OVERVIEW OF Domain Name Trademark Disputes by huangyuarong


									           Domain Name Disputes and U.S. Trademark Law:
                       A Handout for Students1
         By Nancy J. King, Assistant Professor of Business Law,
     Oregon State University and Gail Lasprogata, Seattle University

Part A: ICANN and the Uniform Domain Name Dispute Resolution Policy

         The Internet Corporation for Assigned Names and Numbers (ICANN), a global

entity not affiliated with any one government, is responsible for Internet administration,

including administration of the domain name system, and oversight of domain name

registrars.2 ICANN also oversees the administration of its mandatory dispute resolution

policy for certain disputes between trademark holders and domain name holders through

the Uniform Domain Name Dispute Resolution Policy, or UDRP.3

         The UDRP is an arbitration-like domain name dispute resolution policy that has

proven to be enormously popular with trademark holders for the resolution of

cybersquatting disputes.4 The scope of UDRP proceedings is strictly limited to claims of

  This handout consists of excerpts from an article published by Nancy J. King and Gail A. Lasprogata, The
Journal of Legal Studies Education, Volume 20:2 (2003).
  The assignment of domain names was originally the responsibility of the Internet Assigned Numbers
Authority (IANA), a U.S. government-based organization. In the early 1990’s, IANA assigned its authority
over allocation and management of domain names to the Internet Network Information Center, which in
turn subcontracted it to Network Solutions, Inc. (NSI). NSI maintained essentially monopoly control of the
domain name system (DNS) until 1998. See Jason M. Osborne, Effective and Complimentary Solutions to
Domain Name Disputes: ICANN's Uniform Domain Name Dispute Resolution Policy And The Federal
Anticybersquatting Consumer Protection Act of 1999, 76 NOTRE DAME L. REV. 209, 213 (2000); LEE B.
BURGUNDER, LEGAL ASPECTS OF MANAGING TECHNOLOGY 445 (2d ed. 2001). In response to international
criticism regarding U.S. control of the DNS and to encourage international participation, the U.S.
transferred oversight responsibility for Internet administration from IANA to ICANN. See United States
Department of Commerce, Management of Internet Names and Addresses, National Telecommunications
and Information Administration, Statement of Policy, No. 980212036-8146-02, at
http://www.icann.org/general/white-paper-05jun98.htm (last visited February 1, 2003.
  See UDRP; Osborne, supra note 2, at 213-216. ICANN’s broad authority with regard to the DNS includes
managing and coordinating the accreditation of registrars, and overseeing the administration of the UDRP.
  Osborne, supra note 2, at 214. All domain name registrars in the .aero, .biz, .com, .coop, .info, .museum,
.name, .net and .org top-level domains follow the UDRP. See ICANN, Uniform Domain Name Dispute
Resolution Policy, at http://www.icann.org/udrp (last modified Feb. 5, 2002). The UDRP was adopted on
August 26, 1999 and as of February 5, 2003, 11, 102 domain name disputes have been resolved under the

"abusive registrations of Internet domain names."5 Under the policy a claimant (i.e.,

trademark holder) may institute an online arbitration proceeding against a domain name

owner if: the domain name being used is alleged to be identical or confusingly similar to

the claimant's trademark; the domain name owner does not have any rights or legitimate

interests in the name; and the domain name owner registered the domain name in "bad

faith."6 In other words, the UDRP covers registration of domain names made with a bad-

faith intent to profit commercially from another's trademarks.7 The UDRP is not meant

to resolve all disputes between trademark owners and domain name holders. All other

"legitimate" disputes concerning domain name ownership are left to the courts.8

        ICANN has made the UDRP uniform by requiring its inclusion in all domain

name registration agreements between ICANN-approved registrars and their domain

name registrants.9 As such, the policy "creates a contract-based scheme for addressing

disputes between domain name registrants and third parties challenging the registration

and use of their domain names."10

        The UDRP is a streamlined, inexpensive, administrative dispute-resolution

procedure fashioned like an online arbitration. Complainants initiate UDRP proceedings

