register. INTA is a not-for-profit organization comprised of 3,400 members from over 117 countries. The Association's membership crosses all industry lines and includes manufacturers, retailers, law firms, and professional and trade associations. What this diverse group has in common, is the understanding that trademarks are a company's most valuable asset -- a simple yet effective means of communicating with consumers in the global marketplace.

In addition to our official response, we are pleased to provide you with a "special edition" of INTA "White Paper:" The Intersection of Trademarks and Domain Names. This INTA publication has been prepared by the Association's Internet Subcommittee as a source of information on the meeting between the world of trademarks and the new world of cyberspace. Most importantly, Appendix II of the "White Paper" contains a complete version of INTA's proposal for a new domain name assignment system. All documents being provided by INTA are contained on computer diskette (WordPerfect 6.1) which has also been enclosed.

INTA appreciates the opportunity to present its views on this important and highly complex issue. Please do not hesitate to contact Mike Heltzer, INTA's Government Relations Program Coordinator, if you require further information.

Thank you for considering our submission.

Sincerely,

David Stimson
President

Enclosures



Appropriate Principles

INTA has answered a, b, c, d, e, and f

Competition in and expansion of the domain name registration system should be encouraged. Conflicting domains, systems, and registries should not be permitted to jeopardize the interoperation of the Internet, however. The addressing scheme should not prevent any user from connecting to any other site.

Ans: INTA recognizes the importance of competition and the importance of inter-operation. It is essential, however, that the administration of Internet domain names recognize that the important and valuable legal rights of trademark owners not be harmed.

The private sector, with input from governments, should develop stable, consensus-based self-governing mechanisms for domain name registration and management that adequately defines responsibilities and maintains accountability.

Ans: INTA generally agrees with this principle and, toward that end, participated in the International Ad Hoc Committee (IAHC) and currently has a representative on the interim Policy Oversight Committee (iPOC) -- the body that oversees implementation of the IAHC plan.

These self-governance mechanisms should recognize the inherently global nature of the Internet and be able to evolve as necessary over time.

Ans: Although the Internet was conceived of and raised from infancy by the U.S. government, it has grown well beyond its borders, and the U.S. government should not now attempt to treat the Internet as a U.S.-asset. Instead, the U.S. government should work with the private sector, as well as other governments and international organizations to permit the Internet to evolve into a truly global asset.

d. The overall framework for accomodating competition should be open, robust, efficient, and fair.

Ans: INTA supports open, robust, efficient and fair competition with appropriate mechanisms to protect the rights of trademark owners.

e. The overall policy framework as well as name allocation and management mechanisms should promote prompt, fair, and efficient resolution of conflicts, including conflicts over proprietary rights.

Ans: INTA agrees that the overall policy framework for domain name allocation and management should promote prompt, fair and efficient resolution of conflicts, including those involving intellectual property. Toward that end, INTA believes that the IAHC plan is a positive step.

The IAHC plan also includes administrative domain name challenge panels (ACPs), that will not take the place of national or regional sovereign courts, but will assist trademark owners in the protection of their well-known trademarks. In addition, the IAHC procedures require detailed contact information of domain name applicants (and those renewing domain names), prepayment for domain names, annual renewal, and procedures for the immediate publication of domain names, all of which should assist trademark owners with their efforts to police against trademark infringement.

f. A framework should be adopted as quickly as prudent consideration of these issues permits.

Ans: INTA supports an early resolution of the problems relating to registration and administration of domain names. The need for an early resolution becomes more critical as the Spring 1998 termination date of NSI's contract with the National Science Foundation (NSF) approaches. However, INTA also notes that the issues that must be resolved involve new and complicated legal and technical concerns that must be carefully considered before arriving at a fair solution.

IAHC has created the necessary framework for the continued evolution of the domain name system. INTA encourages the U.S. government to support the IAHC plan, recognizing the accomplishments of the process, while permitting further evaluation of some of the elements of the plan, including the decision to increase the number of generic top level domain names (gTLDs), and the standards to be applied by administrative challenge panels (ACPs).

