Cyberspace
Law materials - Domain names: Governance and Disputes
The Internet Assigned Numbers Authority (IANA) - delegation of responsibilities
Network Solutions- allocation of names under the current gTLDs
The dispute over reform of international domain name allocations
When a domain name constitutes passing off and/or misleading and deceptive conduct
Other instances of misleading and deceptive conduct and passing off
Domain names are the text addresses for locations on the Internet. All locations on the Internet are actually identified in numerical form, but fortunately a text address can be matched to the numerical address so that users can remember locations and navigate more easily.
The first half of these materials looks at the structure of how domain names are regulated, and the second half from section 7 onwards looks at practical remedies for disputes, which can often avoid courts by using Alternative Dispute Resolution panels applying Australian or global Dispute Resolution Policy, not national laws in the first instance. (Laws from various countries can still apply, but it is cheaper and simpler to use the special purpose system set up to deal with domain problems.)
1.1. Generic Top Level Domains (gTLDs)
The system of allocating domain names to particular organisations and individuals is known as the Domain Name System (DNS) and is broken into several key categories:
Generic Top Level Domains (gTLDs) are the highest level domains and are international i.e. they are not intended to indicate any particular country. The domain suffix indicates the nature or type of content held at that Internet location. These include .com for companies, .net for networks and .org for organisations. Although they are sometimes associated with the United States, this is a result of the US dominance of Internet content and the reluctance of US organisations to use the .us ccTLD.
Country Code Top Level Domains (ccTLDs) indicate the country in which the domain name has been allocated. There are over 200 ccTLDs including .au for Australia, .uk for the United Kingdom and the little used .us for the United States. The use of a country code does not necessarily mean that the Internet content has any relationship with that country. For example the .tv ccTLD is a popular domain suffix for commercial television shows and networks in the United States and Europe, which have no relationship with Tuvalu, a tiny island in the Pacific which administers the .tv domain. Within each ccTLD are a range of sub domains, such as .com.au, .net.au and .org.au.
Individuals and organisations can apply to register a domain name, however the particular procedure and rules for each domain can be fairly complicated. Some general rules applying to most domains are that domain names are issued on a first come first served basis, that generic words are often not permitted, that some words may be excluded because they are obscene, and that domains are often registered only for a fixed period and may have to be renewed. There are numerous exceptions to these rules depending on the nature of the domain and the country code. These rules and procedures can be found at:
International Index: This page from the Norwegian registry Norid provides an alphabetical listing of the domain registration sites for every country (http://www.norid.no/domenenavnbaser/domreg.html)
.com: The InterNIC site, run by ICANN, administers registration of the generic top level domain (gTLD) for companies. There are links to the numerous sites which supply .com domains to the public http://www.internic.net
.gov: This site administers only the US Government gTLD (there is no generic .gov domain) http://www.nic.gov
.int: This domain administered by IANA (International Assigned Names Authority) is limited to organisations established by an international treaty and a limited number of Internet databases. http://www.iana.org/int-dom/
.net: This gTLD is still administered by InterNIC. It is intended for use by network related entities and ISPs. Competitive registrar services are available. http://www.internic.net
.org: This gTLD is also administered by InterNIC. It is intended for use by non-profit organisations. Competitive registrar services are available. http://www.internic.net
In Australia, technical information on domain name registrations is available at AuNIC (Australian Network Information Centre): http://www.aunic.net
General policy and consumer information about domain names in Australia is available from: http://www.auda.org.au. For a brief outline of Australian domain names and some issues involved with domain name registration read Australian domain names - An Overview (http://www.auda.org.au/pdf/auda-overview.pdf)
Various registrars administer the various Australian domains. The following sites are either the registrars of the 2LDs (second level domains) or contain links to accredited registrars:
All open 2LDs are administered by http://www.auda.org.au/domains/au-registry/
Companies: .com.au
Networks: .net.au
Non profit and miscellaneous organisations: .org.au
Associations: .asn.au
Individuals: .id.au
Conferences: .conf.au
Major information resources: .info.au
Education: .edu.au http://www.domainname.edu.au/
Government agencies: .gov.au http://domainname.gov.au/
CSIRO (Commonwealth Scientific and Industrial Research Organisation) : .csiro.au this domain is administered by the CSIROs IT Services and Operations section.
ACSnet: .oz.au entities within the ACSnet network. This domain is shrinking as the number of sites connected to the domain are decreasing
.telememo.au: this closed domain is used to support the gateway between the
public X.400 email service, operated by Telstra Enhanced Services
In November 2000 the Internet
Corporation for Assigned Names and Numbers (ICANN), which administers the
Domain Name System, announced seven new gTLDs would be available. Of these new
domains only .info has been extended to a 2DL in the .au domain (i.e. the
domain .info.au now exists (see above)). The seven new domain names are:
.aero: For use by the air transport and aviation industry.
.biz: For use by businesses (the .biz registry is operated by NeuLevel, for a list of ICANN accredited .biz registrars see http://www.neustarregistry.biz/)
.coop: For use by cooperatives.
.info: Now available for unrestricted use.
.museum: For use by museums.
.name: For use by individuals.
.pro: For use by professionals (accountants, lawyers, doctors etc.).
auDA is an independent, non-profit Australian company with the responsibility of formulating and administering policy in relation to the .au name space. auDA is endorsed b the Australian government and recognised by ICANN. (See http://www.auda.org.au/about for more information) Prior to October 2001, the .au name space was administered by Mr Robert Elz.
3.2. Available sub-domain categories
A number of subdomain categories in addition to the well known (.com, .org, .net, .edu and .gov) have been created in .au, the country name space for Australia. Section 2 (above) lists these subdomains and distinguishes between those domain names which are open to the general public subject to some eligibility requirements, and those that are closed in that their availability is restricted to defined communities of interest.
Until 2002, each subdomain of .au was delegated to a designated authority that was responsible for the administration of the applicable policies. (See the role of Robert Elz in this historical arrangement, and the transition to auDA.)
On 1 July 2002, auDA assumed responsibility for policy administration for all open subdomains. Further information on other subdomains can be obtained at http://www.auda.org.au/policy/current-policies/.
3.3. Registry and registrar functions for the .com.au space
Until the introduction by auDA of a new competition regime on 1 July 2002, Melbourne IT (formerly trading as Internet Names Worldwide, see http://melbourneit.com.au) was the sole registrar (ie processing data for registrants and approved resellers and providing customer service) for the .com.au space.
There are now more than 10 auDA Accredited Registrars, authorised to provide registrar services in all open 2LDs. They are listed at http://auda.org.au/registrars.
Registry functions for the .com.au domain space (maintaining the database and providing an information service) which were previously provided by AUNIC, was provided by AusRegistry until July 2006. AusRegistry is be responsible for the .id.au, .net.au, .org.au and .asn.au domain space.
auDA seeks tenders for the provision of registry services by another body when new 2TLDs are opened up eg .biz.au.
3.4. Requirements for registration of a .com.au domain
Domain names are licensed (rather than 'sold') to registrants, on the terms and conditions set down by the relevant registrar (for an example of these terms and conditions see Melbourne ITs (http://www.melbourneit.com.au/policies/aupolicy.php).
Registrant criteria (.com.au)
To be eligible for a .com.au domain name licence in Australia, registrants must be:
an Australian registered company; or
trading under a registered business name in any Australian State or Territory;
an Australia partnership or sole trader;
a foreign company licensed to trade in Australia;
the owner of or an applicant of an Australian registered trademark;
an association incorporated in an Australian State or Territory;
an Australian commercial statutory body.
3.4.1. Domain name criteria (.com.au)
To be eligible for registration, domain names must be:
an exact match or an acronym or abbreviation of the registrants name or trademark; or
otherwise closely or substantially connected to the registrant
In addition:
domain names must be at least two characters long, contain only alphanumeric characters and hyphens (but must not contain hyphens in the third and fourth position, eg. a-bcd.com.au is acceptable but ab-cd.com.au is not); and
The previous restriction of one domain name per eligible commercial entity has now been lifted.
These registration requirements reflect the requirements set out by auDA in its policy document Domain Name Eligibility and Allocation Policy Rules for Open Second Level Domains (2008-05). At: (http://www.auda.org.au/pdf/auda-2008-05.pdf )
Additional licence conditions may also be imposed by individual registrars.
Australian place names and their common abbreviations are considered to be overly representative and are not licensed for use as .com.au domain names. However, if these place names or generic names are combined with other words to form more specific words which are aligned with eligible commercial entities, they would be registrable as domain names.
For example, canberra.com.au would not be licensed but mycanberra.com.au may be. auDA is currently considering removing the restriction on geographical names.
Also excluded from licensed domain names are names which are unacceptable because they are obscene, offensive or contrary to public policy. The administering body has the discretion to decide which names fall into those categories.
For a list of words that cannot be used as domain names see http://www.auda.org.au/policies/auda-2008-03/ (This list is a policy document, and like other policy documents from auDA, it is updated from time to time, so make sure you check its status.)
There is also a list of prohibited mis-spellings at http://www.auda.org.au/policies/auda-2008-09/
Why do you think this would be necessary?3.6. Generic Words
Words that represent commercial categories or sectors (that is, deemed 'generic') were previously not licensed.
This prohibition was lifted by auDA, with generic domain names initially being licensed via an auction process which concluded on 30 June 2002.
3.7. Licence terms
Subject to the above requirements, .com.au domain names are licensed on a first-come, first-served basis. If a domain name is already licensed, or if there is an application pending for that name, no further application is accepted for that name until the name is either revoked or the pending application is declined. The licence to use the domain name may be renewed at the end of each licence period, subject to current terms and conditions. The licence fee charged differs amongst the various registrars. (For an example of a registrars licensing fee structure see http://www.melbourneit.com.au/products/pricing/.
In an obvious policy designed to discourage cybersquatters, the licence to use the .com.au domain name cannot be transferred or sold to another party.
Similar standards, policies and rules for registration requirements are in place for the remaining open subdomains. (See auDAs Domain Name Eligibility and Allocation Policy Rules for Open Second Level Domains http://www.auda.org.au/policies/auda-2008-05/)
The following is a useful resource for this topic:
Patrick Gunning and Patrick Flynn Trade marks and domain names [2001] CyberLRes 4 (http://www.austlii.edu.au/au/other/CyberLRes/2001/4/ ) (hereinafter 'Gunning and Flynn (2001)')
Gunning and Flynn (2001) Part 3 The introduction of competition in the market for gTLD domain name registration gives a very brief summary of the pre-1999 situation. As he says, 'Domain names, by their very nature, must be unique. Therefore, some body must be responsible for ensuring, among other things, that no duplication occurs.'
4.1. The Internet Assigned Numbers Authority (IANA) - delegation of responsibilities
IANA (Internet Assigned Numbers Authority) (www.iana.org) is currently managed by the Internet Corporation for Assigned Names and Numbers (ICANN). It had a historical role as the overall authority for the allocation of blocks of IP addresses (the numerical addresses) and for the allocation of domain name delegated authority.
In 1998 it was said `IANA currently has responsibility for all TLDs in the global DNS, including ccTLDs, sTLDs (specialized TLDs) and gTLDs. ccTLD registries are delegated by IANA to appropriate local authorities; sTLDs are governed by charters approved by IANA, and gTLDs are governed by a tradition of fair use codified in RFCs and IANA policies.' (source: gTLD-MoU Policy Oversight Committee http://www.gtld-mou.org/docs/poc-gp-response.htm).
However, at the present time, the IANAs main activities fall into three main categories:
Domain names (manages the DNS root, the .int and .arpa domains etc)
Number resources (coordinates the global pool of IP and AS numbers)
Protocol assignments (internet protocols numbering systems are managed by IANA in conjunction with standards bodies). (source: http://www.iana.org/about/ )
IANA chooses which authority/authorities in each country are to allocate domain addresses under the Country Code TLDs (ccTLDs). For administrators of generic top-level domains (gTLDs) see below.
