What’s in a name? If it is a domain name, perhaps a lot. I recently acted for a client who paid several thousand dollars to purchase a dot-com name registered to an individual in the U.S. A minor variant on that person’s last name just happened to be my client’s newly branded corporate identity.
My client may have been prepared to pay even more money for the name, given the importance of a consistent corporate identity, particularly on the Internet.
Early in the development of the Internet, people understood the value of a simple dot-com identity that captured that business’s trademark or brand. The practice of “cybersquatting” soon followed.
Cybersquatters register a domain name that is the same as, or confusingly similar to, the trademark of another. Cybersquatting was facilitated by Network Solutions Inc.’s (NSI) first-come, first-served policy of domain name registration, and as NSI was originally granted the exclusive rights to register all dot-com (as well as dot-net and dot-org top level) domain names, this led to substantial abuse of trademark rights.
For example, McDonalds.com, coke.com, fox.com and abc.com were all first registered to persons other than the trademark holders. Those with nefarious ends in mind would then try to sell these domain names back to the trademark holder at exorbitant rates.
Even innocent use of a confusingly similar domain name had value: the Professional Golfers Association of America purchased pga.com from the Potato Growers Association of Alberta for $25,000.
While NSI had a domain name dispute policy to address the inevitable clash between trademark holders and domain-name registrants, it was generally regarded as ineffective and controversial. The policy merely placed “holds” on domain names, pending settlement by the parties or the imposition of a court order.
Enter ICANN, the Internet Corporation for Assigned Names and Numbers, in October of 1998. This non-profit, non-governmental corporation was established to manage, on a more global basis, the domain-name system, as well as to create competition in the marketplace and remove NSI’s monopoly.
ICANN has worked closely with the World Intellectual Property Organization (WIPO), a special agency of the United Nations, and the prime mover in the evolution of domain name law.
In April 1999, WIPO issued its final report on the Domain Name Process to ICANN, after receiving input from business, Internet users and government. Among its recommendations were to:
* open up the field to new top level domain-name registrars that could compete with NSI;
* establish minimum practice standards for these new registrars;
* create mandatory dispute-resolution procedures to address abusive registrations.
ICANN has formed the new Shared Registry System, where a potentially unlimited number of additional companies can join NSI in being fully licensed top level domain-name registrars. To date, there are more than 65 accredited and operating entities allowed to register .com, .net and .org domain names.
In August 1999, ICANN also adopted a Uniform Domain Name Dispute Resolution Policy (UDRP), to be implemented by its accredited registrars. Under the UDRP, every applicant for a domain name must agree to submit to arbitration if a trademark owner alleges an infringement of its rights or if another dispute arises.
The UDRP became effective Dec. 1 last year and four organizations have been approved to act as arbitrator. The arbitration process is held online and decisions are generally rendered within 60 days. Visit www.internic.net for information.
To be successful at arbitration, the complainant must show that:
* the domain name registered is identical or confusingly similar to its trademark;
* the registrant has no right or legitimate interests in respect of the domain name;
* the domain name was registered in bad faith (i.e. primarily for the purpose of selling it to the trademark owner or to prevent the trademark owner from using its mark in a domain name).
Since that time, there has been an explosion of domain-name disputes under the UDRP, with more than 2,000 proceedings commenced involving more than 4,000 .com, .net or .org domain names.
In fact, last month, Madonna was successful in having madonna.com transferred to her from a respondent who was using that domain name for an adult Web site.
The Canadian Internet Registration Authority (CIRA) governs the .ca top level domain-name registration system in Canada, and it has posted its draft Dispute Resolution Policy at www.cira.ca, which is modelled on the UDRP.
A complainant will need to satisfy three criteria to succeed: the domain name is confusing with the complainant’s trademark, whether registered or unregistered; the registrant has no legitimate pre-existing rights in the name; and the domain name was registered in bad faith.
The draft policy identifies 18 factors that can be used to determine whether a registration has been made in bad faith. If the complainant succeeds, it can have the .ca registration cancelled, suspended or transferred to it.
Gradually, all these initiatives have helped in the battle against cybersquatting.
(Anthony Morris is a lawyer with McCarthy Tetrault practising exclusively in its Technology Law Practice Group. He can be reached at 260-3527 or via e-mail at amorris@mccarthy.ca. The comments herein should not be construed as legal advice, and the reader is encouraged to seek the advice of counsel for any specific question.)
