Mr. Chairman:

I appreciate the opportunity to appear before the Subcommittee today on behalf of the American Intellectual Property Law Association (AIPLA) to present the views of the Association at this Oversight Hearing on Internet Domain Names and Intellectual Property Rights.

The American Intellectual Property Law Association is a 10,000 member, national bar association constituted primarily of lawyers in private and corporate practice, in government service, and in the academic community. The AIPLA represents a wide and diverse spectrum of individuals, companies and institutions involved directly or indirectly in the practice of patent, trademark, copyright and unfair competition law, as well as other fields of law affecting intellectual property. Our members represent both owners and users of intellectual property.

The impact which the Internet has made on society is already enormous and yet it is still in its infancy. The potential of the Internet for education, entertainment, commerce, and other fields is virtually limitless. The creation of wealth and jobs in the United States has been staggering and yet it will increase many-fold in the next decade. For developing nations, the Internet offers access to worldwide markets without the investments required until very recently to build a worldwide marketing and sales infrastructure. But this promise will not be realized if we are not able to corral the wild-west, get-rich-quick activity of those who confuse and defraud consumers through their reckless behavior regarding the Internet. If consumers are uncertain whether the products advertised on the net are genuine or whether their credit card information will be abused, or if authors cannot protect their works or if producers of films and sound recordings cannot protect their investment, the potential of the Internet will not be realized.

The AIPLA has been vitally concerned about the impact which cybersquatting and cyberpiracy have on the protection of intellectual property. For this reason, we have actively followed and commented on the Administration's Green Paper (A Proposal to Improve Technical Management of Internet Names and Addresses, February 20, 1998 (63 Fed. Reg. 8825)) which resulted in the Administration's White Paper (Policy Statement on the Management of Internet Names and Addresses, June 5, 1998 (63 Fed. Reg. 31741)). We complimented the Administration for undertaking the development of a policy to improve the administration of the domain name system and to establish effective procedures for registering domain names and addressing domain name disputes involving intellectual property rights.

The AIPLA has also presented testimony to this Subcommittee on issues surrounding intellectual property and domain name disputes and has participated in meetings on domain names convened by the World Intellectual Property Organization (WIPO) in Geneva, Switzerland.

The AIPLA particularly appreciated the commitment of the U.S. Government in the White Paper to seek international support to call upon WIPO to develop recommendations for a uniform approach to resolving trademark/domain name disputes, recommend a process for protecting famous trademarks, and evaluate the effects on intellectual property owners of adding new gTLDs. We particularly commend the resulting report (The Management of Internet Names and Addresses: Intellectual Property Issues) and strongly endorse its recommendations. The extent of the efforts by WIPO to include all interested parties through the publication of requests for comments on the Internet and the convening of seventeen regional consultations literally around the world is unprecedented. The AIPLA actively participated in the WIPO Domain Name Process through presentations and submissions at the WIPO regional consultations in the United States and through representation on the WIPO Panel of Experts. Though some may differ with respect to the specific details and recommendations, the AIPLA believes that WIPO has synthesized the major viewpoints. We recognize the importance of balancing the interests of individuals and free speech against the need to provide a stable commercial medium that protects the interests of consumers and intellectual property owners, but we believe that the time for debate has passed and that the time for action is now at hand.

The AIPLA also endorses the U.S. Government's decision to transition the governance of the Domain Name System to a non-profit corporation in a manner that will ensure the stability of the Internet and create competition in its administration. Though we continue to be nervous about the transition process from the U.S. Government to the Internet Corporation for Assigned Names and Numbers (ICANN), we have been working diligently within the guidelines established by ICANN to help it come into existence while at the same time seeking to protect the interests of intellectual property owners.

According to the ICANN Bylaws, by September 30, 2000, there will be nineteen elected members of the Board of Directors consisting of nine At Large Members, the President, and three Directors from each of the three Supporting Organizations. Presently, there is an Interim Board with ten members, and they have indicated that they expect the Supporting Organizations to elect their Board Members in time for them to be seated at ICANN's Annual meeting in Los Angeles in November of this year.

The AIPLA joined with domestic and foreign intellectual property and trade associations last year in an effort to establish the Domain Name Supporting Organization (DNSO) (the other two Supporting Organizations are the Address Supporting Organization and the Protocol Supporting Organization). Following a false start culminating in the Board of Directors adopting some revised Bylaws for the DNSO following a meeting of the Board in Singapore in March of this year, we have worked diligently to create an Intellectual Property Constituency (IPC), one of seven initial Constituencies identified in Article VI-B of the revised Bylaws which sets forth the structure of the DNSO. The member organizations of the IPC are annexed to the statement of the IPC President, Jonathan Cohen, another witness at this hearing.

