Trademark Ownership versus Domain Name use Disputes

An enterprising group of business people thought they had found ways to make money on the Internet by registering, as domain names, famous marks of others. A number of this registrations have resulted in disputes that have been brought before the courts. He is some information that may help you understand both sides of the argument .

Background

By far the most comprehensive discussion of Internet domain names and trademark disputes is What's in a Name?, a web site by David Pauker, Stacey Halpern, Jonathan Agmon, graduate students at George Washington University Law School. This site collects, all in one place, nearly all that is known about domain name trademark disputes. It also offers insightful and detailed discussions of the flaws of the present NSI policy and a number of suggestions for its improvement.

Numerous others are collecting data. The Electronic Frontier Foundation has prepared an important archive of information on domain name disputes. See also an important article by Mikki Barry entitled "Is the InterNIC's Dispute Policy Unconstitutional?" published by Matrix Information and Directory Services, Inc. Robert Shaw has written a thoughtful article entitled "Internet Domain Names: Whose Domain Is This?". The Domain Name Rights Coalition has been set up to try to protect the rights of domain name owners in the face of NSI's policy. The US Patent and Trademark Office had an article about domain names that was of interest, but they have withdrawn it "for revision". Carl Oppedahl has written articles in the New York Law Journal dated August 8, 1995, November 28, 1995, and May 21, 1996 that discuss domain name trademark issues. See also Carl Oppedahl's article in the May 27, 1996 Network World. See also Prof. Eric Schlachter's excellent bibliography of articles about trademarks and domain names. Roadrunner Computer Systems, Inc. has a web page discussing the first case. Daniel Tobias has compiled a compendium of resources relating to domain name/trademark disputes.

The Internet Ad Hoc Committee has released its Draft Specifications for Administration and Management of gTLDs which makes recommendations regarding the administration of top-level domains. Here's what the Committee had to say about NSI's trademark domain name policy:

One gTLD registrar has attempted to address this problem by inserting itself as an arbiter of disputes between trademark owners and SLD holders: The registrar will put an SLD on hold at the behest of the owner of a trademark registration certificate if the holder of an "identical" SLD, once challenged, cannot produce its own, trumping trademark certificate or otherwise establish that its use of the domain predates either the effective date or first use date of trademark registration. This well-intentioned policy, which has generated significant controversy, unjustifiably confers upon a non-judicial body the discretion to essentially grant an injunction against continued use of a SLD, without any adjudication of the merits of the trademark owner's claim against the domain holder. Such an approach is inconsistent with basic tenets of trademark law and principles of equity and fair play. The dispute policy unfairly burdens the domain holder - who may actually have trademark rights superior to those of the challenging trademark registrant.

IAHC seeks a policy in which registrars are involved as little as possible in trademark disputes.

A federal district court judge had this to say about the NSI trademark domain policy:

• "NSI's standard domain name registration agreement contains a domain name dispute policy, but the policy has not proven effective in resolving domain name conflicts."

• "It is clear beyond question that the Policy's sole purpose is to protect NSI. Indeed, as Panavision itself stated in its opposition to defendant NSI's motion to dismiss: '... NSI has repeatedly represented that it is out to protect no interests but its own.'"

Panavision Int'l, L.P. v. Toeppen, ___ F.Supp. ___ , (96 cv. 3284, C.D. Cal., November 1, 1996).

A thought-provoking article entitled Applying the Trademark Misuse Doctrine to Domain Name Disputes was published recently in The Computer Lawyer, authored by Stephen J. Davidson and Nicole A. Engisch.

Maria Eliseeva has written an excellent article entitled Domain Name Dispute Policy of September '96: Is NSI Off The Hook?

See also Domain Names vs. Trademarks -- Who Decides? by James Evans, writing in Government Technology magazine.

NSI's improper use of interpleader (improper because it followed NSI mailing out a 30-day letter that created the problem that led to the interpleader) was described in an opinion in which the Colorado federal court dismissed NSI's interpleader action. The federal judge in Colorado likens NSI to "a wrongdoer with respect to the subject matter of the suit", says that NSI is not "free from blame in causing the controversy", and says that NSI was improperly seeking "to escape adjudication of its contractual duties, and possible liability, in the state court action." You can see the dismissal order.