4.2. Network Solutions- allocation of names under the current gTLDs
By arrangement with IANA and ISOC, VeriSigns Global Registry Services (formerly Network Solutions Inc prior to being taken over by VeriSign) undertook the allocation of the most commercially important generic (non-country-specific) top level domains or gTLDs (`.com', `.net', `.org'). However in 2002 VeriSigns control over the .org registry expired and the domain is now administered by Public Interest Registry. VeriSigns control of the .com and .net registries is guaranteed till at least 2007 provided VeriSign Global Registry and NSI Registrar businesses are completely separated as specified in the ICANN/NSI Registry Agreement(.com .net and .org registry agreements are available from ICANN at: (http://www.icann.org/en/registries/agreements.htm ) and Cooperative Agreement # NCR 92-18742 (http://www.icann.org/nsi/nsi-registry-agreement-04nov99.htm).
VeriSign therefore has a monopoly over the allocation of the most commercially valuable domain names worldwide, since the .com and .net domains are not country-specific and (though dominated by US name-holders) are increasingly used by and attractive to businesses all over the world (precisely because they are not country-specific).
4.3. The dispute over reform of international domain name allocations
From 1995 there developed an escalating international dispute about how to reform the domain name system. The NSI monopoly, and the growing pressure on the existing top-level domains because of the scarcity of attractive names left available, led in large part to debate over reform of the domain name system administration (resulting in the creation of ICANN), and the need for more generic top-level domains (gTLDs) which is not yet resolved.
There were two main proposals put forward in 1998: the gTLD-MoU (Memorandum of Understanding) (http://www.gtld-mou.org/) proposal put forward by a coalition of Internet organisations; and the US Green Paper proposals put forward by the US Government. The result was a modified version of the US Green Paper proposal, which led to the creation of ICANN (The Internet Corporation for Assigned Names and Numbers ) in 1998.
[NOTE: www.gtld-mou.org seems to be intermittently accessible, but comes up in Google cache.]
Gunning and Flynn (2001) Part 3 The introduction of competition in the market for gTLD domain name registration explains how the control of domain names and IP addresses has changed fundamentally during 1998-2000 with the creation of ICANN.
The Internet Corporation for Assigned Names and Numbers (ICANN) (http://www.icann.org) was set up by the US Department of Commerce in 1998. It describes itself as the non-profit corporation that was formed to assume responsibility for the IP address space allocation, protocol parameter assignment, domain name system management, and root server system management functions performed under U.S. Government contract by IANA and other entities.
From Gunning and Flynn (2001) note the following:
VeriSigns Network Solutions has lost its position as a monopoly provider of .com and other gTLD domain names, with the introduction of competition in domain name administration overseen by ICANN. ICANN has already accredited over 150 registrars. Network Solutions is now just one of those registrars (but no doubt still the largest).
All Registrars must adopt ICANN's Uniform Dispute Resolution Policy (UDRP) (discussed later).
In order to ensure that competing Registrars do not register the same domain name, there must be a central registry for each gTLD (eg for .com names), to enable Registrars to ensure that they do not register a name already registered, and to allow users to find which Registrar has registered a particular domain name. VeriSign will operate such a central registry for the gTLDs, and will operate a free 'whois' service for users to make enquiries.
5.1. Who runs ICANN?
ICANN is a non-profit corporation formed under US law. The Board of ICANN is composed of nineteen Directors: nine At-Large Directors, nine selected by ICANN's three supporting organizations, and the President/CEO (ex officio). The nine At-Large Directors of the Initial Board are serving initial terms and will be succeeded by At-Large Directors selected by ICANN's At Large Membership. (see About ICANN (http://www.icann.org/about/) for details and current Board membership, this section is current as of 24 January 2003).
The ICANN By-laws provide for three Supporting Organizations (SOs) (http://www.icann.org/en/general/bylaws.htm) to assist, review, and develop recommendations on Internet policy and structure within three specialised areas. They are the Address Supporting Organization, the Country-Code Supporting Organization and the Generic Names Supporting Organization. Each SO names three Directors to the ICANN Board.
Individuals can become At large Members of ICANN (http://www.icann.org/committees/at-large/at-large.htm), and the At Large Members elected 5 Directors of ICANN in November 2000 Press release relating to the 2000 election: (http://www.icann.org/announcements/icann-pr21sep00.htm). Why not consider joining (it's free) if this area interests you?
How democratic or representative is ICANN as a model of Internet governance? The Berkman Centre for Internet and Society at Harvard Law School has made ICANN's development the centrepiece of its Internet Governance Project (http://cyber.law.harvard.edu/research). They conclude:
Our ongoing work with ICANN gives the Berkman Center a unique opportunity to study and help shape a new form of governance for the Internet-one that can potentially respond to rapid change yet maintain the openness and accountability that lend authority and legitimacy to more traditional forms. Our hope is that this research will promote the development of open Internet governance, defining new mechanisms that will fortify user sovereignty, sustain accountability to the constituency, and uphold the principles of free expression, privacy, and due process applied to traditional governments.
The following are some useful ICANN links:
ICANN: www.icann.org The Internet Corporation for Assigned Names & Numbers. Includes schedules and details of all their upcoming public meetings, and published papers from previous events, as well as plenty of background information on the DNS.
ICANN Watch: www.icannwatch.org ICANN Watch is a site set up by concerned observers to act as a watchdog and public forum for ICANN. An excellent site for keeping up with developments and debates about relevant issues. Regular posters include some ICANN directors.
Berkman Center Archive: cyber.law.harvard.edu/icann The Berkman Center ICANN-Related Content Archive is a useful set of documents relating to ICANN, including meeting summaries and various pieces of analysis.
Domain Name Handbook on ICANN: www.domainhandbook.com/icann.html Another useful and more comprehensive resource on all aspects of ICANN.
5.2. Registration of names in the gTLDs (.com, .net, .org)
See Gunning and Flynn (2001) for details of registration and transfer of names in the new competitive environment of the gTLDs. The important points are that the competing Registrars will all have to implement certain ICANN policies in their contracts with customers in order to obtain registration. These include agreement to abide by ICANN's dispute resolution policy, and rules for choice of law. They do not impose restrictions on transfer of names.
5.3. ICANN Mission Overview
The Internet Corporation for Assigned Names and Numbers (ICANN) is responsible for coordinating the Internet's naming, address allocation, and protocol parameter assignment systems. These systems enable globally unique and universally interoperable identifiers for the benefit of the Internet and its users. These systems are highly distributed: hundreds of registries, registrars, and others, located around the world, play essential roles in providing naming and address allocation services for the Internet. ICANN's paramount concern is the stability of these remarkably robust services. As overall coordinator of the Internet's systems of unique identifiers, ICANN's role, while defined and limited, includes both operational and policymaking functions.
5.4. Security
Finally, ICANN has the responsibility for policy coordination with respect to the security of the various parts of infrastructure that make up the operational DNS. In addition, ICANN has certain operational security responsibilities with respect to ICANN's operational activities. Finally, ICANN attempts to nurture and encourage continuing and serious attention to security and stability issues by all participants in the DNS, and to ensure that necessary tasks are undertaken by some responsible party.
5.5. Policymaking
In the policymaking sphere, ICANN is responsible for developing and implementing policies related to each of its operational functions. The nature and scope of ICANN's policymaking role differs for each function. For example, ICANN's policy role for the country-code top-level domain registries (ccTLDs) is limited to global policy coordination with deference to each local Internet community's responsibility to set its own registry-level policies (i.e., registration criteria, pricing, dispute resolution, mechanisms for local community participation and policymaking, etc.). By contrast, ICANN plays a more direct and significant role in setting registry-level policies for the global top-level domain registries (gTLDs), such as .com, .net, .org, .info, .name, and .biz. In effect, ICANN serves as the global Internet community's open policymaking forum for the gTLD registries.
ICANN is a private, not-for-profit corporation set up in 1998 to help co-ordinate certain key aspects of the Internets technical infrastructure, specifically, coordinating the Internet's naming, address allocation, and protocol parameter assignment systems (Toward A Statement of the ICANN Mission, http://www.icann.org/general/toward-mission-statement-07mar02.htm). Four years later, proposals have been tabled to reform both the structure and mission of ICANN. The CEO and President of ICANN, Mr Stuart Lynn, issued a report on 24 February 2002 entitled ICANN: The Case For Reform (http://www.icann.org/general/lynn-reform-proposal-24feb02.htm). This contains a critical analysis of ICANN operations and achievements against its mission, and recommends major changes in structure and operations. His focus is on what he perceives as an undue focus on process to the exclusion of substance and effectiveness.
In 2002 ICANNs new bylaws (version with latest amendments available at http://www.icann.org/en/general/bylaws.htm), based on Lynns proposal came into operation. While ICANN was still in a transitional phase (2003) and the full effect of the restructuring was yet to be felt, the new by-laws were criticised by many as being undemocratic, involving too little public consultation and too much government input. The focus of the bylaws was to create a public-private partnership from which ICANN would operate, as opposed to the previous private governance based on consensus and consent (David E. Sorkin in Internet Governance and the Domain Name System: An International Perspective vol 5.1 Internet Law Bulletin).
In early 2003 ICANN announced a meeting to select members for the Nominating Committee, to select the new Board of Directors (http://www.icann.org/announcements/announcement-28jan03.htm). This was one of ICANNs first steps in implementing the 2002 bylaws.
Earlier it also announced the members of the Interim At-Large Advisory Committee Members (http://www.icann.org/announcements/announcement-20jan03.htm).
On June 29, 2007, the last Interim ALAC member was replaced by elected representatives and the Interim ALAC therefore became the full ALAC. See the At-Large Advisory Committee page for current membership ( http://www.icann.org/en/committees/alac/ ).
Q: Do you think they adequately represent the users of the Internet?
What criteria would you use for this assessment?
What about the only 1,000 or so ICANN at Large Members? (http://www.atlarge.icann.org/).
6.1. ICANN: The Case For Reform
The following is an edited summary of extracts from Lynns 2002 ICANN: The Case For Reform.
It is now more than three years since the creation of ICANN, and there are some real accomplishments: the introduction of a competitive registrar market, the Uniform Dispute Resolution Policy, the creation of seven new global Top Level Domains. But despite this progress, all the original expectations of ICANN have not been realized. ICANN is still not fully organized, and it is certainly not yet capable of shouldering the entire responsibility of global DNS management and coordination
The original concept of ICANN as a purely private sector body, based on consensus and consent, has been shown to be impractical. The fact that many of those critical to global coordination are still not willing to participate fully and effectively in the ICANN process is strong evidence of this fact. But I also am convinced that, for a resource as changeable and dynamic as the Internet, a traditional governmental approach as an alternative to ICANN remains a bad idea. The Internet needs effective, lightweight, and sensible global coordination in a few limited areas, allowing ample room for the innovation and change that makes this unique resource so useful and valuable.
I have concluded that ICANN needs reform: deep, meaningful, structural reform, based on a clearheaded understanding of the successes and failures of the last three years. If ICANN is to succeed, this reform must replace ICANN's unstable institutional foundations with an effective public-private partnership, rooted in the private sector but with the active backing and participation of national governments.
ICANN's major problems can be broadly categorized into three categories:
too little participation by critical stakeholders (across the full range of infrastructure operators, major users and national governments);
too much focus on process; and
too little funding to provide quality services.
6.1.1. Too Little Participation by Critical Stakeholders
The essential participants in an effective ICANN are: (a) the various infrastructure providers of the Internet; (b) major users; (c) the relevant technical community and (d) national governments. It is these participants that are absolutely essential for ICANN to carry out global management and coordination effectively. And their participation must be more than token. They must be actively involved; those that are part of the name and address operating infrastructure must be willing to agree to abide by the results of the ICANN policymaking process; and they must fund the process at levels adequate for ICANN to function effectively
National governments are perhaps the most irreplaceable supporters of ICANN, in the sense that notwithstanding the efforts or desires of other stakeholders the backing of governments is necessary if private sector coordination of the Internet's naming and address allocation systems is to be feasible. While there has been significant departure from the original conception of ICANN as a purely private sector body, appropriate national government participation would contribute greatly to the success of ICANN in at least two ways. First, it could provide public interest accountability and second, it would increase the likelihood that governments would more effectively encourage the participation of their citizens and entities that is critical for ICANN's success.
