Copyright (c) 1996 MIDS
Domain names have become a very valuable commercial commodity. Customers find vendors via their domain name. Internet service providers (ISPs) are known through their domain names. ISPs in turn, register sub domain names, one of which might become your personal email address. Loss of a domain name, even for a short period of time, brings with it loss of your Internet connectivity. If your livelihood depends in any way on access to the Web, email from customers or contacts, or you depend on the net to advertise your products, you would feel it financially if that access were cut off for any period of time. This, of course, doesn't take into account the psychological difficulties one encounters when one is "out of touch" with friends, family, or clients via the net.
Given the hoopla and media hype about the Internet, numerous individuals and organizations have registered domain names that they have become identified with in "cyberspace." Companies like Yahoo and Netscape have become publicly traded, mostly due to their presence and name recognition on the Internet. For them, and many other lesser known companies, the name by which they are accessed, their domain name, is their lifeblood.
In the United States, if you are in the .COM registry, as most companies are, you have most likely registered your domain name through Network Solutions, Inc. Network Solutions, or NSI, was given the responsibility for registering domain names in the .COM, United States government, represented by the National Science Foundation1. The contract established an entity called the InterNIC, which was a combination of General Atomics, who oversaw information services, AT&T who oversaw directory and database services, and Network Solutions, who oversaw registration services. General Atomics was later removed from the cooperative agreement by the NSF.
It is rather obvious in this world of interconnectivity, and billions of dollars being generated via the net, that loss of connectivity would be devastating. It is also obvious that if you have to change your Internet address, a part of your identity is lost to those who are trying to contact you. Although you'd get some help if your clients use search engines such as Alta-Vista or Yahoo, you'd have to start publicizing your new address, and wait for it to propagate, essentially starting from square one and losing any goodwill and name recognition you may have already established with customers, clients or friends.
Of course, if you were an Internet Service Provider (ISP), your problem is compounded. Not only does the ISP itself need a new address, along with all the hassles that causes, but each of the ISP's customers must do the same. If the ISP has several subdomains, each sub domain must then also find a new address and re-advertise that fact across the net, its brochures, business cards, letter head, television advertisements, etc.
Many people who procured domain name registrations, relied on the *first come, first served *policies of the authorities controlling domain name registration. In fact, unlike later versions that were written without consulting the relevant community, the "policy" that was followed was actually an Internet RFC (Request for Comment) that was essentially a consensus of the groups involved at the time2. In the past, if you registered a domain name, you had a reasonable expectation of keeping that domain name. In July of 1995, that all changed, at least on the .COM, .GOV, .ORG, .EDU and .NET sides of things. In that month, The InterNIC promulgated its first "Domain Name Dispute Policy" 3. This policy was quicky followed up in November of 1995 with NSI's second Domain Name Dispute Policy. 4.
The rules changed again November 23, 1995 with yet another Domain Name Dispute Policy, which the InterNIC published on its FTP site. The major provisions of the policy were as follows:
Since this domain name dispute policy was enacted, there have been several lawsuits filed5, numerous critical articles and papers written6 , and various upset people, several of whom joined together to start an organization of domain name holders in hopes of fighting the InterNIC's policies.7
The InterNIC decided to change some of the provisions of its policy, and announced a new one to take effect September 9, 1996. Its major changes and provisions are as follows:
If a valid trademark registration is provided, and the trademark holder provides notice, and a copy to NSI, NSI may follow the rest of the policy it has laid out, which includes:
The next group of provisions goes into effect if anyone files a lawsuit prior to NSI placing the domain name on hold.
The legalese at the end is mostly the same for both versions of the policy, and is mainly:
In a nutshell, the problem with the Domain Dispute Policy are as follows:
NSI calls the document on which it explains its position, the "Domain Dispute Policy." However, a policy is generally a document which lays out the steps an entity will take when faced with particular situations. The new NSI "policy" states specifically that NSI *may *use this policy to handle domain disputes. This, of course, means that they also *may _not_*. This is technically known as "weasel words." Needless to say, this is hardly something most businesspeople would wish to stake their business identity upon.
There are other significant problems with the domain dispute policy:
One of the most damning criticism of Network Solutions, Inc's domain dispute policy is that it was created without normal procedures. On the Internet, when one wishes to make a dramatic or sweeping change that affects the net "across the board," one uses the RFC process. RFC stands for "Request for Comment" and is the general method used to inform the Internet community what you wish to do, ask for comments and suggestions, and solicit cooperation for your plan. NSI, on both occasions that it has implemented its domain dispute policies, has released them only after they were "done deals." Although David Graves of NSI has said that comments and suggestions were taken into consideration for the formulation of the second domain name dispute policy 10, the community as a whole was given no notice of any discussions being held by NSI, or of any coordinated method for providing suggestions or comments. Even worse, however, is the probability that since NSI is creating policy on behalf of the National Science Foundation, an agency of the United States Government, NSI would be required to follow the rulemaking procedures of every other governmental agency. Of course, we know that it has not. The constitutional arguments concerning the InterNIC policy are disussed in the first article of this series, Is the InterNic's Dispute Policy Unconstitutional?
