Territoriality challenges in protecting trademark interests in the system of generic top-level domains (gTLDs).

AuthorKim, Jesse

    Being human-friendly addresses on the Internet, domain names, such as amazon.com and cbc.ca, operate as globally unique gateways that enable consumers of products, services, and information to reach online contents. Trademarks, on the other hand, are territorial in nature and arise primarily from the need to prevent consumer confusion. The interface between the two systems in an Internet economy is such that domain names act similarly to word-marks in the trademark system, thereby functioning as quasi-trademarks.

    In an Internet economy, there is an entrenched association between trademarks and domain names despite the inherent legal and technical incompatibility between the two, a result of which gives rise to exploitative business practices in the midst of an ever-present risk of violation of exclusive rights. As domain names continue to be an integral part of any firm's trademark strategy, there have been increasing efforts on an international level to make the administration of the domain name system (DNS) compatible with the way trademark rights are enforced. This article examines such trends, particularly in light of Internet Corporation for Assigned Names and Numbers' (ICANN's) introduction of generic top-level domains (gTLDs), and their ramifications from an intellectual property law standpoint.

    Legal avenues for domain name dispute resolution have long favoured trademark interests in the current domain name system. The provisions and safeguards in ICANN's new gTLD programme, however, introduce new dimensions of complexity in terms of dispute resolution, which transcend the extent of territorially enforced trademarks. Some of the early developments since the closing of the gTLD registration applications show the increasing misalignment between the governance of identifying marks on the Internet and the reach of national trademark laws. The paradoxical nature of endeavours to align the governance of globally unique domain names with that of territorial trademark interests inevitably harms domain names' conformity to the traditional trademark system.


    In terms of valuation of assets, trademarks are "as significant in economic terms as patents and copyright; and their impact across industry is thought to be far wider." (1) In fact, the result of having trademarks is argued to be purely economic, one that "seeks to protect consumers from deceitful and anti- competitive practices." (2) Moreover, while the protection of trademarks in itself may not create an incentive for continuous improvement in quality, trademarks are key to maintaining the quality associated with goods and services offered. (3) Internet domain names, on the other hand, are a largely privately administered system, born out of technical needs to facilitate a global addressing scheme for the operation of the Internet. (4) In order to draw an intuitive comparison, Phillips and Simon classify trademarks and domain names as "distinguishing" signs and "disguising" signs, respectively. (5) While closely interwound on the surface and in practice, the domain name system differs significantly from trademarks in the following legal and technical aspects:

    International legal harmonisation: Unlike trademarks, there is no international convention or treaty to govern domain names upon which ratifying member states are obliged to harmonise administration.

    Principle of territoriality: Country-code top-level domains (ccTLDs) such as .it, .nz, and .kr correspond to individual countries and territories. ccTLDs are managed territorially by authorities according to local policies and legal circumstances of the country or territory involved. (6) Still, the country-code portion cannot be omitted and must always follow the string to the left of the dot when written down or pronounced. For example, the armani.it domain name cannot be shortened or communicated as simply ARMANI even within the territory of Italy.

    Principle of specificity: One of the key design goals of the domain name system is that it reliably provides the same answers to the same queries from any source. (7) A corollary of this is that identical domain names are not allowed even if they belong to different classes of goods and services as may be permitted in the trademark system. A domain name is functional only when it is complete with the top-level portion, i.e. the right-hand side of the right-most dot, which determines the outermost name space in the domain name system. As a result, all Internet domain names are unique not only at the national level but also globally.

    Single root: The "Internet root servers," which act as the first tier of the directory of all domain names on the Internet, are property of the government of the United States. ICANN, an agency of the U.S. government, is ultimately responsible for the governance of all top-level domains (TLDs), thereby creating a single system of domain name administration across the entire cyberspace. Trademarks, on the other hand, are territorial and generally have national jurisdictions where each country's trademark office is the ultimate authority over all trademarks registered in that country.

    Global execution of changes: Many arbitration proceedings in disputes over the ownership of Internet domain names result in cancellation or transfer. Due to the technical nature of the domain name system, the outcome of a dispute takes effect globally, uniformly, and immediately, thereby creating a de facto international jurisdiction, which is clearly not the case with national trademark laws.


    Economically, exclusive rights conferred in trademarks "reduce inefficiencies that result from a mismatch of information between buyers and sellers on certain attributes of goods and services." (8) Since the commercialisation of the Internet, rights-holders of existing trademarks have sought to extend their exclusive rights by securing domain names that supposedly represent their trademarks.

    The business objective in this context is to correspond to an intuitive association, likely to be made by the average consumer, between the marketed domain name and the registered trademark the domain name purports to represent. For instance, it would not be unreasonable for average customers of Scandinavian Airlines, widely known and trading as SAS, to expect to find the airline's services--or at least meaningful pointers to the services--on the Internet domain sas.com. (9)

    Similarly, rights-holders of future trademarks, such as owners of start-up businesses or new brands, want to ensure that the Internet domain names that correspond to their new trade remain available for them to register before publicising or marketing their products or services. Many authors and bloggers on the Internet offer advice on how to choose the right domain name for a business, (10) and even domain name-generation services have sprung up to assist business owners in finding domain names that suit their business ideas. (11) A domain name's role of acting as a mark that represents one's trade has become so elemental and widely accepted that it is now arguably common practice for organisations to avoid creating a word-mark whose corresponding domain name, as would be naturally perceived by the average target consumers of the product or service, is:

    1. Impossible or difficult to express in character sets allowed in the domain name system; or

    2. Currently unavailable and deemed impractical to acquire from a third-party registrant, who is often a competitor.

    Two relevant facts are at play here: 1) unlike a postal address, an Internet domain name is expressly chosen by its owner; and 2) on the Internet, users "readily interpret a domain name as reflecting the identity of its owner." (12) The above outlines the nature of trademark interests with respect to the domain name system. A domain name that implements a trademark "conveys all the goodwill and intangible value that are epitomised in the trademark." (13) It is consistent with a trademark's functions of origin, advertising, and investment as intended by its proprietor. (14) While the owner of a registered trademark is conferred exclusive rights in accordance with Article 16(1) of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), (15) an Internet domain name is a time-bound contract of assignment between a registrant and a registry that is in charge of a name space, often involving a registrar in the middle.

    There is no explicit notion of property right associated with Internet domain names; to date, no institutionalisation or formalisation on domain names has been made within an explicit legal understanding, although courts have three possible theories: trademark, contracts for services, and property rights. (16) The consequence of this uncertainty in everyday language is as follows: a person who has registered a domain name for any purpose, commercial or otherwise, without the corresponding trademark rights registered at least in their own country, is always exposed and vulnerable to ownership disputes initiated by a third-party entity that does allegedly have trademark rights associated with the domain name in question.

    Up until 2012, there existed twenty-three "global" top-level domains that were not tied to country codes. (17) They included .com, .net, .org, .info, .biz, and .xxx, all of which transcended the notion of territoriality as employed by the trademark system. Of these, the .com space is by far the most popular TLD among businesses in most countries, as they prefer a single territory-neutral .com to local TLDs and any other currently available global TLDs. (18) Such is consistent with the general tendency observed in trademark...

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