6.1.2. Too Much Process
ICANN was born with a particular and intense focus on process and representation. Undue focus on process to the exclusion of substance and effectiveness is the second major problem facing ICANN. The intense focus on process at the time of ICANN's creation was in part driven by a reasonable desire among some to shield the Internet from hasty, unsophisticated or foolish decisions by ICANN, a new and untested institution. However, that impulse, coupled with a widespread failure to understand ICANN's inherently limited scope and lack of coercive authority, caused the creation of ever-more procedural loops and layers at the expense of overall Internet-speed effectiveness. There were even attempts to cause ICANN to implement the thousands upon thousands of pages of administrative and regulatory procedures that apply to US government agencies a move that is totally inconsistent with the reason for creating a private sector organization in the first place
The concept of At Large membership elections from a self-selected pool of unknown voters is not just flawed, but fatally flawed, and that continued devotion of ICANN's very finite energy and resources down this path will very likely prevent the creation of an effective and viable institution. We must find another, more effective path for appropriate input into the ICANN process by the general user community that will accomplish the key purpose underlying the At Large concept to ensure that the broad public interest is effectively reflected and protected in the ICANN consensus development process.
6.1.3. Too Little Funding
Finally, the third major problem is inadequate funding. ICANN began its existence with no guaranteed funding. It survives today on a heavily negotiated revenue stream generated from a small number of very interested intermediaries who also have major influence in establishing the ICANN budget.
Overall, the ICANN process is understaffed by at least 10-12 fulltime employees. A fully funded ICANN probably requires an operating budget of 300-500% of its current budget level, plus funding for significant one-time expenditures if funding of root name server operators and the establishment of appropriate reserves are included. This level of needed funding requires a very different kind of funding structure from the one that exists today. All of the participants in the ICANN process that have the ability to pay a share of ICANN funding should do so. With "skin in the game," these participants will feel a more immediate and direct connection to the success of the ICANN process.
6.2. Principles of Reform
Based on the experience of the last three years and my own focus on ICANN over the last year, I am convinced that a reformed ICANN can be successful if we re-focus on our core mission, reform our institutional foundations to fit that mission, and eliminate the distractions of peripheral issues and agendas.
To be clear: ICANN's mission is effective management and coordination of those few, higher-level elements of the Internet's naming and address allocation systems that require or benefit from global management and coordination, while abstaining from actions that might interfere with the creativity and innovation that has made the Internet such a dynamic resource. ICANN's mission is stewardship and operational stability while preserving the core values of openness and board participation.
Having said that, it is essential to state unambiguously what falls outside of ICANN's scope. The core ICANN mission includes no mandate:
to innovate new institutions of global democracy,
to achieve mathematically equal representation of all affected individuals and organizations,
to regulate content, nor
to embody some idealized (and never-before-realized) model of process or procedure.
However important those ideals may be, they are for other, better-suited organizations to address.
6.2.1. A New Public-Private Partnership Is Necessary
I am now convinced that the original desire to avoid a totally governmental takeover of the IANA functions led to an overreaction the choice of a totally private model. With three years' experience, it is clear that model is simply not workable. It is not workable because it leaves ICANN isolated from the real-world institutions governments whose backing and support are essential for any effective global coordinating body to accomplish its assigned tasks. ICANN currently has an advisory committee to channel governmental input, but that mechanism has not effectively integrated the views or the influence of governments; we must find a better way. What is needed at this stage if ICANN is to carry out its mission is neither a totally private nor a totally governmental solution, but rather a well-balanced public-private partnership. We should seek an effective middle ground that will incorporate the best of both options.
6.3. Details of the reforms
The ICANN organisational chart can be viewed at http://www.icann.org/en/structure/.
6.3.1. Reformation of the ICANN Board
15 member Board of Trustees:
10 At Large Trustees
Five nominated by governments and confirmed by Board of Trustees
Five nominated by open Nominating Committee process and confirmed by Board of Trustees
Five Ex Officio Trustees
Chairs (or designees) of three Policy Councils and Technical Advisory Committee (see below)
CEO
Designee of Internet Architecture Board and Chair of Governmental Advisory Committee serve as non-voting liaisons to Board of Trustees
6.3.2. Reform of the ICANN Policy Development Structure and Process:
Three Policy Councils Providing Advice to Board of Trustees
Address and Numbering Policy Council
Generic TLD Names Policy Council
Geographic TLD Names Policy Council
1. Managed by Steering Committees composed of about
half ex officio representatives of categories of relevant entities (registries, registrars, etc.) and
half of persons nominated by Nominating Committee and confirmed by Board of Trustees
2. Nominating Committee composed of
nonvoting Chair (selected by CEO after wide consultation),
three members of Board of Trustees whose terms are not expiring, and
four other persons appointed by Board of Trustees after consultation with and suggestions from community.
Two Standing Advisory Committees
Technical Advisory Committee: Composed of ex officio members (designee of IAB, regional IP address registries (RIRs), root name server operators and name registries/registrars) and three other persons nominated by Nominating Committee and confirmed by Board of Trustees
Governmental Advisory Committee
Two Additional Standing Committees
Security Committee (appointed by Board of Trustees)
Root Server System Operations Committee (root server operators and other invited persons by the Committee)
Participation in Councils by Self-Organized Forums (Individuals and/or Entities with Common Interests), including potentially an At Large organization for individuals
6.3.3. Transparency and Accountability
1. Ombudsman
2. Person of unassailable credentials responsible for managing public comment and other public participation
Ombudsman
Responsible for receiving and processing petitions for reconsideration, and other complaints and disputes; access to all necessary information to evaluate same
Responsible for making recommendations to Board of Trustees with respect to complaints and disputes, and requests for reconsideration; all such recommendations to be published on ICANN website.
Provided with support staff and other resources necessary to carry out responsibilities effectively
Manager of Public Participation
Responsible for managing the public comment and participation process for ICANN on all substantive matters. Will solicit, receive and report to the Board on all public input on matters put out for public comment.
Responsible for managing all ICANN public forums, public e-mail list, etc.
Provided necessary electronic access to publicize findings and recommendations, all of which will be available to the public.
Provided with support staff and other resources necessary to carry out responsibilities effectively
6.3.4. Funding
1. Funding (for staff, general operations and additional requirements including root server operator compensation) must be significantly increased, and sources of funding broadened
2. Funding to come from both governmental and private participants
3. Funding to include both contributions for core functions and fees for services
6.4. Criticisms of ICANNs reforms
David E. Sorkin in Internet Governance and the Domain Name System: An International Perspective vol 5.1 Internet Law Bulletin April 2002 criticises the ICANN reforms saying:
While the idea of reforming ICANN is laudable, some of the proposed changes frankly are quite suspicious. For example, ICANN proposes to eliminate elected board members while one of its current elected directorsone of only two member-nominated board membersis suing the organisation to open its books. Governments conveniently would be given the right to appoint a third of ICANNs board (by an as-yet undefined process), while the organisation is struggling to gain recognition from governments and collect dues from country-code registry operators. The plan would streamline ICANNs decision making processes and secure its fundingboth of which may sound good in theory, but would make the organisation even less accountable than it is now. Finally, the plan proposes to give ICANN complete control over the domain name systems root, removing one of the vestiges of U.S. government control over the Internet, but simultaneously eliminating what may be the most powerful restraint on ICANNs power.
Center for Democracy and Technologys ICANN Reform Plan Falls Short (http://fec.cdt.org/press/020628press.shtml) also criticised the ICANN reforms as having no meaningful checks on its power, affording them with diminished accountability through vesting greater power in board members and considerably less public input and involvement.
Similar criticisms of ICANNs lack of public involvement and power of board members can be found in The Registers Governments weigh in on ICANN reform (http://www.theregister.co.uk/content/6/24424.html)
ICANN continues to face challenges in relation to accountability ongoing reform. For example, its registrar-accreditation system came into the spotlight in 2007 in relation to fraudulent actions done by Registerfly, an ICANN-accredited registrar. (http://www.theregister.co.uk/2007/03/03/icann_registerfly_domain/ )
6.5 IANA functions
Governance at the top level of the DNS system remains controversial. In early 2012, the US National Telecommunications and Information Administration announced they were canceling the Request for Proposal for a renewal of the functions of the Internet Assigned Names and Numbers Authority, IANA. As a contributor to an online group explained:
The NTIA is the part of the US government that contracts with ICANN for the performance of various functions relating to Internet governance.
For historical reasons, these are referred to as the IANA functions - IP-address admin, DNS root-servers, .int and .arpa admin, protocol parameter admin, time zone database admin.
The world is naturally suspicious of NTIA, and would prefer some other institutional structures and processes that better reflect the international nature of the Internet in the 21st century.
But there's no consensus on what replacement structures and processes should be created; and no plan on how to negotiate with the US in order to implement them.
Jon Postel ran IANA at ISI 1990-98, and ICANN has run it since 1999.
The IANA contract is up, and NTIA called for bids to perform the function. ICANN failed to submit a bid that satisfied NTIA's requirements. See below.
But, if there were any other bidders, they failed as well. So ICANN's contract has been extended to September 2012, and a second round of bidding is to be called.
Here is the notice from NTIA:
Notice - Cancelled Internet Assigned Numbers Authority (IANA) Functions - Request for Proposal (RFP) SA1301-12-RP-IANA
Topics/Subtopics: Domain Name System
Date: March 10, 2012
The National Telecommunications and Information Administration (NTIA) remains committed to preserving the stability and security of the Internet's domain name system (DNS). Critical to the DNS is the continued performance of the Internet Assigned Numbers Authority (IANA) functions. In anticipation of the impending expiration of the IANA functions contract, NTIA, via two public notices in February and June 2011, consulted on how best to enhance the performance of the IANA functions. Based on the input received from stakeholders around the world, NTIA added new requirements to the IANA functions’ statement of work, including the need for structural separation of policymaking from implementation, a robust company wide conflict of interest policy, provisions reflecting heightened respect for local country laws, and a series of consultation and reporting requirements to increase transparency and accountability to the international community.
On November 10, 2011, the Department of Commerce issued a Request for Proposal (RFP) SA1301-12-RP-IANA for a new IANA functions contract with a deadline of December 19, 2011. The government may cancel any solicitation that does not meet the requirements. Accordingly, we are canceling this RFP because we received no proposals that met the requirements requested by the global community. The Department intends to reissue the RFP at a future date to be determined (TBD) so that the requirements of the global internet community can be served. Interested parties are encouraged to visit www.fbo.gov for updates.
This caused consternation among the non-US government entities concerned with DNS governance. The implications and outcome were not immediately known.
7. Domain Name Disputes Reasons and Motives
This is the beginning of the more pragmatic local problem solving aspect of this class materials, moving on from the first sections above which covered the governance model, structures, representation and history of the domain name regulation system generally.
For general information see Report of the Second WIPO Internet Domain Name Process WIPO 3 September 2001 (http://www.wipo.int/amc/en/processes/process2/report/html/report.html) which looks at among other things cybersquatting and the UDRP (see below).
7.1. Domain Name as Business Identifiers BRANDING!
The intersection of the global, digital and borderless space of the Internet with the systems and laws designed for the physical, territorial world has created many legal issues. The original purpose of domain names was to enable people to remember Internet addresses more easily than a string of numbers. Due to their inherent characteristic of being easy to remember and to identify, domain names have acquired a further significance as business identifiers.
As commercial activities have increased on the Internet, domain names have become part of the standard communication tool used by businesses to identify themselves, their products and their activities. Advertisements in the media now routinely include a domain name, in addition to other means of identification and communication such as the corporate name, trademark, telephone and fax numbers. Telephone and fax numbers are generally a string of anonymous numbers without any other significance. By contrast, a domain name is easily remembered and identified and often carries an additional significance which is connected with the name or mark of a business or its product or services.
7.2. Tension Between Domain Names and Other Business Identifiers
As a consequence of the dual function which domain names have come to perform, conflicts have arisen out of interests in domain names and the traditional forms of business identifiers.
The main form of traditional identifiers consist of trademarks, but also includes other rights of business identification, such as personality rights (whether attaching to real or fictional characters) and place names (e.g. geographical indication such as Coonawarra, champagne, cognac).
Of course there are exceptions where the businesses choose particular phone numbers, e.g., numbers with corresponding letters which spell out their name, or certain strings of numbers which are easier to memorise, e.g., 1234 but in general, the numbers are merely an anonymous string of numbers.