NSI has attempted to make it very clear that they do not desire to be brought into the middle of domain name disputes. They have gone so far as to state twice in their new policy, once up front and once in the middle, that they do not act as arbiter of disputes between "Registrants and third party complainants." However, the policy itself removes control of a domain from the original domain name holder, and puts it "on hold" while the dispute is settled by a court, or settled under the NSI policy. In these cases, the domain name holder is automatically penalized, and the challenger succeeds in depriving a domain name holder of business opportunities merely because they hold a trademark and have sent a letter alleging infringement and harm. Unlike the court system, the challenger does not have to prove infringement and harm in order for the domain name holder to have been deprived of his or her property. As has been noted, being deprived of one's domain name, even for a short period of time, can have serious business consequences.
As much as NSI wishes to claim that it is not arbitrating disputes, it is very clear that regardless of the outcome, a domain name holder must either file a lawsuit to keep the name, or hope that the trademark holder files a suit. If the trademark holder's goal is merely to prevent use of the name, it is in their best interest *not *to file suit, since the domain name holder's only recourse would then be to hire a lawyer and file their own lawsuit, prior to NSI putting the domain on hold. Given that the domain name holder only has 30 days in which to respond, the legal costs for filing will be much higher since any time you wish an attorney to work quickly, you will probably pay extra for it.
Ironically, the policy as written also acts as a deterrent to arbitration of the dispute rather than taking it to court. The policy specifically states that the domain name will not be put on hold if one of the parties files suit. It does not say that the name will not be put on hold if the parties seek arbitration. The policy also does not provide for instances where the challenger may agree (although it may be against their best interests) to allow for continued use of the domain name by the domain name holder while the dispute is settled. Perhaps this is one of the areas where NSI may use its "may" provisions of the policy.
Most contracts between parties contain a "notice" provision. The notice provision generally tells people where and how they must send notice to the other party, generally when some sort of action is required to be performed. Most contracts also provide that the contract can only be changed by a writing signed by both parties, but it is clear that NSI did not wish to grant that authority to domain name holders.
Both domain name policies promulgated by NSI provide that the only notice that needs to be given of contract changes, is by making a file available on NSI's FTP site.11 This means that unlike other contracts, where the onus is on the person who wishes to change the contract, the people being affected by a unilateral decision are required to take the affirmative action of periodically checking the NSI FTP site.12
Indemnity. Reimbursement. An undertaking whereby one agrees to indemnify another upon the occurrence of an anticipated loss. [...] A contractual or equitable right under which the entire loss is shifted from a tortfeasor who is only technically or passively at fault to another who is primarily or actively responsible. Black's Law Dictionary.
Indemnification shifts the burden from one party to another. In this case, NSI has given the domain name holder no alternative but to promise to pay for any losses that a court may award as the result of use of a domain name. However, the interesting thing here is that the contract doesn't call for the domain name holder to indemnify just NSI, or just NSI and the National Science Foundation. It also calls for the domain name holder to indemnify people and organizations who, as far as anyone can tell, have very little to do with NSI. This hodgepodge of organizations seem to have only one true common thread: they all have "Internet" in their name. Here is the list:
Besides NSI and the NSF, it is difficult to understand why a contract ostensibly between a domain name holder and Network Solutions, Inc .would possibly contain indemnification language benefiting organizations who do not seem to be involved with NSI or its parent company, SAIC.
Of course, the indemnification provisions of the domain name dispute policy are binding only on the domain name holder, and not on any challenger. The result is that a challenger will be more likely to litigate matters if it knows that the opponent is being faced with not only their own legal costs, but this indemnification of a large group of other entities. This would almost be incentive for the challenger to file suit against each indemnified party, its officers, directors, employees, and agents, causing the domain name holder to take a hard look at what would happen if the case is lost and damages are awarded to the challenger from all of the listed parties.
There is good news about this new policy, however. In the old policy, a domain name holder could be ordered to post a bond if the InterNIC (NSI) believed that it was about to be sued. The bond could be in any amount that NSI saw fit, as an advance estimate of legal expenses. If the domain name holder didn't post the bond, the domain name went into "hold" status.
Trademarks in the United States are governed by a statute called the Lanham Act which was enacted in 1946 and updated in 1996 20. The purpose of a trademark is to identify the maker of a good or a service. The mark is to be displayed on brochures or on labels, or on the goods themselves to keep from confusing the consumer as to where a product was made.
