Domain Name Disputes (BitLaw) (2024)

Domain Names--an Introduction

Domain names are simply the addresses of the Internet. E-mail is sent and web pages are foundthrough the use of domain names. As an example, the web address for the Microsoft web site iswww.microsoft.com, while Bill Gates might have an e-mail address such as [email protected] (both using the"microsoft.com" domain name). Without the domain name, a computer would have no ideawhere to look for a web page, and e-mail routers would not be able to send e-mail. Of course, domain names are more than just addresses, since they can be selected by the"addressee" and are usually closely associated with a particular service orproduct.

Domain names are divided into hierarchies. The top-level of the hierarchy appears after thelast dot ('.') in a domain name. In "microsoft.com", the top level domain name is.COM. The .COM name is the most common top-level domain name, and is used to indicate that thedomain name is owned by a commercial enterprise. Other common top-level domain names include.ORG (for non-profit organizations), .NET (for network and Internet related organizations),.EDU (for four-year colleges and universities), and .GOV (for government entities).

In addition to these generic domain names, each country has been given a unique top-leveldomain name. For instance, .CA indicates a domain in Canada, and .IE indicates an Irishdomain. Although there is a .US top-level domain name, most organizations in the UnitedStates outside of state and local governments opt for one of the generic names (i.e., .COM,.ORG, .NET), which are available to entities in any country. For several years there havebeen proposals to add new generic top-level names, such as .FIRM, .STORE, and .WEB. While eachof these proposals has eventually faded away, it is expected that some new top level domainnames will be created within the next two years.

The disputes that arise over domain names involve "second level" domain names. Thesecond level name is the name directly to the left of the top-level domain name in an Internetaddress. For instance, in the address "www.microsoft.com", the second level domainname is Microsoft.

Two identical second level domain names cannot coexist under the same top level domain. Forexample, even though both the Delta Faucet Company and Delta Airlines would like the"delta.com" domain name, only one Delta company can have delta.com. Unfortunatelyfor both Delta Faucet Company and Delta Airlines, that Delta company is Delta Financial ofWoodbury, New York. Instead of using delta.com, Delta Airlines uses deltaairlines.com, whileDelta Faucet Company uses deltafaucet.com.

How assigned

In order to register a second level domain name under a top-level domain, a request must bemade to the organization that has the power to assign names for that top-level domain. Forinstance, The US Domain Registry administers the registrationof second level domain names under the .US top-level domain.

Prior to December 1999, a company called NetworkSolutions Inc. ("NSI") was almost solely responsible for the registration ofsecond level domain names for the most popular top-level domains, including .COM, .NET, and.ORG. Since the vast majority of domain names are under one of these top-level domains (themost common being .COM domain names), Network Solutions had a great deal of control over howdomain names were registered, and how disputes would be resolved. To avoid having to be thearbitrator between two parties who both desire the same domain name, NSI decided to simplyadopt a first come, first serve arrangement with respect to domain names. Under this scheme,NSI would not question an applicant's right to have a particular domain name. If the domainname was available, the applicant was given the name.

As of December 1999, the ability to register .COM, .NET, and .ORG domain names was spread outamong many registrars.These registrars are accredited by The Internet Corporation for Assigned Names and Numbers (or"ICANN"), an non-profit corporation formed specifically to control Internet domainname management and similar functions. NSI continues to assign domain names, but now they arejust one of many domain name registrars. Following NSI's precedence, all of these registrarsassign names on a first-come, first-serve basis, and do not do any checking before assigning anew domain name.

Domain names disputes

Because of the increasing popularity of the Internet, companies have realized that having adomain name that is the same as their company name or the name of one of their products can bean extremely valuable part of establishing an Internet presence. Asexplained above, a company wishing to acquire a domain name must file an application withthe appropriate agency. Before doing so, a search is done to see if their desired domain nameis already taken. A good site for doing such a search is provided by Network Solutions. When acompany finds that the domain name corresponding to their corporate name or product trademarkis owned by someone else, the company can either choose a different name or fight to get thedomain name back from its current owners.

Some well publicized examples of these types of domain names disputes are:

• candyland.com: Both Hasbro and an adultentertainment provider desired the candyland.com domain name. Hasbro was too late toregister the name itself, but it is never too late to sue (well, almost never). Thedomain name is now safely in the hands of Hasbro.
• mcdonalds.com: This domain name was taken by anauthor from Wired magazine who was writing a story on the valueof domain names. In his article, the author requested that people contact him at [email protected] with suggestions of what to dowith the domain name. In exchange for returning the domain name to McDonalds, theauthor convinced the company to make a charitable contribution.
• micros0ft.com: The company Zero Micro Software obtained a registration formicros0ft.com (with a zero in place of the second 'o'), but the registration wassuspended after Microsoft filed a protest. When the domain name went abandoned fornon-payment of fees, the domain name was picked up by someone else: VisionEnterprises of Roanoke, TX
• mtv.com: The MTV domain name was originally taken byMTV video jockey Adam Curry. Although MTV originally showed little interest in thedomain name or the Internet, when Adam Curry left MTV the company wanted to controlthe domain name. After a federal court action was brought, the dispute settled out ofcourt.
• peta.org: An organization entitled "PeopleEating Tasty Animals" obtained the peta.org domain name, much to the disgustof the better know People for the Ethical Treatmentof Animals. This domain name was suspended and was eventually litigated, resulting in the domain being awarded to People for the Ethical Treatment of Animals based primarily on their previous trademark rights.
• roadrunner.com: When NSI threatened tosuspend the roadrunner.com domain name after a protest by Warner Brothers, the NewMexico Internet access provider who was using the domain name filed suit to preventthe suspension. Although the access provider was able to prevent the suspension, ajoint venture company involving Time Warner, MediaOne, Microsoft, Compaq, andAdvance/Newhouse eventually obtained the domain name.
• taiwan.com: The mainland China news organizationXinhua was allowed to register the domain name taiwan.com, much to the disgust of thegovernment of Taiwan.

