Domain Names and Trademark Law: Cybersquatting
A domain name is one's address on the World Wide Web. Although individuals and companies throughout the United States can share more than one name or address (for example, DELTA AIR LINES® coexists with DELTA DENTAL® , and DOVE BAR® for ice cream coexists with DOVE® for soap), domain names are unique identifiers and cannot be shared by more than one entity. Most companies use part of their name as their domain name. For example, IBM's domain name or Web address is www.ibm.com. Such an address makes it easier for consumers to locate IBM on the Web because many will simply make an educated guess that a company's Web address is the same as its name plus the identifier .com used for commercial sites.
As many small companies register their names on the Web and establish Web sites, there are greater chances that companies with similar or identical names will bump into each other in cyberspace. Previously, the seller of gift baskets in a small suburb of Boston might never have known that another company was offering similar services under a similar or identical name in Idaho. When each offered its goods locally, there was little chance of confusion or infringement. However, the Internet has allowed these companies to discover each other, leading to numerous disputes over trademarks and domain names, and making even more compelling the need for a comprehensive trademark search before the launch of a mark for a product or service.
There are two parts to a domain name: the generic top-level domain (the portion to the right of a period, such as com or gov, sometimes called a suffix) and the secondary domain (the portion to the left of the period, such as hoovers in www.hoovers.com, sometimes called a prefix). The typical generic top-level domain indicators are com and net, representing commercial sites; gov, representing government sites; edu, indicating educational institutions' sites; mil, indicating military sites; and org, which originally indicated a nonprofit organization but may indicate a commercial enterprise as well. Domain names are valuable property and have been sold as assets by one company to another.
In the early 1990s the National Science Foundation granted exclusive rights to a company called Network Solutions, Inc. (NSI), located in northern Virginia, to register domain names. NSI registered only 7,000 domain names in 1993. By late 1999, NSI had registered 8.1 million domain name registrations, charging moderate registration fees.[1] Because many individuals challenged NSI's exclusive franchise on assigning domain names, a new nonprofit corporation, the Internet Corporation for Assigned Names and Numbers (ICANN), was created in the late 1990s to foster competition in the lucrative business of registering domain names and to oversee the domain name industry. In late 2000, ICANN approved seven new toplevel domains, including biz, restricted to businesses; pro, for licensed professionals; and name, for personal name registrations.
[1] Mary Gravely, ''Lord of the Domain,'' TECHNOLOGY Virginia, (March/April 2000): 30–32.
In the early days of domain name registrations, unscrupulous individuals and companies often registered domain names including the names or marks of famous companies or individuals for the sole purpose of ransoming or selling the addresses to their rightful owners. For exam-ple, one person alone registered nearly 250 domain names, including www.deltaairlines.com and www.neiman-marcus.com. To end this practice, Congress passed the Anticybersquatting Consumer Protection Act in 1999 to outlaw domain name piracy. The act added a new provision to the U.S. Trademark Act to allow injured parties to sue for bad faith registration of their names, trafficking in the use of domain names that infringe or dilute famous marks, and profiteering in registering the names of famous people as domain names. A court may award damages and may order the cancellation of the infringing domain name or its transfer to its rightful owner. The new law permits an award of $1,000 to $100,000 per domain name, in lieu of the owner having to prove actual damages.
In October 2000, a cybersquatter who registered five Internet domain names in bad faith was ordered to pay $500,000 in damages and more than $30,000 in attorney's fees.
Not all uses are prohibited. For example, in Hasbro, Inc. v. Clue Computing, Inc., 66 F. Supp. 2d 117 (D. Mass. 1999), the court held that Clue Computing did not infringe or dilute Hasbro's famous CLUE® mark used for its board game because the computer company had its own rights in the name. However, it is clear that bad faith registrations of another's name or a confusingly similar name can be enjoined. Immediately after the act was passed, actor Brad Pitt used it to sue the registrants of www.bradpitt.net and www.bradpitt.com in federal court in California. In mid-2000, the International Olympic Committee and two related organizations filed a civil suit under the act to shut down more than 1,800 Web sites containing the words Olympic, Olympics, or Olympiad, most of which related to pornography and gambling.
Even a good faith use might be prohibited. In June 2000, the United States District Court for the Northern District of Iowa held that Ford Financial Services (a company named after its founder) could not use Ford in its trademark or domain name because it was likely to produce consumer confusion with Ford Motor Company, which held a variety of trademark registrations for related financial services including Ford and also used Ford in its domain name. The court held that the right to use a personal name is not unlimited, and because the automaker had prior, distinctive, and famous use, consumers were likely to be deceived by Ford Financial Service's domain name. On the other hand, the use of Ford for a service not offered by or related to one used by Ford Motor Company, such as catering services or health care services, should be permissible.
The Anticybersquatting Act shields domain name registrars such as NSI from liability for registration of domain names unless there is a showing of bad faith intent to profit from such registration. ICANN has taken the position that it is the responsibility of the party wanting to register a domain name to determine whether the application infringes another's rights.
ICANN has also issued a Uniform Domain Name Dispute Resolution Policy to resolve disputes between parties over their domain names. In its first six months, ICANN's dispute policy resulted in 327 decisions. Disputes arising from abusive registrations, such as cybersquatting, are quickly and inexpensively handled, mainly online, and ICANN has the authority to cancel domain names or to order transfers of domain names to their rightful owners, leading many experts to believe that the new anticybersquatting legislation coupled with ICANN's dispute resolution policy will eventually eliminate the practice of cybersquatting. Some uncertainty remains, however, because in mid-2000 a federal judge in Illinois ruled that courts are not bound by the administrative proceedings of ICANN. Thus, although ICANN can cancel a domain name, its decision may not be the final word in the matter.
Domain names can be registered with the U.S. Patent and Trademark Office (PTO) as trademarks as long as they function as source identifiers and not mere addresses. In fact, as of mid-2000, the PTO had more than 15,000 pending applications including the term .com.