Conflicts over Domain Names

1. Conflicts over Domain Names William Fisher July 1, 2002 © 2002. All rights reserved

2. Outline • Functions of Domain Names • Functions of Trademarks • Types of Disputes • Goals? • Dispute Resolution Systems • Alternatives I II III IV V VI

3. 44.56.0.48 Individual Computer Subnetworks Network IP Numbers and Domain Names roscoe.law.harvard.edu Top-level domain Second-level domain Third-level domain Individual computer

4. Old Allocation System • Internet Address Number Authority (IANA) • Internet Society (ISOC) • Internet Network Information Center (InterNIC) • Network Solutions, Inc. • AT&T • General Atomics

5. New Allocation System • Internet Corporation for Assigned Numbers and Names (ICANN) • Licenses registers and registrars for gTLDs: .com; .org .net, etc. • Covered by UDRP • 250 Country Code TLDs • E.g., .to (Tonga); .as (American Samoa) • Some are covered by UDRP

6. Domain Names (unlike IP addresses) are valuable • Recent transactions: • Business.com: $7.5 million (sold) • Broadband.com: $6 million (asking price) • Loans.com: $3 million (sold) • Flu.com: $1.4 million (asking price) • Bingo.com: $1.1 million (sold) • Beauty.cc: $1 million (sold) • Drugs.com: $823,000 (sold) • University.com: $530,000 (sold) • Online markets in domain names: • Greatdomains.com; bestdomains.com; domains.com; domainmart.com; webdomains.cc

7. Why? • They vary in attractiveness and ease of memorization • Web surfers often guess at domain names • Assume they match trademarks or service marks • Websurfers sometimes use generic domain names as search terms • E.g., loans.com received 3000 hits per day while inactive; sold to Bank of America • They may affect huge volumes of commerce • Pride or emotional attachment to distinctive words

8. Ecommerce Growth Not adjusted for seasons and holidays; source:www.census.gov/mrts/www/current.html

9. The End of the “Land Rush”? From: http://dcc.syr.edu/markle/markle-report-final.pdf But registration of country-code TLDs continue to rise

10. What Do Trademarks Do? • Reduce transaction costs • Incentives to raise quality of products • Confer market power and threaten competition • Identify sources of products • Mnemonic devices • Provide substantive information • Generalized indicia of prestige • Increase the attractiveness of products through sound, appearance, or connotation • Provide vehicles for conversation and parody • Shape consumers’ preferences and attitudes Ambiguous or mixed socioeconomic effects

11. Consumer Information Theory • TMs reduce transaction costs (especially search time and memory requirements) by assisting consumers in making informed choices • Value of TMs is highest when: • goods are difficult to inspect • costs of mistaken choice are high • consumers are not making repeat purchases • consumers are wealthy

12. Beneficial Assist consumers in making informed choices Pressure manufacturers to increase quality Pernicious Confer market power on owner of the TM Prices rise Some consumers priced out of the market Effects of Trademarks that Convey Substantive Informative

13. Increase attractiveness through sound, appearance, or connotation • Make the products itself more attractive • Harley-Davidson muffler sound; shape of Perrier bottle • Evoke positive associations not attributable to another manufacturer • Acura, Lexis, Nantucket T-shirts • Evoke positive associations attributable to another manufacturer • Rolls-Royce Radio Tubes; Gay Olympics

14. Trademark Parodies • Jordache Jeans / Lardache Jeans (oversized jeans with pig emblem) • Dom Perignon Champagne / Dom Popignon popcorn • “Enjoy Coca-Cola” / “Enjoy Cocaine” • Poster of Pregnant Girl with slogan: “Be Prepared”

15. Utilitarian Critique: artificial product differentiation & oligopolistic pricing Cultural Critique: Physically unhealthy and morally pernicious Political Critique: concentration of semiotic power Utilitarian Defense: increase of hedonic capacity & total social welfare Cultural Defense: potential health benefits & cultural richness Political Defense: common vocabulary & materials for semiotic democracy Assessments of the Preference-Shaping Power of TMs and Ads

16. Doctrines that seek to minimize pernicious effects of TMs • Goals: • Prevent TM owners from controlling the flow of information • Prevent TMs from impairing competition • Doctrines: • Hostility toward descriptive marks • Genericity • Use Requirement • Ban on immoral, scandalous, or disparaging marks • Fair Use Doctrine • First Amendment limitation – e.g., LL Bean

17. Types of Disputes • Cybersquatting • Typosquatting • Competing Use • Noncompeting Use • Reverse Domain Name Hijacking • Parody and Commentary

18. Cybersquatting • Joshua Quittner registers “mcdonalds.com” • Dennis Toeppen registers “intermatic.com,” “panavision.com” • NFLtoday.com

19. Typosquatting • Wwwpainewebber.com • Misrosoft.com • Mnsbc.com • Yafoo.com

20. Competing Use • Princeton Review registers “kaplan.com” • Amazon.com brings suit against amazon.gr • Omega registers “sportys.com”

21. Noncompeting Use • Howard Johnson registers “howardjohnson.com” • eToys.com v. etoy.com • Hasbro v. Clue Computing

22. Reverse Domain Name Hijacking • Veronica.org

23. Parody and Commentary • Akkaoui registers “adultsrus.com” • Jewsforjesus.org • Yahooka.com • Verizonreallysucks.com

24. Goals? • Incentives for socially valuable activities; • creating and policing TMs • arbitrage of DNs • Optimal exploitation of resources • -- get DNs into hands where they are most valuable • Reduce transaction costs • -- minimize number of steps • Economic Efficiency

