It is common knowledge that in our national field regarding cyberspace, the harmonisation of laws concerning The Domain Name System represents a serious issue, as there is a lack of effectiveness in what concerns the legislation ought to protect intellectual property.
A slight glimpse back to the origins of the internet depicts a common use of the internet – communication. Although the purpose was different (easy communication as a way to protect from Russian threats), the main reason represents the need of facilitating sending and receiving information.
Notwithstanding the great success of this innovation, major problems have been posed ever since commerce represents a fast growing part of the internet. Its perpetual development has led to many disputes which require legal intervention to a significant extent.
Cybersquatting means domain name traffic, while Domain name represents the identification used within the internet.
Why is it a problem?
The main problem consists of the meaning of the two misunderstood notions, trademark and domain name. The shortcomings that have risen include the confusion between these concepts which somehow lead to the lack of effectiveness concerning the practice of ”cybersquatting”. It is worth mentioning that the ”multiple use of a trademark is allowed as long as it used in a different market and does not create any kind of confusion among the goods or products” (Searing, 2000). Consequently, The Federal Trademark Dilution Act (FTDA) does not specifically prohibit cybersquatting, therefore cybersquatters have not abandoned their practices.
On the basis of the example mentioned above, the effects of this conduct aims to discourage the consumers’ use of the internet, undermine confidence and, to a greater extent, destroy the value of brand-names and trademarks, leading to inequity towards fair businesses; these are the reasons which were presented to the President of the US and which eventually led to the attempts to solve the problems.
How does the law regulate the issue ?
The United States Anticybersquatting Consumer Protection Act (ACPA) has been enacted in order to protect the interests of fair businesses by establishing factors which determine bad-faith. These factors include:
1. whether or not the domain name was registered
2. the extent to which the domain name consists of the legal name of the person or a name that is commonly used to identify that person, such as nicknames
3. the person’s prior use, if any, of the domain name
4. the person’s bona fide noncommercial or fair use of the mark in a site accessible under the domain name
5. the intent to divert consumers from the mark owner’s online location to a site accessible under the domain name that could harm the image of the business, either for commercial gain or with the intent to destroy the value of the mark
6. the offer to transfer, sell, or otherwise assign the domain name to the mark owner or any third party for financial gain without having used, or having an intent to use, the domain name in the „bona fide” (since an offer of sale alone cannot be considered enough to prove bad-faith)
7. the provision of material and misleading false contact information when applying for the registration of the domain name
8. the registration or acquisition of multiple domain names which the person knows are identical, dilutive of famous marks or confusingly similar to marks of others that are distinctive at the time of registration of such domain names, without regard to the goods or services of the parties
The ACPA also states/remarks the consequences that have to be faced in order to restore the prejudice: if a violation of the ACPA is found, a court can order the forfeiture or cancellation of the [offending] domain name or its transfer to the owner of the mark. The mark owner can also recover up to three times his actual damages and obtain injunctive relief. Actual damages include the profits that the domain name registrant made from his use of the mark, as well as losses sustained by the mark holder as a result of the domain name registrant’s actions, such as lost sales or harm to the mark’s reputation.
It was not until 1998 that an effective measure was in fact taken, as there were no international laws to protect consumers against cybersquatting. The efforts to stop this misdemeanour had come to fruition as the US Department of Commerce addressed the issue to the World International Property Organization (WIPO). They requested the developement of a uniform trademark and cybersquatting resolution. Thus, WIPO created a non--profit international corporation, Internet Corporation for Assigned Names and Numbers (ICANN).
ICANN aims to develop and administer an international policy regarding the domain names. As a result, it founded the Uniform Domain Name Dispute Resolution Policy (UDNDRP) which has the role of handling these sort of disputes and offers an effective and more profitable lawful mechanism, as an alternative to litigation.
The UDNDRP consists of three elements: name, interest and bad faith. Therefore, the parties have to determine the: name and whether it is similar or identical; the interest in the domain and more particularly if it is legitimate; and lastly if it has been registered in bad faith. Although the UNDNRP does not include a definition of the term bad-faith, it exemplifies it as: ”registering a domain name to sell to the owner of the trademark for an inflated cost; registering a domain name to prevent the owner of the trademark from using it; registering a domain name to harm another’s business; or attracting consumers to a website by confusing the cybersquatter’s domain name with another.
The complainant has the initial burden of proving bad faith intent. As a defence, the respondent must demonstrate their right to the domain name by showing one of the following: 1) a bona fide use of the domain name; 2) a common use of the domain name in connection to the domain name holder; or 3)a good faith intent to use the domain name in a non-commercial way.
Despite numerous conflicts resolved by these laws, they are not however flawless, for there are many problems that still need to be overcome. There are the well-known laws of nature which have proven to be the strongest winning factors. If we were to transpose this principle in the world of commerce, the issue that remains is that the prodigious corporations, worldwide known businesses are in the habit of intimidating smaller businesses even if they are fully legitimate.