B. General/Organizational Framework Issues

INTA has answered questions 1, 2, 3, 4 (part), 5, and 8

1. What are the advantages and disadvantages of the current domain name registration system?

Ans: The Disadvantages

The current system established by Network Solutions, Inc. (NSI) is inadequate to combat "cybersquatters." "Cybersquatters" are online pirates who routinely register domain names in bulk, without regard for the rights of trademark owners and with no other purpose than to ransom the names to the highest bidder. NSI procedures are also not equipped to handle cases where two companies own the same mark, or where an individual's name may be the same as a company's mark. In addition, NSI does not require sufficient information from the domain name applicant.

At the core of NSI's problem is its position that domain names have no legal significance, but are used only to address various sites in cyberspace. Further, NSI has stated that its only purpose is to register domain names, not perform trademark searches or arbitrate trademark rights. NSI contends that it is not equipped or funded to perform such searches and that it should not be responsible for any infringement that takes place involving the domain names it registers. This aspect of NSI's policy is disappointing to trademark owners, since like a trademark, domain names serve as a "shorthand" reference tool to locate information concerning a specific product and learn about the company offering the product for sale. Trademarks in cyberspace deserve the same level of protection they are afforded in the "real-world" of commercial activity.

Instead of being familiar with just a single policy, there is a potential requirement for trademark owners to be familiar with hundreds -- if not thousands of dispute policies. This system represents an unnecessary expenditure of money and manpower. Finally, some registrars do not even have a dispute policy.

Advantages

The disadvantages outlined above make it evident that there are few, if any real advantages for trademark owners under the current domain name registration system. Notwithstanding, there are a select few aspects of NSI's application policy that represent a step in the right direction: (1) an applicant must submit a document that states, to its knowledge, the domain name requested does not interfere with or infringe the rights of third parties and (2) an applicant must have a bona fide intention to use the Internet domain name on a regular basis.

Finally, the ability to get a domain name put on hold may be considered an advantage.

2. How might the current domain name system be improved?

Ans: INTA has circulated a proposal for a new domain name registration policy, portions of which have been incorporated into the IAHC plan. A complete version of the INTA proposal can be found in "Appendix II" of INTA "White Paper:" The Intersection of Trademarks and Domain Names (see attached).

Highlights of this proposal include:

INTA also supports the plan developed by the International Ad Hoc Committee (IAHC).

3. By what entity, entities, or type of entities should current domain name systems be administered?

Ans: INTA encourages the U.S. government to support the plan of the IAHC and to promote regulation by the private sector.

4. Are there decision-making processes that can serve as models for deciding on domain name registration systems (e.g., network numbering plan, standard-setting processes, spectrum allocation)? Are there private/public sector administered models or regimes that can be used for domain name registration (e.g., network numbering plan, standard- setting processes, or spectrum allocation processes)? What is the proper role of national or international governmental/nongovernmental organizations, if any, in national and international domain name registration systems?

Ans: In accordance with the IAHC plan, INTA supports a system which is industry-driven. The Association does however, support the role of international governmental organizations such as the World Intellectual Property Organization (WIPO) in the administration of on-line mediation and dispute resolution procedures.

5. Should generic top level domains (gTLDs), (e.g., .com), be retired from circulation? Should geographic or country codes (e.g., .us) be required? If so, what should happen to the .com registry? Are gTLD management issues separable from questions about International Standard Organization (ISO) country code domains?

Ans: Given the current dependence of the commercial world on existing gTLDs, particularly .com, the economic costs of retiring gTLDs would be too great. It is too late to delete mnemonics entirely and use only random numbers based on names. Likewise, requiring country code TLDs alone is not a realistic alternative give the historical use of gTLDs and industry's enthusiasm.