The DNS gives rise to registrations that result in a global presence accessible from anywhere in the world. However, the DNS was never intended to give rise to any proprietary rights in the names which were registered under the system. Initially, there were no formal requirements which had to be met to register a domain name at the open gTLD level. Domain names in the .com.au space were also allocated on a "first come, first served" basis, subject to minimal eligibility requirements. Essentially, the requirement was that the domain names had to be derived from the registrant's company or business name and entities were restricted to one domain name. (Recent amendments to these requirements are discussed further below, notably that the restriction of one domain name per business has been lifted.)
By contrast, the intellectual property rights legal system governs the economic rights attached to intellectual property (e.g. trademarks). The system is publicly administered on a territorial basis and gives rise to rights that are exercisable only within the territory concerned. The system requires formal requirements to be met before any registration can be made and is based on certain governing legal principles (e.g. balancing public and private rights).
The DNS encroached upon the territory of the intellectual property legal system in the early days of domain name registration when there were very few formal requirements that needed to be satisfied.
This tension was exacerbated by a practice commonly known as cybersquatting. Cybersquatting is the practice of registering as domain names famous or well-known trademarks in the hope of selling those domain names to the owners of those trademarks or other marks, or taking unfair advantage of the reputation attached to those marks.
7.3. What are domain names worth?
This section is a slightly edited extract from Chad de Souzas Specific remedies for cybersquatting (Part One) Vol 3 No 4 Internet Law Bulletin (July 2000).
Even though they were not intended to be anything other than temporarily assigned registrations for Internet addresses, domain names can in practice represent some of the best return investments available. For the registration price of around US$30 domain names can be on sold for considerable profit. Examples of some high priced domain name acquisitions include:
In 1998 Compaq Computer Corp. paid US$3.3 million dollars to purchase the rights to AltaVista.com;
In 1999 eCompanies Inc paid US$7.5 million dollars for Business.com (McCance, M Firms Enter into Battle for Internet Domain Names, Richmond Times Dispatch, 18 April 2000)
Earlier in 2000 Tuvalu, a South Pacific nation measuring 26 square kilometres, sold the use of its ccTLD (.tv) to US based Idealab! for US$50 million a year until 2012. The annual national budget of Tuvalu is US$14 million. The deal will raise the per capita revenue of its residents, all 10 600 of them, to US$6037, up from US$400 (Vacher, G. Tiny Tuvalu cashes in on tv domains ZDNet News, 11 April 2000).
Now you can check up on current records on a web site: see http://www.soldnames.com/
According to article http://technewsreview.com.au/article.php?article=2968,
SoldNames has a list of the top 100 premium domain name sales. Top of the list of course is sex.com listed as being sold for US$14 million in 2006. Top of the list of course is sex.com listed as being sold for US$14 million in 2006. It's interesting to peruse their list. Porn.com, Business.com, Diamond.com and Beer.com round out the top 5
At one stage, The highest non- .com sale is Beauty.cc, selling in 1999 for one million dollars in equal 42nd place while Beauty.com sold in 2000 for $800,000 in equal 53rd place.
The wide spread use of ICANNs Uniform Dispute Resolution Policy (UDRP) as a relatively cheap method of resolving domain name disputes means that today there few large scale payouts for transfers of domain name registration. This is furthered by the fact that complainants have a high rate of success in UDRP proceedings.
The ease by which gTLDs can be registered has lead to the flurry in registration activity. Using an approved registrar, any domain name (that has not been previously registered) may be registered from anywhere in the world on a first come first served for around US$30 a year (for an example see http://www.domainregistry.com/domainregistry/). Other than availability checks, no check is done of any trademark database. Payment may be made by credit card and ownership registered within 24 hours. No checks are made to confirm that the details of the registrant are valid or correctly recorded allowing parties to record non-existent companies or individuals as domain name owners.
An entire industry has arisen around trading in the rights to domain names which are perceived to hold great commercial value. It is in fact the profitability of this industry that has lead to the spread of the cybersquatting problem, and the many related forms of abuse of the domain name system.
The significance of domain names in todays society as a business identifier has resulted in a whole new area of domain name disputes. Predominately these disputes arise from cybersquatting in its various forms, but sometimes disputes arise between parties who both have a legitimate interest in the domain name.
Sections 8.1 8.5 is again an edited extract from de Souzas Specific remedies for cybersquatting and looks at the types of disputes that arise from different types of cybersquatting.
8.1. Traditional cybersquatter
The traditional cybersquatter registers a domain name similar to or identical to an existing trademark or the name of a celebrity. The domain name is never used and may be warehoused with many other domain names. The sole purpose of this cybersquatter is to sell the domain name to the rightful owner of the trademark or the celebrity at a profit.
Examples of these cybersquatters include Mr Jeff Burgar who has registered over 1,500 domain names (such as yankees1.com, redsox1.com) and has recently been embroiled in a series of legal actions over domain names with the Coalition to Advance the Protection of Sports Logos (representing four of the major sports leagues in the USA and Canada) (Regan, K. Infamous Cybersquatter Shut Down by Judge E-Commerce Times 14 April 2000), Hewlett-Packard, Canadian search engine NorthernLight.com and pop star Mariah Carey. Sometimes referred to as cyber speculators or cyber investors, sites that trade domain names include Famous Domains Ltd, greatdomains.com and rockbottomdomains.com.
8.2. Redirect cybersquatter
The redirect cybersquatter registers a famous trademark or name as a domain name and uses the site to link to an unrelated (usually pornographic) website. Web surfers who type in the name of the domain name are unwittingly directed to these unrelated websites. Search engines will also frequently list these websites in search results for the famous mark or name. Examples of famous names which have been subject to such behaviour include paulmccartney.com and mickjagger.com. Both domain names until a couple of years ago led to pornographic websites.
Recent registration policy in Australia limits redirect cybersquatting through its registration criteria which includes that the owner of the website must have a registered trademark or be a registered company and the domain name must exactly match the trademark or company name, or be an abbreviation of it. (See Domain Name Eligibility and Allocation Policy Rules for Open 2LDs, auDA 2008 (http://www.auda.org.au/policies/auda-2008-01/ ).
8.3. Business competitor
Domain name disputes can also involve the registration by competing businesses seeking the same address on the Web.
For a business competitor, there is no requirement of an obvious element of bad faith or intent to profit from the disputed domain name. The dispute between Buy.com Inc (and others) and Mr. Duncan Angus in the Australian Federal Court provides an example of competing businesses seeking the same virtual real estate. Buy.com Inc operates a discount on-line retailer at www.buy.com and sought the Australian ccTLD equivalent www.buy.com.au. The domain name had already been registered by Mr. Angus which used to operate an auction site. Buy.com Inc brought an action under the common law doctrine of passing off and misleading and deceptive conduct under the Trade Practices Act 1974 (Cth) (Buy.com Inc v Duncan James Angus Federal Court of Australia, NSW District Registry, Proceeding No N303 of 2000). The case was dismissed on the 24th of July 2000 and Angus retained registration of the domain.
There have been several examples in the USA including the litigation over Sportys.com between Sportsmans Market (a manufacturer of aviation goods) and Sportys farm L.Lc (a manufacturer of Christmas trees) (Sportys Farm L.L.C v Sportmans Market Inc, 98-7452 (l)) and between Bargain Bid and Ubid over the domain name barginbid.com (Bargain Bid v. Ubid, 99 CV 7598).
8.4. Cyber griper
Another incident of cybersquatting is where the domain name registrant seeks to damage the reputation/goodwill of the person/company by using a website as a forum for unfavourable commentary. This type of behaviour frequently involves the registration of a variation of a trademark or celebrity name.
For instance, the domain DearOphrah.com was used to host a Website that acted as a forum for the registrant to air its grievances against talk show host Oprah Winfrey (Patridge, J Toronto Entrepreneur locks horns with Oprah The Globe and Mail 25 May 2000).
Another example was the domain name oxford-university.com registered by an Australian resident and containing a vitriolic attack on the World Intellectual Property Organisation ("WIPO") and the Internet Corporation for Assigned Names and Numbers ("ICANN") arbitration procedure (Johanson, Simon. Whats in a domain name The Age On Line 15 June 2000). Further, Lucent Technologies recently tried to recover the domain name Lucentsucks.com. in the US Courts (Lucent Technologies Inc v lucentsucks.com 2000 US Dist LEXIS 6159, 3 May 2000).
The ICANN arbitration procedure for gTLDs, under the Uniform Dispute Resolution Procedure (UDRP), also has arbitrated over several cybergriper domain name cases (see below).
8.5. Thief
A recent phenomenon is the outright theft of domain names through the altering of the registration details on the domain name registration database. This was experienced in 2000 by the owners of Web.net (a hosting site for charities) and Bali.com (a tour operator) as well as Internet.com (an on-line trade magazine). The "thieves" forge the e-mail details of the actual domain name registrant ("spoofing") and apply to change the legal owners of the website.
A more recent example is the sex.com dispute where Stephen Cohen stole the lucrative domain from Gary Kremen by forging a letter to NSI asking that the domain name be transferred from Kremens to Cohens company (see 9.1 for the case study). On the domain name registration database ultimately maintained by Network Solutions Inc (NSI), now VeriSign following a take-over, which has blamed the incidents on the high volume of e-mail traffic received by NSI and the introduction of other gTLD domain name registrars. This issue does not require a separate legal remedy but should be addressed by improved technical and security measures.
Regardless of the circumstances or the type of cybersquatter, the loss of a unique domain name can lead to potential damage to a businesss e-commerce positioning as well as affecting the goodwill that is held in a trademark or name.
The Institute of Arbitrators and Mediators Australia, an .au Dispute Resolution Provider was faced with deciding whether the Australian Drivers Rights Association or the Australian Dust Removalists Association had rights over the www.adra.com.au domain name.
The Panel found for the respondent, the current owner of the domain, as they had not acted in bad faith in registering the domain name and had a legitimate interest in the domain. This case is a good short example of how the .au Dispute Resolution Policy (auDRP) is applied. The version used at that date is available at http://www.auda.org.au/pdf/auda-2002-22.pdf
The Australian Drivers' Rights Association, a motorist lobby group, had registered 'adra.com.au' in 1998 but registration lapsed in July 2002 because the registrar allegedly failed to act on instructions to renew the' name. The Dust Removalists Association, an association for dust removal professionals, subsequently registered the domain name. This lead the drivers association to bring proceedings to obtain the transfer of the domain name.
The drivers association argued (i) that the removers association had registered the domain name to prevent it from using its allegedly well-known website, and (ii) that the removers association had requested A$30,000 for the transfer of the domain name, which was evidence of bad-faith registration.
The removers association responded that:
prior to the dispute it had no knowledge of the drivers association and, having checked that the domain name was available, registered it as an obvious acronym (ADRA) for its name;
it had prepared and widely distributed literature bearing the acronym to municipal councils and others; and
in response to the demand of the drivers association, it had suggested an 'off the cuff' figure of A$30,000 as an appropriate amount for the transfer of the name.
Sole panelist John Brydon stated that the registrant's failure to act on the drivers association's renewal instructions was not a relevant consideration under the auDRP, and held that the removers association had a legitimate interest in the domain name and that the registration had not been made in bad faith. He therefore refused to order the transfer. http://www.iama.org.au/media/web/2006Q01.htm
A trademark can be defined as any sign used, or intended to be used, to distinguish goods or services of one trader from those of another (s 17 Trademarks Act 1995 (Cth) (http://www.austlii.edu.au/au/legis/cth/consol_act/tma1995121/s17.html)). A sign includes any letter, word, name, signature, numeral, device, brand, heading, label, ticket, aspect of packaging, shape, colour, sound or scent (s 6 Trademarks Act 1995 (Cth)).
9.1. Protecting trademarks in Australia
Trademarks in Australia can be protected: (See generally P Hourigan Domain Names and Trademarks: an Australian Perspective Going Digital 2000: Legal Issues for E-commerce, Software and the Internet (2000))
by registration with IP Australia (http://www.ipaustralia.gov.au) under the Trademarks Act 1995 (Cth);
at common law by an action known as the tort of passing off; or
by the misleading and deceptive conduct provisions of the trade practices legislation.
9.2. Trademarks must be in use
Unlike many other forms of property, a trademark must be in use as a trademark for the registered holder to maintain its trademark rights (s 92 Trademarks Act). The use as a trademark must indicate a connection in the course of trade between the trademark and the goods or services of the trademark holder (ss. 7(4), (5) Trademarks Act).