Legal Remedies

When a dispute over a domain name occurs, such as those described above, the parties can always turn to the courts. While courts and judgeshave the authority to award control and ownership over domain names (just as they haveauthority to award control and ownership over any other property), the judicial process isnotoriously slow. Consequently, many parties have avoided the courts and turned to the domainname dispute policies of the domain name registrars (see the followingsection for more information on these policies).

Companies that do bring a court action must present legal arguments on why a domain nameregistered to someone else should be cancelled or transferred to an organization who wasn'tfast enough to register the name first. Historically, these arguments were based on trademarklaw or dilution law (which are discussed in more detail on the BitLaw section on trademarks on the Internet). It was sometimes difficult to presenta strong case under the traditional principals of trademark law, especially when the partyseeking to obtain a domain name either could not prove a likelihood of confusion (which isrequired under trademark law) or was a famous individual who never technically establishedtrademark rights in their name.

In response to intense lobbying from trademark owners and famous individuals, Congress passedthe Anticybersquatting Consumer Protection Act in November of 1999. This act made it easierfor individuals and companies to take over domain names that are confusingly similar to theirnames or valid trademarks. To do so, however, they must establish that the domain name holderacted in bad faith.

One portion of this Act related to famous individuals. This portion allows individuals to file a civil action against anyone whor*gisters their name as a second level domain name for the purpose of selling the domain namefor a profit.

The more general portion of the statute protectscompanies against persons who, in bad faith, register a domain name that is the same orconfusingly similar to an existing trademark. The statute the lists the following factors aselements that a court can consider to determine whether the domain name was registered in badfaith.

• Does the domain name holder have trademark rights in the domain name?
• Is the domain name the legal name of the domain name holder, or some other name thatis otherwise commonly used to identify that person?
• Has the domain name holder made use (prior to the dispute) of the domain name inconnection with a bona fide sale of goods or services?
• Is the domain name holder using the mark in a bona fide noncommercial or fair use wayat a web site accessible at the domain name?
• Is the domain name holder attempting to divert consumers from the trademark owner'sweb site in a confusing way, either for commercial gain or in an attempt to tarnishor disparage the trademark mark?
• Has the domain name holder offered to sell the domain name to the trademark owner (oranyone else) for financial gain without having any intent to use the mark with thesale of goods or services?
• Has the domain name holder behaved in a pattern of registering and selling domainnames without intending to use them in connection with the sale of goods or services?
• Did the domain name holder provide false information when applying for theregistration of the domain name (or do so in connection with other domain names)?
• Has the domain name holder registered domain names of other parties trademarks?; and
• How distinctive and famous is the trademark owner's trademark?

Domain Name Dispute Policies

The best alternative to pursuing a domain name dispute through the courts is to takeadvantage of the domain name dispute policies that have been developed by the organizationsthat assign domain names. Disputes prior to December of 1999 were handled under the domainname dispute policy created by NSI.

Under this much maligned policy, NSI created a procedure under which a third-party canchallenge the right of a domain name owner to use a particular domain name. If the challengewere successful, the domain name would be suspended. This policy only protected parties thathad a nationally registered trademark identical to another party's second level domain name(i.e., Microsoft in "www.microsoft.com"). Anowner of an unregistered trademark could not initiate an action under this policy, nor couldan owner of a trademark that was confusingly similar (but not identical). If the date that thetrademark was first registered predated the domain name registration, the domain name ownerhad to supply their own trademark registration for the second-level domain name. If thedomain name owner could not provide such a trademark registration, NSI would suspend all useof the domain name. This is true even if the challenging party could not properly prove aclaim of trademark infringement (see the BitLaw discussions on trademark infringement in general and trademark infringement on the Internet for more information).

This policy has now been replaced with a UniformDomain Name Dispute Resolution Policy created by ICANN and used by all accreditedregistrars. Under this new policy, a trademark owner can initiate a relatively inexpensiveadministrative procedure to challenge the existing domain name. In order to prevail, thetrademark owner must show:

1. that the trademark owner owns a trademark (either registered or unregistered) that isthe same or confusingly similar to the registered second level domain name;
2. that the party that registered the domain name has no legitimate right or interest inthe domain name; and
3. that the domain name was registered and used in bad faith.

If the trademark owner successfully proves all three points in the administrative proceeding,then the domain name can either be cancelled or transferred to the prevailing trademark owner.If the trademark owner fails to prove one of these points, the administrative panel will notcancel nor transfer the domain name.

Among the ways that a domain name owner can prove a legitimate right or interest in a domainname is by showing:

• use or preparations to use the domain name in connection with a bona fide offering ofgoods or services prior to any notice of the dispute;
• that the domain name owner has been commonly known by the second level domain name; or
• that the domain name owner is making legitimate noncommercial or fair use of thedomain name, without intent of (i) commercial gain, (ii) misleadingly divertingconsumers, or (iii) tarnishing the trademark at issue

A trademark owner can show that a domain name was registered and used in bad faith in avariety of ways, including by showing that the domain name owner:

• registered the name primarily for the purpose of selling or transferring the domainname to the trademark owner or a competitor of the trademark owner for a price greaterthan out of pocket costs;
• engaged in a pattern of registering trademarks of others to prevent the use of thedomain name by the trademark owner;
• registered the domain name primarily to disrupt the business of a competitor; or
• is attempting to attract users to a web site for commercial gain by creating alikelihood of confusion with the trademark owner's trademark.