By Seyamack Kouretchian

National Law Journal

October 28, 1996

On September 9, 1996, rules governing domain name disputes were revised. Although

these revisions relate to the handling of disputes, they have an indirect and noteworthy impact

upon the domain name registration process. Specifically, because the new policies expressly

depict the superiority of trademark registrations in domain name disputes, a domain name

registrant must now do more than merely reserve a name with the Internic. Rather, as set forth

below, the domain name registrant must take further steps to protect itself by filing for federal

trademark protection.

The revised policy allows for owners of a registered trademark to suspend a domain

name owner's right to use the subject domain name. Under this policy, when a trademark

owner claims that a domain name infringes its trademark rights, the burden of proof shifts to the

owner of the domain name, who must then prove that it has a registered mark or its equivalent

(note that if the domain name owner cannot produce proof of a registered mark, it must

initiate a declaratory judgment action). If the domain name owner fails to respond within thirty

(30) days, the domain name will be placed on "hold". The "hold" status will begin ninety (90) days

after the expiration of the first thirty (30) day period to allow the domain name owner enough

time to adopt a different name and notify its users of the new domain name.

The implication of this revised policy, therefore, are clear. It takes more than just a

domain name registration to ensure continued viability on the Internet. It takes trademark

registrations, trademark searches, domain name searches, and traditional trademark analysis.

This revised policy comes at an explosive time. Today's practitioners are increasingly

being asked about domain name registration procedures and the legal implications, if any,

arising therefrom. Because the answer to these questions require a review of rules promulgated

by private corporations and some very recent state and federal legislation and judicial opinions,

a practitioner will often find herself swimming alone in what may seem like very rough surf. Fear

not, however, as learning to swim in this rough surf requires nothing more than a good

understanding of the revised policy and trademark law.

A domain name is, in its most non-technical form, an address on the Internet where one's

on-line offerings may be found. Contrary to popular belief, it is neither an e-mail address

(seyamack@aol.com) nor a Uniform Resource Locator (http://www.thegig.com/html). Rather, it

is just the small portion of the address that immediately precedes ".com", ".net", ".edu",

".gov", and/or ".org". In "seyamack@aol.com", for example, the domain name is "aol.com".

This distinction is important because the other elements of the on-line address play no role in the

registration process.

Presently, the majority of domain names are administered by Network Solutions, Inc.

("NSI"), of Herndon, Virginia. In 1993, this private corporation was awarded a five year

"cooperative" contract from the National Science Foundation, an executive agency of the

United States, to process and administer five top level domains (".com" for commercial; ".org"

for nonprofit; ".edu" for educational; ".net" for network service providers; and ".gov" for

government). Although their are other domain name registrys, like the dot U.S. registry which

would register, for example, "mcdonalds.us", with approximately 1,700 domain names being

registered daily through Network Solution, Inc., its registration policies have become powerful

"quasi-statutes" that have direct impact upon the new a practitioner will need to become

familiar with.

It is estimated that their are thirty to forty million users on the Internet. As a result,

domain names have quickly become valuable and coveted corporate assets, with businesses

often staking their commercial success on the marketing power of their domain name.

Predictably, with the perceived importance placed upon this new intangible property right,

business with differing opinions have asked courts to intervene by applying, among other

theories, unfair competition and trademark infringement claims to the alleged wrongs.

Because of the potential for liability arising from domain name registration, it is imperative that

today’s practitioner completely understand that registration of a domain name requires more

scrutiny than ensuring an application is completed and a check is mailed.

Until recently, the only rule governing domain name registration was "first come, first

served." This policy provided too much flexibility for the mischievous, who started reserving

valuable and recognized trademarks as domain names. For example, in the spirit of Princeton

Review's reservation of its competitor's domain name ("kaplan.com"), a Sacramento radio

station, KCRA, recently reserved domain names in the names of its three largest competitors,

"kvie.com", "ktlx.com", and "kpwb.com." Sprint, the third largest long distance telephone

company, is also rumored to have had some fun, reserving the name "mci.com" for itself. Their is

also the recent dispute regarding the the reservation of "peta.com" by an organization entitled

People Eating Tasty Animals. The animal rights organization, People for Ethical Treatment of

Animals, is now fighting over its right to use "peta.com". Although some of these disputes were

ultimately settled to the satisfaction of the owners of the registrered trademark owners, they and

other similar disputes have forced a change in the rules governing domain name registration.

Today, a domain name registrant must certify that, to the best of their knowledge, the

use of the domain name does not violate any trademarks or other statutes. They must also pay

$50.00 per year for the domain name. With the certified statement and fee in hand, the domain

name can be registered by NSI in as little as 72 hours and, absent valid opposition, maintained

indefinitely. For those with a computer and Internet access, the whole process can even be

handled without leaving their home or office. Simply typing "internic" in any on-line search

engine will be sufficient for access to on-line domain name registration.

A practitioner should also be aware that legislation recently passed in Georgia entitled

the "Computer Systems Protections Act" ("CSPA") may have an impact upon domain name

applicants. Under CSPA, which became effective on July 1, 1996, the unauthorized use of a

trademark over the Internet can give rise to substantial penalties, including thousands of dollars

in fines and up to 12 months in jail. The rights of trademark owner under the CSPA are superior

to the rights of a domain name owner, thereby further depicting the important role trademarks

play in the domain name application process.

