SPEAKERS CONTENTS INSERTS
Page 1 TOP OF DOCINTERNET DOMAIN NAME TRADEMARK PROTECTION
WEDNESDAY, NOVEMBER 5, 1997
House of Representatives,
Subcommittee on Courts and Intellectual Property,
Committee on the Judiciary,
The subcommittee met, pursuant to notice, at 10:00 a.m., in Room 2226, Rayburn House Office Building, Hon. Howard Coble (chairman of the subcommittee) presiding.
Present: Representatives Edward A. Pease and Barny Frank.
Also present: Vince Garlock, majority counsel; Eunice Goldring, staff assistant; Robert Raben, minority counsel; and Stephanie Peters, minority counsel.
OPENING STATEMENT OF CHAIRMAN COBLE
Mr. COBLE. Good morning. The subcommittee will come to order. As you all know, we like to start this train on time. I don't like to penalize people who have come here at the prescribed time, so we are going to get rolling.
I don't like to put you all on a short leash, but we almost have to do it that way to meet time constraints. We have a very important hearing. I don't mean to imply this one is not important because it is; but we have another important hearing before the full Judiciary Committee this morning involving antitrust matters. And some others, I think, would like to go to that if we can wrap up here in an orderly fashion.
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We are delighted to have all of you witnesses with us. But if you all could confine your oral testimony to 5 minutes, we will be appreciative, and we will aid and assist you to that end by illuminating the red light. When the red light illuminates, that is your signal that it is about time to wrap up. I assure you your written testimony will be examined thoroughly and deliberately after today's hearing.
Today we are conducting an oversight hearing concerning Internet domain name trademark protection. As many of you know, a domain name is a familiar or a shorthand name used in place of a series of numbers to locate an address on the Internet. These domain names are frequently utilized by Internet users to search the World Wide Web and locate the address of a desired company when the actual Internet protocol address numbers are unknown to them. These domain names are therefore frequently associated with the trade name or trademark of a company with which the public is generally familiar.
Because these domain names are frequently associated with a particular company, they are also ripe for manipulation, misrepresentation, or theft. For example, some individuals will register a name in hopes that their site will be mistaken for that of a well-known company or brand. Others, known as ''cyber-squatters,'' will register a name associated with a famous company or product with no intention of trading on it themselves. Instead, they attempt to extort money from the original trademark or service mark owner. Still others will innocently register a name, which is highly similar or identical to another company's, thereby confusing the average Internet user as to which company they are dealing with.
In this country, the assignment of domain names has been the work of Network Solutions, Inc., known to many of you all as NSI, working under the Internet Network Information Center, InterNic, agreement granted by the National Science Foundation. National Science Foundation has announced it is bowing out of assigning domain names as of March 1998 and will not be renewing this group. This has opened the way for competition and the privatization of Internet domain name registration and different proposals on the best way to proceed when it comes to the registration of trademark domain names.
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With these developments comes a host of questions and issues which are of great concern for this subcommittee and the Congress as a whole, such as what role, if any, should government have in the assignment of domain names which also represent trademarks; how should trademark disputes over domain names be settled both domestically and internationally; and how do we assure the integrity of United States company-owned trademarks and trade names as we move further toward the information age.
I look forward to the testimony this morning of all of our witnesses to enlighten the members of the subcommittee on this interesting topic. No one else is here, but I am sure we will be joined subsequently by other members of the subcommittee.
Our first panel this morning will be the Honorable Bruce Lehman, who is the Assistant Secretary of Commerce and Commissioner of Patents and Trademarks. Representatives of the Commissioner's Office are currently leading international consultive meetings at the World Intellectual Property Organization on Internet domain names and trademark protection.
We have a written statement from the commissioner for which I ask unanimous consent to submit into the record in its entirety. And I welcome you, Mr. Lehman. Good to have you back with us.
STATEMENT OF HON. BRUCE A. LEHMAN, ASSISTANT SECRETARY OF COMMERCE AND COMMISSIONER OF PATENTS AND TRADEMARKS, PATENT AND TRADEMARK OFFICE, UNITED STATES DEPARTMENT OF COMMERCE
Page 4 PREV PAGE TOP OF DOC Mr. LEHMAN. Thank you very much, Mr. Chairman. Is my time up already?
Mr. COBLE. I just admonished my able assistant to illuminate the green light.
Mr. LEHMAN. I better get going pretty quick here. I have got 5 minutes. Actually, the good news is you have already had such a comprehensive opening statement, Mr. Chairman, that I think you and the committee have a very good understanding of this problem already, so it should be able to make the hearing a little easier. Maybe I can try to fill in some of the blanks from your opening statement from the point of view of the administration and what is going on now in the executive branch of the U.S. Government and elsewhere.
It seems to me that there are really three questions that we have to deal with here in this oversight hearing. And I think this is a perfect time for the committee to be looking into this issue because it has started to ripen to the point now I think where we can really identify with what the issues and the problems are. I think if we had done this a year ago, that would not have been the case.
There are three questions at least that come to my mind, or problems. First problem is the creation and assignment of domain names. Now, one of the difficulties that we have here is that, at least on the surface of it, it would appear there aren't enough domain names to go around. You know, there is no problem with somebody putting their name in the phone book or in the yellow pages because anybody can just put their name in the yellow pages, even if they have the same name as somebody else. You may have a trademark problem when people start using that as advertising, but at least there is not a problem getting yourself into the phone book.
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One of the problems that we have here is that there are only so many domain names to go around and, therefore, some people go to register their domain name and they find somebody else has already got there first. And if that somebody else that has already got there first is using a domain name which looks a lot like their trademark, whether or not that person may be in business using that trademark, we have a trademark problem. So that is the first sort of set of issues.
That can be resolved in part by making better use of the existing domain name system and by creating additional domains. And a process to do that is now under way and that has been recommended by the International Ad Hoc Committee, which has looked into this, and the International Telecommunications Union and the WIPO have been working on trying to support those kinds of solutions, though it may well be that the technology of domain names is such that there will never be enough domain names to go around for certain trademark owners.
Think of all the people that have the trademark ''Acme,'' for example, in their name or ''Universal'' or something like that. Even if we have 100 top level domains name, there are going to be some people who are going to be left out if they want to have ''Universal'' dot something; whether it is .com or dotI think that with the new domains that are proposed, i.e., .store, .firm, and so on, we still won't have enough. So the creation of top level domains and assignment is an issue.
The second problem area is what happens when two people want the same domain name and one or both of them owns it as a trademark. And that is really the issue of principal concern to this subcommittee and to the patent and trademark office. And of course, we have had a lot of experience with that already. Yet, a lot of people had thought they would be kind of cute, and they became what we call ''cyber-squatters'' early on in this. They went and registered famous trademarks as domain names and then either just did it for fun or because they thought they could get some money out of it by holding up the true trademark owners.
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Now this is something, if we had this hearing a year ago, we would have had more confusion about domain name and trademark disputes than now. But fortunately the law that we have in place is, at least in this country, already beginning to deal with that problem. This committee, I believe it was in 1995, amended the Lanham Act to include an antidilution provision in it which strengthens the protection for famous marks.
And so now using the strengthened Lanham Act, at least in the United States, a number of people have been able to go to court, and where they have a cyber-squatter who is trying to hold them up for use of their name, they have been able to get relief in the Federal courts under the Lanham Act and push those people off the Internet and get that domain name for themselves.
That still doesn't resolve the problem, though, where you have two people who both have trademark rights in the same name. Obviously a lot of names I mentioned, previously (you know, the word ''Universal'') a lot of people use ''universal'' as a mark for various things. And so what do you do there, where you have those problems? But I think the Lanhan Act and the antidilution provisions are beginning to kick in to help resolve, at least in part, this problem in the U.S.
Then the final question that I think that we have is how do we resolve disputes that occur that cannot be solved under the procedures that I just mentioned to you. That is where we have, you know, two trademark owners that want to use the same domain name. And also, what happens in an international context? Because keep in mind that the U.S. courts, of course, only have jurisdiction over the U.S. use of a trademark. And the Internet is an inherently multinational entity. And so there are a number of issues that arise there.
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You can have a situation where a companythere are certain companies that have world famous names, you know; ''Rolls Royce,'' for example, is a world famous trademark. It is not an American trademark. It is a British one. We would enforce rights in Rolls Royce here. They would enforce them all over the world. Under the TRIPs agreement, which was part of our WTO agreement, theI see my time is up. If you will just give me a second.
Mr. COBLE. Proceed.
Mr. LEHMAN. Under the TRIPs agreement, we now have special recognition of the rights in well-known marks, i.e. so if you haveat least in theory every country in the world now is supposed to enforce well-known marks. So if you have a domain name registry, even in another country, under the trips agreement, you should be able to have a trademark right if you have a well-known mark to assert your right, I would say in the domain name context.
However, that still doesn't resolve the problem of what about a situation, and one of the witnesses is going to tell you, what about a company like Exxon. ''Exxon'' is a very famous mark in this country but they go under ''Esso'' in Europe. It is not a global name. How do you resolve those kinds of disputes? How do you resolve disputes where a trademark may be strong in the United States but not in another country or, again, where there are people using one of these very limited domain names but two people have a right to use the same name?