The DNSO consists of a Names Council, which in turn consists of three elected representatives from each of the constituencies (currently seven, although one has not yet been recognized by the Board), and a General Assembly, which consists of all interested individuals and entities. The General Assembly will nominate persons from whom the Names Council will select the DNSO's three Directors.

The AIPLA has been participating in the creation of the DNSO because we believe that the adequate protection of intellectual property will be critical for the ultimate success of ICANN and for the Internet to continue its remarkable growth and realize its full commercial potential. The DNSO offers perhaps the only opportunity for us to promote the placement of a person on the Board who will be knowledgeable about the needs of the intellectual property community as regards the Internet. However, we are very concerned about our ability to accomplish this goal. At the risk of being too candid and frank, no one on the Interim Board is experienced in intellectual property. Moreover, given the make-up and structure of the DNSO, we are certainly not optimistic that the DNSO will select an intellectual property expert to be one of its three Board members, but we are working within the structure dictated to us. Apart from the Commercial and Business Entities Constituency, the remaining five Constituencies are not likely to have protection of intellectual property high on their list of priorities.

In addition, the Bylaws provide that no two members from any one Constituency selected for the DNSO's Names Council may be citizens of countries in the same geographic region, except with the consent of the Board. Thus, notwithstanding the fact that the United States created the Internet, has the greatest investment in the infrastructure of and commercial activity on the Internet, the largest number of Internet users and domain name holders, and is the world leader in creating content for the Internet, the Bylaws of ICANN would appear to countenance the possibility that even if only one person with an intellectual property background from the DNSO's Names Council is selected for the board, that person may well not be from the United States. Even ignoring nationality, it is certain that of the current 18 (possibly 21) members of the Names Council, only three are certain to have intellectual property backgrounds. Such structural bias does not bode well either for sound intellectual property policies being forwarded to the Board or for the Board to have a member with an intellectual property background.

Nonetheless, failure of ICANN is clearly not in the best interests of the long term vitality and stability of the Internet. In this regard, we disagree with the opposition of the Department of Commerce to the $1 per-year, per domain registration user fee and regret the decision of ICANN to eliminate this fee. Even though Network Solutions, Inc. (NSI) is slowly relinquishing its monopoly for the registration of the .com, .org, and .net TLDs, it is charging the new registrars $9 per year for each second level domain name registered. While there should be adequate checks and balances in place to ensure that ICANN's budget is not excessive, we can only wonder why the Department of Commerce is silent on the $9 fee - dare we say tax - it allows NSI to impose on its competition. Intellectual property owners have long been accustomed to user fees to underwrite the costs of administering the various intellectual property systems and we do not find the $1 user fee objectionable.

As stated in the White Paper, intellectual property owners must have access to searchable databases of registered domain names that provide the information necessary to contact a domain name registrant when a conflict arises. In this regard, the AIPLA strongly supported the recommendation contained in the WIPO Interim Report that domain name registration agreements should call for accurate and reliable contact details consisting of (1) the full name of the applicant, (2) the applicant's postal address, (3) the applicant's e-mail address, (4) the applicant's voice telephone number, (5) the applicant's facsimile number, if available, and (6) where the applicant is an organization, the name of an authorized person for contact purposes. The AIPLA was therefore pleased to see that ICANN's March 4, 1999 Statement of Registrar Accreditation Policy called for this information as well as the expiration date of the domain name registration. In this regard, we would also like to have added to this list the date on which the domain name was first registered. We also supported the Interim Report's recommendation that this contact information be made publicly available and we were similarly pleased that ICANN's Policy calls for the public to have free, real time access to such contact information by way of a Whois service.

The AIPLA also believes that registrars should be required to adopt reasonable automated procedures to verify contact information submitted by new domain name applicants and by registrants renewing their registrations. Some of the most blatant cybersquatters provide fictitious addresses and other contact information, making it just that much more difficult for a trademark or copyright owner to take action against the perpetrator. While we do not suggest that registrars should be burdened with searching trademark databases to ensure that requested domain names do not conflict with registered trademarks of others, the use of on-line validation mechanisms to ensure the accuracy of contact information should be mandated.

In order to facilitate the public's access to the contact information that each registrar accredited by ICANN must make available, the AIPLA believes that ICANN should establish a consolidated Whois database. ICANN has already announced fifty-two new post-testbed registrars (in addition to NSI and the five testbed registrars) and others are likely. It will become increasingly difficult for intellectual property owners to protect their interests if they must contact a growing number of registrars with differing systems to obtain contact information regarding domain name registrations. A consolidated Whois database would eliminate this potential problem.

