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STATEMENT OF MICHAEL K. KIRK AMERICAN INTELLECTUAL PROPERTY LAW ASSOCIATION BEFORE THE SUBCOMMITTEE ON COURTS AND INTELLECTUAL PROPERTY COMMITTEE ON THE JUDICIARY U.S. HOUSE OF REPRESENTATIVES OVERSIGHT HEARING NOVEMBER 5, 1997 Mr. Chairman: I am pleased to have the opportunity to present the views of the American Intellectual Property Law Association (AIPLA) on the various trademark-related issues arising from the registration and use of domain names on the Internet. The American Intellectual Property Law Association is a more than 10,000 member, national bar association whose membership primarily consists of lawyers in private and corporate practice, in government service, and in the academic community. AIPLA members comprise a wide and diverse spectrum of individuals involved directly or indirectly in the practice of patent, trademark, copyright, trade secret and unfair competition law, as well as other fields of law affecting intellectual property. Our members represent both owners and users of intellectual property, including many large and small businesses that make commercial use of the Internet via websites or otherwise provide services over the Internet. We congratulate you, Mr. Chairman, for holding this hearing on what has become a very thorny and contentious array of issues affecting the rights of U.S. trademark owners. These issues have exploded upon us with the growth in domain name registrations in this country from only 200 per month two years ago to more than 125,000 registrations per month today. The vast majority of this growth has been by commercial users and it is this reality which has caused the current difficulties for trademark owners. It is time for a more direct and assertive role to be played by the Government in crafting an international framework for handling problems facing trademark owners. The Problem The registration and use of domain names creates significant trademark protection and enforcement problems for trademark owners because domain names, which often incorporate trademarks as well as generic terms, are treated as unique assets that can be held by one and only one owner. This stems from the technological fact that a domain name is an easy-to-remember word, or combination of letters or alphanumeric characters, that corresponds to an underlying unique Internet Protocol ("IP") number that is used to address computers and route traffic on the Internet. A "Top Level Domain" (TLD) registry presently exists for each country. There is also a registry in the United States which is responsible for registering domain names which are sometimes referred to as international TLDs (iTLDs) or as generic TLDs (gTLDs). These include the TLDs .com, .org, and . net. Unlike most TLDs which are country specific and cannot, therefore, accept registrations on a worldwide basis, gTLDs can accommodate registrations from anyone in the world. Approximately eighty percent (80%) of registrations by United States entities occur in the .com gTLD and there is extensive non-U.S. use of this gTLD. Network Solutions, Inc. is currently the exclusive registry for the .com, .org, and .net gTLDs under a contract with the National Science Foundation which is scheduled to expire in March 1998, with a possible one-time, six-month renewal. When an Internet user inputs "http:\\www.aipla.org", the domain name "aipla.org" is correlated by appropriate software to an IP number and the user is then routed to the appropriate designation. Moreover, the very fact that the Internet is a global medium makes the AIPLA's website accessible throughout the world by inputting the above-mentioned domain name. On the other hand, most trademarks are not unique assets, as evidenced by the existence of identical trademarks on different goods and services. Trademark rights have historically been territorial in nature. Trademark registrations issued by federal and state governments extend only to the territorial limits of the sovereign entity issuing the registration. This fundamental difference between domain names and trademarks is what creates the difficulties. The problems are exacerbated in the situation of famous marks which are unique assets and which, by virtue of their fame, may be afforded some protection even in jurisdictions where they have not yet been registered. Some examples will illustrate the difficulties with domain names. First, consider that there are many trademarks that include the word "United," including United Airlines, United Van Lines, and United Bank. At the same time, only one of these entities could exclusively hold the domain name "united.com" even though each entity in theory has a right to claim that domain name. Nevertheless, since domain names are currently registered on a "first come first served" basis, only the first of these trademark owners to register united.com will get the exclusive right to hold that domain name. Second, ownership rights in many trademarks are globally divided. For example, the Scrabble trademark is owned by one entity (Hasbro) in the United States and Canada and another entity (Mattel) throughout the rest of the world. Here again, each entity could legitimately claim rights to the scrabble.com domain name and argue that it should be available only to that entity. Third, some trademarks in fact correspond to commonly used surnames, such as Miller and Avery, that are legitimately used by other entities as their surnames. Here, problems can arise for a trademark owner, such as Miller Brewing Company, when an individual registers his or her surname as a domain name (e.g., miller.com) for an e-mail account or for some other purpose. The