Now, we don't yet have an international legal system of international district courts. And so there is going to have to be a sort of meshing of the international system, a harmonizing of the national systems, and then the plugging in of our own judicial system.
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Now, WIPO is looking into this matter. A lot of people are supporting an alternative dispute resolution mechanism there, and that would be like a set of arbitration panels. This committee has done a lot of work, I think, in alternative dispute resolution because you have the judicial jurisdiction in this country so you are intimately familiar with all of that. And, you know, that is great, and a lot of people want it. The problem is there are a certain number of cases where that breaks down, and people just are not going to submit their rights to some kind of arbitration panel. They are going to rely onwant to rely onour U.S. district courts.
So that relationship is something that we are going to have to take a close look at as we evolve the WIPO dispute resolution process. It is also something, I think, that naturally should be of concern to the committee because it involves also the sovereignty of the United States and our court system and so on and so forth. So there are some very interesting issues there.
The bottom line, Mr. Chairman, since I have gone over my time, is that at this point I think we in the administration would probably conclude, and I think you would probably conclude here, that we are not ready for any kind of markup for legislation on this issue. We need to study it a little more. It is ripening. We need to see a little bit more what is happening in WIPO, a little bit more what is happening when we adopt the ad hoc committee recommendations and assign more domain names. But in the end, there may be some need for an international treaty. There may be some need for legislative intervention here.
Generally speaking, in the administration we are adopting the position that government intervention should be a matter of last recourse; that we want to let the private sector try to work out these issues. But if they can't, we may have to step in, and in the interest of creating a viable and efficient marketplace in electronic commerce, we may have to step in and try to adjust some of these disputes. I would be happy to answer any questions, Mr. Chairman, that you might have.
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[The prepared statement of Mr. Lehman follows:]
PREPARED STATEMENT OF HON. BRUCE A. LEHMAN, ASSISTANT SECRETARY OF COMMERCE AND COMMISSIONER OF PATENTS AND TRADEMARKS, UNITED STATES DEPARTMENT OF COMMERCE
I am pleased to appear before this Committee today to testify on issues surrounding trademarks and Internet domain names. No single force embodies the electronic transformation we are experiencing today more than the evolving medium known as the Internet. Once a tool reserved for scientific and academic exchange, the Internet has emerged as an appliance of every day life, accessible from almost every point on the planet. Students across the world are discovering vast treasures of data via the World Wide Web. Doctors are utilizing telemedicine to administer off-site diagnoses to patients in need. The Internet is being used to reinvent government and reshape our lives and communities. Finally, as the Internet empowers citizens and democratizes societies, it is also changing classic business and economic paradigms.
Given that over the next decade, advances in electronic communication will affect almost every aspect of our daily life, it is important that we look to preserving the integrity and stability of the Internet. And the way in which we address controversial issues surrounding Internet domain names will affect our ability to realize the full potential of the Internet in the years to come.
Background on the Domain Names Controversy
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Domain names are the familiar and easy-to-remember names for Internet users (e.g. ''www.thomas.loc.gov''). They correspond to unique Internet Protocol (IP) numbers (e.g. 22.214.171.124) that are used to address computers and route traffic on the Internet. Despite the growth and commercialization of the Internet, major components of the domain name system are still financially assisted by the U.S. Government:
The registration and propagation function for key top-level domain names (.com, .org, .net) is performed by Network Solutions, Inc. (NSI) under a five year cooperative agreement with the National Science Foundation (NSF). As of September 1995, NSF permitted NSI to institute user fees for registration and maintenance of domain names. Thirty percent of the fees must be deposited by NSI into an infrastructure fund, the disposition of which has not yet been determined. NSF's cooperative agreement with NSI expires on March 31, 1998, although the agreement provides for an optional six month ''ramp-down period.''
The policy oversight function for both the administration of domain names and allocation of network numbers is performed by the Internet Assigned Numbers Authority (IANA), operated by the Information Sciences Institute (ISI) at the University of Southern California (USC). IANA performs these services under a contract with Defense Advanced Research Projects Agency (DARPA).
The United States Government plays a direct or indirect role in the operation of half of the world's thirteen root servers. The root servers propagate the domain names and corresponding network numbers from the master database maintained by NSI.
Page 11 PREV PAGE TOP OF DOC U.S. research agencies have been trying to reduce and eventually eliminate their roles in these infrastructure functions, as they have done with respect to the provision of backbone and interconnection services. The decision to allow NSI to charge user fees privatized the allocation and management of domain names from a budgetary standpoint. NSI, however, remains in in sole with respect to the most valuable name space''.com''creating a situation that is not acceptable to many in the Internet community. This situation could become especially problematic if NSI were to remain in sole control of the .com domain upon expiration of the NSF/NSI cooperative agreement.
In response to NSI's sole control, and NSF's announced intention to let the cooperative agreement with NSI expire in 1998, IANA and the Internet Society (ISOC) organized the International Ad Hoc Committee (IAHC or the Ad Hoc committee) in September 1996, in partnership with the World Intellectual Property Organization (WIPO) and the International Telecommunications Union (ITU). The Federal Networking Council (FNC) participated in the early deliberations of the Ad Hoc Committee.
The IAHC issued a draft plan in December 1996, which generated some 6000 comments. The final report proposed a memorandum of understanding (MOU) that would initially establish seven new generic top-level domains (gTLDs) to be allocated on a non-exclusive basis by new private registrars. Under the MOU, registrants for second-level domains would be required to submit to mediation and arbitration, facilitated by WIPO, in the event of conflict with trademark holders.
The MOU was opened for signature by companies and governments at a meeting sponsored by the ITU in April of 1997. To date, some 170 entities have signed the MOU, including a few major carriers, such as Deutsche Telekom and MCI. Only one government has signed thus far. Meanwhile, the Ad Hoc Committee itself has transformed into an interim Policy Oversight Council (iPOC) and has begun processing applications for new registrars. To date, 81 applicants have been qualified as registrars including the well-known U.S. trademark search firm of Thomson and Thomson, Mindspring, a large U.S. Internet service provider, as well as France Telecom, Deutsche Telecom, and Bahamas Telecommunication. The interim Policy Oversight Committee closed its application process on October 16, 1997, but is planning to reopen the process in the future.
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The IAHC process has been criticized for being exclusive, especially for lacking industry participation. iPOC has made concessions to these critics, however, and has removed the limit on the number of registrars for the new generic top level domains. More recently iPOC has invited further public input on several important aspects of the MOU, employing a formalized notice and comment procedure. Overall, iPOC has demonstrated a commendable degree of flexibility in the face of these criticisms.
Since the announcement by NSF that it would not renew the cooperative agreement with NSI, NSI has suggested that it may own a proprietary interest in .com, .net, and .org. NSI has not clarified the exact nature of this alleged proprietary interest, and has stated publicly that, not withstanding such an interest, it will act in the best interests of the Internet including sharing the valuable .com name space.
Request For Comments
The Clinton Administration supports the continued privatization and commercialization of the Internet and is committed to completing the transition to private sector governance. We realize, however, that this transition must be accomplished in a way that enhances the stability of the Internet and ensures its continued smooth operation.
An interagency working group has been studying domain name problems since March 1997. On July 1, 1997, President Clinton announced the Administration's Framework for Global Electronic Commerce. As part of this initiative, the President directed Secretary Daley to support efforts to make the governance of the domain name system private and competitive and to create a contractually based self-regulatory regime that deals with potential conflicts between domain name usage and trademark laws on a global basis. This directive has the highest priority at the Department of Commerce and throughout the Executive Branch.
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On July 2, 1997, the Department of Commerce, on behalf of the interagency group, issued a Request for Comments on the Registration and Administration of Internet Domain Names (RFC) in order to ascertain the views of the public regarding various domain name policy issues including trademark and domain name issues.
To date, we have received over 430 comments, amounting to some 1500 pages. The RFC elicited thoughtful comments from around the world, representing diverse perspectives.
In accordance with this Committee's desire to reduce the number of printed pages, I have not provided a hard copy of the comments received (although I would be happy to do so). These comments are readily available, however, at the NTIA site on the World Wide Web, the URL for which is ''www.ntia.doc.gov''. I have provided a summary of comments prepared by the interagency working group in Appendix A to my testimony.
Let me start by saying that the comments we received reflect overwhelming support for two things: private sector governance of, and increased competition in, domain name systems. Moreover, the principle of globalism received strong support. Most commenters agreed that the transformation of the Internet from its U.S. roots into a global medium should be reflected in the Internet's administrative bodies. Many warned that continued treatment of the Internet as a ''U.S. asset'' could provoke a negative reaction from foreign governments, businesses, and consumers.
Page 14 PREV PAGE TOP OF DOC Having said that, many commenters expressed a preference for making a smooth transition to the ''right'' system over rushing to adopt an ill-considered solution. We believe, and commenters agreed, that consensus must be achieved through an open and democratic process that is as expeditious as prudent consideration of these important issues permit.
