Mixing oil with water: resolving the differences between domain names and trademark law.

• Author: Nilsen, Jonathan O.

"The Internet has evolved from its inception as primarily a research network into a full-blown commercial marketplace." (1)

1. INTRODUCTION

   Trademarks exist as an important aspect of businesses. (2) Businesses today demonstrate the importance they place on their trademarks by the amount of money invested in their mark. (3) Registering a company logo as a federal trademark gives the mark owner protection from other parties using the mark without the owner's permission. (4) Trademark law also grants protection for the mark even if the owner did not register the mark. (5) The granted protection consists of preventing another party from using the same or similar mark in commerce. (6) Similar to the use of trademarks in the real world, an owner's permission to use the mark is also needed on the Internet. (7)

   The most recent source of conflict involving trademarks on the Internet deals with domain names, or the addresses by which companies may be located on the Internet. (8) The growing number of disputes over electronic addresses demonstrates one of the more visible examples of a new area that appears to have outpaced established legal doctrine. (9) Creating a domain name that appears similar to the company's name is important because it is that company name that Internet users ("users") will search for on the Internet. (10) In order to protect the domain name from being used or misused by other parties, the company would need to register it, even if the company name is already a trademark. (11) The National Science Foundation ("NSF") created a registry for the purpose of registering domain names. (12)

2. TRADEMARK LAW

   The goal of real world trademark law is to prevent consumer confusion as to the source of some product. (13) In addition, trademark law aims to prevent parties from free-riding on the goodwill of an established mark. (14) Trademark law grants to the mark owner the right to exclude others from employing confusingly similar marks in commerce. (15)

   The Internet provides an opportunity for any party, no matter how large or small, to receive notice from the Internet community, in terms of making other users aware of the party's presence. Further, the Internet allows not only companies to operate on it, but private individuals and non-profit organizations as well. People post websites about their families, write editorials on particular subjects, and find "meeting places" for others with similar interests. (16) Trademark law inherently involves businesses. The Internet does not automatically identify parties according to whether they operate for profit or not. When a system of law that necessarily treats all parties as businesses is applied to a system that makes no such distinctions, that system imposes a law that does not apply to all concerned parties. Trademark law needs to address the issue of how to protect trademarks from being improperly registered as domain names without permission by the mark owner without significantly impairing the registration of other domain names.

   Trademark law must not only incorporate non-profit marks, but also acknowledge and accommodate a more restricted, but at times more lenient, medium in the Internet than trademark law is accustomed to dealing with. (17) The structure of the Internet only allows a party to register one particular configuration of letters. (18) The structure of the Internet therefore creates a problem for traditional trademark law since the law usually makes allowances for multiple registrations of the same word under the doctrine of concurrent use. (19) Taking the inherent restrictions of the Internet into account may mean allowing a more lenient standard for similarity of marks. (20)

   Fusing one world that incorporates both personal and business interests with another one that only deals with business interests results in a tricky process. The amalgamation must incorporate the purpose of each model while resolving the conflicts between the two systems. The new system must protect against consumer confusion and prevent free-riding on marks while still allowing the freedom that any party can register a domain name for their own purposes. The new system must take each of these into account and cannot put either aside.

3. NETWORK SOLUTIONS AND ICANN

   In 1992, Network Solutions, Inc. (NSI) bid for and received the responsibility of managing and enhancing the domain name registration system in the U.S. (21) A large surge of domain name registrations in the past few years helped to create conflicts and litigation between the Internet and the real world. (22) The result is that the real world trademark owners are not guaranteed that their mark will be available to them on the Internet, allowing the potential use by a competitor. (23)

   The Internet Corporation for Assigned Names and Numbers (ICANN) is a non-profit organization created for the purpose of managing the allocation of domain names. (24) ICANN effectively came into existence with the Memorandum of Understanding, an agreement between ICANN and the U.S. Department of Commerce. (25) ICANN exists in order to represent and serve the interests of the entire Internet community. (26) Since its inception, ICANN has worked to create a privatized form of domain name registration in order to stimulate the introduction of new registrars. (27) ICANN expects that the introduction of new registrars "will drive down registration costs and improve consumer choice for businesses and individuals." (28) In creating these privatized registrars, however, ICANN has encountered resistance from NSI, who has refused to sign ICANN's accreditation agreement. (29) This note will address the problems posed by "cybersquatters" and how they take advantage of the domain name dispute policy. (30) In addition, this note will address the problems resulting from NSI's domain name dispute policy (DND) and its procedure regarding domain name registration. (31) This paper will also discuss the proposed reform of the domain name registration process in general and ICANN. Specifically, this paper will discuss whether ICANN and the other registrars will employ policies that will make consistency between trademark law and the Internet possible. (32)

4. CYBERSQUATTERS

   The purpose and importance of registering domain names as trademarks lies in the commercial value of web sites. (33) The commercial value of a web site results from two sources: first, from the value of the website in itself and second, from the advertisements placed on it and the amount that each placement costs, measured by the amount of "hits" the site receives. (34) The value of securing a good domain name provides the incentives to get that optimal domain name registered. (35)

   Trademark law, however, does not easily lend itself to the regulation of domain names. A federal trademark entitles the owner to protection of the mark from use by another without the owner's permission. (36) The aspects that differentiate between two trademarks cannot appear with domain names when the web site address is typed in. (37) Therefore, unlike real world trademarks, domain names may only belong to one owner at a time because of how the Internet is structured. (38)

   In order to ensure that multiple parties would not try to use the same domain name, NSI created their policy of "first come, first served," which also serves to keep NSI from arbitrating any conflicts that arise. (39) In this way, NSI sets a very simple procedure for applicants to follow and, because of the policy's simplicity, leaves many situations open for dispute. (40)

   Cybersquatting has become a problem because of NSI's "first come, first served" registration and DND policies. (41) Cybersquatting has been defined several ways. The most general definition of a cybersquatter is a person who registers a domain name that matches a well-known company for the purpose of ransoming it to that company. (42) In a famous cybersquatter case, the court considered the defendant's efforts "to sell the trademarks themselves." (43) Registrars permit applicants to register any number of domain names limited only in that each name is different. (44) When cybersquatters register another party's mark as a domain name, the cybersquatter effectively blocks the mark owner from registering the mark as a domain name in the same top-level domain name (TLD) as the one with which the cybersquatter registered. (45) Cybersquatters possess the ability to appropriate marks because NSI's registration policy only requires that the mark owner make some use of the domain name without investigating how it is used. (46) Further, NSI did not require applicants to sign any statement verifying the truth of the information asserted. (47) Cybersquatters register other parties' names for several reasons, such as to extract an amount of money from the mark owner in return for turning over the domain name to the mark owner. (48) A cybersquatter may also register another party's name for the purpose of posting disparaging information and statements against the mark owner. (49) Cybersquatters act because, until recently, little viable recourse existed against them.

   NSI's DND policy allows any party to register a domain name provided that no other party has registered that exact domain name. (50) The DND policy allows the first party to request the registration of a domain name to register that name. (51) NSI makes no form of investigation to check on possible trademark conflicts. (52) NSI investigates a request only to the extent of ensuring that no other party registered the requested particular permutation of letters. (53) Beyond that, NSI absolves itself of any involvement in a dispute over the domain name. (54)

   NSI's DND policy allows cybersquatters to act because NSI does not investigate the cybersquatter to check on how the cybersquatter intends to use the domain name. (55) A cybersquatter simply applies for a particular unclaimed domain name and NSI grants...