above-mentioned examples generally involve instances where trademark owners or individuals using their surnames at least theoretically have some legitimate claim to a domain name. However, the treatment of domain names as unique assets has also given rise to the registration and use of domain names by entities for illicit purposes. An infamous example of illicit use is that by so-called "cybersquatters," a coined word used to refer to entities who register another's trademark as a domain name and then try to sell the domain name back to the trademark owner. Panavision Int'l., L.P. v. Toeppen, 938 F. Supp. 616 (C.D. Cal. 1996); Intermatic, Inc. v. Toeppen, 41 USPQ2d 1223 (N.D. Ill. 1996) There are also other instances, Planned Parenthood Federation of America, Inc. v. Richard Bucci, 42 USPQ2d 1430, 1432-33 (S.D. N.Y. 1997) where entities register a trademark as a domain name primarily to make a political or other statement. Finally, there are more classic cases of trademark infringement or trademark dilution where an entity registers another's trademark as a domain name for the purpose of trading on the goodwill inherent in the trademark, Cardservice International Inc. v. McGee 42 USPQ2d 1850 (E.D. Va. 1997). Some have suggested a review process for domain name registries akin to that which the United States Patent and Trademark Office (USPTO) undertakes in determining whether to issue a trademark registration. Such a review process includes a determination as to whether a trademark, if registered, would be likely to cause confusion as to source of origin, sponsorship, or affiliation with another previously-registered or used trademark. The AIPLA believes that pre-screening of applications for domain name registrations, other than the automatic computer-generated rejection that ensues when an entity attempts to register a name identical to one already registered, is neither desirable nor feasible for a variety of reasons. Even a streamlined review process for domain name applications could significantly delay the registration of domain names which, unlike trademarks, cannot be used until registered. In addition, pre-screening domain name applications prior to registration would necessarily increase the expense of obtaining a domain name registration many fold, (although some additional care to make it more difficult to circumvent the system by, for example, merely including a dash or removing a space between two terms otherwise taken, e.g. Coca-Cola, Cocacola, may be warranted). Since the vast majority of Internet domain name registrations do not conflict with any trademark rights due to their completely generic nature, there is very little practical enforcement benefit from pre-screening domain names prior to registration. Only a very small fraction of 1% of these registrations has ever resulted in any complaints by trademark owners about a particular registration. Adequacy of Trademark Law While there have clearly been difficulties for trademark owners created by domain name registrations, the AIPLA believes that existing United States law has been up to the task of allowing trademark owners to fairly resolve domain name disputes. Further, while the protection and enforcement of trademark rights needs to be bolstered in certain foreign countries, a number of foreign countries likewise have adequate laws in place. Specifically, in the United States, trademark owners have successfully employed the United States anti-dilution statute to terminate use of their marks as domain names by cybersquatters and garden variety trademark infringers. Panavision Int'l., L.P. v. Toeppen, 94 F. Supp. 1296, 1304 (C.D. Cal. 1996); Intermatic Inc. v. Toeppen 41 USPQ2d 1223 (N.D. Ill. 1996) Moreover, while the anti-dilution statute on its face applies only to famous marks, the courts have expansively construed "famous" to include even locally famous trademarks. Tele Tech Customer Care Management Inc. v. Tele-Tech Co. 42 USPQ2d 1913, 1916 - 18 (C.D. Cal. 1997) It is, of course, true that those trademark owners who do not possess a famous trademark will need to rely on the other statutory provisions of the Lanham Act, notably the trademark infringement, false description and false designation of origin provisions. However, this is no different a legal recourse than such trademark owners would have with respect to non-Internet-related infringement, dilution or unfair competition. Moreover, a growing number of courts have allowed the Lanham Act to be asserted against foreign domain name registrants whose Internet websites are accessed by entities in the United States. Thus, we expect that illicit activity can be addressed by vigorous enforcement of now-developed case law. However, there remains the problem of multiple businesses using the identical trademark for different goals and services. As outlined above, only one business entity can currently obtain a domain name in the commercially-desirable .com gTLD. Proposals to Relieve the Pressure on .com Concerned about the exponential explosion of use of the Internet, the Internet Society, together with the Internet Assigned Numbers Authority, established an International Ad Hoc Committee (IAHC) to develop proposals for enhanced domain name administration and management. The Final Report of the IAHC recommended establishing seven new gTLDs: .firm, .store, .web, .arts, .rec, .info, and .nom. It also recommended the creation of a Memorandum of Understanding on the Generic Top Level Domain Name Space of the Internet Domain Name System (gTLD - MoU) to implement the IAHC recommendations. It also recommended the creation of a Council of Registrars (CORE) through another Memorandum of Understanding (CORE - MoU). The CORE - MoU establishes the basis under which CORE and the Registrars for the new gTLDs must operate. The IAHC Final Report, the gTLD - MoU, and the CORE - MoU all contain provisions addressing the conflict between domain names and trademarks. The IAHC Final Report proposed the policy that second level domain names which are identical or closely similar to names which are internationally known and for which demonstrable intellectual property rights exist should only be held by or with the authorization of the owner of such rights. The CORE - MOU requires Registrars of the new gTLDs to include in agreements with applicants for domain names their consent