As far a trademarks are concerned, the comments indicated general agreement that trademark rights (registered and common law trademarks, trade names, business names, etc.) should be protected. Commenters also focused on how trademark rights should be protected, i.e., by national courts or some other types of dispute resolution mechanism.
All commenters agreed that the national courts should remain an option for trademark protection, and indeed the technical community expressed a preference that this should be the only forum for trademarks disputes. However, trademark owners and their representatives indicated that they would prefer an additional alternative dispute resolution mechanism for some kind of first level clearance to deal quickly with cyber-pirates.
There was general consensus among the commenters that there should be no preliminary review process. First, such a review would add unwanted delay to the registration process. Second, most commenters did not want the registrars to review applications on any substantive grounds. Finally a standard of review would be too difficult to establish and enforce.
Only a few respondents supported the institution of a waiting period after the filing of an application but prior to registration so that disputes could be filled. However because there are currently a fairly low number of actual disputes, it appears that establishing a short period after registration, during which a domain name could be suspended in the event of a conflict, would be a less intrusive procedure. For the majority of domain names there has been no trademark conflict.
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There is general agreement that domain name/trademark conflicts cannot be prevented in an international arenabut they can be minimized with certain technological solutions. The commenters agreed that a searchable domain name database with up-to-date contact information would certainly be helpful for clearance purposes. There were also a few comments suggesting that a worldwide trademark registration database would be helpful to deter conflict, however it is generally agreed that such a database would be too difficult to maintain.
The Two Roles of The World Intellectual Property Organization
WIPO was approached by the Internet Society more than a year ago to become involved in the process of sorting out the issue of trademark protection vis-a-vis domain names and has served as a facilitator for international discussion on the many trademark issues that are associated with domain names. A WIPO official was involved in the deliberations of the International Ad Hoc Committee. WIPO then hosted a small meeting of consultants in February of 1997, to which the U.S. sent two representatives. This meeting generated so much interest among WIPO's member states that WIPO scheduled a consultants' meeting inviting all members and a very diverse group of organizations and participants, to discuss the myriad of trademark issues that were emerging. Consultants' meetings with full member participation were held from May 26 to May 30, 1997, and on September 1 and 2, 1997. Thus WIPO's first role has been to provide a forum in which representatives of the Member States, private organizations and Internet-savvy technical experts could meet and discuss trademark-domain name issues.
WIPO has been questioned by some member states as to the propriety of holding these meetings without direct member approval. However, it is clear that if WIPO had not held these meetings, the Member States would not have had the opportunity to meet and discuss these important issues. The U.S. has also questioned the propriety of having WIPO or any other intergovernmental organization as a voting member of the Policy Oversight Committee. This is of special concern given that President Clinton has made it clear that the Internet should be private-sector based and self-regulatory. Indeed, the U.S. views the GTLD MOU as essentially a private-sector instrument, despite the fact that one government has signed the MOU. Nevertheless, WIPO's recognized expertise in trademark matters should remain as a valuable advisory resource for whatever private sector-based leadership may emerge to govern the Internet. My understanding is that the iPOC and WIPO have heard the U.S. concerns in this matter and are giving them serious consideration.
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WIPO's second role in Internet domain name and trademark matters concerns the alternative dispute resolution mechanism that is in place as part of the contractual arrangements between the registrars and domain name registrants under the iPOC proposal. It provides that all applicants for domain names must agree to submit to the jurisdiction of an Administrative Challenge Panel or submit to non-binding mediation/arbitration, at the option of the person challenging the domain name holder's right to the particular domain name. In this model, registries agree to enforce the decisions of the ACP's. The iPOC proposal does not preclude resort to the national courts. Further, the iPOC proposal makes clear that under any of these alternative dispute mechanisms, the arbitrator/mediator or administrative challenge panel has jurisdiction only over the domain name at issue.
The ACP Process
The role of WIPO's Mediation and Arbitration Center would be the following: to provide lists of potential ACP panelists or of mediators and arbitrators; and, to provide the facilities for on-line mediation or arbitration and on-line administrative challenge panels. All of these procedures would be administered under WIPO's mediation, arbitration and administrative challenge panel procedures which are currently being revised pursuant to an open comment period at the GTLD web site. WIPO would not act as the mediator or arbitrator. Again, all parties have recourse to their national courts.
As originally envisioned, the ACP process was meant to be a first level ''pirate screen.'' It was meant to resolve disputes between one party with very clear intellectual property rights and a cyber-squatter or cyber-pirate. With those assumptions in place, it was felt that there would be few successful challenges in the national courts to the decisions of the Challenge Panels. Further, ACP's would not be making decisions as to the relative strength of the rights of two trademark owners who were battling over a particular domain name. However, as a result of the Consultants' meetings at WIPO, the current proposal for the ACP's includes the right to hear disputes between two trademark owners over a particular domain name.
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The ACP process as currently envisioned will be governed procedurally by WIPO's mediation and arbitration rules. Substantively, the iPOC, in conjunction with WIPO, has been developing substantive guidelines for use in the process. These guidelines have been extensively commented on at the WIPO Consultants' meeting and have been posted at the iPOC web site for further comment.
The ACP process can be invoked by a trademark owner at any time. However, if the challenge is lodged in the first thirty days after the domain name is registered, then the domain name is automatically suspended. This thirty day suspension period resulted from a compromise between those who wanted a 3060 day waiting period before any domain name could go ''on-line'', similar to the opposition period for a trademark, and those who wanted no waiting period at all. In the course of the discussion over this issue, many argued that having a waiting period that applied to every new domain name penalized all new domain name holders, when, in fact, there are trademark disputes in far less than 1% of the cases. Additionally, trademark owners were assured that any new domain name data base would be designed so that it could be easily searched for trademark clearance purposes and would have readily available contact information for each domain name holder.
Some trademark owners are deeply suspicious of the ACP process. Others see it as an opportunity for an inexpensive, first-line defense against-cyber pirates. At this time, the major registry in the .com and other top-level domains (except country codes), NSI, is conveniently located in Herndon Virginia and therefore under the jurisdiction of the U.S. Courts. For this reason most U.S. trademark owners with domain name disputes have been able to solve them in the U.S. court system. When registries in the gTLDs move out of the U.S., the process of litigating these disputes will become much more problematic and expensive. Finally, one must remember that the ACP process was established as a temporary measure to provide additional protection to trademark owners until an international framework could evolve to deal with trademark-domain name issues.
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Creation of New gTLDs
The comments reflected extensive support from the technical community for the addition of new gTLDs. On the other hand, trademark owners for the most part weighed in against the creation of new gTLDs out of concerns that they would increase policing burdens and give bad actors more opportunities to infringe.
A substantial number of commenters addressed the type of new gTLDs that might be created. Several suggested that any new gTLDs that are created should be distinct enough in their intended purpose to minimize the chance of confusion created by the desire of name holders to register their name in all domains. Though many commenters found the concept of creating special-purpose gTLDs attractive, they expressed concern that the specific top level domains proposed by IAHC could ''raise questions about global transparency and potential duplication and user confusion.'' Several commenters urged that gTLDs correspond to the categories in an industrial classification system. Others suggested that we address the need for complementary business gTLDs by encouraging the use of ''.com.us'' and perhaps by ''cloning'' .com (that is, by allowing the use of ''.com1'', ''.com2'', etc.) to mitigate the demands for the same name space by companies with similar names.
A system that makes it easy for domain name holders to self-select the appropriate GTLD has great appeal. Thus, it seems obvious that if ''.air'' was a new GTLD, that airlines, aircraft manufacturers and other related businesses would want to have their corporate domain names in ''.air.'' However, what would manufacturers of air conditioners think? What about air purifiers? One of the problems inherent in such an approach is that it is very difficult to establish categories that are clear enough so that self-selecting produces predictable results. If the results are not mostly predictable, then the system will not meet the purpose for which it was established.
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Further, there are literally hundreds of headings for businessessee the Yellow Pages for examples. Therefore, the such a system might have to have hundreds of new GTLDs. Finally, because there is no enforcement mechanism contemplated for the system, those who want to cause mischief, such as registering a famous.softdrink name in the ''.air'' domain space would be able to do just that. Trademark owners would still be faced with the necessity of clearing through all of the new GTLDs, even those unrelated to their product or service.
Additional consensus is needed with respect to important intellectual property problems, especially, but not exclusively, in the area of trademarks. The iPOC has set out the contours of a dispute resolution process, the details of which require further attention and discussion. This dispute resolution process holds great promise as a possible way to stop cyber-pirates easily and inexpensively. However, in any system which emerges, trademark owners must be comfortable that their rights will be protected adequately, if not perfectly.
The number and type of new generic top level domain names must thus be carefully considered. The rate at which these new top level domains are added to the system is also important.
Clearly, no matter what kind of system emerges, trademark owners must be assured that a readily searchable domain name database which includes adequate contact information is available.
