In the United States, domain names have become big business. Many individuals and corporations have contributed significant resources towards cultivating consumer and industry recognition of their domain names. Many, relying on the first come first served policies of the authorities controlling domain name registration, believed that once their unique identifier was registered, the name was theirs to keep, as with other property or tangible personal or corporate assets. Recently, however, one of the registration agencies has changed that policy, causing widespread confusion throughout the industry.
Two main authorities in the United States control domain name registration systems. The first is the IANA, or Internet Assigned Numbers Authority located at the Information Sciences Institute of the University of Southern California. The IANA controls all domain names that end with .us. Names like snaggletooth@fooey.washington.dc.us would be under this domain. The second group is called the InterNIC (Network Information Center) whose registry is located at Network Solutions, Inc.. The InterNIC controls the more fashionable .com,.net, .gov, .edu and .org domains. This group include addresses like mickey_mouse@disney.com or net_god@verylarge.net.
Since the .us domain does not currently have a written policy which allows for the taking of a domain name from the first registered user, this article will focus on the InterNIC, and its policies regarding disputed arising from domain name registrations in the .com, .net, .gov, .edu and .org domains. There are numerous international registries that handle domains such as the .ca domain for Canadian names, the .uk domain for United Kingdom, .de for Germany, etc. (see note 1)
The InterNIC was established in January of 1993 as the result of a
Program Solicitation from the National Science Foundation in
1992
(see
note 2)
calling for a three part organization to handle directory and
database services, domain name registration services, and information
services. The contract was won by AT&T, who oversaw the
InterNIC directory and database services project, Network
Solutions, Inc.
Given the rapid growth of the Internet, it is not surprising that disputes would arise, as they have in every other sector of the business community, regarding the names used to identify products or services. What is surprising, at least to outside observers, is the manner in which various registration authorities have responded to these disputes. Almost universally, the world wide domain name registration authorities have taken the approach of the US Copyright Office; that of a registration clearing house only. The notable exception to that approach is the InterNIC, the largest of world wide registrars. (see note 6) The InterNIC has instead decided to become defacto arbiters of legal rights (regardless of their claims to the contrary, see note 7 ) in a misguided attempt to liken domain names to trademarks (see note 8) grafting incompatible legal theories onto a technology that, by its very structure, cannot sustain it. The InterNIC is the only registration authority to date that has taken it upon itself to define domain names as falling under the rubric of trademark law, and attempt to reallocate property from one owner to another.
Theoretically, under a strict reading of the Dispute Policy, a party could trademark the letters IBM for their pool cleaning business. They could then present the NIC with the valid trademark. The NIC would then be obliged to require International Business Machines to post a bond and sign an indemnification agreement to keep their domain. Numerous attorneys have thusfar commented on the heinous nature of the terms of the indemnification agreement required (see note 9) making it highly unlikely that the agreement would be signed. Therefore, the NIC would be forced to put the entire IBM domain on hold. It would be much more probable that the NIC would unilaterally rewrite the dispute policy than tackle the likes of IBM or any other large corporation with an established domain. The dispute policy also does not envision any of the possible scenarios in which two or more groups hold trademarks or service marks in different categories or in different countries. When one registers a trademark, that trademark is only valid for a certain class of product or service. For example, Dominos Pizza and Dominos Sugar, or Apple Computer and Apple Records. One could certainly imagine cases in which both Dominos seek the rights to dominos.com. Under the InterNIC's current policy, Dominos Sugar could take away use of dominos.com from Dominos Pizza if Dominos Pizza refused to sign the highly onerous indemnification agreement, or post a bond in whichever amount the InterNIC chose, regardless of the fact that Dominos Pizza held a registered trademark, had registered the domain first, and had expended substantial resources to bring its domain to the attention of world wide consumers.
Perhaps the most disturbing part of the dispute policy, however, is that the InterNIC reserves the right to redefine the policy unilaterally, with 30 days notice, by simply posting the changes to its ftp site. (see note 10)
The biggest question in the entire domain name dispute policy issue has nothing to do with whether or not the policy is workable (a detailed analysis of the policy itself and its highly negative impact on Internet commerce will be the subject of a future article). The main issue is whether or not the InterNIC, or even the NSF from whence the InterNIC derives its authority, can unilaterally and seemingly arbitrarily redefine an aspect of intellectual property law without any guidance from legislative, judicial, or even administrative law authorities. The answer is a resounding no.
It has long been a maxim of American jurisprudence that the government cannot employ an agent to perform an act that the government itself is prohibited from performing (see note 11) . The government, for example, is prohibited from taking property or the use of property from individuals or corporations without due process of law. (see note 12) Since the United States Government, through the National Science Foundation, has contracted with the InterNIC (through Network Solutions, Inc., it becomes very clear that the InterNIC cannot perform any action that the United States Government would be prohibited from performing. This, of course, includes the taking of property or use of that property without due process or law and just compensation.
