Transcript Intellectual Property on the Internet

Conflicts over Domain Names
William Fisher
July 1, 2002
© 2002. All rights reserved
Outline
I.
II.
III.
IV.
V.
VI.
Functions of Domain Names
Functions of Trademarks
Types of Disputes
Goals?
Dispute Resolution Systems
Alternatives
I
II
III
IV
V
VI
IP Numbers and Domain Names
44.56.0.48
Individual Computer
Subnetworks
Network
roscoe.law.harvard.edu
Top-level domain
Second-level domain
Third-level domain
Individual computer
Old Allocation System
 Internet Address Number Authority (IANA)
 Internet Society (ISOC)
 Internet Network Information Center
(InterNIC)



Network Solutions, Inc.
AT&T
General Atomics
New Allocation System
 Internet Corporation for Assigned Numbers
and Names (ICANN)


Licenses registers and registrars for gTLDs:
.com; .org .net, etc.
Covered by UDRP
 250 Country Code TLDs


E.g., .to (Tonga); .as (American Samoa)
Some are covered by UDRP
Domain Names (unlike IP
addresses) are valuable
 Recent transactions:








Business.com: $7.5 million (sold)
Broadband.com: $6 million (asking price)
Loans.com: $3 million (sold)
Flu.com: $1.4 million (asking price)
Bingo.com: $1.1 million (sold)
Beauty.cc: $1 million (sold)
Drugs.com: $823,000 (sold)
University.com: $530,000 (sold)
 Online markets in domain names:

Greatdomains.com; bestdomains.com; domains.com;
domainmart.com; webdomains.cc
Why?
1) They vary in attractiveness and ease of
memorization
2) Web surfers often guess at domain names

Assume they match trademarks or service marks
3) Websurfers sometimes use generic domain
names as search terms

E.g., loans.com received 3000 hits per day while
inactive; sold to Bank of America
4) They may affect huge volumes of commerce
5) Pride or emotional attachment to distinctive
words
Ecommerce Growth
1st quarter, 2000
2nd quarter
3rd quarter
4th quarter
1st quarter, 2001
2nd quarter
3rd quarter
4th quarter
1st quarter, 2002
U.S. Ecommerce % of Total Retail
$5,814,000,000
0.8%
$6,346,000,000
0.8%
$7,266,000,000
0.9%
$9,459,000,000
1.2%
$8,256,000,000
1.1%
$8,246,000,000
1.0%
$8,236,000,000
1.1%
$11,178,000,000
1.3%
$9,849,000,000
1.3%
Not adjusted for seasons and holidays; source:www.census.gov/mrts/www/current.html
The End of the “Land Rush”?
From: http://dcc.syr.edu/markle/markle-report-final.pdf
But registration of country-code TLDs continue to rise
What Do Trademarks Do?
 Identify sources of
Reduce transaction costs
products
Incentives to raise quality of
products
 Mnemonic devices
Confer market power and
 Provide substantive
threaten competition
information
 Generalized indicia of prestige
 Increase the attractiveness of products through
sound, appearance, or connotation
 Provide vehicles for conversation and parody
 Shape consumers’ preferences and attitudes
Ambiguous or mixed socioeconomic effects
Consumer Information Theory
 TMs reduce transaction costs (especially
search time and memory requirements) by
assisting consumers in making informed
choices
 Value of TMs is highest when:




goods are difficult to inspect
costs of mistaken choice are high
consumers are not making repeat purchases
consumers are wealthy
Effects of Trademarks that Convey
Substantive Informative
Beneficial
 Assist consumers in
making informed
choices
 Pressure
manufacturers to
increase quality
Pernicious
 Confer market power
on owner of the TM
 Prices rise
 Some consumers
priced out of the
market
Increase attractiveness through
sound, appearance, or connotation
 Make the products itself more attractive

Harley-Davidson muffler sound; shape of Perrier bottle
 Evoke positive associations not attributable to
another manufacturer

Acura, Lexis, Nantucket T-shirts
 Evoke positive associations attributable to another
manufacturer