Page 20 PREV PAGE TOP OF DOC Resolving the issues surrounding technology, governance and trademarks will, unfortunately take some time. We are quite confident, however, that adequate will and the basis for agreement can be mustered to complete the transition to a robust, stable, competitive, global, and private-sector driven system over the course of the next year.
First of all, the U.S. Government must act promptly to assure the Internet community that it will preserve the stability and integrity of the Internet during a transition period.
Second, the interagency working group must complete and make available a detailed analysis of comments submitted in response to the Department of Commerce request for comments. Based on this analysis, we would expect to issue policy recommendations with respect to each of the questions.
Third, the United States should work with the global Internet community to establish an independent, self-sufficient policy oversight body with sufficient authority, global credibility, as well as a structure and process that will minimize the risk of anticompetitive conduct to carry out the core aspects of Internet governance that must be undertaken on a centralized basis.
I would be happy to answer any questions that the Members may have at this time.
Page 21 PREV PAGE TOP OF DOCSUMMARY
Additional consensus is needed with respect to important intellectual property problems, especially, but not exclusively, in the area of trademarks. The iPOC has set out the contours of a dispute resolution process, the details of which require further attention and discussion . This dispute resolution process holds great promise as a possible way to stop cyber-pirates easily and inexpensively. However, in any system which emerges, trademark owners must be comfortable that their rights will be protected adequately, if not perfectly.
The number and type of new generic top level domain names must thus be carefully considered. The rate at which these new top level domains are added to the system is also important.
Clearly, no matter what kind of system emerges, trademark owners must be assured that a readily searchable domain name database which includes adequate contact information is available.
Resolving the issues surrounding technology, governance and trademarks will, unfortunately take some time. We are quite confident, however, that adequate will and the basis for agreement can be mustered to complete the transition to a robust, stable, competitive, global, and private-sector driven system over the course of the next year.
The Patent and Trademark Office (Office) is mindful of President Clinton's directive to Commerce Secretary Daley to work with the private sector to create a stable and predictable legal environment for the Internet.
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Further, the Office recognizes the initiative of the World Intellectual Property Organization (WIPO) in providing a forum for the discussion of trademarks and domain names. At the same time, the Office is mindful that WIPO, as an intergovernmental organization, should limit its role to one of an advisor to whatever group or groups emerge to govern the Internet.
INSERT OFFSET RING FOLIOS 1 TO 5 HERE
Mr. COBLE. I thank you, Commissioner. The ranking member, the gentleman from Massachusetts has a Banking Committee hearing or a markup now. And as I said, we have a full Judiciary Committee hearing ongoing now as well. So that may explain why we may have slight attendance today.
Commissioner, thank you for being with us. Some argue that the United States might be agreeing to a lower form of protection of trademarks if we accede to an international form of domain named registration. What do you say in response to a charge like that?
Mr. LEHMAN. Well, I think there might be some truth to that charge, but I would first say, Mr. Chairman, we have not yet agreed to that. What is going on here at the present time is that in the context of the World Intellectual Property Organization, basically as requested by a group of private sector companies under the international ad hoc or private sector users of the Internet, International Ad Hoc Committee, WIPO has looked into this issue and has assembled a committee ofa group of experts informally, and they have recommended this dispute resolution mechanism at WIPO.
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Neither the governing bodies of WIPO reflect by its member states nor any specific government, to my knowledge, including the United States, has yet endorsed that procedure, except Albania. So it is still very, very open. That is why this hearing is valuable, I think, for us to take a look at this.
I am not saying that that isthat the recommendations are a bad idea. As I said, from the point of view of the administration, we generally want to try to let the private sector guide us on these matters.
And we put out a notice of inquiry in July of this year. We got approximately 430 responses, the Department of Commerce did. And it was pretty clear, I think, the majority of those responses favored the WIPO creating a dispute resolution process. So we are going to go along. Our position is we are going to go along with the evolution of that.
But there are some serious questions, obviously, that will get involved. I mean, is this going to be binding or nonbinding? What is the relationship of this dispute resolution process with the decision, for example, of a court within a particular country, like the United States district court? Will the court decisions be de novo or not? There are lots of questions that will have to be resolved. Obviously, under no circumstances will the sovereignty of the United States be compromised without the concurrence of the Congress of the United States.
Mr. COBLE. Commissioner, is there any indication that the United States plans to sign on to the gTLD memorandum of understanding?
Page 24 PREV PAGE TOP OF DOC Mr. LEHMAN. As I understand this memorandum of understanding, and I have to say this is more in the domainin the domain, excuse me for using the word here that people use a lot, and my colleague Larry Irving, who is the Assistant Secretary for Telecommunications in the Department of Commerce, that that is at this point primarily something that has been, again, organized by the private sector. And in fact, our notice of inquiry that has been led by Mr. Irving is sort of designed to take a look at these issues. I am not aware that the government itself, that the Department of Commerce or the administration, has signed on to this memorandum or has any intention to do so, but I will check that and get back to you.
Mr. COBLE. And incidentally, Commissioner, I am in agreement with you when you declare that it would be premature for us to be thinking of terms of markup imminently; I mean by this calendar year. I think this is a beginning process, and I think it would not be wise even thinking about marking up at this early stage.
You have alluded a couple times to the private sector. Let me ask you this: Do you think that the time has come in this area where the government should let the market decide the next direction, or should we be looking at some way to legislate without unintentionally hindering the Internet development?
Mr. LEHMAN. Well, I think that right now, from the point of view of the jurisdiction of this committee, the trademark law within the United States is working pretty well. And I think that the antidilution statute came along at just the right time to deal with some of our problems here. And it is working.
With regard to legislating beyond that, I think we don't know yet all the information we need to know. One of the things we need to know is that right now there is in developmentyou know, we will haveyou will hear from other witnesses later, we are going to have a new registry system; Network Solutions is going to lose its monopoly on registration. We are likely to create more top level domains. You will hear people that will tell you we are not making good enough use of the top level domains that we have now.
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At the outset, I indicated that part of the problem that we have relates to the scarcity of domain names. Where you have a scarcity situation, that exacerbates the trademark problem, because two people who have a trademark claim to the same domain name might not be able to use it. Currently, it may only go to one of the two parties.
I don't think we worked through yet whether or not that scarcity problem might be alleviated in part by creating additional top level domains and usingand then also usingmaking better use of the top level domains that we have right now.
So, I think that process is something that the existing sort of ad hoc structure, which is a combination of private sector activity and maybe minimum government activity in some countries, can play itself out a little bit before we know whether or not we have the kind of crisis that requires some sort of mechanism for us to modify at least our U.S. laws to determine where you have the scarcity situation and you have a conflict between trademark owners whether there should be some kind of new mechanism for resolving that dispute.
Mr. COBLE. I thank you, sir.
The gentleman from Indiana, Mr. Pease.
Mr. PEASE. I thank you, Mr. Chairman.
Mr. Lehman, I apologize for being late and to the Chairman as well, and to advise the chair, but not surprising this time of the year, I have four hearings going on simultaneously. And so my purpose here today, quite frankly, is to download as much information as I can from you, and I will pass on questions and will read your material and get back to you later. But thank you so much.
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Mr. LEHMAN. Thank you.
Mr. COBLE. Commissioner, always good to have you with us. And I would like to put a question to the gentleman from Indiana, if I may. Ed, if you would come up here and let me go to the full committee
Mr. PEASE. Yes.
Mr. COBLE [continuing]. And let me make an appearance, and I will return.
Let me bring on the next panel. The first witness on this panel will be Gabriel A. Battista who is Chief Executive Officer and Director of Network Solutions, Inc. He is also a registered professional engineer in the State of Pennsylvania.
Our second witness on this panel is unknown to none of us in this room. Mr. Mike Kirk is the very able Executive Director of the American Intellectual Property Law Association.
Our next witness is David Stimson who is President of the International Trademark Association. He is responsible for the world wide trademarks and company rights for the consumer imaging, Kodak professional and entertainment imaging division to the company.
Our next witness is John Wood who is Senior Internet Consultant for PRINCE, plc in London, England.
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Our final witness on our second panel is Douglas J. Wood who is an executive partner of the New York law firm of Hall, Dickler, Kent, Friedman & Wood, testifying on behalf of the Coalition for Advertising Supported Information and Entertainment or CASIE. CASIE is the coalition jointly founded by the Association of National Advertisers of the American Advertising Association.
We have written statements from each of you. And I ask unanimous consent to submit into the record your statements in their entirety. And, gentlemen, I assure you that my brief absence is not an indication of any lack of interest, but as Ed pointed out, we have to be at four or five places simultaneously today. So I will surrender the gavel to the gentleman from Indiana. And I will return imminently and pick up in a few minutes. If you will remember the 5-minute rule, it is in order. And you have heard me to say, no one will be keelhauled if you violate it, but try not to violate it too severely.
Mr. PEASE (presiding). Mr. Stimson.
STATEMENT OF DAVID STIMSON, PRESIDENT, INTERNATIONAL TRADEMARK ASSOCIATION
Mr. STIMSON. Thank you, Mr. Pease.