It should be emphasized that these procedures and commitments do not apply to the existing gTLDs. The CORE-MoU will also set forth in an appendix Substantive Guidelines Concerning Administrative Domain Name Challenge Panels. While the AIPLA applauds, in principle, efforts to facilitate global harmonization of domain name registration and conflict resolution, certain of these proposals may exacerbate the protection and enforcement problems for trademark owners. It is certainly conceivable, if not likely, that some trademark owners will make a "mad dash" to register domain names in as many of the new gTLDs as possible in order to preempt other entities with identical or similar trademarks and trade names from doing so. The existence of new gTLDs may also increase opportunities for cybersquatters In this connection, we are quite concerned about the impact which the CORE-MoU's Substantive Guidelines Concerning Administrative Domain Name Challenge Panels, the latest draft of which was issued on October 2, 1997, will have on U.S. trademark owners. Although the Guidelines attempt to address the difficult issues involved in fairly allocating rights between trademark owners and domain name registrants, they leave many questions unanswered. While the Guidelines appear to recognize the need to consider substantive standards in resolving conflicts, they only list "factors" which ACPs may consider in domain name disputes. Without more specific principles dealing with issues such as confusion, dilution, etc., the outcome of challenges could well depend too heavily on the comparative financial strength of the parties. The open-ended standards envisioned by the Guidelines also would, in many circumstances, place an impossible burden on small entities and individuals who have not established worldwide intellectual property rights. A small entity or individual faced with the prospect of marshaling and presenting a body of evidence regarding a long list of possibly relevant factors would, in many cases, be forced to give in to a larger, better funded opponent. The Guidelines should embody clearer substantive standards which would make the system fairer and more consistent for all parties. We are also concerned that the Guidelines do not appear to adequately, if at all, recognize common law trademark rights as sufficient to support a challenge to a domain name registration (see Paragraphs 12 and 15). Common law trademark rights are recognized and enforceable in the United States, and are of significant value to many U.S. businesses, especially small businesses. Guidelines in which common law rights are not recognized would not adequately serve U.S. business interests. An International Framework We believe that there simply must be greater involvement by a wider constituency in designing the future of the Internet than has been the case to date. The Internet Society, the Internet Assigned Numbers Authority, the International Ad Hoc Committee, and the Interim Policy Committee have all worked very hard to address the problems confronting the Internet and particularly the problems which are presented for trademark owners. However, we fear that the process has not been sufficiently inclusive of all affected interests and particularly that there has been insufficient involvement by the United States Government and a broad spectrum of U.S. interests in overseeing and guiding this process. While the Internet is global in nature, it is a creation of the United States, indeed the United States Government. As mentioned earlier, the contract of the existing registry for domain names in the United States will expire next year and we are not aware of any plans by the National Science Foundation to ensure the continued effective functioning of the existing system. Moreover, we must not lose sight of the fact that the proposals developed by the International Ad Hoc Committee do not address the existing gTLDs, particularly the .com gTLD, which has been the source of so much pressure and controversy. NSI has registered nearly 1.5 million domain names in the .com gTLD and mostly to U.S. entities. The Government of the United States should take the lead in developing a binding international framework both for the creation and registration of new gTLDs and for formulating a binding conflict resolution policy both for existing and new gTLDs. This conflict resolution policy should include efforts to harmonize trademark laws as they affect domain names. The creation and registration of any new gTLDs as well as the connection between existing and any new gTLDs might well take the form of an agreement under the auspices of the International Telecommunications Union (ITU) while the trademark/domain name dispute resolution rules could be the subject of a new international trademark agreement, under the auspices of the World Intellectual Property Organization (WIPO) with meaningful involvement and participation by trademark owner interests. While it is true that both of these organizations are