9.3. Benefits of registering a trademark
There are two main benefits of registering a trademark:
Obtain a presumption of distinctiveness of the trademark (s 20 Trademarks Act http://www.austlii.edu.au/au/legis/cth/consol_act/tma1995121/s20.html)
The registered holder does not have to prove it has built up a reputation in the mark by use in the market place (as would need to be done in an action for passing off).
The Register of Trademarks maintained by IP Australia is split into various classes of goods and services (Trademark Regulations 1995 (Cth) regulation 3.1, Schedule 1). Registration applies only to the goods and services described in the trademark application. This means that the monopoly rights attaching to trademarks which are not "well-known" extend only to those goods or services or closely related goods or services. In other words, a mark held by one trader, say in relation to furniture, would not prevent a beauty salon from registering a similar mark in relation to the provision of beauty care services (s 120(2) Trademarks Act). The policy basis is that there is no likelihood of confusion.
In the case of well-known trademarks, monopoly rights can extend to unrelated goods or services where there is a likelihood that consumers would assume a connection between the two products, to the detriment of the trademark owner (s 120(3) Trademarks Act).
A registered trademark is initially protected for 10 years and renewable for further periods of 10 years (s 72(3) Trademarks Act). It is the exclusive right of a trademark owner to apply the trademark to particular goods and services, and to sell and license its trademark rights (s 20 Trademarks Act).
9.4. Infringement of a trademark
Trademark infringement occurs where a person uses a trademark or a sign (which may include a domain name) that is substantially identical with or deceptively similar to a registered trademark in use by another in relation to certain goods or services (s 120 Trademarks Act).
Infringement of a trademark requires "use as a trademark". If the domain name is merely registered but there is no use in the course of trade, infringement is unlikely: s 17 Trademarks Act; Pepsico Australia Pty Ltd v Kettle Chip Co Pty Ltd (1996) 33 IPR 161.
See also the more recent case based on this principle, Christodoulou v Disney Enterprises Inc [2005] FCA 1401 (http://www.austlii.edu.au/au/cases/cth/federal_ct/2005/1401.html) explained in Infringing Trade Marks With Descriptive Statements (http://www.stephens.com.au/view/22/37_20060519115436).
9.5. Passing off and misleading conduct
The tort of passing off is a common law action used to prevent trader A from misusing trader B's goodwill or reputation by misrepresenting that A's goods or services are those of or related to B.
Most passing off actions are brought in conjunction with an action for breach of the misleading and deceptive conduct provision of the trade practices legislation. The two actions are similar, although under the trade practices provision it is not necessary to prove customers have actually been misled (Pepsico Australia Pty Ltd v Kettle Chip Co Pty Ltd (1996)).
9.6. Trademarks and domain names
A domain name is an alphanumeric name that is easier for users to remember than a long series of numbers that actually make up an Internet address.
The functional role of domain names as user friendly Internet addresses, meant that they were initially allocated on a "first come, first served" basis.
However, the commercialisation of the Internet has brought domain names into conflict with traditional business identifiers such as trademarks.
This tension is heightened by the need for each domain name to be unique at a global level.
This is in contrast to trademark rights, which are structured along product and territorial lines. These factors have encouraged "cybersquatters" to register as domain names, trademarks to which they had no legitimate connection
9.7. Domain name registration
9.7.1. As above, in .com.au
To be eligible for registration in the ".com.au" space, a domain name must be directly derived from:
the commercial name of an entity which is registered or licensed to trade in Australia; OR
a trademark which has been registered or is the subject of an application for registration by the entity.
(Domain Name Eligibility and Allocation Policy Rules for Open 2LDs, auDA, May 2008 )
Once a domain name is registered, the use of the name is granted to the registrant under a non-transferable license.
Recent changes have weakened this rule to enable some transfer to occur, while retaining the principle that they should not be registered for that purpose. In Schedule 2 of the Eligibility rules, there is this:
Prohibition on registering domain names for sole purpose of resale:
8. A registrant may not register a domain name for the sole purpose of resale or transfer to another entity.
Holders of .com.au and .com domain names are generally required, as a term of the license, to warrant that registration of the domain name and its use will not directly or indirectly infringe the legal rights of a third party (including copyright and trademark rights). A breach of the warranty would allow the relevant licensing authority to terminate the domain name license.
9.7.2. New Top Level Domains
Trademarks can now also be protected during the launch of new Top Level Domain names. In 2001, the launch of new gTLDs, .biz and .info, gave trademark holders an opportunity to assert their rights before registrations were open to the general public. By making an intellectual property claim, the domain name was effectively tagged in an attempt to warn off cybersquatters. If applicants of the domain name wished to proceed with the application in the knowledge of these trademark rights, the trademark holder was notified and had the option to proceed to dispute resolution, go to court or do nothing.
9.8. When a domain name comes into conflict with a trademark
This depends on the nature of the use of the domain name and the nature of the registration of the trademark (or use in the case of an unregistered mark) (Elizabeth Bay Developments v Boral Building Services 36 NSWLR 709).
A domain name identical with or deceptively similar to a trademark (that is not well known) will not come into conflict with the trademark owner's legal rights if the domain name relates to entirely different goods or services.
The reverse result may arise if the trademark is well known (s 120 Trademarks Act).
See Killen M, Cybersquatting and Trademark Infringement E LAW, Murdoch University Electronic Journal of Law, Volume 7, Number 3 (September 2000) (http://www.murdoch.edu.au/elaw/issues/v7n3/kilian73_text.html)
The mere registration of a trademark as a domain name may involve a representation that the registrant is connected with the owner of the goodwill in the mark and thus constitute an instrument of fraud. This was the finding of the UK Court of Appeals in One in a Million case, which concerned the registration of various domain names incorporating famous marks by domain name dealers (http://www.nic.uk/disputes/caselaw/index/million/) (For the case study see 7.1.1.).
Given that Australias law of passing off is based on UK law, the case is likely to be persuasive in Australia. In fact, the case was recently applied by the Supreme Court of Queensland in The Architects (Australia) Pty Ltd t/as Architects Australia v Witty Consultants & Witty (see below). This case is the only decision of an Australian court to result from a contested trial concerning the issue of whether or not the registration and/or use of a domain name constitutes passing off.
Other possible categories of misleading conduct in relation to domain names include: (See generally B Finch Consumer Protection on the Internet Going Digital 2000: Legal Issues for E-commerce, Software and the Internet (2000))
falsely suggesting a connection between the site and a known business or particular goods or services (e.g. ninenews.com);
falsely suggesting particular qualities or attributes (e.g. free.shareware.com);
buying the domain name of a rival company and redirecting traffic from that site to the former site; or
exploiting deliberate reading or typing mistakes (e.g. westcap.bank.com) or abbreviations.
9.9.1. Case Study: The Architects (Australia) Pty Ltd t/as Architects Australia v Witty Consultants & Witty [2002] QSC 139.
The facts of the case are as follows:
The plaintiff, an architect, traded under the name "Architects Australia".
The defendant operated the web site "architectsaustralia.com.au", which provided a directory services for architects. The defendant established the web site before becoming aware of the plaintiffs business.
After becoming aware of the plaintiffs business, the defendant placed a disclaimer on its web site stating "This web site is in no way connected with the Architects (Aust) Pty Ltd".
The plaintiff alleged that the defendants use and promotion of the domain name transgressed on the goodwill attaching to the plaintiffs business name, resulting in confusion and the diversion of business.
The Court found that the domain name "architectsaustralia.com.au" was an instrument of fraud and ordered its deregistration. More specifically, the Court found that:
There was a sufficient connection between the two businesses for confusion to arise and for business to be diverted.
The disclaimer on the web site was ineffective because it only referred to the plaintiffs company name and not to its trading name. In addition the disclaimer only appeared on the website, whereas the defendant had referred to the domain name in its general advertising campaign.
The fact that the defendant was unaware of the plaintiffs business when it registered the domain name, did not preclude a finding of equitable fraud.
http://archive.sclqld.org.au/qjudgment/2002/QSC02-139.pdf
9.10. Alternative Dispute Resolution Policies
Trademark owners seeking to obtain a domain name from a cybersquatter may also take advantage of the streamlined alternative dispute resolution procedures which are available at both the gTLD (Uniform Dispute Resolution Policy, see section 5) and .au domain name level (auDA Dispute Resolution Policy, see section 4). Remedies under both procedures are limited to the status of the infringing domain name (i.e. deregistration or transfer). However, in cases where the cybersquatter has passively held the domain name, the trademark owner would be unlikely to recover significant damages under traditional legal remedies in any case. This is because of the difficulty in establishing profits made by the cybersquatter or loss in sales revenue incurred by the trademark owner. Importantly, pursuing either of these procedures does not prevent subsequent legal action by the trademark owner.
9.11. Reverse Domain Name Hijacking
"Reverse domain name hijacking" refers to the bad faith use of any intellectual property rights principles or of the above dispute resolution policies to attempt to deprive a registered domain-name holder of a domain name (for .au ccTLDs, see Para 1, auDRP Rules, in Schedule B of the auDRP at http://www.auda.org.au/policies/auda-2008-01/; and for gTLDs, see Para 1, UDRP Rules http://www.icann.org/en/dndr/udrp/uniform-rules.htm under the UDRP http://www.icann.org/en/dndr/udrp/policy.htm).
An example of this tactic has been the initiation of litigation by Nissan (Motors) against Uzi Nissan, the registered holder of www.nissan.com. Mr. Uzi Nissan, an Israeli-American uses the domain name www.nissan.com for his legitimate computer company and has never traded in domain names. Nissan (Motors) is attempting to 'lever off' Uzi Nissan by filing a suit for trademark dilution and domain name piracy. Uzi Nissan's litigation costs are estimated to be up to US$1million. Mr. Nissan alleges that the lawsuit is an attempt to pressure him to transfer his domain name. After a lengthy legal battle the court handed down its decision on the 14th of November 2002 in which it granted Nissan Motors permanent injunction against Nissan Computer Corporation (Uzi Nissans company). Ordering that the disputed website no longer be used for commercial purposes. (http://www.cacd.uscourts.gov/CACD/RecentPubOp.nsf/bb61c530eab0911c882567cf005ac6f9/f42f7900793f983088256c7600599fa1/$FILE/CV99-12980DDP.pdf)
9.12. Other instances of misleading and deceptive conduct and passing off
The use on websites of internal and external links, frames, meta tags, the location and prominence of disclaimers and content generally, must not be misleading or deceptive to the extent goods or services of A are passed off as those of B (s 53 Trade Practices Act 1974 (Cth), see Trumpet Software Pty Ltd v Ozemail Pty Ltd (1996) 34 IPR 481). The prohibition applies to unintentional misleading or deceptive conduct, whether through silence or gratuitous expression of opinion, and cannot be contracted out of.
Cyber stuffing is the practice of embedding metatags in a website. Metatags are HTML code placed around specific pieces of information which are picked up by search engines to provide keyword information about the contents of a particular website and rank the site in order of relevance. Generally metatags are invisible to the eye. By "stuffing" a website with metatags, the website will have a high relevance to most search queries. For example, a car company may stuff its website with metatags containing the brand names of other car companies so that its website always answers to search queries involving those other car brands. The use of trademarks as metatags is likely to constitute a trademark infringement and may constitute misleading or deceptive conduct and passing off.
Would deep hyperlinking and framing be considered misleading conduct or passing off? Deep hyperlinking means linking directly to the content of another website. This involves bypassing the home page containing advertising and information about the site owner and sometimes also the terms and conditions of use of the site. A frame is a window inside a web browser. A webpage can be divided into several frames, each displaying different content. A user may navigate from page to page or site to site in one frame while the content of another frame (e.g. an index) remains the same.
Where a disclaimer or acknowledgment is appropriately located in website A which leaves a visitor with no doubt about the relationship between site A and the framed or linked sites within it, framing and deep linking may not constitute misleading and deceptive conduct or be the subject of a successful passing off action. For example, an acknowledgment of the source of the linked content and a link to the homepage of the source could be placed next to the deep hyperlink to minimise liability.
The following is an edited extract from Khajaque Kortians article New Domain Name Dispute Policy for Australian Open Second Level Domain Name Internet Law Bulletin vol 5 No 3 2002.