Management issues pertaining to gTLDs are separable from questions of ISO country code domains for two reasons: one historical and one political/practical. The historical reason is that gTLDs and ISO country code domains simply have been treated separately over time by the Internet Assigned Numbers Authority (IANA). The political/practical reason is one of sovereignty and self-determination. INTA believes that the latter remains important in some respects, but the former does not. INTA would like to see all registry policy uniform on questions of second level domain (SLD) assignment and dispute resolution.

8. How should the transition to any new system be accomplished?

Ans: INTA supports the revisions to the existing system contained in the IAHC plan. This plan is currently being implemented by the interim Policy Oversight Committee (iPOC). As a member of IAHC and now iPOC, INTA has been involved in developing the new system and providing input which reflects the needs and concerns of trademark owners from around the world. In May 1997, INTA signed the gTLD Memorandum of Understanding (MoU) acknowledging its support for the IAHC system.

INTA believes the following aspects of the IAHC proposal will be beneficial to trademark owners:

In light of the benefits to trademark owners which are listed above, INTA urges the U.S. government to issue a statement which acknowledges its full support of the IAHC plan. INTA further urges the U.S. government to ensure that the gTLDs which are currently administered exclusively by NSI (.com, .org and .net) as per a cooperative agreement with the National Science Foundation (NSF), be made a part of the shared registry system developed by the IAHC.



C. Creation of New gTLDs

INTA has answered questions 10, 11, 12 and 13

10. Are there technical, practical, and/or policy considerations that constrain the total number of different gTLDs that can be created?

Ans: Some proposed domain name plans call for hundreds, even thousands of new generic top level domains (gTLDs). This scenario presents a policing problem for trademark owners, requiring them to spend countless hours monitoring for infringing use of their marks. "Cybersquatters," the pirates of the Internet, would also be given more opportunities to infringe on the good names of trademark owners.

11. Should additional gTLDs be created?

Ans: Not at this time. INTA advocates a "go-slow approach" and views the seven new gTLDs (as proposed by the International Ad Hoc Committee) as an experiment, the results of which, particularly in terms of the increased policing burden on trademark owners, must be considered prior to adopting any more gTLDs.

12. Are there technical, practical, and/or policy issues about guaranteeing the scalability of the name space associated with increasing the number of gTLDs?

Ans: See answer to question 10.

13. Are gTLD management issues separable from questions about ISO country code domains?

Ans: The issues relating to gTLD management are separable from questions involving ISO country code domains for two reasons, one historical and one practical. The historical is that gTLDs and ISO country code domains simply have been treated separately over time by the Internet Assigned Numbers Authority (IANA). The political/practical reason is one of sovereignty and self-determination. INTA believes that the latter remains important, in some respects, but the former does not. INTA would like to see all registry policy uniform on questions of second level domain (SLD) assignment and dispute resolution.



D. Policies for Registrars

INTA has answered questions 18 and 20

18. Are there technical, business and/or policy issues about the name space raised by increasing the number of domain name registrars?

Ans: There are significant business and policy reasons that caution against increasing the number of domain name registrars. It cannot be emphasized enough that domain name registrars must serve in a critical position of worldwide public trust. If one registrar fails to keep that trust, the entire domain name system will suffer.

A policy to support a large (or unlimited) number of registrars bears a likelihood of unintentionally creating economic incentives that will injure trademarks and the overall interests of the domain name system. Because a high number of newly created registrars would be competing for the finite resources of domain name applicants, such registrars would be motivated purely by financial considerations to urge the creation of more and more gTLDs over time to ensure profitability. Registrars would seek to create more gTLDs regardless of the effect upon trademark rights or the needs and best interest of the Internet as a whole.

Numerous registrars competing for profit and for finite resources, also create the potential for a variety of other abuses. For example, a registrar, motivated by financial gain, could misuse proprietary information in a shared registry database to encourage its own applicants to "lock up" certain names. Registrars located in countries whose laws are not as favorably disposed to protecting trademark rights, could also take advantage of the current lack of harmonization in international trademark laws by encouraging extortionists and infringers to take advantage of the jurisdictional advantages afforded under the laws of a particular country. For these reasons alone, the number of domain name registrars must be limited.

