By Joyce Romine
The gold rush is on. Company web sites have opened up tremendous business opportunities with a staggering market. At the end of 1999, 38 percent of households in North America were online, according to the Forrester Research Group. A company’s domain name is a valuable asset worth fighting for since it’s virtually the global gatekeeper to a company’s web site. As a result, companies are dueling against other legitimate businesses or against unscrupulous opportunists the Internet industry has dubbed “cybersquatters.”
Do Trademarks Guarantee a Domain Name?
“Several years ago, problems began surfacing with domain names,” says Caroline Chicoine, an attorney with Blackwell Sanders Peper Martin. “The main problem was that Network Solutions Inc. (NSI) was the only company that controlled domain name registration. The company had a government contract. But NSI’s dispute policies were not adequate to address trademark infringement.”
Jeff Fine, a partner at Polsinelli, White, Vardeman and Shalton, says the dispute policies were very controversial. “These policies didn’t take into account standard trademark infringement law, which requires proving confusion in the marketplace—proving the goods and services of the trademarked name and the domain name traveled in the same circles.”
The result of the controversy was the creation of ICANN, the Internet Corporation for Assigned Names and Numbers, an industry watchdog. ICANN is a non-profit, private sector corporation designated by the U.S. Government to serve as the global consensus entity. By September, the government will have transferred all responsibility for coordinating key functions for the Internet, including the management of the domain name system, to ICANN.
ICANN appointed a 19-member Names Council specifically to address the domain name assignment system. Chicoine is a member of this Council and says the issues are complex but progress is being made. In October 1999, ICANN issued a series of rulings and policies.
An important step since the inception of ICANN was allowing other companies besides NSI to register domain names. In addition, a centralized “Who is” database is expected in the very near future. NSI’s new “Who is” database now identifies the registrar for each .com, .net and .org so the contact information for domain names not registered with NSI can be easily found, Chicoine says.
ICANN also adopted a new dispute policy to address the practice of abusive registrations. The policy requires arbitration of disputes.
“I’m pleased with the new policy,” Fine says. “Companies now can have a valid domain name without a federally registered trademark. The policy takes into account how integral the web site is to a company’s business. So if a company uses a name and builds a business around that name, it will have more protection.”
However, Chicoine points out a key factor that continues to be an obstacle as ICANN works to establish global Internet policies relating to domain names. “There is no single international trademark law,” she says. “And what right does ICANN have to create, let alone impose, such a law?”
Chicoine says trademark issues and domain names affect businesses and consumers alike. “Trademark owners tend to get a bad rap for going to court to protect their names,” she says. “But the trademark disputes are consumer issues, too. Consumers have to trust and feel confident in the Internet or it will fail, and so will the businesses relying on it.”
ICANN is discussing adding new gtlds-the suffix in the domain name such as .com. Names may expand to .firm or .art, for example. But Chicoine isn’t sold on the idea yet. “Adding these gtlds may be multiplying the problem before the .com issue is solved and it may just give cybersquatters that many more names to hold hostage,” she says.
Stamping Out Cybersquatters
ICANN’s policy also addresses abusive domain name registration, specifically cybersquatters and others who have no intention of using the domain name for commercial use. Instead they hold domain names hostage to extort money from companies, says Randy Canis, an associate at Greensfelder, Hemker & Gale who practices Internet law and maintains web sites himself.
“Cybersquatters lock up the right to use a name, but sometimes don’t actively use it. They have created a side business of auctioning off names, which include generic terms, to companies,” Canis says. “Companies like Procter & Gamble protected themselves early by registering a number of names. But McDonald’s Restaurants didn’t register their domain name for a long time and left themselves open to cybersquatters.”