The problems created by disputes over domain name registrations and intellectual property rights are outlined in the WIPO Report: 1) the global nature of the Internet raises the potential for infringement of IP rights in several jurisdictions; 2) because there are more than 200 TLDs, the same dispute can arise in several TLDs; 3) in view of the speed of communication on, and global access to, the Internet, the need to quickly resolve disputes can be critical; and, 4) the economic value of the damage which can flow from an abusive domain name registration and the cost to IP rights holders and consumers can be enormous.

In light of these considerations, the AIPLA strongly believes that a mandatory administrative dispute resolution procedure should be adopted for deliberate, bad faith cases of abusive registrations or cybersquatting. With regard to the definition of what constitutes an abusive registration of a domain name, we would agree with the definition set forth in paragraph 171 of the WIPO Report. In order to prevent "registrar-shopping" by cybersquatters, this procedure should be adopted by ICANN and imposed on registrars for the resolution of all disputes in the .com, .org, and .net TLDs. In this regard, at its meeting in Berlin in May of this year, the ICANN Board referred WIPO's recommendations on dispute settlement to the DNSO for its consideration and requested that the DNSO submit its recommendations back to the Board by July 31. We know that the IPC input to the DNSO decision-making process will be very supportive of the WIPO recommendations and we can only hope that the other Names Council members will agree.

In addition, ICANN, WIPO and other international bodies should press for the adoption of such a procedure by all country code top-level domain (ccTLDs) registrars to foreclose opportunities for cybersquatters to work their mischief in the 200-plus ccTLDs. Finally, the uniform dispute resolution procedures initially adopted by ICANN should be periodically reviewed with a view toward their improvement based on experience and as technology, circumstances and law require.

While agreeing with WIPO that mandatory dispute resolution should be limited to deliberate, bad faith abusive registrations, the AIPLA would not wish parties to a dispute to be precluded from voluntarily submitting domain name disputes between parties with competing legitimate rights to such dispute resolution. At the same time, however, the adoption of a mandatory dispute resolution policy by ICANN should never preclude parties to a dispute from filing a claim in the relevant national court, even after the administrative procedure has been completed.

Before leaving the subject of dispute resolution involving the abusive registration of domain names, I would like to mention AIPLA's support for the concept of amending the Lanham Act to strengthen the protection currently available against the bad-faith registration of domain names confusingly similar to, or which would dilute, the trademark or service mark of another. We believe that a carefully-crafted bill targeting the registration of a domain name identical or confusingly similar to the mark of another, by a person with no legitimate interest in that name, with the intent to benefit from the goodwill of that mark as evidenced by objective criteria - with appropriate safeguards such as exemptions for the innocent registration of a person's name and freedom of expression to protect legitimate parody - would provide an additional and desirable new remedy for trademark owners to protect their marks and prevent the perpetration of a fraud on the consuming public. The AIPLA also believes that consideration should be given to creating an in rem cause of action against the domain name itself in which a court could order an appropriate remedy such as cancellation or transfer of the domain name.

The AIPLA does not believe that it would be appropriate at this time to provide for criminal sanctions such as those contained in S. 1255 which was the subject of a hearing in the Senate last week. We do believe, however, that the provision of statutory damages, in addition to the existing Lanham Act remedies, would be desirable.

Famous and well-known marks have, for obvious reasons, been subjected to special attention by cybersquatters, requiring the owners of such marks to invest huge sums to protect them. The bright light of fame attracts cybersquatters much as a bright light in the night time attracts insects. It presents a serious problem for which the protection recommended by WIPO strikes us as an appropriate response.

The AIPLA regards the establishment of a mechanism for the exclusion in open gTLDs for truly famous and well-known marks as a sine qua non for the introduction of any new gTLDs. We are mindful of the concerns which have been expressed regarding the lowering of standards over time as to what qualifies as a famous mark. We believe, however, that the list of non-exhaustive factors recently adopted by WIPO's Standing Committee on the Law of Trademarks, Industrial Designs and Geographical indications, applied in a centralized administration by WIPO or other appropriate body, fully responds to these concerns. Indeed, contrary to those who oppose providing such protection for famous marks, we believe that the number of marks found to qualify for exclusionary status will be considerably smaller than even many trademark owners might expect. Accordingly, the AIPLA would like to see ICANN assign a high degree of urgency to the development and implementation of an exclusion mechanism for famous and well-known marks.

We again commend you, Mr. Chairman, for holding this hearing on the promise and problems of the Internet as it affects intellectual property. As you will undoubtedly hear from all of the witnesses, the Internet raises a host of important issues which impact the creators and users of intellectual property. We look forward to working with you and the other Members of the Subcommittee as we travel with this exciting new medium into the new millennium.