UDRP. See ICANN, Summary of Status of Proceedings, at http://www.icann.org/udrp/proceedings-stat.htm
(last modified February 5, 2003).
  Parisi v. Netlearning, Inc., 139 F. Supp. 2d 745, 747 (E.D. Va. 2001) (citing ICANN, Second Staff Report
on Implementation Documents for the Uniform Dispute Resolution Policy (Oct. 25, 1999), at
http://www.icann.org/udrp/udrp-second-staff-report-24oct99.htm [hereinafter, ICANN Second Staff
Report] ).
  UDRP, P 4(a).
  See ICANN Second Staff Report.
  Id.; see also Osborne, supra note 2.
  UDRP, P 1.
   Parisi, 139 F. Supp. 2d at 751.

electronically with a dispute resolution service provider approved by ICANN.11

Currently there are four active providers: the World Intellectual Property Organization

Arbitration and Mediation Center, the National Arbitration Forum, CPR Institute for

Dispute Resolution, and the Asian Domain Name Dispute Resolution Center.12 The

complaint is forwarded by the dispute resolution service provider to the domain name

owner who then has an opportunity to respond. There are detailed procedures for the

appointment of either a solo arbitrator or a three-member panel to decide the case. There

are no in-person hearings, teleconferences or Web conferences unless the arbitrator(s)

determine that exceptional circumstances exist warranting such an expense.13 Instead, the

dispute is decided based on "the statements and documents submitted" in accordance with

the UDRP, the UDRP Rules, and "any rules and principles of law that [the arbitrator(s)]

deem applicable."14 The arbitrator(s) generally issue a decision within fourteen days of


         If the UDRP panel rules in the complainant's favor, the only available remedy is

for the registrar to cancel the domain name registration or transfer it to the complainant.16

No money damages may be awarded. Upon notice from the panel of its decision, a

registrar may automatically implement a UDRP panel decision after ten days unless the

registrant notifies the registrar within that period that it has challenged that decision by
   Internet Corporation for Assigned Names and Numbers, Rules for Uniform Domain Name Dispute
Resolution Policy, at http://www.icann.org/udrp/udrp-rules-24oct99.htm (last modified February 5, 2002)
[hereinafter, UDRP Rules], P 3.
   See ICANN, Approved Providers for Uniform Domain-Name Dispute-Resolution Policy, at
http://www.icann.org/dndr/udrp/approved-providers.htm (last modified March 1, 2002).
   UDRP Rules, P 13. A search of cases at the ICANN Web site conducted on May 10, 2002 produced no
case where such circumstances were found to exist.
   UDRP Rules, PP 13, 15(a); Parisi, 139 F. Supp. 2d at 747. Although the arbitrators are given discretion
under the UDRP to apply any law they deem applicable, because of U.S. dominance of the Internet, they
frequently apply U.S. law. See Osborne, supra note 2, at 222.
   UDRP Rules, P 15(b).
   UDRP, P 4(i).

judicial action.17 In that event, the registrar will not take action until it receives sufficient

evidence of resolution of the dispute, the dismissal or withdrawal of the lawsuit, or a

court order that the registrant does not have the right to continue using the domain


        A broader understanding of the concepts of trademark infringement, blurring,

tarnishment and cybersquatting gives meaning to the UDRP by placing the UDRP in the

context of the trademark law principles on which it is based.19 Part B of this paper

reviews the basics of trademark law and policy, the cybersquatting phenomenon that has

occurred as part of the Internet revolution, and the online processes for protecting

valuable trademarks in cyberspace under the ICANN Uniform Domain Name Dispute

Resolution Policy.

Advantages to Selecting the UDRP to Resolve Domain Name Disputes

          The dramatic increase in commercial activity on the Internet and the distinctive

legal aspects of cyberspace create a virtual environment ripe for new methods of dispute

resolution.20 Trading on the attractiveness of traditional methods of alternative dispute