There is no dispute that domain names are valuable commodities. Prior to the InterNIC's change of policy effective November 23, 1995, companies routinely negotiated with domain name holders if they wished to use names that had been previously registered by others. (see note 13) Corporations and individuals alike have invested substantial resources in order to inform audiences of their web sites or ftp sites. Substantial commerce is conducted on the Internet, leaving little doubt that domain names are a valuable commodity, and thus are property in at least an intellectual property sense. There is no question that the commercial disadvantage of changing a domain name and losing the goodwill and substantial investment in disseminating information through and about that domain name, is substantial. Worse still is the likelihood that small Internet Service Providers, under this policy, will lose their domain names causing hundreds if not thousands of individuals to suddenly lose their addresses for their web sites, electronic mail, ftp, etc. It would not be difficult to imagine a scenario in which an Internet Service Provider (ISP) named Great Stuff established greatstuff.com. Greatstuff.com would, of course, become very large and successful, with 100,000 subscribers, all of whom are businesses who have spent years broadcasting their web sites, email addresses, and ftp sites around the known universe. In the haste of servicing customers and growing a business, Great Stuff neglects to apply for a trademark. One day, another company called Great Stuff who manufactures garden weasels decides that they would like to be on the net. The original greatstuff.com would lose the years of effort put into advertising their business, and each of the 100,000 businesses who used that ISP would likewise have to start from scratch in rebuilding their audience.
The Constitutional requirement for due process of law and just compesation for a governmental taking has been interpreted in a number of ways over the years. At the very minimum, hearings must be held in order to establish the governmentis clear need to take the property, and to show some type of public necessity for the taking. The taking authority must also show justification for whatever figure it believes satisfies the just compensation clause. In most cases, a judge makes the decision as to whether the government has satisfied its burden and rules on whether the taking is justified. The InterNIC policy however, provides no such safeguards for the taking of domain names or their use. Even if the InterNIC were to apply the more commercially recognizable standards of trademark law, a series of hearings and trials is necessary prior to telling a company that it is no longer allowed to use a product or service name, and again the decision is made by a judge or a jury. No company or individual is prevented from using a name until the court orders it, with due process of law.
Slightly lower standards for due process exist in cases where a taking is the result of a government agency's rules or policies. These cases would include instances where an agency's regulations call for dispute resolution in which one entity loses a right, privilege, or in same cases, use of property. However, even in these cases, due process applies, and the agency must allow for public comments through their rulemaking procedures. Even this standard, however, is not being applied in the InterNIC's Domain Name Dispute Policy. In no case can a government agency arbitrarily change its rules with 30 days notice posted to the agency's own ftp site without a requirement for public comments, and without legal justification.
It is no wonder that the other registries of domain names have decided against implementing policies that interfere in disputes between entities who wish to use the same name. Other registries, such as the .us registry, ask potential registrants to affirm that they are the legal users of the name, and many then require the applicant to sign a hold harmless agreement, indemnifying the registration agency from possible damages due to lawsuits. This is the model that the US Copyright Office operates under. The Copyright office does nothing but register copyrights. It makes no warranty as to whether the copyright is valid, whether the applicant was the first to create the work, or makes any other types of determinations. Instead, those with disputes are required to settle it amongst themselves, with or without court involvement.
Given the tremendous economic opportunities of the Internet, and given the tremendous reliance that corporations and individuals place on the stability of their registered domain names, the court system and not the registration system should be the only authority for changing a properly registered domain name. Several lawsuits are currently pending in the federal court system arising specifically from the InterNIC's threats to block use of the domain name by the registered holders. (see note 14) One such suit has resulted in a preliminary injunction, establishing that taking the use of a domain name would cause irreparable harm, and the InterNIC has been prevented from placing the names on hold. (see note 15) In several other cases, the InterNIC has agreed not to interrupt use of domain names pending litigation. (see note 16) However, the InterNIC has stated that these precedents apply only to the cases in question, and not to any subsequent cases. In other words, each domain name holder who is challenged would have to hire an attorney, and pay court costs to establish their own injunction against the InterNIC blocking their use of their registered domain name, then would presumably have to go through a trial in order to keep what was registered to them in the first place. This is clearly a significant burden that seemingly was enacted solely to protect the company that runs the InterNIC's registration services, Network Information Systems.
Applicant acknowledges and agrees that NSI cannot act as an arbiter of disputes arising out of the registration and use of Domain Names.
Nor shall any person ...be deprived of life, liberty or property, without due process of lawU.S. Constitution, Amendment V.
Nor shall any State deprive any person of life, liberty, or property without due process of lawU.S. Constitution, Amendment XIV.
This agreement is entered into between the United States of America, Hereinafter called the Government, represented by the National Science Foundation [...] NSF Cooperative Agreement No. NCR-9218742.- Some of these disputes include Joshua Quittner registered mcdonalds.com. McDonalds Corporation settled with Quittner and obtained domain registration. Other corporations took domain name holders to court, then settled amongst themselves without InterNIC involvement. These include MTV Networks v. Curry, 867 F. Supp. 202 (S.D.N.Y. 1994), Software Tool & Die v. WorldWide Net, Inc; and wire.com vs. wired.net.
- Clue Computing, Inc. v. Network Solutions, Inc. at http://www.clue.com/legal/ complain.html; Data Concepts, Inc. v. Network Solutions, Inc. at http://www.patents.com/dci/ dci.sht; and Philip L. Giacalone v. Network Solutions, Inc. and Ty, Inc. at http://www.iplawyers.com/ giacalon.htm. Roadrunner Computer Systems v. Network Solutions, Inc. was recently dismissed, but information about the case can be found at http://www.patents.com/nsi.sht.
- Clue Computing, Inc. v. Network Solutions, Inc. at http://www.clue.com/legal/ complain.html resulted in a preliminary injunction on June 25, 1996.
- In both Data Concepts, Inc. v. Network Solutions, Inc. at http://www.patents.com/dci/ dci.sht; and Roadrunner Computer Systems v. Network Solutions, Inc. at http://www.patents.com/nsi.sht, NSI agreed to refrain from placing the disupted domain names on hold.