On 1 August 2002, a new mandatory administrative dispute resolution policy and procedure came into effect for open second level Australia country code domain names, i.e. .com.au, .net.au, .org.au, .asn.au, and .id.au (.au Domain Names).
The .au Domain Name Dispute Resolution Policy (known as auDRP (http://www.auda.org.au/policies/auda-2008-01/) is modeled from the ICANN Uniform Dispute Resolution Policy (UDRP (http://www.icann.org/udrp), a feature that will be welcomed by trademark proprietors. Previous domain name dispute policies, which relied on the voluntary participation of the parties in arbitration were ineffective, particularly in addressing the problem of cybersquatting.
Like the UDRP, the auDRP only applies in relation to "abusive" domain name registrations i.e. cybersquatting.
However, it incorporates a number of differences reflecting the stricter eligibility and allocation policy for .au Domain Names, as well as addressing certain practical shortcomings of the UDRP.
All applicants for new .au Domain Names after 1 August 2002 are contractually bound to submit to the auDRP in relation to disputes between domain name license holders and parties with competing legal rights to the domain names.
The auDRP does not apply to .au Domain Names registered before 1 August 2002 until those domain names are renewed (unless a registrant elects, in the interim, to be bound by the auDRP).
For a complainant to be successful in having a domain name either cancelled or transferred to it under the auDRP, it must establish each of the following grounds to the satisfaction of a panel appointed by an approved dispute resolution service provider:
1. the domain name is identical or confusingly similar to a name, trademark or service mark in which the complainant has rights; and
2. the domain name license holder has no right or legitimate interest in respect of the domain name; and
3. the domain name has been registered or is subsequently used in bad faith.
The reference to a name in paragraph 1 above is in addition to the corresponding ground under the UDRP and has been included to cover, among other things, the unauthorised registration of the names of individuals (e.g. the names of well-known personalities), as well any other legal or trading names registered with a relevant Australian government authority, as domain names.
This provision under the auDRP also allows for complaints to be lodged where a domain name was initially registered in good faith but is subsequently used in bad faith.
The following circumstances (which are not exhaustive) will be regarded as evidence of registration or use of the domain name in bad faith under the auDRP:
circumstances indicating that the domain name was registered or acquired primarily for the purposes of selling, renting, or otherwise transferring the domain name registration to another person for valuable consideration in excess of the documented out-of-pocket costs directly relating to the domain name; or
where the domain name license holder has registered the domain name in order to prevent the owner of a name, trademark or service mark, reflecting that name or a mark in a corresponding domain name; or
where the domain name license holder has registered the domain name primarily for the purpose of disrupting the business or activity of another person; or
by using the domain name, the domain name license holder has intentionally attempted to attract, for commercial gain, Internet users to a website, by creating a likelihood of confusion with the complainants name or mark as to the source, sponsorship, affiliation or endorsement of that website or of a product or service on that website or location.
A domain name license holder which is the subject of a complaint under the auDRP (respondent) may demonstrate that it has rights to and legitimate interests in a domain name the subject of a complaint if:
1. before any notice to the respondent of the subject matter of the dispute, the respondent can show bona fide use of, or demonstrable preparation to use, the domain name or a name corresponding to the domain name in connection with an offering of goods or services (not being the offering of domain names acquired for the purpose of selling, renting or otherwise transferring); or
2. the respondent has been commonly known by the domain name, even if it has acquired no trademark or service mark rights; or
3. the respondent is making a legitimate non-commercial use of the domain name, without an intention for commercial gain to misleadingly divert consumers or to tarnish the name, trademark or service mark of the complainant.
A complainant under the auDRP must, itself, demonstrate eligibility (under the Eligibility and Allocation Policy for the relevant domain name) before any domain name in question is directed to be transferred to the complainant.
The relevant period under the auDRP for a respondent to show such a right or legitimate interest in a domain name is not necessarily the date of the complaint being lodged (as required under the UDRP), but the date on which the respondent is put on notice as to the subject matter of the dispute. This allows a complainant the option of issuing a letter of demand to the respondent before incurring the costs of preparing and lodging a formal complaint, and without the risk that the respondent may, in the interim, attempt to demonstrate rights to or a legitimate interest in the domain name.
Proceedings under the auDRP are conducted by way of written submissions (both in electronic form and hard copy) and provide for a relatively cost and time effective dispute resolution mechanism for domain name disputes. A decision from the panel is usually handed down less than 40 days from the date the complaint is lodged. The auDRP does not prevent any party from applying to a Court of competent jurisdiction for the resolution of a domain name dispute before or after the auDRP proceedings.
The Uniform Dispute Resolution Policy (UDRP) (http://www.icann.org/udrp) is an administrative dispute resolution procedure available to companies or individuals whose trade or service marks have been subjected to abusive registration or "cybersquatting" in the .com, .org, .net domain name space, as opposed to Australian country code domains.
A person seeking to register a gTLD domain name must agree to comply with the UDRP.
Specific requirements under the UDRP include showing that:
1. the domain name registered by the respondent is identical or confusingly similar to a trade or service mark of the complainant; and
2. use and registration is in bad faith; and
3. the registered party has no legitimate interest. (Paragraph 4(a))
This paragraph is of particular importance in domain name disputes under the UDRP as it is the threshold test used to determine whether a domain name has been wrongly registered.
cancellation of the domain name registration;
transfer of the domain name registration to the third party complainant; or
the allocation of the responsibility for payment of the costs of the proceedings.
1. The filing of a Complaint with an ICANN-accredited dispute resolution service provider chosen by the Complainant;
2. The filing of a Response by the person or entity against whom the Complaint was made;
3. The appointment by the chosen dispute resolution service provider of an Administrative Panel of one or three persons who will decide the dispute;
4. The issuance of the Administrative Panels decision and the notification of all relevant parties; and
5. The implementation of the Administrative Panels decision by the registrar(s) concerned should there be a decision that the domain name(s) in question be cancelled or transferred. (http://www.wipo.int/amc/en/domains/guide/index.html)
Chad de Souza in Specific remedies for cybersquatting (Part One) Internet Law Bulletin Vol 3 No 4 2000 notes the following features about dispute resolution under UDRP:
The entire procedure takes the form of written arguments and generally no oral presentations of evidence are made. In the event that no Response is filed in time, an Administrative Panel will still be formed and will consider the available information and will draw such inferences, as it deems appropriate from the respondents default.
In order to avoid the transfer or cancellation of the domain name the respondent should demonstrate that:
before any notice to it of the dispute, the respondents use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or
the respondent (as an individual, business, or other organisation) has been commonly known by the domain name, even if the respondent has acquired no trademark or service mark rights; or
the respondent is making a legitimate non-commercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.
If a party wishes to challenge the decision of the Administrative Panel, it will have to file a legal action in the jurisdiction of either the domain name registrar or of the domain name registrant (as provided in the registration details). The Administrative Panel will then reserve its decision until notification of a result from the relevant court or notification that the matter has been settled.
The panelists are usually lawyers, judges or academics with extensive Intellectual Property experience. There is no requirement that a particular UDRP provider be used though they are subject to availability restrictions.
UDRP arbitration should take around 45-50 days from the time the complaint is filed until a decision is made. The complainant bears all costs for the arbitration in most circumstances. These costs range (depending on the forum) between US$750 for a single panelist and a single domain up to US$6,000 for 3 panelists and 3 or more domain names
11.3. Criticisms of the UDRP
The following is an extract from David E. Sorkins Internet Governance and the Domain Name System: An International Perspective Internet Law Bulletin Vol 5 No 1 2002:
Although the availability of the UDRP often helps parties avoid litigation, it has been criticised sharply on both substantive and procedural grounds.[24] It allegedly is biased in favor of trademark owners, or in favor of domain name registrants; and there are many types of domain name disputes that the UDRP simply does not address, such as registration of domain names corresponding to personal or geographic names that lack trademark protection. The procedural objections are more compelling. There are several ICANN-accredited dispute resolution providers, but two of them, the World Intellectual Property Organisation (WIPO) and the National Arbitration Forum, dominate the market. A dispute resolution service based in Canada, eResolution, recently terminated its operations and declared bankruptcy, apparently because it was unable to attract much UDRP business. Commentators attribute eResolutions small market share to the fact that its panels had decided a higher proportion of cases in favor of domain name registrants, and the UDRP gives trademark owners the ability to select the forum.
Aside from the forum-shopping issue, there have been questions raised about the reliability and consistency of UDRP decisions, the qualifications and potential bias of panel members, the high incidence of default judgments, and the lack of procedural safeguards in the streamlined dispute resolution process. These procedural concerns affect more than just the individual parties to each dispute. The substantial base of published UDRP decisions, together with the fact that they often cite to previous decisions, has effectively created a private body of common law. It is not farfetched to believe that courts may soon start to view UDRP decisions as persuasive authority on trademark and domain name law.
The availability of judicial review ameliorates some of these concerns. A party that loses a UDRP proceeding (usually, a domain name registrant) can stay the implementation of the panels decision by filing a lawsuit and notifying the registrar of the suit within ten days. Most courts are likely to ignore the panel decision and decide the dispute on its merits, following the applicable law instead of the UDRP. While the UDRP benefits from this reliance on legal governance mechanisms, concerns about the fairness and legitimacy of the UDRPalong with the lack of finality of decisions, and the cost of operating what amounts to a redundant systemcast some doubt on whether this mixed method of governance is the optimal approach. (Footnotes deleted)
11.4. Domain Name Dispute Resolution Links
ICANN UDRP: http://www.icann.org/udrp - includes links to the history of and development of the UDRP.
Approved UDRP providers: http://www.icann.org/dndr/udrp/approved-providers.htm - list of the dispute resolution service providers which have been approved by ICANN to consider UDRP disputes.
UDRP analysis: http://www.udrpinfo.com - a web site maintained by Professor Michael Geist of the University of Ottawa Law School. The site provides independent information on the effectiveness of the UDRP, including two critical studies on bias in UDRP decisions.
UDRP Library: http://eon.law.harvard.edu/udrp/library.html - a comprehensive library of online resources relating to all aspects of the UDRP, maintained by the Harvard Law School
Domain Battles: http://www.domainbattles.com - this site provides up to date links to UDRP decisions and news.
Note: there was also previously at UDRP legal information site at http://www.udrplaw.net, however it no longer seems to be functioning.
There are four ICANN approved service providers:
Asian Domain Name Dispute Resolution Centre (ADNDRC) - https://www.adndrc.org/index.html
CPR Institute for Dispute Resolution (Center for Public Resources) - http://www.cpradr.org
National Arbitration Forum - http://domains.adrforum.com/
World Intellectual Property
Organisation (WIPO) - http://arbiter.wipo.int/domains
There are some major differences between the auDRP and the UDRP. Which one applies will depend on the original TLD of the registration. The differences include:
Identical or confusingly similar: The auDRP extends to domain names which are identical or confusingly similar to names as well as to trademarks and service marks.
In contrast, the UDRP covers only trade and service marks.Registered and/or used in bad faith: The UDRP requires that the domain name be both registered and used in bad faith.
The auDA Dispute Resolution Working Group noted that this requirement has proved problematic in applying the UDRP. As a result, the auDRP provides that the domain name must have been registered or subsequently used in bad faith (para 4(a)(i) auDRP).Intention: The auDRP provides that registration primarily for the purposes of transferring the domain name to a third party for profit amounts to bad faith.
This is in contrast to the corresponding provision of the UDRP, which requires an intention to transfer the domain name to the complainant, or one of its competitors, for a profit (para 4(a)(iii) auDRP).Prevent what: The UDRP provides that a pattern of conduct showing intent to prevent the complainant from reflecting its trademark in a corresponding domain name amounts to bad faith (para 4(b)(i) UDRP).
The auDRP provides that it is sufficient for the complainant to show that the registered the domain name in order to prevent the complainant from registering the domain name (para 4(b)(i) UDRP).Primary purpose: The UDRP provides that registration of the domain name primarily for the purpose of disrupting the business of a competitor amounts to bad faith (para 4(b)(ii) auDRP).
Under the auDRP, the complainant need only show that this was an intention of the respondent (para 4(b)(ii) UDRP).Redirect: The auDRP makes it clear that an intentional attempt to direct Internet users to another website not operated by the respondent can amount to bad faith (para 4(b)(iii) auDRP).