Good morning. My name is David Stimson. I am President of the International Trademark Association. On behalf of INTA's 3,400 members who are increasingly using the Internet as a mode of commercial activity, I appreciate the opportunity to testify in connection with the subcommittee's investigation of the Internet domain name assignment system.
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Indeed, there is a direct connection between trademarks and domain names. INTA takes the position that the domain names can and often do function as trademarks. Both trademarks and domain names are shorthand reference tools that consumers can use to locate information concerning a specific product and learn about the company which was offering the product for sale. Both serve to educate and reassure the consuming public that they are in the right place and they are purchasing the right product for the particular need.
When a Web surfer logs onto www.kodak.com, he or she expects to receive information about Eastman Kodak Company, not some unrelated or possibly slanderous subject. That is why it is essential for companies and the public to have some mechanism to ensure that trademarks and the use of those marks as domain names are safeguarded in the new world of on-line commerce.
Unfortunately, most of the current domain name registries including the U.S. registrar Network Solutions Incorporated, or NSI, maintain that domain names have no legal significance but are used only as addresses for various sites in cyberspace. NSI and other registries claim that their only purpose is to register domain names and not to perform trademark searches or arbitrate trademark rights.
As a result of this lack of attention, trademark owners and consumers are experiencing a number of problems in cyberspace. For example, as we have heard, we must now deal with cyber-squatters, on-line pirates who routinely register domain names in bulk, with no intention of using them and with no other purpose than to ransom them off to the highest bidder.
Page 29 PREV PAGE TOP OF DOC We are also faced with the emergence of confusingly similar domain names, since NSI will register any name as long as it is not exactly the same as one which has already been registered by another party.
Under the current system, for example, you can have www.acmewidgets.com with acme and widgets as one word; www.acme-widgets.com; and www.acmewidgets.com. Which is the genuine site of the Acme Widgets Company, and which contains possibly slanderous and offensive material? It is impossible for the consumer to know. So they have to surf around the net to find out.
The plan developed by the International Ad Hoc Committee, or IAHC, seeks to address a number of the problems. The plan represents a convergence of the business in Internet communities and was initiated by the Internet Society and the Internet Assigned Numbers Authority.
The International Trademark Association was and remains a part of the IAHC and believes that it is the only alternative presented thus far which addresses the rights of trademark owners. The plan provides, for example, a more detailed application procedure and publication of domain name applications on a publicly available Web site.
The IAHC plan also includes seven new generic top level domains or gTLDs. Examples of existing gTLDs are .com, .org and .edu. Some parties had initially proposed an unlimited number of gTLDs. INTA found this proposal to be unacceptable, and we used our seat on the IAHC to bring the number down to seven.
Page 30 PREV PAGE TOP OF DOC However, the addition of any new gTLDs is of major concern to INTA and its members, since they represent a policing problem for trademark owners. INTA advocates a deliberate approach with respect to any new additional gTLDs. INTA remains open to other ideas. Should other proposals be introduced in the future, we will carefully consider supporting them.
I would like to thank the committee once again for the privilege of appearing here today. A more thorough discussion of these issues can be found in the INTA white paper called ''The Intersection of Trademarks and Domain Names,'' and I brought with me here today copies of this white paper for each member of the subcommittee.
In conclusion, I want to reemphasize the important role that trademarks play in cyberspace. The International Trademark Association remains available to Congress and the administration to assist and cooperate in exploring approaches to the domain name system that recognize the rights of trademark owners in the new and ever-changing world of the Internet. Thank you.
[The prepared statement of Mr. Stimson follows:]
PREPARED STATEMENT OF DAVID STIMSON, PRESIDENT, INTERNATIONAL TRADEMARK ASSOCIATION
Mr. Chairman, the International Trademark Association (''INTA'') appreciates the opportunity to testify today in connection with the Subcommittee's investigation of the Internet domain name assignment system. The emergence of the Internet, and the problems of piracy, trademark infringement, and false advertising associated with its evolution, have made it clear that we must make every effort to preserve and protect trademarks on this new mode of communication. We therefore thank you Mr. Chairman for your willingness to conduct these hearings and offer the trademark community an opportunity to voice its opinion on this topic.
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My name is David Stimson, and I currently serve as Chairperson of the Board of Directors and President of the International Trademark Association. I am employed by INTA member Eastman Kodak Company in Rochester, New York as Trademark Counsel. As with all INTA officers, board members and committee members, I serve on a voluntary basis.
INTA is a not-for-profit membership organization, which just recently celebrated its 119th anniversary at its annual meeting in San Antonio, Texas. Since its founding in 1878, membership has grown from twelve New York-based manufacturers to more than 3,400 members that are drawn from across the United States and from 119 additional countries.
Membership in INTA is open to trademark owners and those who serve trademark owners. Its members are corporations, advertising agencies, professional and trade associations, and law firms. INTA's membership is extremely diverse, crossing all industry lines and spanning a broad range of manufacturing, retail, and service operations. It is equally important to note that not all of INTA's members are large corporations. Many of the Association's members represent small businesses which are looking to expand operations and contribute to the domestic economy based on the strength of their trademarks. Nonetheless, all of INTA's members, regardless of their size or international scope, share a common interest in trademarks and a recognition of the importance of brand identity to their owners, to the general public, to the economy of the United States and the global marketplace. During the on-going international debate on the future of the domain name assignment system, INTA has served as the voice of trademark owners in the United States and around the globe, ensuring that their trademarks are protected.
Value of Trademarks
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Trademarks are a subtle, yet fundamental element of our daily lives in the identification of products in the marketplace. They are a basic mode of communication, a means for a company to convey a message of quality, consistency, safety, and predictability to the consumer in an easy-to-understand form. Equally important, trademarks generate an economic ripple effect that starts even before a consumer buys a branded product. First, trademarks benefit the suppliers of raw materials and equipment needed to make the product. Then trademarks stimulate advertising oriented to the brand$174 billion for the U.S. in 1996 alone. Finally, when the consumer purchases the trademarked product, the manufacturer, distributor and retailer benefitas do their employees and shareholders. The consumer benefits by easily being able to recognize and select products or services.
For the reasons just discussed, trademark owners are eager to protect their products' names and distinguishing features in the real world, as well as cyberspace. There is no denying that a trademark is a tremendously valuable asset to a company and our economy. It is usually one of the most significant property assets of a company. Further, if we are successful in our efforts to protect trademarks here in the U.S., then there is greater assurance that their status in the global marketplace will be better protected against international counterfeiters, unfair foreign competition and others seeking to unjustly profit from the efforts and investment of the trademark owner.
The Structure, Assignment, and Global Nature of Domain Names
From a technological perspective, every computer connected to the Internet is assigned a numeric address, with which other computers on the network use to communicate. A typical numeric Internet address is a string of numbers, such as 126.96.36.199. Because these numeric addresses are difficult for people to remember, Internet authorities also assign alphanumeric addresses or ''domain names.'' Examples of domain names are www.whitehouse.gov and www.saralee.com.
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There are actually two parts to a domain name: the generic top level domain (gTLD) and the second level domain (SLD). Examples of gTLDs or root identifiers include: .edu, .gov, .com, .org, and .net (for entities which are educational, governmental, commercial, organizational, and network infrastructure in nature, respectively). The SLD's are the first part of a domain nametypically the familiar name or phrase (e.g. saralee, INTA, reebok, etc.) that describes the product, service or topic which the Web site addresses.
The present system for assigning domain names was established by several private and government organizations working together, including the National Science Foundation (NSF), the Internet Society (ISOC), and the Internet Assigned Numbers Authority (IANA), among others. Together they established InterNIC (Internet Network Information Center) to provide services in the United States. InterNIC, through NSF contracted with Network Solutions, Inc. (NSI) a private company, to register domains with the gTLDs .org, .net, and .com.
NSI, like most registries, assigns domain names on a first-come, first served basis. By the end of 1995, the number of .com domain names exceeded 200,000; by the end of 1996, the number of .com domain names exceeded 600,000. Through July 1997, over 1.4 million domain names had been registered in the .com gTLD. As a result, domain names including the .com suffix now form the overwhelming majority of names on the Internet and the longer one waits to apply to NSI for a .com, the greater the chance that one's choice will not be available.
Just as trademark owners register their trademarks abroad in different national trademark offices, it is also possible to register domain names in over 200 national and quasi-national registries using two-letter country code TLDs such as .de for Germany and .ca for Canada. These registries are totally independent from NSI, just as, for example, the United Kingdom's Patent Office is independent from the U.S. Patent and Trademark Office. In certain countries, there are also sub-domains, e.g. .co.uk for United Kingdom Commercial and .ac.uk for United Kingdom academic, so there are over 400 distinct domain name registration possibilities. An example of a domain name using a two-letter country code would be www.acme.co.uk.
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Numerous trademark owners utilize the country code domains in the local marketing, with locally-oriented Web sites in the local language, ostensibly to emphasize the local presence of their company.