The Information Infrastructure Project at Harvard's Kennedy School of Government held a conference entitled "Coordination and Administration of the Internet" on September 9 and 10, 1996. Carl Oppedahl presented a paper, "Analysis and Suggestions Regarding NSI Domain Name Trademark Dispute Policy", at the conference on September 9.

Note that Carl Oppedahl has published an October 22, 1996 article in the New York Law Journal that discusses remedies in domain name trademark lawsuits.

See also an amicus curiae brief which this firm has filed in the Clue interpleader case.

At the One ISPCon on August 9 in San Francisco, NSI announced yet another trademark domain name policy, its fourth policy in thirteen months. This announcement was made by NSI during the first of two back-to-back sessions at which the present (now previous) NSI domain name policy was scheduled to be discussed. NSI's presentation was the first of the two hour-long sessions, and the second session was presented by Carl Oppedahl and Gervaise Davis. (You can see NSI's slides from the presentation, as well as Carl Oppedahl's slides. Keep in mind that Carl Oppedahl's slides were prepared in advance of the meeting at a time when NSI had not yet said it would be changing its policy.) You can see a transcript of NSI's presentation as prepared by the Domain Name Rights Coalition.

NSI's newest policy is dated August 9, 1996 (the date that it was announced at the conference) and is said to take effect on September 9, 1996. It is discussed in a September 3, 1996 article by Carl Oppedahl in the New York Law Journal.

Another recent article, Forcing a Square Peg: Why Federal Trademark Law Does Not Protect Internet Domain Names, by Jeff Wilson, criticizes NSI's trademark domain name policy.

See also an article in the American Bar Association Student Lawyer magazine entitle Welcome to the wide, wide world of domain names, trademarks and the courts by Richard P. Klau, which criticizes NSI's policy.

See also an article in the December 1996 issue of the Federal Communications Bar Association News entitled NSI Implements New Internet Domain Name Policy by Robert M. Cannon, which discusses some of the criticisms of the NSI policy.

The San Francisco Recorder carried an article about the new policy, quoting an NSI lawyer about the policy. The Recorder has printed Carl Oppedahl's letter to the editor responding to the quotation from the NSI lawyer.

The written text of the just-announced NSI policy is, in some ways, less biased in favor of trademark owners than was the previous NSI policy, but in other ways is more biased in favor of trademark owners. NSI has, however, a history of implementing its policies in ways that differ from the terms of the policy, so only time will reveal the extent to which the just-announced policy is, in practice, biased in favor of trademark owners.

A quick review of the terms of the policy shows the following:

• In a move that increases the bias in favor of trademark owners (as compared to the bias evident in the previous policy), it is now the case that a domain name owner who is on the receiving end of an NSI challenge (or on the receiving end of a threat letter from a trademark owner) cannot reach safety by rushing to Tunisia and getting a trademark. NSI only gives credit for a trademark registration that was obtained by the domain name owner prior to the threat letter. In practical terms, this means that domain name owners who wish to protect themselves from groundless threats by trademark owners must obtain their trademark registrations in advance of any threat. NSI's new policy actually increases the incentive to go to a fast-registering country such as Tunisia. (Under the previous policy, the domain name owners who had an incentive to go to Tunisia were merely the ones who had received NSI 30-day letters. Under the present policy, all domain name owners have such an incentive.)

• Under the previous NSI policy, an innocent domain name owner (one who is not infringing any trademarks) who received a 30-day letter had an incentive to rush to court and to sue NSI for an injunction, since the other option (playing by NSI's rules) meant signing a terrible indemnification agreement. Under the just-announced NSI policy, an innocent domain name owner (one who is not infringing any trademarks) who receives a 30-day letter still has an incentive to rush to court and to sue NSI for an injunction, for two reasons. First, there is the risk that NSI might announce yet another policy change. Second, NSI has been known to give varying interpretations to its policies in the past, and such interpretations mean that a domain name owner may be better off with a court order directing NSI (as a party to the case) not to cut off the domain name than with NSI's mere policy statement that it would not cut off the domain name.