Time of notice: The auDRP makes it clear that the respondent is taken to have notice of the dispute from the time that it receives a letter of demand from the complainant, rather than from the time of the formal complaint (para 4(b)(iii) UDRP).
Mere Use: The UDRP requires the respondent to show that the domain name has been used in connection with a bona fide offering of goods and services (para 4(b)(iv) auDRP).
The auDRP provides that it is the use of the domain name which must be bona fide, rather than the offering of goods and services (para 4(c)(i) auDRP).
The following sections along with Section 8 are an edited summary of Chad de Souzas article Specific Remedies for Cybersquatting (Part Two) Internet Law Bulletin Vol 3 No 5 (2000) (footnotes have been deleted).
Both prior to and since the adoption of
the UDRP, legal proceedings have been used to attempt to retrieve domain names
or otherwise prevent another party from using domain name. Some of the laws
invoked include the laws of trademark infringement, passing off or statutory
misleading and deceptive conduct.
Where there are no trademark registrations for a name, a common law action of passing off may be brought against the defendant. The basic elements of the action that the plaintiff must show are:
1. that there is some reputation or goodwill which is attached to the name, mark or get up;
2. that the defendant has used the same or a deceptively similar name or mark so as to confuse or deceive the relevant public; and
3. that as a result of this conduct on the part of the defendant, damage has been caused, or is likely to be caused, to the plaintiff's business reputation or goodwill.
Legal authorities (for the leading authority see below) would seem to indicate that the law of passing off could be applied, in certain circumstances, to cybersquatting situations regardless of whether use of the domain name has been made by the defendant.
This type of common law (created by principles set out in case decisions, not statute) legal action is known as a tort: it is civil not criminal, and it does not rely on a contractual relationship between the parties, just some potential for foreseeable harm to a neighbour.
13.1.1. Case Study: Marks & Spencer PLC v One in a Million
The UK case of Marks & Spencer
PLC v One in a Million (1997) 42 IPR 309
(http://www.nic.uk/disputes/caselaw/index/million/millionjudge/)
at first instance and later on appeal ((1998) 42 IPR 289 - http://www.nic.uk/disputes/caselaw/index/million/millionappeal/)
dealt with the application of the common law remedy of passing off to the issue
of cybersquatting. The case dealt with "traditional cybersquatters"
who had registered a series of gTLDs and ccTLDs (i.e., domain names ending with
".uk") incorporating the names of various well known companies
including marksandspencer.co.uk, sundaytimes.co.uk, bskyb.net, virgin.org and
leedsunited.com. The domain names were almost all dormant and not used by the
defendants. The action had been brought by Marks & Spencer Plc, J Sainsbury
Plc, Ladbroke Group Plc, Virgin Enterprises Ltd and British Telecommunications
Plc for passing off and trademark infringement. The defendants had attempted to
sell several of the domain names (e.g., burgerking.co.uk to Burger King for the
sum of 25 000).
The Court hearing the appeal commented
on the issue of the defendants use of domain names in relation to the element
of misrepresentation to the public liable. While the mere registration of a
deceptive company name or a deceptive Internet domain name is not passing off
the court was willing to hold that an injunction could be granted based on the
fact that there was only one possible reason why anyone who was not part of
the [group] should wish to use such a domain address, and that is to pass
himself off as part of that group or his products as theirs" ( n 44,
at 314). On the basis of the potential breach the injunctions were granted. The
Court of Appeal upheld the decision at first instance.
This decision would indicate that
injunctive relief is available against traditional cybersquatters though
damages were not awarded.
13.2. Trademark Infringement
Actions may be brought under statute (s120 Trademarks Act 1995 (Cth) (http://www.austlii.edu.au/au/legis/cth/consol_act/tma1995121/s120.html)) for trademark infringement where a trademark has been registered in the relevant jurisdiction.
In Australia, the elements of trademark infringement include the use, as a trademark of a sign that is identical or substantially identical with or deceptively similar to a registered trademark. The use of the mark in relation to the goods or services in question must usually be covered by the trademark registration or be closely related to the registered goods and services.
For marks that are "well
known" in Australia, the use of the infringing sign may be for goods and
services unrelated to the trademark registration if "because the
trademark is well known, the sign would be likely to be taken as indicating a
connection between the unrelated goods and services and the registered owner of
the trademark." (s120
Trademarks Act 1995 (Cth)).
It is possible that s 52 of the Trade Practices Act 1974 (Cth) (http://www.austlii.edu.au/au/legis/cth/consol_act/tpa1974149/s52.html) may be used to bring an action against cybersquatters that "in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive".
Section 52 was relied upon by Melbourne IT in 1999 against a Queensland couple who had registered melbourne-it.com and were conducting the business of selling gTLDs (Finlayson, G. Melbourne IT wins day in court, ZDNetAu Technews 17 August 1999 and 13 October 2000 http://www.zdnet.com.au/news/soa/Melbourne-IT-wins-day-in-court-/0,139023165,120103588,00.htm). The use of fair trading legislation adds an important limb to the remedies available to cybersquatting as it circumvents the difficulty under trademark law of registering a name that is generic.
13.4. Anti-cybersquatting Consumer Protection Act (US)
In the United States, successful use had been made under "traditional" trademark law using the Federal trademarks Statute, the Lanham Act (http://www.bitlaw.com/source/15usc) to bring actions for trademark infringement, dilution etc (e.g., see Panavision v. Toeppen below).
In November 1999 the Anticybersquatting Consumer Protection Act (ACPA) (http://www.cybertelecom.org/dns/acparef.htm#law) was signed into law and codified as ss. 43 (d) of the Lanham Act, 15 USC 1125(d). The ACPA represents the first cybersquatting specific legislation in the world and gives the owner of a US registered or unregistered trademark or service mark a civil cause of action against a person who in bad faith registers, uses or traffics a domain name that is identical of confusingly similar to, or dilutive of a famous mark (in the USA). Generally the ACPA will be available where the domain name has been registered with a US based domain name registrar or if the plaintiffs/defendants are located in the USA.
The ACPA provides for numerous remedies including injunctive relief, statutory damages in lieu of actual damages, and a potential in rem action against the domain name itself where the registrant cannot be found or is not subject to personal jurisdiction. In the in rem action, remedies are limited to transfer or cancellation and no statutory damages are available. The mark owner may file suit in a court having jurisdiction where the domain name registrar is located.
Under traditional trademark law (at least in the USA) a plaintiff would most likely have to prove that the infringing defendant used the mark in the course of trade. Under the ACPA the act of registration, in and of itself, is actionable.
The ACPA provides for a separate cause of action for the bad faith registration of a domain name of a living person or of a name substantially and confusingly similar. (That is a celebrity need not register his or her name as a trademark to bring an action under the ACPA.)
Since the ACPA's passage into law, a large number of claims have been brought. Domain names litigated under the ACPA include nfltoday.com, teenmagazine.net, goto.com and go.com owned by the Disney Corporation (the matter has now settled with Disney paying goto.com $US21.5 million dollars), googoodolls.com, bradpitt.com sportys.com etc.
The sportys.com litigation resulted in the first appellate consideration of the ACPA and affirmed the right of a trademark owner to the domain name. The ACPA has also been used to recover "intuitive" domain names.
In Volkswagen AG v. Virtual Works Inc (ED Va, no 99-1289-A, http://pub.bna.com/eclr/991289.htm) it was held that the domain name vw.net should be given up to Volkswagen as it was the only party entitled to use the domain name.
In addition to litigation and arbitration, the following preventative strategies may be used to reduce the risk of cybersquatting.
14.1. Domain name registrations
The trademark or famous name to be protected should be registered as a domain name in all of the open gTLDs (.com, .net and .org) and in as many of the ccTLDs that the mark is likely to be used for trade and commerce.
These domain name registrations should also include variations to the spelling of the trademark or famous name as well as common spelling errors. At a cost of US$30 or less for each domain name, a preventative strategy is still the most cost-effective way of dealing with the cybersquatting.
14.2. Trademark Registrations
Another strategy to help reduce the risk of cybersquatting is for the famous name or mark to be registered as a trademark in the major relevant jurisdictions of its use. In order to rely on litigation or the UDRP, the existence and use of trademarks will have to be established in the jurisdiction where the suit is taking place.
One continuing problem involves the
unique nature of domain names which do not facilitate, as in the trademark
system, the operation of multiple similar names in different services and
classes (as illustrated in the business competitor scenarios). Due to the fact
that newer more restrictive gTLDs (e.g., .aero, .biz and .museum) have been
introduced, there is scope for further differentiation of similar (and
especially generic) domain names.
14.3. ccTLD Specific Strategies
Strategies unique to a ccTLD may also be used to defeat potential cybersquatters. For instance, under the .au ccTLD rules a business registration (if used instead of company name) is required to maintain the license over a domain name. If use of the business name is not made by the cybersquatter, the business name registration may be challenged and if removed will result in the invalidation of the domain name license.
Kremen v Cohen Case No. 01-15899 9th Cir. filed May 9, 2001 is the first Internet governance litigation to reach a federal appeals court in the US. The case began when Gary Kremen sued Stephen Cohen, Network Solutions Inc. (now VeriSign following a takeover), and others, claiming that Cohen had hijacked his Internet domain name, "sex.com". The trial court ruled that Kremen was entitled to $65 million in damages for the loss of the domain name and associated income. However, the trial court found that the domain name registrar -VeriSign was not liable for its role in allowing the hijack of the domain name.
The case is proving to be vital in determining the application of property law to the Internet, and both the American Internet Registrants Association and the Electronic Frontier Foundation have submitted amicus briefs, supporting Kremen's claims against VeriSign.
Gary Kremen was the owner of the sex.com domain, having registered the domain with Network Solutions, Inc in 1994. However, Kremen did not develop the site and concentrated his efforts on a dating service he delivered at the domain match.com.
In 1995 Stephen Cohen fraudulently arranged to have the domain name transferred to him. He forged a letter asking NSI to transfer sex.com from Kremen to Cohens company, and then developed a multimillion dollar pornography website at sex.com. NSI was the sole domain name registry for dot-com domain names at that time.
When he discovered the fraud, Kremen demanded that NSI return the domain name to him. NSI refused. In 1998, Kremen sued Cohen under several different legal causes of action to reclaim the domain name sex.com:
Conversion;
Conspiracy to Convert;
Unfair Competition;
False Advertising; and
Slander of Title.
Kremen sued NSI under the following causes of action, based on NSIs position as the company responsible for registering Internet domain names and ensuring their proper registration and protection:
Conversion by Bailee;
Breach of Trust;
Negligent Misrepresentation;
Breach of Contract; and
Breach of Third Party Beneficiary Contract.
Kremen also sought a declaratory judgment as to the respective rights to the Internet domain name sex.com.
The court stated, The elements of conversion are as follows: (1) the plaintiff has ownership or right to possession of the property at the time of the conversion; (2) the defendant's conversion is by a wrongful act or disposition of property rights; and (3) damages. The trial court determined that domain names only constitute intangible property, and held that the domain name could not be subject to conversion unless it was represented by something tangible (such as a share certificate).
The Court did determine that the domain name should be returned to Kremen. However, without succeeding on the conversion arguments, Kremen was unable to obtain any damages from NSI.
Following the ruling, Kremen argued that the result was ridiculous. "If you follow the logic here, it's open season for stealing domains. If I go hijack your domain and use it for a year, you have absolutely no recourse."
Gary Kremens description of the outcome of the original case as ridiculous remains the most appropriate comment on the case. This appears to be one of the greatest examples of the law simply not keeping pace with technology. Domain names are uniquely identifiable (that is in fact their entire purpose) and have at least as much value and identity as a share. The absence of the equivalent of a share certificate in relation to domain names should not render domain names as purely intangible. For owner-registrants of valuable domain names the law of conversion could be a powerful weapon against companies like NSI who incorrectly make their domains available to the public, or who allow hijacking to take place. NSI was the clear winner in round one of this case much now rests on the appeal.