   UDRP, P 4(k); UDRP Rules, P 5(e).
   UDRP, P 4(k).
   For example, enumerated, non-exclusive examples of what constitutes "bad faith" and "legitimate
interest" are provided in the UDRP Paragraphs 4 (b) and (c) respectively. Evidence of "bad faith" includes
"use of a domain name with the intent to attract, for commercial gain, Internet users to an associated Web
site, by creating a likelihood of confusion with the complainant's mark as to the source, sponsorship,
affiliation or endorsement of the Web site." See UDRP, P 4(b) (italics added). Evidence of a "legitimate
interest" that might rebut the allegations of bad faith includes evidence that "the registrant is making a
legitimate, noncommercial or fair use of the domain name, without intent for commercial gain to
misleadingly divert consumers, or to tarnish the mark at issue." See UDRP, P 4(c). Although many scholars
believe the UDRP is grounded in a trademark infringement claim, the UDRP seems to encapsulate both
infringement and dilution theory. See, e.g., Elizabeth Thornburg, Going Private: Technology, Due Process,
and Internet Dispute Resolution, 34 U.C. DAVIS L. REV. 151, 159 (2000).
   Gail A. Lasprogata, Virtual Arbitration: Contract Law and Dispute Resolution Meet in Cyberspace, 19-1
J. LEGAL STUD. EDUC. 107 (2001).

resolution, online dispute resolution (ODR) has emerged as a viable option for the

resolution of disputes arising from Internet activity. 21 The ability to participate in a

virtual proceeding enables parties anywhere and at any time to initiate or respond to a

claim by accessing a Web site and completing electronic forms that guide them through

the various stages of the process. All existing ODR facilities incorporate digital

communication tools to allow the participants to exchange information. A few facilities

supplement electronic communication with telephone or video conferencing and mail

exchange.22 ODR options mostly include settlement and mediation facilities, or some

hybrid combination of both.23

         The UDRP is unique in the world of ODR systems because, while labeled an

"administrative proceeding," it is more like arbitration. Although confined to domain

name disputes involving alleged cybersquatters, the UDRP dispute resolution

methodology is likely the most successful example of ODR to date.24 The process itself

is faster and more economical than going to court to litigate a claim under the Lanham

Act or its amendments.25 The online system is user-friendly and does not require attorney

representation. Similar to traditional arbitration, this form of online dispute resolution

permits participants to have their disputes decided by experts, in this case experts in

    Internet disputes include those based on transactions between e-tailers and auction sites and purchasers,
or between business parties or merchants. They also include complaints based on breaches of customary
Internet practices, or "netiquette," as well as complaints grounded in tort such as defamation, invasion of
privacy, and most importantly here, unfair trade practices and domain name disputes. See Lan Q. Hang,
Online Dispute Resolution Systems: The Future of Cyberspace Law, 41 SANTA CLARA L. REV. 837 (2001);
Richard Michael Victorio, Internet Dispute Resolution (iDR): Bringing ADR Into The 21 st Century, 1 PEPP.
DISP. RESOL. L.J. 279 (2001).
   See Lasprogata, supra note 20, at 112.
    See id. at 112-118 (canvassing available ODR options); see also Hang, supra note 21.
    See Lasprogata, supra note 20, at 117-118; see also Catherine Kessedjian & Sandrine Cahn, Dispute
Resolution Online, 32 INT'L. LAWYER 977 (1998) (discussing online dispute resolution as a new means for
access to justice).
    Filing fees range from approximately $1500 to $5,000 U.S. Dollars. See Schedule of Fees under the
ICANN Policy, at http://arbiter.wipo.int/domains/fees/index.html (last visited February 1, 2003).

trademark law, domain name disputes and the Internet.26 The UDRP is also international

in scope providing a single mechanism for resolving a domain name dispute regardless of

where the domain name owner and complainant are located.27 Moreover, the limited

remedy of domain name transfer or domain name cancellation in the event of a finding of

trademark infraction is easily enforced by the domain name registrar without the need for

judicial assistance.28

         Prior to adoption of the UDRP, the issue of location for purposes of resolving

disputes presented a significant problem for trademark holders in enforcing their

trademark rights against cybersquatters, namely that of personal jurisdiction.29 Courts

faced with the personal jurisdiction defense in this context have managed to remain loyal

to the traditional "minimum contacts" analysis. However, they have not so adhered

without applying some creative license.30 The domain name owner is contractually

obligated to participate in a mandatory administrative proceeding under the UDRP when

there is a claim of an abusive registration of a domain name. The UDRP circumvents the

need for resolution of the jurisdictional issues regarding the domain name holder, even in