Rolls-Royce Radio Tubes; Gay Olympics
Trademark Parodies
 Jordache Jeans / Lardache Jeans (oversized jeans
with pig emblem)
 Dom Perignon Champagne / Dom Popignon
popcorn
 “Enjoy Coca-Cola” / “Enjoy Cocaine”
 Poster of Pregnant Girl with slogan: “Be
Prepared”
Assessments of the PreferenceShaping Power of TMs and Ads
 Utilitarian Critique:
 Utilitarian Defense:
artificial product
increase of hedonic
differentiation &
capacity & total social
oligopolistic pricing
welfare
 Cultural Critique:
 Cultural Defense: potential
Physically unhealthy
health benefits & cultural
and morally pernicious
richness
 Political Critique:
 Political Defense: common
concentration of
vocabulary & materials for
semiotic power
semiotic democracy
Doctrines that seek to minimize
pernicious effects of TMs
 Goals:


Prevent TM owners from controlling the flow of
information
Prevent TMs from impairing competition
 Doctrines:






Hostility toward descriptive marks
Genericity
Use Requirement
Ban on immoral, scandalous, or disparaging marks
Fair Use Doctrine
First Amendment limitation – e.g., LL Bean
Types of Disputes






Cybersquatting
Typosquatting
Competing Use
Noncompeting Use
Reverse Domain Name Hijacking
Parody and Commentary
Cybersquatting
 Joshua Quittner registers “mcdonalds.com”
 Dennis Toeppen registers “intermatic.com,”
“panavision.com”
 NFLtoday.com
Typosquatting




Wwwpainewebber.com
Misrosoft.com
Mnsbc.com
Yafoo.com
Competing Use
 Princeton Review registers
“kaplan.com”
 Amazon.com brings suit against
amazon.gr
 Omega registers “sportys.com”
Noncompeting Use
 Howard Johnson registers
“howardjohnson.com”
 eToys.com v. etoy.com
 Hasbro v. Clue Computing
Reverse Domain Name Hijacking
 Veronica.org
Parody and Commentary




Akkaoui registers “adultsrus.com”
Jewsforjesus.org
Yahooka.com
Verizonreallysucks.com
Goals?
1) Economic
Efficiency
(a) Incentives for socially
valuable activities;
i. creating and policing
TMs
ii. arbitrage of DNs
(b) Optimal exploitation of
resources
-- get DNs into hands where
they are most valuable
(c) Reduce transaction costs
-- minimize number of steps
Goals?
1) Economic
Efficiency
2) Fairness
(a) Reward Effort
(b) Reward Ingenuity
Goals?
1) Economic
Efficiency
2) Fairness
3) Distributive
Justice
(a) Equalize Access to the
Internet
(b) Equalize Participation
among developed and
developing countries
Goals?
1) Economic
Efficiency
2) Fairness
3) Distributive
Justice
4) Free Speech
& Creativity
(a) Opportunities for
individual expression
(b) Semiotic democracy
Goals?
1) Economic
Efficiency
2) Fairness
3) Distributive
Justice
4) Free Speech
& Creativity
5) Privacy
Allow anonymity in DN
registration
Dispute-Resolution Systems
1) UDRP
2) Anticybersquatting Consumer
Protection Act
3) Trademark Infringement
- Likelihood of Confusion
4) Trademark Dilution
5) Unfair Competition
-
UDRP governs “Abusive
Registrations and Use” of DNs
 the domain name is identical or
misleadingly similar to a trademark in
which someone else has rights.
 the holder of the domain name has no rights
or legitimate interests in that domain name
 the domain name has been registered and is
used in bad faith.
http://www.icann.org/dndr/udrp/uniform-rules.htm
Examples of “Bad Faith”
 Circumstances indicate that defendant’s main
purpose was to sell DN to TM owner for more
than the direct costs of registration
 History of registering DNs to prevent TM owners
from registering
 Registering a DN in order to disrupt the business
of a competitor
 attempting to divert Internet users to Defendant’s
site for commercial gain by creating confusion
concerning source or sponsorship
Examples of “Legitimate Interests”
Pre-dispute use or demonstrable preparations
to use the DN in bona fide offering of goods
or services
Defendant was commonly known by the name
Legitimate, noncommercial or fair use of the
DN without intent to misleadingly divert or
tarnish
“Abusive Registrations”
Not applicable to:
 geographic designations

e.g., Chateâu Neuf du Pape
 Personality Rights

George W Bush
 Unregistered names of organizations

wipo.com
Procedure






Complainant picks forum
Respondents have 20 days to respond
No additional submissions typically are permitted
Decision within 14 days of appointment of panelist(s)
Respondents default 50% of the time
Remedies:


Cancellation of the registration
Transfer of the DN to the complainant
 Losing respondent can postpone remedy by filing suit
within 20 days
UDRP Usage
 As of June, 2002, over 6,000 proceedings


Over 10,000 domain names
(Currently, aprx. 29,000,000 gTLDs)
 Rates of filing are declining gradually
 Most of the DNs challenged under UDRP were
registered during the boom of early 2000
 WIPO is the most popular provider, and becoming
more so – aprx. 70% of the cases
 55 “appeals” to date: http://www.udrplaw.net/UDRPappeals.htm
See Convergence Center Database: http://dcc.syr.edu/markle/mhome.htm;
Mueller Report (6/24/2002): http://dcc.syr.edu/markle/markle-report-final.pdf
Extension of UDRP
 Commentary with deception




Csa-canada.com; csa-international.com
Dodgeviper.com
Kelsonmd.com
Kwasizabantu.com
Conflicts and Ambiguities
 Commentary without deception




Stopcompusa.com; bancompusa.com
Mcdonaldssucks.com
Newworldcoffeefraud.com
Walmartcanadasucks.com
Conflicts and Ambiguities
 Genericity









Astrocartography.com
Barcelona.com
Tonsil.com
Corinthians.com
Crew.com
Pueblo.org
Sting.com
Craftwork.com
Traditions.com
Conflicts and Ambiguities
 Unauthorized retailers/ resellers


Webergrill.com
Porsche.net
Conflicts and Ambiguities
 Inaction by DN registrant




Presidentchoicesocks.com
Cignadirect.com
Visasatellite.com
Buyvuarnetsunglasses.com
ACPA, 15 U.S.C. sec. 1125 (d)
 TM owners have civil cause of action
against defendants who, with bad faith
intent to profit from the goodwill of a TM,
register or use a DN that is:


identical or confusingly similar to a distinctive
mark,
or dilutive of a famous mark
ACPA Factors
1. Does  have IP rights in the DN?
2. Is the DN ’s legal or customary name?
3. ’s prior use of DN to offer goods/services
4. ’s prior noncommercial or fair use of DN
5. ‘s intent to divert business from  and harm
good will by causing likelihood of confusion
6. ‘s offer to sell DN – or habit of doing so
7. Did  provide false contact information
8. Did  acquire multiple DNs similar to TMs
9. How distinctive or famous is ’s mark?
Safe Harbor:
 “Bad faith intent” shall not be found where
the defendant “believed and had reasonable
grounds to believe that the use of the
domain name was a fair use or otherwise
lawful”
Remedies
 Injunctive Relief (retroactive)
 Damages (nonretroactive)
 Statutory Damages (nonretroactive)

$1000 - $100,000 per domain name
 In rem jurisdiction
 Registrars may sua sponte refuse to register
marks that they deem to violate the rules
Applications of ACPA
 Sporty’s Farm (CA2 2000):  registers
“sportys.com” to draw business from competitive
seller of aviation equipment
 Mattel v. Schiff (SDNY 2000):
barbiesplaypen.com for commercial porn club
 People for Ethical Treatment of Animals v.
Doughney (EDVa 2000): peta.org used for parody
site: “People eating tasty animals”

Links to leather-goods and meat websites
 Virtual Works v. Volkswagen (CA4 2001): In
1996, ISP Virtual Works registers vw.com,
considers possibility of later sale to Volkswagen
Sporty’s Farm
1. Does  have IP rights in the DN?
2. Is the DN ’s legal or customary name?
3. ’s prior use of DN to offer goods/services
4. ’s prior noncommercial or fair use of DN
5. ‘s intent to divert business from  and harm
good will by causing likelihood of confusion
6. ‘s offer to sell DN – or habit of doing so
7. Did  provide false contact information
8. Did  acquire multiple DNs similar to TMs
9. How distinctive or famous is ’s mark?
10. Deliberate interference with a competitor






Mattel
1. Does  have IP rights in the DN?