25. Goals? • Economic Efficiency • Fairness Reward Effort Reward Ingenuity

26. Goals? • Economic Efficiency • Fairness • Distributive Justice Equalize Access to the Internet Equalize Participation among developed and developing countries

27. Goals? • Economic Efficiency • Fairness • Distributive Justice • Free Speech & Creativity Opportunities for individual expression Semiotic democracy

28. Goals? • Economic Efficiency • Fairness • Distributive Justice • Free Speech & Creativity • Privacy Allow anonymity in DN registration

29. Dispute-Resolution Systems • UDRP • Anticybersquatting Consumer Protection Act • Trademark Infringement -- Likelihood of Confusion • Trademark Dilution • Unfair Competition

30. UDRP governs “Abusive Registrations and Use” of DNs • the domain name is identical or misleadingly similar to a trademark in which someone else has rights. • the holder of the domain name has no rights or legitimate interests in that domain name • the domain name has been registered and is used in bad faith. http://www.icann.org/dndr/udrp/uniform-rules.htm

31. Examples of “Bad Faith” • Circumstances indicate that defendant’s main purpose was to sell DN to TM owner for more than the direct costs of registration • History of registering DNs to prevent TM owners from registering • Registering a DN in order to disrupt the business of a competitor • attempting to divert Internet users to Defendant’s site for commercial gain by creating confusion concerning source or sponsorship

32. Examples of “Legitimate Interests” Pre-dispute use or demonstrable preparations to use the DN in bona fide offering of goods or services Defendant was commonly known by the name Legitimate, noncommercial or fair use of the DN without intent to misleadingly divert or tarnish

33. “Abusive Registrations” Not applicable to: • geographic designations • e.g., Chateâu Neuf du Pape • Personality Rights • George W Bush • Unregistered names of organizations • wipo.com

34. Procedure • Complainant picks forum • Respondents have 20 days to respond • No additional submissions typically are permitted • Decision within 14 days of appointment of panelist(s) • Respondents default 50% of the time • Remedies: • Cancellation of the registration • Transfer of the DN to the complainant • Losing respondent can postpone remedy by filing suit within 20 days

35. UDRP Usage • As of June, 2002, over 6,000 proceedings • Over 10,000 domain names • (Currently, aprx. 29,000,000 gTLDs) • Rates of filing are declining gradually • Most of the DNs challenged under UDRP were registered during the boom of early 2000 • WIPO is the most popular provider, and becoming more so – aprx. 70% of the cases • 55 “appeals” to date: http://www.udrplaw.net/UDRPappeals.htm See Convergence Center Database: http://dcc.syr.edu/markle/mhome.htm; Mueller Report (6/24/2002): http://dcc.syr.edu/markle/markle-report-final.pdf

36. Extension of UDRP • Commentary with deception • Csa-canada.com; csa-international.com • Dodgeviper.com • Kelsonmd.com • Kwasizabantu.com

37. Conflicts and Ambiguities • Commentary without deception • Stopcompusa.com; bancompusa.com • Mcdonaldssucks.com • Newworldcoffeefraud.com • Walmartcanadasucks.com

38. Conflicts and Ambiguities • Genericity • Astrocartography.com • Barcelona.com • Tonsil.com • Corinthians.com • Crew.com • Pueblo.org • Sting.com • Craftwork.com • Traditions.com

39. Conflicts and Ambiguities • Unauthorized retailers/ resellers • Webergrill.com • Porsche.net

40. Conflicts and Ambiguities • Inaction by DN registrant • Presidentchoicesocks.com • Cignadirect.com • Visasatellite.com • Buyvuarnetsunglasses.com

41. ACPA, 15 U.S.C. sec. 1125 (d) • TM owners have civil cause of action against defendants who, with bad faith intent to profit from the goodwill of a TM, register or use a DN that is: • identical or confusingly similar to a distinctive mark, • or dilutive of a famous mark

42. ACPA Factors

43. Safe Harbor: • “Bad faith intent” shall not be found where the defendant “believed and had reasonable grounds to believe that the use of the domain name was a fair use or otherwise lawful”

44. Remedies • Injunctive Relief (retroactive) • Damages (nonretroactive) • Statutory Damages (nonretroactive) • $1000 - $100,000 per domain name • In rem jurisdiction • Registrars may sua sponte refuse to register marks that they deem to violate the rules

45. Applications of ACPA • Sporty’s Farm (CA2 2000):  registers “sportys.com” to draw business from competitive seller of aviation equipment • Mattel v. Schiff (SDNY 2000): barbiesplaypen.com for commercial porn club • People for Ethical Treatment of Animals v. Doughney (EDVa 2000): peta.org used for parody site: “People eating tasty animals” • Links to leather-goods and meat websites • Virtual Works v. Volkswagen (CA4 2001): In 1996, ISP Virtual Works registers vw.com, considers possibility of later sale to Volkswagen

46. Sporty’s Farm 10. Deliberate interference with a competitor

47. Mattel

48. PETA

49. Volkswagen CA4 declines to “march through the nine factors seriatim,” but finds bad faith on the basis of: • Famousness of VW mark • Similarity of vw.net to VW • Admission that Virtual Works never did business as “VW” • Availability of alternatives (e.g., vwi.net) • Ds considered at time of registration the possibility of later reselling to VW • Ds later did offer to sell to VW

50. Types of Trademark Infringement Identical Marks on Competitive Products Similar Marks on Competitive Products Similar Marks on Noncompetitive Products Dilution