While more information about trademarks and how to obtain them will be provided in a subsequent article in this series, here is an overview of the trademark process and its costs:
1. Determine what product(s) or service(s) you wishes to apply a name to.
2. Find a name that is not generic (such as Band-Aid for bandages) descriptive (such as Brown Table for a wooden table), or substantially similar to another name someone else has come up with for the same or similar products or services.
3. Contract with a lawyer or a search company to do a search on the proposed mark to see if someone else already has the name you thought you dreamed up.
4. If no one else has the name in the category of product or service you want, have the lawyer fill out the trademark application, complete with specimens, drawings, and a $245.00 filing fee. If you like government forms, you may wish to fill out the application yourself, but realize it may be bounced back several times until you find the "magic words" that the Patent and Trademark Office want to see.
5. Wait for approximately four months for an examiner to even look at the application.
6. Expect a few iterations back and forth between you or your attorney and the examiner before everything is just right.
7. Receive a trademark registration. Now you can use the symbol ® next to the trademark name. Note that your trademark is only valid for the goods or services you specified in your application.
This whole process can take anywhere from 8 months or so to years. During this time, you may have a "common law" trademark if you were the first person to use the name. You can also apply for a state trademark, giving you certain rights in that state. However, neither a common law trademark, nor a state trademark will help you with the InterNIC. It is quite interesting, however, that NSI's first domain name dispute policy 21 did not specifiy that trademarks would have to be federal. This change did not occur until the policy of November, 1995.
It is curious that in a recent speech, David Graves of NSI stated that there was no known correlation between trademark law and domain names22. A domain name is a verbal address that is used by humans in place of the numeric IP address that computers and network routers care about. As such, a domain name is much more an identifier than a mark one would place on a good or service to determine its origin. Congress has not as yet spoken to some trademark holder's claims that ownership of the trademark made automatic their ownership of a domain name, regardless of whether someone else had registered that name.
Regardless of the lack of legislative action, and the normal workings of the law in trademark disputes, NSI has decided that trademark can be used as a sort of "trump card," ensuring that trademark holders receive special treatment with regard to domain name holders. In all other legal situations, in order for a trademark holder to stop someone from using a similar or identical name, the trademark holder would have to show that its mark was being infringed. That is not neccesary in NSI's policy. In order to get a domain name taken away, essentially all that is needed is for a trademark holder to send a domain name holder a letter alleging that that mark is being infringed. The domain name holder is then put on the defensive, and risks significant chance of losing the domain name regardless of what actions are taken.
In US trademark law, many different people can have the same name trademarked for different purposes, or in different "classes." A "class" consists of a grouping of similar products, such as class 10 for surgical, medical, dental and veterinary apparatus and instruments, artificial limbs, eyes and teeth; orthopedic articles and suture materials. Since the primary purpose of trademark law is to protect the consumer from being fooled as to the source of a product, these class designations make sense. It would be difficult for most people to believe the Cadillac cars also made Cadillac cat food. This branch of law was clearly created to protect the less sophisticated consumer from making errors of this type.
In the normal course of business in trademark law, in order to succeed with a claim of infringement, a trademark holder must show infringement _in the class in which the trademark is held. _This is, of course, impossible in an arena where there are no classes, such as the Internet. Applying trademark law to the Internet immediately raises two important distinctions. The first is that on the net, there is only one possible use for any given name in the .COM domain. Since .COM is the most used and therefore most coveted address, competition between US federally registered trademark holders and foreign registered trademark holders, will surely make for an impossible situation if NSI insists on its current procedure of using federal trademark as a "trump" card. The second is that domain names are not necessarily used for goods or services, which are the only two categories which the Lanham Act speaks to.
Given that NSI itself feels that there is no real correlation between trademark law and ownership of domain names, and the ill fit between trademark law and domain identifiers from both a legal perspective as well as a technical one, NSI's insistence on providing certain trademark owners (arguably the first who comes along) with the de facto authority to have a domain made unavailable to its registrant is largely incoherrent and without foundation in either law or logic.
NSI is responsible for registration all domain names in the most coveted .COM domain. Of course, this includes international commercial entities as well. However, trademark law is not international. Each country's trademark laws differ enough that many trademark lawyers specialize in specific countries for companies dealing multi nationally. Large US corporations may hold trademarks in 10 or more different countries, each with differing expiration dates, requirements for maintaining the trademark, quirks in the registration process, etc. Given that it is possible to get a valid federally registered trademark from Tunisia in 48 hours, rather than waiting for a minimum of 6 months for a US registration, it is easy to imagine the domain name dispute of the future being decided in Tunisia. Thusfar, no non-US entities have brought suit over domain names, alleging trademark infringement. When it does occur, deciding which court it will be tried in and whose laws will apply could well result in a decade or more of litigation. There will be more on national and international trademark issues in the next article in this series.