2. Is the DN ’s legal or customary name?

3. ’s prior use of DN to offer goods/services

4. ’s prior noncommercial or fair use of DN

5. ‘s intent to divert business from  and harm
good will by causing likelihood of confusion
6. ‘s offer to sell DN – or habit of doing so

7. Did  provide false contact information

8. Did  acquire multiple DNs similar to TMs

9. How distinctive or famous is ’s mark?


PETA
1. Does  have IP rights in the DN?

2. Is the DN ’s legal or customary name?

3. ’s prior use of DN to offer goods/services
?
4. ’s prior noncommercial or fair use of DN
?
5. ‘s intent to divert business from  and harm
good will by causing likelihood of confusion
6. ‘s offer to sell DN – or habit of doing so
?
7. Did  provide false contact information
?
8. Did  acquire multiple DNs similar to TMs

9. How distinctive or famous is ’s mark?


Volkswagen
CA4 declines to “march through the nine factors
seriatim,” but finds bad faith on the basis of:
a) Famousness of VW mark
b) Similarity of vw.net to VW
c) Admission that Virtual Works never did business
as “VW”
d) Availability of alternatives (e.g., vwi.net)
e) Ds considered at time of registration the
possibility of later reselling to VW
f) Ds later did offer to sell to VW
Types of Trademark Infringement
Identical Marks on
Competitive Products
Similar Marks on
Competitive Products
Similar Marks on
Noncompetitive
Products
Dilution
Axes and Factors in Assessing
Likelihood of Confusion




Similarity of Appearance
Similarity of Sound
Similarity of Meaning
Marketing Environment
Similarity of Appearance
head of bulldog / head of terrier (for beer)
SQUIRT / QUIRST (for soft drinks)
CARTIER / CATTIER (for cosmetics)
Tornado / Vornado (for electrical
appliances)
Similarity of Sound
Cygon / Phygon (for pesticides sold to
farmers)
Huggies / Dougies (for disposable diapers)
Le Conte / Conti (for hair care products)
Bonamine / Dramamine (for nausea
medecine)
V-8 / VA (for vegetable juice)
Similarity of Meaning
 Cyclone / Tornado (for chain-link fencing)
 Apple / Pineapple (for computer products)
 Pledge / Promise (for furniture polish)
 Smog / London Fog (for raincoats)
 Boston Tea Party / Boston Sea Party (for restaurant
services)
 Hungry Hobo / Hobo Joe’s (for restaurants)
 “Beer Nuts” / picture of stein of beer on package of nuts
 “Pegasus” / picture of flying horse (for petroleum
products)
 Good Morning / Buenos Dias (for bath products)
Polaroid/McGregor Factors for
Noncompetitive Products
Ultimate issue: likelihood of confusion
 Strength of the plaintiff’s mark
 Similarity of the two marks
 Proximity of the two products
 Quality of the defendant’s product
 Likelihood of the plaintiff “bridging the gap”
 Actual confusion
 Defendant’s “good faith”
 Sophistication of buyers of the products
 General equities
Varieties of “Consumer Confusion”