• The just-announced NSI policy continues the defect of the previous policy that a domain name owner is at great risk of loss of a domain name despite the complete absence of any trademark infringement. It continues the defect that it gives no weight to the common-law trademark rights of the domain name owner. It continues the defect that it artificially elevates a trademark registration to the special status of being the only way a domain name owner can protect itself within the policy, despite the fact that many domain name owners are ineligible for trademark registration (e.g. the domain name is not being used to indicate the origin of goods or services that are shipped in interstate commerce).

• NSI continues its practice of conducting its policy-development process in secrecy with no meaningful involvement by anyone in the Internet community, including its customers, the domain name owners. The latest policy, like the previous ones, was simply announced as a fait accompli.

Many of the most important domain names on the Internet (those ending in COM, ORG, NET, and EDU, for example) are administered by Network Solutions, Inc. ("NSI") under contract from the National Science Foundation. In July of 1995 NSI announced a policy according to which a domain name owner would lose its domain name as a matter of course, if a trademark owner wrote a letter to NSI asking it to do so. Under the July 1995 NSI policy, innocence was no defense; it did not matter if the domain name owner was not infringing the trademark.

It was a terribly flawed policy; no one seemed to like it except NSI's lawyers. But under the policy, NSI has taken away hundreds of domain names from domain name owners with no apparent concern for the rights of the domain name owners.

By early 1996, however, domain name owners had begun to fight back. When a domain name owner received a "30-day letter" (the letter from NSI stating that the domain name will be cut off in 30 days at the request of some trademark owner) it became routine for the domain name owner to consider not only the three "options" set forth in the 30-day letter, but also to consider the step of suing NSI. In such a lawsuit, the domain name owner simply asks the court to issue an injunction, ordering NSI not to cut off the domain name.

Roadrunner is, to our knowledge, the first domain name owner to have sued NSI to ask a court to order them not to cut off a domain name, in the belief that it is not infringing any trademarks and thus should not have to lose its domain name to an NSI 30-day challenge. Since Roadrunner's lawsuit against NSI, there have been other similar lawsuits against NSI by other domain name owners. The lawsuits are:

• The DCI.COM case in Tennesee

• The TY.COM case in California

• The CLUE.COM case in Colorado

• The DISC.COM case in Colorado

• The REGIS.COM case in California

• The JUNO.COM case in Virginia.

NSI's policy change announced on August 9, 1996 at ISPCon was presumably prompted by the first several of these lawsuits.

Trademark owners suing NSI

In several instances, trademark owners have sued NSI. Some of the lawsuits were filed prior to the July 1995 policy, namely:

• The Knowledgenet case in Illinois, filed December 2, 1994

• The Frys case in California, filed July 12, 1995

Based on when they were filed, it appears that neither of these cases represents dissatisfaction by a trademark owner with the NSI July 1995 policy or its successors.

Since NSI put its July 1995 policy in effect, on a few occasions a trademark owner has sued NSI (in each case, along with other defendants) over a domain name. The known cases are:

• The Porsche case in Virginia

• The Mikasa case in California

• The Panavision case in California

• The Prestone case in Virginia

It is not clear whether any of these cases represents dissatisfaction by a trademark owner with the NSI July 1995 policy or its successors, or whether NSI was simply joined along with the domain name owner defendants to assure that the court's injunctions would be enforceable against NSI.

NSI's domain name policies over the years

• Prior to July 28, 1995: RFC 1591

• NSI's second policy effective July 28, 1995

• NSI's third policy effective November 23, 1995

• NSI's fourth policy effective September 9, 1996

Domain name policies around the world

Network Solutions Inc. is not the only domain name registration authority in the world. NSI is simply the one mentioned most often because they administer the very popular COM domain, and because they have such a poorly conceived domain name trademark policy and have been sued so many times as a result. Geoffrey Gussis has done the enormous task of compiling, all in one place, the domain name trademark policies of other registration authorities around the world. He has prepared a table showing his findings. A somewhat similar study has been done by Netnamesusa.