The Connection Between Trademarks and Domain Names
Short, simple, distinctive, and indicative of origin. These are the essential qualities which trademarks and domain names share. Just like trademarks, people use domain names as ''shorthand'' reference tools to locate specific information concerning a particular product and learn about the company which is offering the product for sale. The important thing to remember is that domain names can function as trademarks. Both serve to educate and reassure the consuming public that they are in the right place and that they are purchasing the right product for their particular needs. When a ''Web surfer'' logs-on to www.kodak.com, he/she should expect information about Eastman Kodak Company, not some unrelated or possibly slanderous subject. That is why it is essential for companies to have some mechanism to ensure that their trademarks and the use of those marks as domain names are safeguarded in the new world of online commerce.
Conflicts Between Trademarks and Domain Names
Most domain name registries, including NSI, maintain that domain names have no legal significance, but are used only as addresses of various sites in cyberspace. Further, NSI states that its only purpose is to register domain names, not to perform trademark searches or arbitrate trademark rights. NSI contends that it is not equipped or funded to perform such searches, nor should it be responsible for any infringement that takes place involving the domain names it registers. As a result, a number of problems for trademark owners have arisen.
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First, the current domain name registration policy of NSI is inadequate to combat ''cybersquatters''online pirates who routinely register domain names in bulk, without regard for the rights of trademark owners and with no other purpose than to ransom the names off to the highest bidder. The most famous ''cybersquatter'' is Dennis Toeppen, who up until he was enjoined by a federal district court, had obtained 240 domain names, including: www.aircanada.com, www.anaheimstadium.com, www.australia.com, www.deltaairlines .com, www.eddiebauer.com, www.neimanmarcus.com, and www .ussteel.com.
Second, NSI procedures are also not properly equipped to handle cases where two companies own the same name or mark. Take for example, the name UNITED. Which corporate entity has the right to own www.united.com: United Airlines or United Van Lines? Both have used the name extensively in commerce and both equally deserve to use it in cyberspace. However, under the current system, only one company can use UNITED in the .com gTLD.
Third, NSI's procedures permit the registration of confusingly similar domain names. So long as the name being sought is not precisely identical to one which is already registered to another party, the applicant may obtain it. For example, while the owners of the fictitious Acme Company, famous makers of widgets, may have registered www.acmewidgets.com, another party, with no relation whatsoever to Acme, can register www.acme-widgets.com, www.acme.widgets.com, or www.acmewidgets.com and place any form of content it so desires on the Web siteeven material which is slanderous towards the legitimate Acme company. This can lead to consumer confusion and customer dissatisfaction.
In addition to the problems posed by NSI's procedures, trademark owners are faced with the difficulty of learning the rules and regulations established by the various two-letter country code registries. These rules are often complicated to the novice. For example, most countries in the developed world have a requirement that the domain name applicant must have residence in the country (e.g. a subsidiary), but numerous countries have no such requirement, and register domains, like the U.S. on a first-come, first served basis. In addition, each registry is entitled to have its own dispute resolution policy. Finally, the rules change often, and foreign domains can be expensive to register and to maintain.
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An Alternative to the Existing System: The IAHC Plan
Both the trademark community and the Internet community recognized that there was a need for change. Given that INTA's membership is representative of much of the corporate world, the Association was one of seven organizations (and the only organization representing the trademark community) chosen to be on the International Ad Hoc Committee (IAHC), a group charged by ISOC and IANA, with charting the future of the Interneta future that takes trademark rights into consideration.
After pouring over the needs of several competing and divergent interests, including the trademark community and the Internet engineering community, and studying public comment, the final IAHC plan was released on February 4, 1997. Due to the participation of INTA, the IAHC plan includes a number of trademark related provisions which seek to achieve a balance among the competing interests. These include:
(1) A detailed application procedure requiring an applicant to provide specific information regarding its intended use of the domain and to submit to the jurisdiction of the appropriate court (this is intended to alleviate the often complicated problem of obtaining jurisdiction over a challenged domain);
(2) Publication of domain name applications on a public Web site, with full particulars of the domain name applicant, enabling trademark owners to monitor potential infringements of their trademarks;
(3) An alternative dispute mechanism, including an online challenge process that will permit a trademark owner to contest the granting of a particular domain name (It is important to note that neither this online challenge process, nor other alternatives in the plan in any way whatsoever preclude a party from seeking relief in a national court.); and
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(4) An initial limit of new generic top level domain names to seven (one prior initiative contemplated immediate activation of an unlimited number).
For the above reasons, INTA supports the IAHC plan and has signed a Memorandum of Understanding (MoU) to that effect. Thus far, this initiative is the only alternative presented that addresses the rights of trademark owners. If the trademark community is to realize true relief from infringement, then the IAHC plan, or a similar initiative which addresses trademark concerns, must be given a fair chance to operate.
NSI has put forth an alternative plan which calls for an unlimited number of generic top level domain names. This is a direction which the trademark community opposes. During deliberations of the IAHC, INTA fought hard to minimize the number of generic top level domain names, since such additions would exacerbate the policing problems already being experienced by trademark owners. For example, at present, Eastman Kodak Company must not only monitor for infringement in the .com registry, but also be wary for cases in the up to 200 two-letter country codes that exist around the world. Imagine how difficult it would be for a trademark owner to monitor hundreds, if not thousands of additional gTLDs for possible infringements. The amount of time and money it would take is staggering to even think about. INTA believes that it is imperative, if trademark rights are to be protected, that a deliberative approach, such as that proposed by the IAHC, be taken on the addition of new generic top level domain names.
Page 38 PREV PAGE TOP OF DOC Mr. Chairman, I would like to thank you once again for the privilege of appearing before the Subcommittee today to discuss the intersection of trademarks and domain names. A more thorough discussion of the issues surrounding this highly complex and dynamic subject can be found in INTA White Paper: The Intersection of Trademarks and Domain Names, a document which has been prepared by INTA's Internet Subcommittee. I have brought with me today copies for each member of the Subcommittee and I ask that these be distributed so that the Subcommittee members may benefit from the information that it contains.
In conclusion, I want to re-emphasize the important role trademarks play in the domestic economy of the U.S., the global marketplace, and in cyberspace. INTA supports the IAHC plan, because it is the only plan to date which contains realistic protective measures for trademark owners. There may, in the future, be other proposals. INTA remains available to the U.S. government to assist and cooperate in exploring and considering other approaches that recognize the rights of trademark owners in the new and ever-changing world of the Internet, should they become available.
HOUSE RULE XI DISCLOSURE
Pursuant to House Rule XI, clause 2(g)(4), the Subcommittee is hereby informed that the International Trademark Association has received no federal grant, contract, or subcontract in the current and preceding two fiscal years.
I have been a lawyer on the Trademark, Advertising and Copyright Legal Staff of the Legal Division of Eastman Kodak Company in Rochester, New York since May 1986. I am responsible for the worldwide trademarks and copyrights of the Consumer Imaging, Kodak Professional and Entertainment Imaging Divisions of the company.
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Prior to joining Kodak, I was a partner in the law firm of Rogers, Hoge & Hills in New York City.
I was born in Cincinnati, Ohio. I received my BA from Hamilton College in Clinton, New York and my JD from the University of Cincinnati College of Law.
INSERT OFFSET RING FOLIOS 6 HERE
Mr. PEASE. Thank you, Mr. Stimson. Mr. Stimson, do you wish for your white paper to be included in the record or simply to distribute to members of the committee?
Mr. STIMSON. We brought it for members of the subcommittee. If the subcommittee would entertain entering it into the record, we would appreciate that.
Mr. PEASE. We will advise the Chairman. He will make the appropriate decision. Thank you.
[The information follows:]
INSERT OFFSET RING FOLIOS 7 TO 50 HERE
Mr. PEASE. Thank you, Mr. Kirk.
Page 40 PREV PAGE TOP OF DOCSTATEMENT OF MICHAEL K. KIRK, EXECUTIVE DIRECTOR, AMERICAN INTELLECTUAL PROPERTY LAW ASSOCIATION
Mr. KIRK. Thank you, Mr. Pease. We appreciate the fact that the subcommittee is holding the hearing this morning on what has become a very thorny and contentious issue affecting the rights of U.S. trademark owners.
The registration and use of domain names creates significant protection and enforcement problems for trademark owners because domain names, which often incorporate trademarks, are treated as unique assets which can be held by one and only one owner. On the other hand, most trademarks are not unique assets, as evidenced by the existence of identical marks on different goods and services.
This fundamental difference between domain names and trademarks is what creates one of the difficulties. The treatment of domain names as unique assets has given rise to the registration and use of domain names by cyber-squatters, as Chairman Coble mentioned in his opening statement.
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 in this country.
For example, trademark owners have, as Commissioner Lehman mentioned, successfully employed the new antidilution statute to terminate use of their marks as domain names by cyber-squatters as well as by garden variety trademark infringers.
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Those trademark owners who do not possess a famous trademark have relied on other statutory provisions of the Lanhan Act to protect their rights. Thus, while we expect that illicit activity can be addressed by vigorous enforcement of the now developed case law, there remain the problems of multiple businesses using the identical trademark for different goods and services and the fact that trademark owners must sometimes engage in litigation against cyber-squatters to protect their trademark rights.