It is also instructive to look to the Final Report of the International Ad Hoc Committee (IAHC) for guidance on this issue. That report had proposed the creation of no more than 28 new registrars, based on a regional quota and selected by lottery. One key feature of that proposal was the requirement that the applicant agree to locate the registrar only in countries that are party to the Paris Convention for the Protection of Industrial Property, or are members of the World Trade Organization (WTO) and comply with at least Article 2 of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). At an absolute minimum, it is critical to ensure that registrars be located in countries that respect trademark laws.

20. Are there any other issues which should be addressed in this area?

Ans: Registrars should also be subject to a consistent set of registration and dispute resolution policies. INTA has proposed a domain name registry policy for second level domain names that encourages meaningful and effective procedures for (1) ensuring accountability by domain name registrants, (2) allowing complainants sufficient information through an application, pre-screening and publication process to pursue appropriate legal remedies against extortionists and infringers, (3) reducing "deadwood," i.e., unused domain names, (4) increasing the available pool of domain names, (5) ensuring fair and legally supportable decisions regarding domain names; and (6) reducing Network Information Center (NIC) exposure and costs by taking NIC out of the dispute resolution business. INTA endorses the procedures discussed in its proposal and recommends that it serve as the mode to be adhered to by all approved registrars. A complete copy of the INTA proposal can be found in Appendix II of the INTA "White Paper."

E. Trademark Issues

INTA has answered questions 21, 22, 23, 24, 25, 26 and 27

21. What trademark rights (e.g., registered trademarks, common law trademarks, geographic indications, etc.), if any, should be protected on the Internet vis-a-vis domain names?

Ans: INTA believes, that under certain circumstances, trademark rights need to be protected vis-a-vis domain names. The issue should not be categorized in terms of whether trademark rights stem from common law rights or registration but rather whether a party can lay any claim to superior rights. It is important to note that trademark registration does not confer trademark rights in the U.S. and certain common law countries, but rather merely constitutes rebuttable evidence of those rights. In the U.S., substantive trademark rights arise from actual use as a trademark. In civil code countries, trademark rights exist only through registration. Under trademark law, most trademark owners do not own the right to use the mark in question to the exclusion of all others -- many similar and identical marks coexist happily and peaceably in commerce because rights are very often limited by dissimilarities of products or services, and by jurisdictional territory.

Additional problems arise in the context of the Web. Because people use domain names to locate Web resources, companies doing business online want domain names that are easy to remember and relate to their products, trade names and trademarks. For example, a florist might find the domain name flowers.com very valuable to identify it as a source of flowers. Likewise, owners of famous trademarks (such as Microsoft) typically register their trademarks as domain names (such as microsoft.com). This kind of identification can be highly important to a business that conducts commerce on the Internet. Moreover, many consumers who do not know the domain name of a company often will first choose the principal trademark of such company to locate the company's Web site.

However, the Internet was not created solely for commercial enterprise, and domain names should not be the exclusive province of trademark owners. Thus, those with legitimate non-trademark interests in second level domain names have to be accommodated along with the rights of trademark owners. Similarly, the interests of owners of trademarks which exist in commerce concurrently for non- related products or services must be considered, as do those of well-known marks.

22. Should some process of preliminary review of an application for registration of a domain name be required, before allocation, to determine if it conflicts with a trademark, a trade name, a geographic indication, etc., if so, what standards should be used? Who should conduct the preliminary review? If a conflict is found, what should be done, e.g., domain name applicant and/or trademark owner is notified of the conflict? Automatic referral to dispute settlement?

