Technology Law Column

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Published in the Chicago Daily Law Bulletin, September 12, 1996, at page 5.

Internet Name Game Gets New Set of Rules.

Copyright 1996 by David Loundy


Internet domain names are once again a hot topic for discussion. The "rules" are changing, and the scope of the game is expanding. Domain name issues are of great importance both to businesses which already have a presence on the Internet, and those which might one day wish to take advantage of the global communications network. Before discussing the new domain name trademark policy put out by Network Solutions, Inc. (which operates the registry for a large number of Internet domain names), and the proposals for new "international top level domains," let us take a step back and examine the basics of what all of this means and how domain names work.

The Internet connects together millions of computers on various interconnected networks world wide. To send information from one machine to another, you must be able to identify each machine on the Internet uniquely. To identify each machine, an "IP (Internet protocol) number" is assigned to the machine. The IP number takes the form of four sets of numbers separated by periods, or "dots."

The IP number system is coordinated by, and numbers are assigned under the authority of, the Internet Assigned Numbers Authority (IANA)-- which receives its charter from the Internet Society and the Federal Network Council. IP numbers are long and hard to remember. Regardless, they are what computers understand and use to route traffic on the Internet. For the convenience of the humans who use these computers, we use "domain names" instead. The domain name system was created simply to make human access to machines on the Internet easier-- not to identify trademarks. Because computers route information based only on the underlying IP numbers, there has to be some way to correlate a name with a number. To achieve this purpose, there are a number of computers which act as "nameservers."

To use myself as an example, when you tell your web-browser to call up my web page at "www.Loundy.com", the browser sends a query to a nameserver which responds "www.Loundy.com is currently located at IP number 206.54.248.130." Type either the name or the number into your web browser, and you will get the same result-- the last sentence has just provided the same information as a nameserver.

Here is where things become interesting. I did not know the IP number for my own web page (which runs on a "virtual machine" and thus has its own IP number) until I looked it up for this article, and even then, I had to write it down to remember it. More importantly, since I just changed one of my Internet providers, even though my domain name has not changed, the machine it is served from has changed-- in other words, even if I could remember the IP number for my web page, it has recently changed.

Thus, domain names serve at least two important functions: first, they make addresses easier to remember, and perhaps even guess-- for instance, if you wanted to look at Apple Computer's web page, you could guess it might be at www.apple.com-- and in this case, you would be correct. Second, domain names provide portability-- I can tell people my web address, and if I change service providers, all I need to do is tell the Internet nameservers that the old name now correlates to a new IP number.

Now, back to the Internet Assigned Numbers Authority. There are different "levels" to a domain name. Starting at the right end of an Internet address, is the "top level" domain. These may be country codes, such as .us or .au, or they may be "international top level domains" such as .com or .org. The IANA decides who will manage these top level domains-- in other words, who will register any "second level" names within a specific top level domain. Currently, the National Science Foundation manages the .com, .org, .edu, and .net domains. It, in turn, has licensed management to Network Solutions, Inc. (NSI).

NSI, for a fee, will register a domain under one of the top level domains it administers. Thus, to get the name "Loundy.com" I pay a fee to NSI. NSI, in turn, makes sure the name is not already taken and that I have met the technical requirements to allow the name to work properly. Most importantly, it then maintains the master database which all of the Internet nameservers look at to be able to correlate a domain name with its corresponding IP number.

Now that you have been presented with the technical details, let's throw in some trademark law. Loundy.com is registered to me-- all of my cousins are out of luck. But what if, instead of my name, we were talking about a trademarked company name? There could be several businesses, all with trademarks in the same name, who would want to use that name on the Internet. However, only one company can register the ".com" address that matches its trademarked name.

This is where NSI's new domain name policy (effective as of September 9, 1996) enters the picture. Under the new policy, the first party to apply for a domain name gets it-- and NSI does not determine if the registration would constitute a trademark infringement.

If a name is already registered, and another party has a U.S. federal or foreign trademark in that name, the trademark holder may try to stop the use of the domain name, or obtain ownership of the domain transferred. As under NSI's old policy, state or common law trademark holders are out of luck under the new policy. (This has, of course, been an ongoing criticism of NSI's policy.)

A trademark owner initiates the conflict process by sending notice to the current domain name holder and to NSI of its claim to the name. A claim of trademark infringement is not required.

If the domain name was registered before the trademark registration was effective, or if it was registered before the first use of the trademark, the domain name holder is asked to produce a trademark registration of its own. If it cannot produce a registration in 30 days, the domain name is placed on "hold" (and neither party can use the name) after a transition period of up to 90 days. An important change from NSI's earlier policy, however, is that any trademark registration produced within the 30 days must pre-date the initial complaint. This change is to close a loophole exploited by Carl Oppedahl (an attorney and vocal critic of NSI's policies) who discovered in the course of defending one of his clients in a domain name dispute that, although a U.S. trademark registration may take more than a year to obtain, a trademark registration may be obtained in Tunisia within the 30 day period allowed by NSI for response.

Once a domain name is placed on hold, it will remain unused until NSI is presented with a court order declaring which party is allowed to use the name.

To prevent deactivation of a domain name, under the old NSI policy it was becoming standard practice to sue NSI as well as the domain name holder (or the domain name seeker if relief from interference was sought). As a result of half a dozen law suits in the course of less than a year, the new policy now provides that if any suit is filed over a domain name, and NSI is served with a copy of the complaint, NSI will turn control over the domain name over to the court, rather than place the domain name on hold.

The new NSI policy is a bit of an improvement over the old one. However, it is still drawing quite a bit of criticism. One of the major complaints about the policy is the lack of a requirement that there be any trademark infringement. (In the case of a distinctive or famous mark, the new "Federal Trademark Dilution Act of 1995" (15 U.S.C. 1125(c)) may prevent any use of a trademark as a domain name, see Hasbro, Inc. v. Internet Entertainment Group, Ltd., No. C96-130WD, U.S. District Court, W.D. Washington, Feb. 9, 1996, available on the Internet at http://www.Loundy.com/CASES/Hasbro_v_IEG.html).

Another complaint is not with the new policy, but rather regarding NSI's monopoly over "corporate namespace." To address this concern, the Internet Society has just "endorsed in principle" a proposal to allow for the creation of as many as 150 new top level domains.

Some companies have not waited for the IANA stamp of approval over the creation of new domains, and have started registries for top level domains of their own creation (which will not be accessible unless you either use that company's name server or the server of another service provider which agrees to support the new domains on their nameservers). This may lessen trademark conflict by allowing companies to register in a domain that pertains to a specific line of business-- such as in the "experimental" .tour, .law or .sex top level domains that have been created. However by adding domains such as .biz and .corp (both administered by MCS Net in Chicago), instead of there being an easing of trademark disputes there will only be an increase in costs as corporations try to secure names in multiple top level domains (and thereby incurring multiple registration fees) in order to prevent any possible confusion.

Unfortunately, the domain name system was not created with trademark rights in mind, and thus, there is no easy solution to the problem. Creating new top level domains will not solve all of the problems, nor will new policies put out by domain registries such as NSI. Domain conflicts will be with us for some time to come-- until there is some precedent as to when the mere ownership or use of a domain name constitutes an infringement.


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