Unlike any other sector of trademark law, a trademark owner need only allege infringement to start the process of removing a domain name from its registered holder. In all other cases, a trademark holder must go to court and convince a judge that someone else is actually infringing on the trademark. As one consolation, in a case where the owner of a registered trademark wishes to take a domain name from its registered owner, the trademark holder must now inform the domain name holder that they feel that their trademark is being infringed. The trademark holder must also send a copy of this to NSI. NSI maythen check to see whether the date of first use of the trademark or service mark is prior to the domain name's first use. If the domain name wasn't issued until after the trademark holder's first use, the domain name holder has the opportunity to provide its own trademark registration, which must be dated prior to the date that NSI asks for it.. If the domain name holder 1) has no trademark; 2) has a trademark that is not identical; 3) has a trademark dated after NSI asks for it or 4) can't find the trademark paperwork or get a copy from the government within 30 days, NSI may put the domain name on hold. Note that although NSI requires the domain name and trademark to be identical they did indeed put roadrunner.com on hold after Warner Brothers alleged trademark infringement with its cartoon character the Road Runner. This, of course, raises the issue that any allegation of trademark infringement may be treated by NSI's removal of access to the main name, given that corporate motivation seems to be with avoiding legal liability, and not with following its policies.
"On hold" means that the InterNIC (NSI) will basically remove the ability to use that domain name across the net, rendering it essentially useless to the domain name holder. The domain name holder must then either begin the process of finding a new name and publicizing it, or go to court to get the domain name back. In that case, the domain name holder would have a quandary as to which entity to file suit against, the trademark name holder, or NSI. From the section on indemnification, we know that the domain name holder has already promised to indemnify NSI and many other possibly somewhat related entities, so in order to sue NSI, the domain name holder would have to hope that the court would find the indemnification clause onerous and strike it down. If the domain name holder chooses to sue the trademark holder, there is always the chance that the trademark holder could countersue both the domain name holder, and NSI. Given that the trademark holder doesn't have to indemnify half of the Internet community, it would almost be legal malpractice not to sue NSI as well, knowing what added pressure it could put on a domain name holder. Obviously, the person or entity with the most money seems to win. In any case, one thing is clear. An allegation on the part of a trademark holder is sure to cost the domain name holder some money.
It is also interesting to note that NSI can put a domain name on hold at the mere written allegation of a trademark holder that it infringes its rights in the trademark or service mark, if the domain name holder does not hold an identical trademark within the prescribed timeframe. Trademark holders, therefore, have no downside to alleging infringement. At very little expense to themselves, a trademark holder can fire off a letter which starts a domino effect of complication and expense if the domain name holder wishes to keep its registered name.
The simple answer to how you can prevent your domain name from being placed on hold status, is money. If the domain name holder has the money to file suit in any court in the United States (note the national bias) then the InterNIC will not put your domain name on hold. The policy specifically states that you need not also sue the NIC in order for them to let you hang onto use of your name for the time being, and the name would be deposited into the court for the court's disposition . Obviously, a domain name holder suing NSI would have to first get the court to invalidate the indemnification clause or take the chance that the domain name holder would have to pay for its lawsuit. In the alternative, the domain name holder can hope that the trademark holder files suit. This would also prevent the InterNIC (NSI) from putting the name on hold. However, it is not clear from the policy what would happen if the trademark holder also sued NSI. It is probable that NSI would also deposit the name into the court in this case as well.
Unfortuantely for domain name holders, NSI's policy is still very slanted towards trademark holders. Currently, the best way to fight fire, is with fire; become a trademark holder. Currently, a federal trademark from any nation satisfies the InterNIC domain name dispute policy if 1) it is identical to the domain name and 2) if it is dated before you receive a request for it from the NIC. Also, unless you are adamant about having a .COM domain name, you have other choices depending on the country you are from. In the United States, check with http://www.isi.edu:80/in-notes/usdnr/ to register under .us. See below for information about other countries:
If you don't mind waiting a bit, Jon Postel of IANA has recently submitted a draft proposal 23 to create multiple new top level domains. This would give users the opportunity to procure names in, for example, the .INC or .BIZ domains. Depending on their domain name dispute policies, these may be viable alternatives to .COM, and the highly biased policies of Network Solutions, Inc. Of course, this solution would be highly annoying to trademark holders who have been "spoiled" with a system that gives them special privilege. With more top level domains, they would have to sue more people across more registries and constantly monitor more domain names. As strange as a scenario such as Apple Computer having to sue apple.com, apple.biz, apple.inc, apple.web and apple.net in order to "alleviate confusion," perhaps the resulting chaos would so muddy the water that applying trademarks to domain name sites would become unwieldy. Then, perhaps, the InterNIC's version of law and policy would become moot.
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