   See Leah Phillips Falzone, Playing the Hollywood Name Game In Cybercourt: The Battle Over Domain
Names In The Age of Celebrity-Squatting, 21 LOY. L.A. ENT. L. REV. 289, 321-322; see, e.g., WIPO
Domain Name Panelists (as of February 1, 2003), at http://arbiter.wipo.int/domains/panel/panelists.html
(last visited February 1, 2003).
   See Lasprogata, supra note 20.
   See Falzone, supra note 26, at 322; cf. Michael Geist, Fair.com?: An Examination of the Allegations of
Systematic Unfairness in the ICANN UDRP (August, 2001), at http://aix1.uottawa.ca/~geist/geistudrp.pdf;
A Michael Froomkin, Wrong Turn in Cyberspace: Using ICANN to Route Around the APA and the
Constitution, 50 DUKE L. J. 17 (2000); Berkman Center for Internet & Society at Harvard Law School, How
Many Forum Shopping Days 'Til Reform, at http://cyber.law.harvard.edu/filter (December 20, 2001).
   It is well settled that "simply registering someone else's trademark as a domain name and posting a Web
site on the Internet is not sufficient to subject a party domiciled in one state to jurisdiction in another."
Panavision Int'l v. Toeppen, 141 F.3d 1316, 1322 (9 th Cir. 1998); cf. Cybersell, Inc. v. Cybersell, Inc., 130
F. 3d 414 (9th Cir. 1997).
   In Panavision Int'l v. Toeppen, the Ninth Circuit affirmed the finding of personal jurisdiction over
Toeppen applying both a purposeful availment analysis and the "effects doctrine." 141 F.3d at 1322; see
also, CompuServe, Inc. v. Patterson, 89 F.3d 1257 (6th Cir. 1996); Bensusan Restaurant Corp. v. King, 126
F.2d 25 (2d Cir. 1997); Zippo Mfg. Co. v. Zippo Dot Com, Inc., 952 F. Supp. 1119 (W.D. Pa. 1997).

international disputes. Complainants from countries other than the United States that do

not have existing cybersquatting laws will particularly benefit from availability of the

UDRP to protect their trademark interests.31

Part B: Overview of U.S. Trademark Law

        This overview of U.S. Trademark Law includes the definition of a trademark,

historical background of trademark law, and the recent evolution of cybersquatting

disputes between trademark holders and registered owners of domain names.

What is a Trademark?

        A trademark is any word, name, symbol, or device or any combination thereof

used by any person to identify and distinguish goods from those of others.32 Trademarks

serve the important functions of identifying and differentiating products, indicating a

consistent source and quality, and facilitating advertising and sales.33 A trademark

ultimately conveys the desirability of the commodity upon which it appears.34

        The historical purpose of trademark law has been to protect the public from

product confusion so that consumers can be confident that in buying a product bearing a

   See Falzone, supra note 26, at 322.
   15 U.S.C.S. § 1127 (2002). Examples of trademarks are: XEROX for copiers; the slogans "Where do you
want to go today?" for Microsoft software products, and "Don't leave homepages without it" for American
Express online services; the NBC chimes for broadcast services; an apple shape for Apple Computers;
ENGLISH LEATHER for men's cologne; LONDON FOG for raincoats; and KODAK for film. See John
Dickson et al., Tires R Us: A Case Study In Choosing A Trade Name and Service Mark, 19 J. LEGAL STUD.
EDUC. 83, 94 (2001). Throughout this appendix the term "trademarks" is used to refer to both trademarks
and service marks. A service mark is the same as a trademark except that it relates to services instead of
   Id. at § 3.3 (citing Justice Frankfurter in Mishawaka Rubber & Woolen Mfg. Co. v. S.S. Kresge Co., 316
U.S. 203 (1942), reh'g denied, 316 U.S. 712 (1942)).