In 2003, Kremen appealed the U.S. District Court for the Northern District of California December 2002 ruling (Kremen v. Cohen, 99 F. Supp. 2d 1168 (N.D. Cal. 2000) (7 ECLR 576) arguing that conversion should apply to intangible property, namely a domain name. The Ninth Circuit ordered in a 2:1 decision that the case be referred to the Supreme Court asking them whether:
intangible property must be merged with a document or other tangible medium for it to be subject to an action in conversion; and
a domain name is sufficiently merged with a document such that it may be subject to a conversion action.
A copy of the ruling is available at http://caselaw.findlaw.com/data2/circs/9th/0115899P.pdf. The case may have later on appeal been heard in the Supreme Court and a final decision handed down.
Some useful articles which outline the Ninth Circuit proceedings include:
Kieren McCarthy, Sex.com case heralds end of Internet NSI The Register 3 February 2003 (http://www.theregister.co.uk/content/6/29152.html)
Ninth Circuit Declines to Decide Whether Domain Name Can Be Subject to Conversion Electronic Commerce & Law Report Vol 8 No 1, 8th January 2003 (http://ipcenter.bna.com/pic2/ip.nsf/id/BNAP-5HML2W?OpenDocument)
Jason Hoppin, 9th Circuit Gives Sex.com to California Supremes Law.com 6th January 2003 (http://www.law.com/jsp/article.jsp?id=1039054542552)
A website used to criticise global insurance firm Legal & General survived a challenge to its use of the domain name legal-and-general.com.
The WIPO Arbitration and Mediation Center considered Legal & General Group Plc v Image Plus Case No. D2002-1019 (http://arbiter.wipo.int/domains/decisions/html/2002/d2002-1019.html) under the UDRP found in favour of the complaint site on December 30 2002, despite their use of the Legal and General trademark in the domain name.
The decision is important as it establishes clear principles for how far complaint sites can impinge on trademarks before losing their domain names. It also appears to extend the ability of complaint sites to use extremely similar domain names to trademarks, as long as there is no attempt to commercialise the site or profit from the sale of the domain name itself.
15.2.1. The Facts
The complainant, Legal & General Group Plc, the global insurance provider with major brands in the United Kingdom and the Unites States. Their official web-site is http://www.legalandgeneral.com/. The respondent was a small organisation called Image Plus, based in the United States. They had registered legal-and-general.com with Network Solutions. Mr. Zeev Golan (the administrative contact for Image Plus) was a former employee of Legal & General in the United States. The complainant elected to have the dispute decided by a three-member panel. Dawn Osborne, Dana Haviland and John Swinson were chosen as panelists (with John Swinson presiding).
The complainant is the owner of registered trademarks which incorporate the words "legal and general" in a number of countries, including in the United Kingdom (with eight registered trademarks), Benelux, France, Portugal and Spain. Legal and General are also the owners of numerous ".com" domain names including legalandgeneral.com, legal-general.com and landg.com. However, they had failed to register legal-and-general.com.
The respondent registered the disputed domain name on August 27, 1999. The website operating at the disputed domain name is a complaints site, allowing Internet users to post messages about Legal and General.
The website opens with the words: "Welcome to L & G Companies Complaints Club.
There were about 20 complaints on the website. Most were about customer service or employee related matters. One complaint however (as noted by the panelists) appeared to assume that the site was an official customer service site for Legal and General:
I spoke to a man on your Help Desk (08700 104080) with a query about my Capital Preservation Plan [number] back in June, and although he could not answer my query he assured me that a reply would be sent out that week. I heard nothing, so I wrote on 26 June to your office at 2 Montefiori Road, Hove ... What do I have to do to get assistance from your widely-advertised Help service? Please e-mail me using [email address], or my postal address which you should have on your computer system.
Generally the site is a small, very simple, text based site with limited content, providing an opportunity for users to air their grievances with Legal and General. It is not dissimilar to the numerous complaint websites which have blossomed in recent years, although it is definitely at the less sophisticated end of the spectrum.
15.2.2. The complainants argument
Legal and General is one of Britains top 50 companies with total funds under management of over 120 billion world-wide. In the USA, the Complainant has a strong market position in the area of term assurance, with L&G USA being one of the top ten largest life insurers in the USA.
Legal and General claimed that Zeev Golan was a former employee of L&G USA, and that there was a dispute regarding the termination of his employment. While they acknowledged his right to comment and enable others to comment on the services and products offered by Legal and General, they submitted that this activity did not represent a legitimate or fair use of the Domain Name.
Legal and General argued among other things that in using and selecting a domain name which is so closely identical to their trademark, the respondent had not chosen a domain name which makes fair use of the trademark. This is the traditional argument made against complaints sites, stemming from the decision in DFO, Inc. v Christian William (WIPO Case No. D2000-0181 at http://arbiter.wipo.int/domains/decisions/html/2000/d2000-0181.html).
Legal and General also argued that the disputed domain name did not contain words which made it clear that the website was not the official website of Legal and General (such words are often used in complaints sites, such as chat, discuss, sucks or stinks).
Further, they noted that the website did not contain a disclaimer stating that the website was not an official "Complaints" site owned or operated by Legal and General. This had been an important argument in many previous complaint site cases, including DFO, Inc. v Christian William.
15.2.3. The Respondents Argument
Image Plus made the following response:
The Complainant referred to cases in misleading ways using quotes that have been taken out of context and which are not accurate.
The Respondent has rights and a legitimate interest in using the disputed domain name to establish a website for publicising Complaints about the Complainant.
The Complainant has failed to provide any evidence of bad faith. Using a domain name solely consisting of a complainants trademark does not constitute bad faith. Bad faith registration alone is an insufficient ground for obtaining a remedy under the Policy. The Complainant must prove registration and use in bad faith.
It is clear from reviewing the comments on the website that users of the website are not confused about any association with the Complainant, as many comments are written in the third person, referring to the Complainant as "they" and "their". This indicates that users understand that they are not actually communicating with the Complainant (otherwise they would use terms such as "you" and "your").
The Complainant never requested that the Respondent make changes to the website content. As a show of good will the Respondent has removed all references on the website to any trademarks of the Complainant and the Complainant was notified of this.
15.2.4. The Decision
The panel was required to apply the core test in Paragraph 4 (a) of the Uniform Domain name Dispute Resolution Policy (see above).
The respondent asserted that they had a legitimate interest, relying on paragraph 4(c)(iii) of the UDRP which states:
you are making a legitimate non-commercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue
In order to rely on Paragraph 4(c) of the UDRP, the onus switches from the complainant to the respondent, to rebut the complainants assertion of lack of rights or legitimate interest in the domain name.
This issue had been discussed in detail in Mission KwaSizabantu v Benjamin Rost (WIPO Case No. D2000-0279 at http://arbiter.wipo.int/domains/decisions/html/2000/d2000-0279.html). On that occasion the panel had set down the following rules for applying Paragraph 4(c)(iii):
1. the Respondents use is legitimate non-commercial or fair use of the domain name;
2. this use is without intent for commercial gain;
3. this use is without intent to misleadingly divert consumers; and
4. this use is without intent to tarnish the trademark of the Complainant.
The majority (Haviland and Swinson) found that because the respondents website had wording critical of Legal and General, it would be clear to most users that the website was not controlled or authorised by Legal and General.
As discussed above, one site visitor did appear to be under the impression that the site was the official complaints web site, and even provided personal details regarding his complaint. The majority noted that the Respondent has not taken any express steps after this occurred to avoid further confusion. However, it does not appear that this action (or lack of action) had any material bearing on the outcome.
The real motivation for the decision is revealed in the following passage of the majority decision:
Moreover, that some Internet users might initially be confused into thinking that, because of the use of the mark in the disputed domain name, legal-and- general.com is the Complainants official website is, in the view of the majority of the Panel, of no moment. First, any such confusion would, in the view of the majority of the Panel immediately be dispelled by the content on the Respondents website. Second, and in any event, such a low level of confusion is, in the view of the majority of the Panel, a price worth paying to preserve the free exchange of ideas via the Internet. A user who stumbles upon the Respondents site while looking for the Complainants official site need only click the "back" button to return to his or her search. (at Point 6B)
Despite protestations that the majority was basing their decision on the wording of paragraph 4(c)(iii) and not on the basis of first amendment principles or free speech concepts, it is clear that the preservation of free speech did play a role in the decision.
15.2.5. The Dissent
Not all judges or adjudicators may agree with the majority decision of their court or alternative dispute resolution panel members, and this is known as a dissent. In this case the dissenting panelist (Osborne) disagreed with the majority on two questions, legitimate interests in the domain name and issues of bad faith:
The Complainants trademark has a significant reputation in its field. The Respondent has, in the opinion of the Dissenting Panelist, no rights or legitimate interests in respect of the Domain Name which consists essentially of the Complainants principal trading name and its registered trademark.
The Dissenting Panelist recognizes that the Respondent has a right to free speech and a legitimate right to host a Complaint site about the Complainant on the Internet. However, in the view of the Dissenting Panelist this is a completely different thing to and should not be confused with having a legitimate right to the Domain Name in question in this case.
The dissenting panelist also appeared to take more notice of the single Internet user who had mistaken the site for an official complaints site. (However, a dissenters ruling will typically not have any force, since the decisions agreed by the majority will be the ones which are implemented.)
15.2.6. Conclusion
While the existence of the dissent detracts a little from the weight of this decision, there is no doubt that this case will be relied upon by those complaint sites who have domain names containing trademarks.
15.3. Panavision v Toeppen
The famous Panavision v Toeppen (938 F. Supp. 616 (C.D. Cal. 1996) (http://www.loundy.com/CASES/Panavision_v_Toeppen.html or http://www.techlawjournal.com/courts/avery/19980417.htm) case involved a trademark dispute between Panavision International L.P. a company which manufactures motion picture cameras and photographic equipment and Dennis Toeppen who was the registered owner of the www.panavision.com domain. Toeppen was using the site to display aerial views of Pana, Illinois. Panavision at the time was the owner of the trademarks Panavision and Panaflex.
Panavision notified the defendant of their desire to use the panavision.com domain, which he responded by requesting $13,000 to discontinue his use of the domain. He then registered the domain www.panaflex.com, a site which only contained the word hello. Toeppen had also registered other domain names including: aircanada.com; anaheimstadium.com; australiaopen.com; deltaairlines.com; frenchopen.com; lufthansa.com; and yankeestadium.com. It was pretty obvious that Toeppens business was to register trademarks as domain names and then sell the domain names to the trademarks owners.
Panavision brought several claims against Toeppen including:
1. Federal dilution of trademark;
2. State dilution of trademark;
3. Federal trademark infringement;
4. Unfair competition; and
5. Intentional interference with prospective economic advantage.
The Federal Court heard all claims summarily.
The Courts decision mainly focused on whether the Defendants use of the disputed domain name constituted dilution of the Panavision trademark. Trademark dilution laws (protected in the US by the Dilution Act 1995 15 U.S.C. 1125(c)) are designed to protect distinctive or famous trademarks from use by other entities even if they are connected with the offering goods and services that do not compete with the original trademark holder. The laws are aimed at reducing consumer confusion over goods and services associated with the mark.
The Court recognised the problem the unique trademark problem created by the Internet in that:
trademark law permits multiple parties to use the same mark for different classes of goods and services; however, the current organization of the Internet permits only one use of a domain name, regardless of the goods or services offered.
It applied the Dilution Act 1995 and held that Toeppens actions did actions did constitute trademark dilution as:
Toeppen traded on the value of the marks as marks by attempting to sell the domain names to Panavision. This conduct injured Panavision by preventing Panavision from exploiting its marks and it injured consumers because it would have been difficult to locate Panavision's web site if Panavision had established a web site under a name other than its own.
The Court also made it a point to note that:
This case does not grant trademark owners preemptive rights in domain names This decision merely holds that registering a famous mark as a domain name for the purpose of trading on the value of the mark by selling the domain name to the trademark owner violates the federal and state dilution statutes the Dilution Act protects parties who "innocently" register a famous trademark as a domain name.
It was ordered that Toeppen transfer the registration of the panavision.com and panaflex.com domain names to Panavision.
For a contemporary discussion of the place of this case in the broader development of trademark and domain law, see Michael Blakeney, Interfacing Trade Marks And Domain Names, [1999] MurUEJL 11 Volume 6, Number 1 (March 1999) http://www.austlii.edu.au/au/journals/MurUEJL/1999/11.html