currently involved, they appear to be moving forward without any input, control or oversight by the Government of the United States or other countries. In fact, one needs only look at the list of signatures for the gTLD-MoU to see that it is essentially devoid of any signatures of the United States and other industrialized countries as well as the representatives of any major industries in the United States, Europe and Japan. Our urging should not be taken as a suggestion that the United States or any other government or international intergovernmental organizations, such as WIPO or the ITU, should control or take over administration of the Internet. To the contrary, we believe that the private sector is best equipped and motivated to handle these responsibilities. What we are suggesting, however, is that an international framework for governance of the Internet should be established with the participation of governments in as rapid a time frame as possible. Technology and the Internet are evolving with great rapidity. If action is not taken in the near future, we may well have a fracturing of the Internet with one Internet system of existing gTLDs administered in the United States (by whom we do not know) and a second Internet controlled and administered by a very limited set of actors headquartered in Switzerland. This, Mr. Chairman, is why this hearing is so appropriate and timely. A Possible Solution The AIPLA believes that presently available technology, if properly utilized, can dramatically alleviate or even virtually eliminate most trademark protection and enforcement problems that now inherently arise from the treatment of domain names as unique assets. Specifically, the AIPLA favors the development and use of a searchable, telephone directory-type system for domain names and the corresponding development of a centralized world-wide database of trademarks and domain names that could be correlated to one another. The AIPLA also applauds and favors the emerging use of so-called "Gateway pages" or customized directories that effectively permit identical trademark owners to avail themselves of identical domain names. In terms of a directory, we envision a "yellow pages" type directory which would allow Internet users, as well as trademark attorneys and other interested parties, to search through multiple trademark, trade name or surname listings at a single Internet address where the users could then have direct linkage to the home page or Website corresponding to a given listing. For example, under such a directory system, an Internet user who typed in the name "United" would be routed to a directory page where all of the listings for "United" would appear alphabetically. If the user, upon reaching the directory page, types in "United Airlines" or clicked on the United Airlines listing, he or she would be taken directly to that company's home page or website. The domain name itself would then largely become irrelevant, because the directory would become the most common means of access. The user could also 'bookmark" or save addresses for future use without having to go through the directory process a second time, much like putting the address into an electronic or conventional organizer. Further, the use of the "Gateway page" option permits identical trademark or trade name owners to effectively share a generic home page for a domain name like united.com or scrabble.com. The home page would then contain icons or links that would take the user to each trademark owner's separate website. Thus, under this option, a user would type united.com and, upon arriving at the home page, be presented with listings of United Airlines, United Van Lines and other United companies and brands, with links to their particular websites. There is in fact growing precedent for this pragmatic solution, as recently reflected in a lawsuit settled between Mattel and Hasbro over the domain names scrabble.com and scrabble.org. A related question concerning directories is how and by whom they should be developed, operated and administered. While the AIPLA certainly believes that governments should have a guiding role in establishing a secure and stable directory system, we have serious reservations about the creation of an international bureaucracy to govern the Internet. Rather, we believe the government's role should be to guide and encourage the private sector, such as domain name registrars and Internet service providers, to develop such a system which the marketplace would then self-regulate for reliability and comprehensiveness. Like existing telephone directories, this could also be done on a regional basis (e.g., each country could have its own directory) or globally. If the United States Government were to take the lead in developing a binding international framework, a directory system could be mandated as one step in reducing the conflicts and tensions we have experienced. The AIPLA recognizes that some trademarks are indeed unique assets, e.g. Coke, Kodak, which when embodied in domain names, should be accorded exclusivity across the board. We are also aware that some domain name holders assert the exclusivity of their domain names, irrespective of the fame of the trademark or the extent of pre-existing third-party usage of similar trademarks, trade names and surnames. It may, therefore, ultimately be necessary for international agreements and national legislation to implement a directory system. We again commend you, Mr. Chairman, for holding this hearing and we look forward to working with you to craft a resolution to the trademark/domain name conflicts which is in the best interests of U.S. industry and trademark owners. |