familiar trademark, they will get the product associated with that trademark.35

Secondarily, it protects the trademark holder's goodwill by prohibiting trademark

misappropriation on other products or services by pirates and cheats. In this way,

trademark law is a species of the law of unfair competition.36 The law is aimed at

eliminating competitive practices that unfairly take advantage of honest


         Although its historic first concern is consumer protection, trademark law does

recognize the commercial value of the mark to the trademark holder by protecting the

mark from infringement and dilution. The law itself has evolved from state law where it

originated, to passage of the Federal Trademark Act of 1946 (the Lanham Act)38 and

subsequent amendments, including most importantly for domain name disputes, the

Federal Trademark Dilution Act of 199539 (the FTDA) and the Anticybersquatting

Consumer Protection Act of 199940 (ACPA).41

The Cybersquatting Phenomenon

   Trademark law is unique in the realm of intellectual property. Unlike patent and copyright law,
trademark law does not grant trademark holders monopoly rights in their marks in an effort to spur and
reward creative genius. Rather, the purpose of trademark law is to combat unethical marketing practices,
protect business goodwill, and enhance the efficient distribution of goods and services. BURGUNDER, supra
note 2, at 376.
   Trademark infringement has been called a commercial tort.
   BURGUNDER, supra note 2, at 377. Trademark holders may register their trademarks with the United
States Patent and Trademark Office. See U.S. Pat. And Trademark Office, Frequently Asked Questions
About Trademarks, at http://www.uspto.gov/web/offices/tac/tmfaq.htm (last modified July 24, 2002).
Although it is not required that a mark holder register to establish ownership rights, there are significant
evidentiary and procedural advantages that accompany registration.
   Trademark Act of 1946, ch. 540, 60 Stat. 427 (1946) (codified and amended at 15 U.S.C. §§ 1051-1127).
   Pub. L. No. 104-98, 109 Stat. 985 (1996) (codified at Lanham Act § 43 (c), 15 U.S.C. § 1125(c) (Supp. II
1996)); see Lynda J. Oswald, "Tarnishment" And "Blurring" Under The Federal Trademark Dilution Act of
1995, 36 AMER. BUS. L. J. 255 (1999) (for an extensive discussion of the FTDA).
   Pub. L. No. 106-113, app. I, tit. III, 1999 U.S.C.C.A.N. (113 Stat.) 1501A-545 (codified at 15 U.S.C.
1125 (d)).
   See Oswald, supra note 39; Osborne, supra note 2 at 209 (discussing the relationship between the ACPA
and ICANN's UDRP).

         A basic understanding of the importance of domain names to communication on

the Internet is essential to understanding the potential conflicts between trademark

holders and domain name registrants. The possession of a domain name is essential to

enable Internet users to communicate with a Web site. A domain name must be assigned

to each host computer on the Internet in the form of a unique nine-digit identification

code, technically referred to as an Internet Protocol.42 Ultimately, the domain name both

identifies the entity that owns the Web site and allows Internet users to locate Web sites

quickly and easily. 43

         Businesses frequently register their tradenames and trademarks as domain names

to make it easier for consumers and other computer users to find them on the Internet.

However, domain names are assigned on a first-come, first-serve basis. Contrary to

trademark law where multiple parties may use the same mark for different classes of

goods or services, under the organization of the Internet only one individual or entity can

own a particular combination of a second level and top level domain name, such as

"Microsoft.com." Domain name ownership is thus a monopoly right. This uniqueness

requirement creates an exclusivity that can have important economic ramifications for a

   See BURGUNDER, supra note 2, at 434; Osborne, supra note 2, at 212-213. The Lanham Act defines
"domain name" as "any alphanumeric designation which is registered with or assigned by any domain name
registrar, domain name registry, or other domain name registration authority as part of an electronic address
on the Internet. 15 U.S.C.S. § 1127 (2002). A domain name consists of at least two parts: the top level
domain (TLD) and the second level domain (SLD). Today, there are twelve generic TLDs, including .com,
.org, .net, .edu, .gov, .biz, .name, .info, .museum, .aero, .coop, and .pro. Seven new TLDs were adopted by
ICANN in November, 2000. See ICANN, New TLD Program, at http://www.icann.org/tlds/ (last modified
March 6, 2002). The TLD indicates the type of organization using the name. See Panavision Int'l v
Toeppen, 945 F. Supp. 1296, 1299 (C.D. Cal. 1996). It is preceded by the SLD, which consists of a
combination of letters, numbers or symbols, frequently reflecting a company's name or trademark. For
example, for the domain name "Microsoft.com", the TLD is the popular .com registry referencing
commercial business while the MICROSOFT trademark is the SLD. A computer user wishing to view
Microsoft's principal Web site could do so by entering http://www.microsoft.com, into his or her Web
browser. See id.
   Panavision, 945 F. Supp. at 1299.