Before registering the domain name, therefore, a domain name search must be

conducted. Several trademark search companies, like Thompson & Thompson, provide this

service at a cost. If the search reveals that the domain name is taken and the applicant has a

foreign or domestic registered trademark in the name, then the applicant may wish to consider

notifying NSI and the domain name owner of the infringement. The applicant may also wish to

consider filing suit against the domain name owner. Since NSI has an updated and detailed

policy regarding such disputes, a practitioner would be well served if she first reviewed the NSI’s

policy before taking any action against the domain name owner.

If, however, the domain name search reveals no impediment to registration, a formal

trademark search should then be conducted in an effort to minimize any future exposure to

liability. After all, as of September 9, 1996, NSI’s domain name dispute policy provides the owner

of an existing and registered foreign or domestic trademark (common law trademarks and state

registrations do not suffice) with the ability to cause an identical domain name to be almost

immediately placed on "hold", thereby preventing any party from using the domain name.

Specifically, if the owner of a domestic or foreign registered trademark provides notice, prior to

any litigation, to the NSI that a domain name infringes a trademark right, then the domain

name owner’s rights to use the domain name are suspended unless the domain name owner

can either produce a registered trademark or initiate a declaratory judgment action against the

registered trademark owner. Note that under these circumstances, the domain name owner

will also then be required to indemnify NSI as a condition of continued use of the domain name.

They will also be required to post a bond- the amount of the bond left to the absolute

discretion of NSI. For these reasons, therefore, if an applicant merely relies upon a domain name

search, it may not realize that its domain name rights are not free from challenge, if not

absolute defeat.

It should be noted that the NSI’s rules exist outside the law. Although they have been

developed in cooperation with the National Science Foundation, they are the policies of a

private corporation. For this reason, when a trademark search reveals the existence of a

confusingly similar registered trademark, a legal analysis of the domain name and registered

trademark must also be performed.

This involves the application of traditional trademark law in a "global sense." In other

words, the practitioner must be aware that because of the global nature of the Internet,

jurisdiction for any resulting trademark dispute may lie practically anywhere in the world. This

requires that the practitioner be familiar with the different standards of review applied by courts

throughout this, and possibly other, countries. If this type of "global" review is not undertaken,

the applicant may find itself at a disadvantage in an unfriendly courtroom on the other side of

the country or world.

Notably, NSI does not take any action against a domain name unless the trademark is

identical, so the factors reviewed in the "global" infringement analysis have no application to

NSI’s decision to register the domain name. The likelihood of confusion standard, therefore,

plays no role in the NSI’s evaluation; it being the NSI’s position that such an evaluation would

require complex analysis that would be dependent upon a multitude of factors that differ from

circuit to circuit.

Notwithstanding, if, after review, the practitioner is sufficiently confident that the mark

will withstand any formal trademark infringement challenge, the practitioner must still advise the

applicant that NSI’s dispute policy may ultimately require that applicant prove, in a court of

law, its right to the mark. After all, as mentioned earlier, the owner of a registered trademark

that is identical to the domain name can ultimately cause NSI to suspend use of the subject

domain name unless, inter alia, the domain name owner provides proof of a registered

trademark. Predictably, the costs of litigation can often be enough to deter a small business

from taking the risk of registering a domain name when an identical trademark registration is in

existence.

In the alternative, when the trademark search reveals no similar mark, the applicant

should be encouraged to immediately register the domain name with NSI. The applicant should

also be encouraged to immediately file a trademark application (either an "In Use" or "Intend

to Use" application, depending upon the circumstances) with the United States Patent and

Trademark Office ("USPTO") for the mark.

Finally, the applicant should also be encouraged to file a trademark application with the

USPTO for the full domain name. Since this type of registration is novel, the USPTO has offered

some guidelines. According to these guidelines, the classification and identification for the

domain name should be dependent upon the goods/services offered on-line via the domain

name. In other words, Class 38 (telecommunication services) should not be used to identify the

goods/services merely because they are available on-line. Rather, the classification shall

correspond to the goods/services offered.

For example, if the applicant intends to promote and sell its line of colorful beanies over

the Internet under the name "intercloths", the applicant would submit an application with the

USPTO for the mark "intercloths.com" for use in connection with beanies. As stated earlier, the

applicant would also submit an application with NSI for the domain name "intercloths.com",

and an application with the USPTO for the mark "intercloths" for use in connection with beanies.

If the applicant utilizes this three-pronged approach, it will best ensure itself against any

surprises.

With client’s increasingly requesting advice regarding domain name registration, today’s

practitioner must maintain an updated familiarity with NSI policy and trademark law. It should

be evident that merely submitting a domain name application is not enough. Trademark

applications must also be submitted. Taking these steps, a practitioner ensures that its client will

not drown in the rough surf that makes up domain name registration.

• Although commonly referred to as "Internic", Network Solutions, Inc. is just a member of the Internic- the other two members being AT&T and the National Science Foundation.
• From speech of Grant Clark, attorney for Science Applications International Corporation (parent of Network Solutions, Inc.), on May 3, 1996, at the American Intellectual Property Law Association’s Spring Meeting.
• American Intellectual Property Law Association Bulletin, May-June 1996, page 588.
• MTV Networks v. Curry, 867 F.Supp. 202 (SDNY 1994).
• See NSI’s Domain Name Dispute Policy, which can be accessed through the Internic site.
• From speech of Michael Lachuk, attorney for Science Applications International Corporation (parent of Network Solutions, Inc.), on May 3, 1996, at the American Intellectual Property Law Association’s Spring Meeting.
• See, http://www.uspto.gov/web/uspto/info/domain.html.

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