Articles and discussions of the lawsuits against NSI

• James Evans, "Getting Run Off the 'Net Road", San Francisco Daily Journal, March 27, 1996.

• Mark Voorhees, "Internet Name Policy Draws Suit It Was Intended To Avoid", Information Law Alert, March 29, 1996.

• Frank Ruiz, "If you value your name, register it", The Tampa Tribune, March 31, 1996

• "Calling Names", The Washington Post, April 1, 1996.

• Bob Quick, "Santa Fe firm sues for 'roadrunner' rights", The New Mexican, April 2, 1996.

• Alan Gahtan, "Another Domain Name Lawsuit", Computer Lawyer E-News, April 2, 1996.

• Lisa M. Brownlee, "Roadrunner v. NSI (Domain Name Dispute Policy)", The Spinoza Project, April 4, 1996.

• "Internet Access Provider Sues NSI Over Domain Name Assignment Policy", Andrews Computer Industry Litigation Reporter, April 4, 1996.

• Chris Stamper, "Beep Beep", The Netly News, April 8, 1996.

• "Goliath and David", Santa Fe Reporter, April 10, 1996.

• David Pauker, Stacey Halpern, and Jonathan Agmon, "Not Quite Someone Else's Trademark", What's in a Name? website, April 14, 1996.

• Mark Voorhees, "Much-maligned attempt to resolve name dispute under review", Information Law Alert, April 19, 1996.

• Jennifer B. Lucas, "Internet Domain Name Holder Sues NSI Over Dispute Resolution Policy", BNA's Electronic Information Policy & Law Report, April 26, 1996.

• "Domain name policies challenged in court", Boardwatch, May 1996, p. 29.

• Keith Dawson's article Land rush in namespace , Tasty Bits From the Technology Front, May 5, 1996

• Traci Manza, "Claiming a Name Is Game on Information Highway", Bloomberg Personal, May 8, 1996.

• Mark Voorhees, "Network Solutions' Second Cross to Bear", Information Law Alert, May 31, 1996.

• Andrew Gelman, "The Fight for Roadrunner.com" Legal Issues, May 31, 1996.

• Daniel Tobias, Master of Your Domain: Conflicts and legal issues regarding Internet domain names.

• James Evans, "Domain Names Issue Gets Confusing", San Francisco Daily Journal, June 6, 1996, p. 7.

• "The Internet: Names writ in water", The Economist, June 8, 1996, p. 71.

• Letter to the editor of The Economist by John Gilmore of EFF

• Mark Voorhees, "Can Network Solutions Escape Ruling On Its Internet Name Policy?", Information Law Alert, June 14, 1996.

• Simson L. Garfinkel, "Salinas man fights for his good name on the Internet", San Jose Mercury, June 17, 1996.

• Mark Voorhees, "Roadrunner To Network Solutions: Shame On You - Domain holder says Internet registry tried to pull a fast one", Information Law Alert, June 18, 1996.

• Sharon Fisher, "What's In A Name? Domain Name Conflicts Abound ", Communications Week, June 21, 1996.

• Mark Voorhees, "Network Solutions Tries Interpleader Route", Information Law Alert, June 28, 1996.

• Denise Caruso, "A battle over Internet site names flares, with one company at its center", New York Times, July 1, 1996.

• What's in a Name? An Internet Domain by any Other Name Would not Be Found by Frederic M. Wilf

• Nancy Tipton, Clashing of Domains Goes to Court, Albuquerque Journal, July 1996.

We trust, now that you have read this article, that you will come to the conclusion that you should include an IP specialist on your list of professional advisors.

If this article has left you with unresolved questions then we ask that you direct them to us. We ask that you take the time you to learn all about ARVIC, who we are, what we can do for you and why you should employ us. For free consultation or practical information on any trademark related issue you are invited to contact us.