business owner who is not the first to register. This poses a tremendous problem for

businesses all over the world scrambling to acquire a particular domain name that the

public associates with their business and to extract those domain names away from

people who first registered them.44 Many of the coveted domain names are registered by

people and businesses that have a legitimate reason and intent for using them. However,

others are registered by a "new type of entrepreneur" introduced earlier in this paper,

called the "cybersquatter," who makes a business out of registering well-known domain

names for the purpose of selling them back to their rightful trademark holders at inflated


         The case of Panavision International, L.P. v. Toeppen involves an infamous case

of cybersquatting.46 Defendant Dennis Toeppen was in the business of registering domain

names that incorporated the trademarks of major corporations, such as

"deltaairlines.com," "northwestairlines.com," "eddiebauer.com," "neiman-marcus.com"

and "yankeestadium.com."47 He successfully sold these pirated domain names to their

respective trademark holders for as much as $15,000.48 Toeppen offered to sell his

domain name, "panavision.com,"49 to Panavision International for a deal at $13,000.

Panavision, however, was not in a deal-making mode and instead filed an action against

   See Thornburg, supra note 19, at 159.
   See id. at 160.
   938 F. Supp. 616 (C.D. Cal. 1996) [hereinafter, Panavision I]. There are three opinions in the Panavision
case. The first district court case concerned the question of whether the court had personal jurisdiction over
Toeppen, which it answered in the affirmative. The second district court case resulted in a granting of
Panavision's motion for summary judgment against Toeppen under the FTDA and state dilution law. See
Panavision Int'l v. Toeppen, 945 F. Supp. 1296 (C.D. Cal. 1996) [hereinafter, Panavision II]. On appeal, the
Ninth Circuit Court of Appeals affirmed both the decision regarding personal jurisdiction and the decision
granting Panavision summary judgment. See Panavision Int'l v. Toeppen, 141 F. 3d 1316 (9 th Cir. 1998)
[hereinafter, Panavision III].
   Panavision II, 945 F. Supp. at 1296.
   Panavision III, 141 F.3d at 1319.
   Toeppen's Web site associated with the domain name displayed photographs of the City of Pana, Illinois.
Panavision III, 141 F.3d at 1319.

Toeppen in the District Court for the Central District of California alleging claims for

dilution of its PANAVISION trademark under the FTDA and the California Anti-dilution

statute. Both the District Court and the Ninth Circuit Court of Appeals on appeal found in

favor of Panavision holding that Toeppen's actions diluted the value of the

PANAVISION mark based on blurring theory. That is, Toeppen's registration and use of

the domain name, "Panavision.com." diminished "the capacity of the Panavision's [mark]

to identify and distinguish Panavision's goods and services on the Internet," ultimately

diminishing the value of the mark to the rightful trademark holder.50

        In Panavision v. Toeppen, Toeppen was essentially an extortionist who

intentionally misappropriated Panavision's trademark as a domain name for financial

gain. However, the term "cybersquatter" is not limited to extortion. It has been defined

more broadly to include anyone who registers a domain name that is the same as or

related to the name or trademark of another entity, usually a company or an

organization.51 Thus, cybersquatters may have motives beyond financial reward, such as

a motive to harass or criticize a business associated with a famous trademark52 or to free

ride on a company's goodwill for its own commercial advantage.53

   Id. at 1326; Panavision II, 945 F. Supp. at 1304.
   See id. (citing G. Peter Albert, Right on the Mark: Defining the Nexus Between Trademarks and Internet
Domain Names, 15 J. MARSHALL J. COMPUTER INFO. L. 277, 304 (1997)).
   See e.g., Bally Total Fitness Holding Corp. v. Faber, 29 F. Supp. 2d 1161 (C.D. Cal. 1998).
   See e.g., Victoria's Cyber Secret Limited Partnership v. V Secret Catalogue, Inc., 161 F. Supp. 2d 1339
(S.D. Fla. 2001).


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