Ans: After significant study and consideration, INTA concluded that Network Solution's (NSI) domain name dispute resolution policy is unworkable and cannot be "fixed," because neither NSI, nor any other future registrar or network information center should be a tribunal for trademark dispute resolution or be expected to be a specialist in trademark matters.

INTA believes that the issue of whether a domain name conflicts with a trademark or trade name or otherwise is violative of some fundamental principle of trademark law, would best be determined in the manner that trademark rights in general are determined by established judicial and alternative dispute resolution methods. Under the INTA plan (see Appendix II "White Paper"), the proposed domain name would be published on a publicly available and well- publicized database prior to its activation for a period of 90 days. During this time, a potential challenger would have the opportunity to take whatever action it deemed necessary with respect to an applied for second level domain name (SLD), including seeking appropriate relief in the courts. It is anticipated that the publication period would afford potentially adverse parties the opportunities to resolve their differences without litigation.

Generally, it is impractical to assume that satisfactory results will result if domain name conflicts are automatically referred to any dispute settlement mechanism. There is no single, international trademark law, so it not possible to reserve disputes involving trademarks and domain names to a body applying a globally recognized body of law. Therefore, in case of an automatic dispute referral system, the dissatisfied party will often seek to have its rights adjudicated in a national court.

INTA believes, however, that the alternative dispute mechanisms contained in the plan created by the International Ad Hoc Committee (IAHC) may be practical tools for cost-effective resolution of a number of international domain name disputes.

23. Aside from a preliminary review process, how should trademark rights be protected on the Internet vis-a-vis domain names? What entity (ies) if any, should resolve disputes? Are national courts the only appropriate forum for such disputes? Specifically, is there a role for national/international governmental/non- governmental organizations?

Ans: Ideally, trademark disputes involving domain names should be settled voluntarily by the parties. Whether by direct negotiation or mediation, these voluntary solutions should be highly favored whenever possible. INTA is a strong supporter of alternative dispute resolution.

The IAHC, of which INTA was a member, recognized that trademark owners rights arise under national trademark laws because there no single, universal international trademark law. The IAHC and INTA also recognize, that involving the registrar as an arbiter of disputes, no matter how well-intentioned, summarily confers upon a non-judicial body the discretion to essentially grant an injunction against a continued use of a second level domain, without any adjudication of the merits of the trademark owners claim against the domain name holder. Therefore, at this time, the INTA believes that national courts serve as the appropriate forum within which trademark rights can be fairly adjudicated if all voluntary efforts fail.

The IAHC, recognizing the demand for some kind of streamlined dispute resolution, at least in the case of disputes involving a well-known mark, has recommended the creation of administrative domain name challenge panels. These panels do not substitute for national or regional sovereign courts; they have authority over the domain names only, not the parties. Unlike courts, however, the challenge panels would have the ability to exclude certain names such as well- known trademarks from all generic top level domains (gTLDs). These standards by which such panels would operate are still being developed. INTA believes that such an approach may prove to be an effective tool against "cybersquatters."

24. How can conflicts over trademarks best be prevented? What information resources (e.g., data bases of registered domain names, registered trademarks, trade names) could help reduce potential conflicts? If there should be a data base(s), who should create the data base(s)? How should such a data base be used?

Ans: Conflicts over trademarks in cyberspace can best be prevented through traditional means. A party wishing to protect a trademark throughout the world, should register the trademark in as many countries as possible and otherwise attempt to publicize the proprietary status of the trademark. The importance of national trademark registrations is not diminished under INTA's proposed policies, as national trademark courts will continue to look to national laws, which primarily rely on trademark registrations as indications of a mark's protectability. Trademarks which are well-known around the world can be protected in countries in which the mark is not registered under the provisions of Article 6 (bis) of the Paris Convention to which nearly all trademark jurisdictions are signatories.

Trademark owners will continue to have a duty to police the use of their marks throughout the world. Vigilant policing and early detection of infringement usually prevents disputes from becoming litigations.