Source
Endorsement (e.g., Rolls Royce Radio Tubes)
Post-sale (e.g., Ferrari)
Initial Interest (e.g., Brookfield)
Forms of Dilution (Clinique 1996)
 “Dilution by blurring occurs where ‘the defendant uses or
modifies the plaintiff's trademark to identify the
defendant's goods and services, raising the possibility that
the mark will lose its ability to serve as a unique identifier
of the plaintiff's product.’ Like tarnishment, blurring is
concerned with an injury to the mark's selling power and
‘need not involve any confusion as to source or
sponsorship.’”
 “Tarnishment may occur when the plaintiff's mark is used
by the defendant in association with unwholesome or
shoddy goods or services. Tarnishment may also result
from an association with obscenity, or sexual or illegal
activity, but is not limited to seamy conduct.”
Dispute-Resolution Systems
1) UDRP
-- Global
2) Anticybersquatting Consumer
Protection Act
-- U.S. only
3) Trademark Infringement
Increasingly
-- Likelihood of Confusion
global
4) Trademark Dilution
5) Unfair Competition
-- Primarily U.S.
Vehicles of International Trademark
Protection
 Paris Convention (1883, 1900, 1911, 1925, 1934, 1958,
1967)
 Madrid Agreement (1890, 1967)
 Madrid Protocol (1989)
 Trademark Law Treaty (1996)
 TRIPS
 Regional Trademark Systems





Community Trademarks (European Union)
MERCOSUR (Brazil, Argentina, Paraguay, Uruguay)
Andean Pact (Bolivia, Colombia, Ecuador, Peru, Venezuela)
APEC (Asia-Pacific)
ARPIO & OAPI (Africa)
Paris Convention
 No discrimination against nationals of other
countries -- 2
 First filing date in a member country gives
applicant priority in all other countries, provided
filings are made within 6 months -- 4
 Marks considered “well-known” in any member
country protected against use on similar goods in
that country -- 6bis
 Protection of foreign nationals against “unfair
competition” -- 10bis
Madrid Protocol
 42 (not yet USA)
 After filing domestic application, applicant may file
international TM application in home office

if int’l application is filed within 6 months of basic
application, get date of priority
 Application forwarded to WIPO, which:



issues international registration
publishes in Les Marques Internationales
forwards application to designated member countries
 National offices examine application for conformity
with national laws

if no action within 1 year, deemed registered
 No “Central Attack”
 French or English
Trademark Law Treaty
 Procedural simplification and harmonization
 46 countries
 Standard forms for applications, powers of attorney,
etc.
 Countries may require only:





name and address,
information concerning the mark
goods and services the mark pertains to,
the mark's classification,
declaration of the intention to use the mark.
 10-year initial term and renewal terms
TRIPS Harmonization
 Service marks must be protected -- 15
 Geographical indications must be protected
(especially for wine and spirits) -- 22 & 23
 Mandatory Procedures for Publication, Opposition,
and Cancellation -- 15
 Expansive protection for well-known marks -- 16
 7-year minimum term -- 18
 Cancellation for non-use only after 3 years; longer if
owner has legitimate excuse -- 19.
 No compulsory licensing -- 21
 No “special requirements” encumbering use -- 21
 Preliminary relief must be available
International Development of
Dilution Doctrine
 Originates in Germany, (Odol 1925)
 Gradually expands in United States



Schecter, 1927
State anti-dilution statutes, 1947-present
Federal Trademark Dilution Act, 1996
 Slow introduction elsewhere


Benelux countries, Germany adopt expansive doctrines
EC Harmonization Directive (1988) and EC
Community TM Regulation (1993) are ambiguous
• Benelux countries and France favor generous reading
• England and ECJ resist
Applications of TM Infringement
Doctrine to Domain Names
 Amadeus Marketing (Italy 1997): TM owner must prove
operation of similar DN is directly confusing or damaging
to TM
 British Telecommunications (UK 1998): A DN
incorporating a TM “shows an inherent tendency to
confuse” consumers
 Champagne Céréales (France 1998): A DN mimicking an
unregistered TM creates excessive likelihood of confusion
 Braunschweig (Germany 1997): DN incorporating name of
a city creates likelihood of confusion
 Patmont Motor Works (NDCal 1997): use of TM in URL
after slash does not confuse consumers
Limitations on application of
dilution doctrine to DN disputes:
 Available only to
holders of “famous”
trademarks
 Requires “use in
commerce” of the
DN
 Sometimes hard to
show either blurring
or tarnishing
(Some) courts respond:
 Local or marketspecific fame is enough
 Offer to sell the DN to
TM owner is enough
 Treat “cybersquatting”
as a new form of
dilution
Principal Forms of Unfair Competition
a) Passing Off

b)
c)
d)
e)
CA2 recognizes even in the context of generic
marks
Contributory Passing Off
Reverse Passing Off
Deceptive Advertising
Misappropriation
Doctrines
 UDRP
 ACPA
 Trademark
Infringement -Likelihood of
Confusion
 Trademark
Dilution
 Unfair
Competition
}
Types of Conflict