While we applaud in principle the efforts of the Internet Society and the Internet Assigned Numbers of Authority to develop proposals for enhanced domain name registration and management, certain of the resulting proposals and recommendations 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 seven 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 the opportunities for cyber-squatters.
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 Government of the United States should take a 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.
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 with meaningful involvement and participation by trademark owner interests.
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This suggestion does not mean that any government or international intergovernmental organization should take control over the administration of the Internet. 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 participation of governments, in as rapid a time frame as possible.
We believe that presently available technology, if properly utilized, can dramatically alleviate most trademark protection and enforcement problems that now inherently arise from the treatment of domain names as unique assets. Specifically, we favor the development and use of a searchable, telephone-directly-type system for domain names and the corresponding development of a centralized worldwide database of trademarks and domain names that could be correlated to one another.
We envision a yellow-pages-type directory which will allow Internet users 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 web site corresponding to a given listing.
For example, under such a directory system, an Internet user who typed in the domain name ''United'' would be routed to a directory page where all the listings for United would appear alphabetically.
Page 43 PREV PAGE TOP OF DOC If the user, upon reaching the directory page, types in United Airlines or clicks on the United Airlines listing, he or she would be taken directly to that company's home page or web site. The domain name itself would then become largely 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.
There is a question concerning how and by whom a directory should be developed, operated and administered. If the United States were to take the lead in developing a binding international framework, a directory system could be one part of that process to reduce the conflicts and tensions that we have experienced.
We recognize that this is not a complete answer to all of the problems, but we believe it will go a long way toward resolving many of them. We commend you again for holding this hearing, and we look forward to working with you in any way that we can to resolve these conflicts. Thank you.
[The prepared statement of Mr. Kirk follows:]
PREPARED STATEMENT OF MICHAEL K. KIRK, EXECUTIVE DIRECTOR, AMERICAN INTELLECTUAL PROPERTY LAW ASSOCIATION
The 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.
Page 44 PREV PAGE TOP OF DOC 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 countryfrom 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 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.
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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:LLwww.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.
Page 46 PREV PAGE TOP OF DOC 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, 143233 (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).
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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
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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, 191618 (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.
Page 49 PREV PAGE TOP OF DOCProposals 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 (gTLDMoU) to implement the IAHC recommendations. It also recommended the creation of a Council of Registrars (CORE) through another Memorandum of Understanding (COREMoU). The COREMoU establishes the basis under which CORE and the Registrars for the new gTLDs must operate.
The IAHC Final Report, the gTLDMoU, and the COREMoU 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 COREMOU requires Registrars of the new gTLDs to include in agreements with applicants for domain names their consent
to submit to on-line mediation (and optionally arbitration) any controversy regarding the registration of a domain name before the WIPO Arbitration and Mediation Center, and
Page 50 PREV PAGE TOP OF DOC to be bound by any decision of an Administrative Domain Name Challenge Panel (ACP) in accordance with WIPO ACP Rules.
It should be emphasized that these procedures and commitments do not apply to the existing gTLDs. The COREMoU 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 COREMoU'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.
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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.
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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 gTLDMoU 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.
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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.
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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.
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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.
Mr. PEASE. Thank you, Mr. Kirk. As I am sure you are aware, there is a vote on in the House. We will recess until the fall of the Chairman's gavel.
Mr. COBLE (presiding). Again, folks, I apologize for the delay, but that is the nature of the beast.
Mr. Kirk, had you completed? Did you have anything additional you wanted to add?
Mr. KIRK. I did not, Mr. Chairman.
Mr. COBLE. Good to have you with us, sir. Mr. Battista.
STATEMENT OF GABRIEL A. BATTISTA, CHIEF EXECUTIVE OFFICER, NETWORK SOLUTIONS, INC.
Mr. BATTISTA. Okay, good. Well, I will go right ahead.
Page 56 PREV PAGE TOP OF DOC Good morning, Mr. Chairman, members of the subcommittee. I am Gabe Battista, the Chief Executive Officer of Network Solutions, Incorporated. I certainly welcome the opportunity to appear before you today to address what we at Network Solutions believe to be one of the issues affecting the future development of the Internet, the trademark-domain name controversy.
In my few minutes here this morning, let me give you an overview of the issue, a sense of the legal problems involved, tell you how we, Network Solutions, have managed the problem, present some actual statistics indicating the size of the problem, and finally offer some observations for the future.
First, when the Internet began, few were worried about the trademark law. The Internet, largely a military research and education medium for the Defense Department and academics, was not being used for commercial purposes.
With the onset of commercial usage in early 1995, conflicts surfaced between trademark owners and domain name holders. By its very nature, the Internet is international. It knows no borders. Once connected, the entire globe is accessible. It didn't take long for the commercial interests here in the United States and the international community to see the value in this new medium as a marketplace.
Existing side by side with this new medium was the law of trademarks with all of its complexity. There are common law trademarks, federally registered trademarks, State registered trademarks, and trademarks which are licensed by the owners to others.
Page 57 PREV PAGE TOP OF DOC Then of course, there are also trademarks registered by 170 countries all over the world, with differing standards and procedures for registration, enforcement, opposition, and maintenance. And finally there are various applicable international treaties.
There is no uniform, consistent body of trademark law to which the world adheres. International trademark protection is complex, as each country has different rules and requirements. And most critical to our purpose here, none of it speaks to the relationship between trademarks and domain names.
As the Internet commercialized, and more and more domain names were registered, those domain names were viewed by trademark owners as identical to their trademarks or similar enough to be confusing to the public.
The Internet's 21st century boundary free, worldwide technology began to collide with the 19th century territorial trademark law. These two very powerful groups, trademark owners, approximately 800,000 alone on the U.S. Patent and Trademark Office's Act register, and domain name holders, now approximately 1 1/2 million just at Network Solutions, began to complain about each other.
Let us look at the legal problem. On the one side, the trademark owners of the world have spent vast sums instilling their trademarks with value. Pepsi-Cola Company, for example, estimates its trademark to be worth $30 billion. They are intent upon protecting it.
To trademark owners, the Internet is just another medium, like billboards, radio, and television. Trademark owners argue that the use of their trademark by others on the Internet confuses the public and dilutes their valuable asset. There is a presumption in this position, however; trademark owners presume that a domain name is synonymous with a trademark.
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On the other side, we find the domain name holders who have registered their domain names on a first-come first-serve basis and who may or may not use that name for commercial purposes. They are affronted by aggressive and powerful trademark owners who, as they see it, only now see the benefits of this new and emerging medium.
Domain name holders feel that they have ''senior'' rights to their domain names on the Internet through prior use, and they have contracts with the registrar to have those domain names.
Most of these disputes do settle. Only the most aggressive actually sue each other to resolve the matters between them. Those trademark owners who do sue, sue for infringement, dilution, unfair competition, and related causes of actions.
Trademark owners contend that the domain name holder is using a domain name in commerce and confusing the public. Trademark owners argue that the Internet crosses all borders and affects their trademarks worldwide. On occasion, trademark owners of the same trademark sue each other over the same domain name.
Domain name holders sue for declaratory relief. They point to the void in the law where no court has held that a domain name is synonymous with a trademark. They argue that trademarks are territorial; that is, they exist in each country solely according to that country's statutory scheme. They argue that the entire Internet cannot be subjected to the ambiguity of the conflicting trademark laws of 170 different countries; that the Internet is more than a commercial marketplace, it is a medium of free and open communication. They argue that domain name registration has nothing to do with a trademark.
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There is no simple solution, no quick fix to this problem. Both sides have rights. Both sides have strong positions.
In response to the problem, in an attempt to enhance the growth of the Internet, in the summer of 1995 Network Solutions instituted a dispute policy which tried to recognize the interests of both sides while attempting to maintain the position of the registrar as a neutral party.
There have been approximately 150 lawsuits concerning domain names, 36 of which we have been involved. In 25 of them, trademark owners such as Panavision, Porsche, Hewlett-Packard, Mattel, and Prince Sports have also sued Network Solutions in their cases against domain name holders or other trademark owners.
Without immunity from suit in this kind of case, and without a single court decision which holds that what a registrar does could not constitute contributory infringement or dilution, Network Solutions instituted this policy. The policy is a proactive attempt to be fair to both sides while not creating any legal position one way or the other. The policy sets out clear procedures for both sides, allows the Internet to grow, and yet attempts to protect the registrar from loss. We did not ignore the problem. We took it head on, and I am very proud of what we have accomplished, to the benefit of all parties concerned. I think it was the right thing to do.
Now, let us look at the results of the policy. Network Solutions has received 3,137 complaint letters from trademark owners against domain name holders. Of those 3,137 complaints, 1,711, or about half, resulted in the application of our dispute policy. Of those 1,700 cases, 659, or about 38 percent, are currently suspended under the terms and conditions of the dispute policy. That is 659 out of approximately 1,560,000 domain names currently registered, or four hundredths of 1 percent.