The IAHC plan (and INTA's proposed domain name registration policy) mandates that an application to register a second level domain name be quite detailed, as explained in response to question 25. Under INTA's proposal, all of these details would be published by the local registrar on a central publicly available Web site for 90 days before the registration becomes effective and before the registrant may begin use. The publication period would commence no later than one week after the registrar receives a fully completed application, including the fee. The publication period would allow potential challengers to take appropriate action. It is assumed that commercial searching services and smart agents/robot searching programs would be sufficient to monitor the publication Web site. In fact, such agencies already actively monitor the registration of new domain names and the use of trademarks on the Internet. The purpose of the database would be for potential challengers to a SLD to determine if sufficient cause exists to object to or take any action against the issuance of the new domain name, preferably, within the 90-day publication period.

25. Should domain name applicants be required to demonstrate that they have a basis for requesting a particular domain name? If so, what information should be supplied? Who should evaluate the information? On the value of what criteria?

Ans: Applicants should be required to identify the basis for their particular domain name request. As further described in INTA's proposed registry policy (see Appendix II of INTA "White Paper"), INTA believes that standard registration procedure should require the applicant to disclose the following information:



* That there is a bona fide intention to publicly use the domain name within 60 days of its registration and a bona fide intent to continue such use for the foreseeable future.

* That the domain name will be used for a [stated] use (e.g., for a web site to advertise the applicant's business, namely,________.) (This can be a very broad statement and is not intended to restrict actual use.)

* That the applicant believes that the domain name is available and does not infringe the rights of any other party.

* That the applicant submits subject matter jurisdiction in an action brought under trademark or unfair competition law, or analogous laws arising out of the actual or intended use of the domain name, and also submits personal jurisdiction in any competent tribunal in the county in which the registrar to which the domain name would be registered is located, and waives the right to challenge either jurisdictional predicate.

* That the basis for the claim could be the applicant's trademark, or business name, or nickname, or child's name, etc.

The INTA domain name registration policy would also mandate a renewal process, similar to the application process, with a sworn statement by the applicant individual or the officer/general partner of the applicant business entity setting forth the actual use of the domain name since the application or last renewal period.

It is not the purpose of the registrar to evaluate the information. The information would be made publicly available so that owners of trademark rights or other potential challengers of the second level domain may fully evaluate the basis on which the domain name has been requested. It is INTA's belief that a great deal of litigation can be avoided once it is made clear that a domain name applicant's intended or actual use does not conflict with any trademark rights of the potential challenger. Additionally, INTA strongly believes that a potential domain name holder will be very hesitant to commit acts of piracy when, as opposed to the present time, it is forced to disclose extensive information under oath and subject itself to services of legal process and jurisdiction.

26. How would the number of different gTLDs and the number of registrars affect the number and cost of resolving trademark disputes?

Ans: Creating multiple gTLDs may result in more problems for the owners of trademarks by imposing an enormous policing burden on the trademark owner requiring them to spend additional fees for monitoring each new international top level domain (TLD) for potential infringement/dilution. Further, as long as registering another's trademark as a domain name is considered lucrative, each new gTLD creates the opportunity for valuable trademarks to be misappropriated.

27. Where there are valid, but conflicting trademark rights for a single domain name, are there any technological solutions?

Ans: A directory of domain names could assist in alleviating likelihood of confusion, but this is not a complete solution. A directory would assist in situations where legitimate trademark owners would normally co-exist without confusion in industry. For example, apple.com could legitimately be owned by companies such as Apple Computers, Apple Records or Apple Bank. A directory appearing on the screen at the outset when "apple" is typed could assist the user in locating the correct company. However, a directory will not help in the case of an extortionist who registers a well-known mark as a domain name. Further, a directory would not assist in instances where the user does not have enough information in the directory to figure out which company it is seeking: e.g., XYZ, Inc., XYZ Company, XYZ Industries. Consequently, INTA supports development of directories, but maintains it only addresses one part of the domain name problem.