Cybersquatting
Typosquatting
Competing Use
Noncompeting Use
Reverse Domain
Name Hijacking
 Parody and
Commentary
{
V. Alternatives
1) Improved UDRP
2) More GTLDs
3) Eliminate protection for generic domain
names
4) Increased latitude for criticism and parody
5) Return to first-come, first-served
6) Repudiate domain names altogether
7) Domain names naturally atrophy
Improved UDRP
Defects:
 Complainant picks
forum
 No appellate process
 Simplified
procedures ill suited
to complex cases
 Arbitrators reach
cases not intended
by the policy
 Innocent defaults
Possible Remedies
 Disputes assigned
randomly to licensed
providers, or
 Registrars pick
providers (Mueller)
 Establish internal
appellate process (loser
pays)
 Add discovery system,
or
 Reduce jurisdiction
 $1000 bond (Mueller)
Major gTLDs
 .com: 21,300,000
 .net: 3,500,000
 .org: 2,400,000
More gTLDs
Operator
.aero
.biz
.coop
.info
.museum
.name
Aviation
Businesses
Cooperatives
Unrestricted
Museums
Personal names
Current
Registrations
SITA
Summer 2002
NeuLevel
700,000
dotCoop
6,000
Afilias
850,000
MuseDoma
2,000
Global Name
132,000
Registry
.pro
Professionals
RegistryPro
Late 2002
Reducing Scarcity?
 See Zittrain & Edelman at
http://cyber.law.harvard.edu/tlds/001/
Trademark Doctrine: No
protection for generic marks
 Inherently generic marks

E.g., Alaska Salmon; Convenience Store
 Marks that become generic through use

E.g., thermos, kleenex; lite beer
Basis of the rule: excessive threat to
competition
Domain-Name practice currently
deviates from this rule
 Trademark owners are sometimes
able to control generic domain names

E.g., crew.com
 Generic domain names are protected
(by law) against “confusingly
similar” domain names

E.g., E-cards.com vs. Ecards.com
 Generic domain names are protected
(by code) against identical domain
names

Only one firm can use sex.com
Reverse
this rule
Reverse
this rule
Either:
(a) Refuse
registration, or
(b) Mandatory
index page
(cf. Mattel v. Hasbro)
Increased Latitude for Criticism
and Parody
 Permit registration of all DNs whose critical
purpose is apparent on their face


E.g., verizonsucks.com; yahooka.com
Doctrinal basis: not “confusingly similar”
 Recognize criticism as a legitimate use
under UDRP, ACPA, and dilution doctrine

E.g., PETA case and Jews for Jesus case would
be decided differently
Return to first-come, first-served
 Analogy to buying up rights to newly
discovered valuable resource

E.g., Edison and bamboo
 Rely on the market to get DNs into the
hands of firms best able to use them
 Limit relief to the conduct of a website in a
fashion likely to cause consumer confusion

Cf. Amadeus
Repudiate Domain Names
 DNs are not essential to navigation of the
Internet
 Dispense with the system in favor of IP
Addresses
 Consumers will rely on search engines,
links, and bookmarks
Domain Names Atrophy
 Value of domain names may diminish
naturally as search engines become more
powerful and ubiquitous
Who Should be Awarded These DNs?
Registrant
Complainant
Webergrill.com
BBQ Pit
Weber
Crew.com
Nat Cohen
J.Crew
Peta.com
People Eating
Tasty Animals
People for the
Ethical Treatment of
Animals
Kumbhmela.com
Jaga
Government of India
Southafrica.com
Virtual
Government of
Countries, Inc. South Africa
BruceSpringsteen.com
Jeff Burgar
Bruce Springsteen
Verizonreallysucks.com
2600
Magazine
Verizon
IntroducingMonday.co.uk
B3TA
Price Waterhouse
Cooper Consulting
3rd party