Alongside the aspect mentioned above, another shortcoming is the misunderstood term ”domain”. According to Searing (2000), courts have a tendency to consider the domain name (DN) as being internet addresses, not making it the property of the registrant despite the fact that it is precisely what should be done. Even if there is no identity between the trademark and the DN, and the confusion must be avoided, it is often difficult since the DN represents the identity of the business, in a manner similar to the trademark.
Compared to Anticybersquatting Consumer Protection Act (ACPA), Uniform Domain Name Dispute Resolution Policy (UDNDRP) provides, as LATHAM AND WATKINS (2000) have noted: ”no remedy other than the transfer of the domain to the trademark holder”. As a result, businesses have no option but to suffer the damages caused by the cybersquatters, their sole guarantee being the recovery of the exclusive use of the domain name.
A rather interesting aspect is the conflict that arises with free speech rights (U.S. CONST. amend. I. “Congress shall make no law[...]abridging the freedom of speech”). A case which shows that usually trademark infringements are taken into consideration leaving aside the free speech rights is Yankee Pub. Inc.v.News America Pub. Inc, case in which the court stated the following: ”To grant one person with the exclusive right to use a set of words or symbols in trade can collide with the free speech rights of others. When another’s trademark (or a confusingly similar mark) is used without permission for the purpose of source identification, the trademark law generally prevails over the First Amendment”. Therefore, what is to be taken into consideration are the regulations of trademark law due to the fact that free speech rights do not apply to labeling or advertising to the extend of creating a conflict with other rights.
Additionally, in Denver Area Education Telecommunications Consortium, Inc. v. Federal Communications Commission, the Supreme Court stated that it is not practical to protect domain names since technology is advancing so quickly. Furthermore, the court noted that it is possible, in the future, for domain names to be considered a form of protected speech. Free speech protection only applies to those words that have a communicative message even if there is another’s trademark in that message. As long as the domain name that is identical or similar to a trademark is not used for “commercial” gain, it cannot be considered as an intentional consumer confusion or harm to the corporation’s trademark reputation.
Searing (2000) argues that despite the violation of the right to free speech, the entire judicial system must be aware of the potential infringement of the trademark, even if there is no commercial gain. Therefore, the Anti-cybersquatting Consumer Protection Act (hereinafter called ACPA) enables trademark holders to keep a domain name from being registered. Free speech impediment occurs when a person, who wants to register a domain name for a political or commentary purpose, would be impeded to do so because of the ACPA. If free speech were infringed in that manner, corporations would be able to prohibit and/or control protected speech, especially critical commentary, for more information see L.L. Bean, Inc. v. Drake Publishers, Inc.
Case-law have shown that even though a domain name may be functional, such as providing an address, there is a communicative aspect that implies protection under the First Amendment, fact which proves that the value of domain names, as well as the value of the information they allow the user to access, is being realized.
The Anti-cybersquatting Consumer Protection Act and the Uniform Domain Name Dispute Resolution Policy both try to find a lawful mechanism which aims to reach a balance between the protection of trademark owners and in the same time permitting the non-commercial use of a trademark (commentary, parody, critique, or news reporting).
The ACPA states that the domain name holder has the burden of proof. He is responsible for providing evidence to show that the website name qualifies as one of the protected forms of speech, the sole resolution being through litigation. Moreover, he has to show that the website is not prone to confuse consumers, for instance a parody must be obvious to the consumer immediately upon opening the website.
Solutions to the problem
One suggestion to solve the domain name problems is to create many new types of Top Level Domains (TLDs). As noted by Denniston and Kubiszyn (2000), some would be .com clones, like .inc, .biz, .web, .zone, .store, .firm, .mall, etc. Others would be particular to types of activity, such as .software, .consultant, .sex, .usedcars, .flowers or .drugstore. Also proposed is the use of “.shop” (for small businesses) and “.banc” (for banks and financial institutions). ”One or two new types of TLDs might reduce some of the current problems. One option would be to use the TLD “.home” or “.pers” for personal domain names” (Searing, 200, p.140).
Under the law the domain name must be considered property of the business and must be offered judicial protection accordingly, because businesses benefit the society in terms of economy, diversity and possibility of development. Laws being put into effect are the first steps in ensuring the proper usage of the Internet.
Regarding Romanian legislation, I consider our attempts to create an effective mechanism quite timid. A Governmental Act no. 1424/2003 aims to provide protection against property law infringement which includes cybersquatting, as well. However, the cyberspace disputes are highly nuanced and problems concerning the effectiveness of the legislation arise. I am inclined to believe that as time passes by, with the support of international legislation our judicial system will represent an example of fairness and equity regarding the Domain Name System.
By Cătălina Ciucu
This article has been originally published in issue 5.1 of the magazine, which can be found here. All references used can be found at the end of that issue.