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The proof is in the numbers, and I suggest, on balance, our dispute policy is working very well. It has significantly reduced the time and cost of conflict between the parties. It is a practical solution to a difficult problem we face every day. The problem is no different than other intellectual property issues, such as copyrights, arising in this new medium.
In conclusion, someday we believe that there will be no need for a domain name dispute policy. Time has a way of resolving things. Sufficient legal precedent which defines the legal relationship between trademarks and domain names will have evolved, and such disputes will have diminished. This is exactly what happened in other new mediums throughout history. We should not overreact to a situation that could eventually resolve itself.
In summary, we believe that the world's population, not just American citizens, should have open, immediate and inexpensive access to the Internet. It is a wonderful medium for world information and for eliminating closed societies and governments. On the other hand, the intellectual property rights of world commerce must be respected and facilitated. We must all try to align and further these two interests and work our way through it.
We usually are accustomed to immediate results, immediate solutions. Well, that is not the situation before us. It is complex, and it is too important to rush to judgment. Until there is a solution, we believe that there is no better alternative to our current dispute policy, which maintains a cost-effective approach and lets the Internet grow. We address the issue every day. We try to make it fair for both sides.
I would like to thank you, Mr. Chairman, and members of the subcommittee for allowing me to reflect briefly on these issues. I will be happy to answer any questions that you have to the best of my ability. Thank you.
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[The prepared statement of Mr. Battista follows:]
PREPARED STATEMENT OF GABRIEL A. BATTISTA, CHEIF EXECUTIVE OFFICER, NETWORK SOLUTIONS, INC.
Good morning, Mr. Chairman, Members of the Subcommittee, I am Gabe Battista, the CEO of Network Solutions, Inc. I welcome the opportunity to appear before you today to address what we, at Network Solutions, believe to be one of the critical issues affecting the future stability of the Internetthe trademark-domain name controversy.
Network Solutions is a publicly-held corporation located in Herndon, Virginia. We have approximately 250 employees, all of whom are engaged in Internet or Intranet related activities.
In 1992, the National Science Foundation (NSF), through a competitive bid, chose Network Solutions to manage and enhance the domain name registration system in the U.S. Just two years ago, this small effort required registering only 200 domain names per month onto the Internet. Today the volume has reached more than 125,000 names per month, with a total of approximately 1.6 million registrations to date. This growth, which has been primarily in the number of registrants in the commercial zone on the Internet, is shown in Figure 1. It is this tremendous explosion, with conflicting commercial interests, which has caused stress on the historical system and procedures of the Internet.
Page 62 PREV PAGE TOP OF DOC In spite of the growing stress, the current domain name system is relatively easy to use, inexpensive, robust in the face of such growth, and financially self-sufficient. While largely U.S.-based expansion raised a number of critical issues, international growth in domain names now requires even greater coordination and global solutions to these problems.
Two critical issues facing the various governmental and non-governmental participants in the Internet are (1) governance and (2) the trademark-Internet domain name controversy. I spoke before Chairman Pickering and the House Basic Research Subcommittee on September 25, 1997, concerning Internet governance, and I am pleased to discuss the trademark-domain name controversy here today.
In addition, many key issues on this exact topic were raised by the Department of Commerce's Notice of Inquiry on Internet Administration, Docket No. 970613137713701 and our response of August 18, 1997. Included herein are Network Solutions' responses to the issues raised by the Department of Commerce's Notice of Inquiry, which directly relate to this Subcommittee's hearings today.
The Subcommittee also should note that Network Solutions, while one of the larger registrars (if not the largest) is but one of nearly 200 registrars of domain names world wide. How the different Internet registrars deal with trademark issues varies by the level of governmental oversight, the applicable national law and legal system, volume, cost and liability. Attached to this testimony is a partial summary, for comparison purposes, of the dispute policies for a number of other registrars. Many such policies are not available in English. Additionally, and more importantly, no explanation of their interpretation and application in actual disputes is available. Our thanks to Geoffrey Gussis, a third-year law student at Washington University School of Law in St. Louis, for his permission to attach his comparative review of registrar dispute policies, available to everyone on the Internet.
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Additionally, as further examples, the dispute policies of China, Ireland and Nominet UK are appended for comparison.
Further, a paper written on Network Solutions' dispute policy, included in the Harvard publication Coordinating the Internet, edited by Brian Kahin and James Keller (MIT Press, 1997) is appended for the convenience of the Subcommittee.
Finally, a copy of Network Solutions' current Dispute Policy is appended for the Subcommittee's convenience.
In my few minutes here this morning, let me (1) give you an overview of the issue; (2) a sense of the legal problems involved, (3) tell you how Network Solutions has managed the problem, (4) present some actual statistics indicating the size of the problem and, (5) finally, offer some observations for the future.
When the Internet began, few were worried about trademark law. The Internet, largely a military, and research and education medium for the Defense Department and academicians, was not being used for commercial purposes. With the onset of commercial usage in early 1995, conflicts surfaced between trademark owners and domain name holders. By its very nature, the Internet is international; it knows no borders. Once connected, the entire globe is accessible. It did not take long for the commercial interests here in the United States and the international community to see the value in this new medium as a marketplace.
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Existing side by side with this new medium was the law of trademarks, with all of its complexity. There are common law trademarks, federally-registered trademarks, state-registered trademarks, and trademarks which are licensed by the owner to others. Then, of course, there are also trademarks registered by 170 countries all over the world, with differing standards and procedures for registration, enforcement, opposition and maintenance, and finally, there are various applicable international treaties. There is no uniform, consistent body of trademark law to which the world adheres. International trademark protection is complex, as each country has different rules and requirements, and, most critical to our purpose here, none of it speaks to the relationships between trademarks and domain names.
As the Internet commercialized, and more and more domain names were registered, those domain names were viewed by trademark owners as identical to their trademarks, or ''similar enough,'' to be confusing to the public. The Internet's 21st Century, ''boundary-free' technology began to collide with 19th Century ''territorial'' trademark law. Two very powerful groups, trademark owners (approximately 800,000 alone on the U.S. Patent and Trademark Office's active register) and domain name holders (now, approximately 1,500,000, just at Network Solutions) began to complain about each other.
The Legal Problem
On the one side, the trademark owners of the world have spent vast sums instilling their trademarks with value. The Pepsi-Cola Company, for example, estimates its trademark to be worth $30 Billion. They are intent upon protecting it. To trademark owners, the Internet is just another mediumlike billboards, radio, and television. Trademark owners argue that the use of their trademarks by others on the Internet confuses the public and dilutes their valuable asset. There is a presumption in this position, however. Trademark owners presume that a domain name is synonymous with a trademark.
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On the other side, we find the domain name holders, who have registered their domain names on a ''first-come, first-served'' basis, and who may or may not use the name for commercial purposes. They are affronted by ''aggressive and powerful trademark owners'' (as they see it) who, only now, see the benefit of the new and expanding medium. Domain name holders feel they have ''senior rights'' to their domain names on the Internet, through prior use, and they have contracts with the registrar to have those domain names.
Most of these disputes settle. Only the most aggressive actually sue each other to resolve the matter between them.
Those trademark owners who do sue, sue for infringement, dilution, unfair competition and related causes of action. Trademark owners contend that the domain name holder is using the domain name in commerce and confusing the public. Trademark owners argue that the Internet crosses all borders and affects their trademarks worldwide. On occasion, trademark owners of the same trademark sue each other over the same domain name.
Domain name holders sue for declaratory relief. They point to the void in the law where no court has held that a domain name is synonymous with a trademark. They argue that trademarks are ''territorial,'' that is, that they exist in each country solely according to that country's statutory scheme. They argue that the entire Internet cannot be subjected to the ambiguity of the conflicting trademark laws of 170 different countries; that the Internet is more than a commercial marketplace; it is a medium of free and open communication. They argue that domain name registration has nothing to do with a trademark.
Page 66 PREV PAGE TOP OF DOC There is no simple solution, no quick fix, to this problem. Both sides have rights; both sides have strong positions.
Network Solutions' Dispute Policy
In response to this problem, and in an attempt to enhance the growth of the Internet, in the Summer of 1995, Network Solutions instituted a Dispute Policy which tried to recognize the interests of both sides, while attempting to maintain the position of the registrar as a neutral party. There have been approximately 150 lawsuits concerning domain names. In 25 of them, trademark owners such as Panavision, Porsche, YKK, Hewlett-Packard, Mattel and Prince Sports, have also sued Network Solutions in their cases against domain name holders or other trademark owners. Without immunity from suit in this kind of case, and without a single court decision which holds that what a registrar does could not constitute contributory infringement or dilution, Network Solutions instituted its Policy.
The Policy was a proactive attempt to be fair to both sides, while not creating any legal position one way or the other. The Policy sets out clear procedures for both sides, allows the Internet to grow, and, yet, attempts to protect the registrar from loss. We did not ignore the problem. We took it head on, and I am very proud of what we have accomplishedto the benefit of all parties concerned. I think it was the right thing to do.
Network Solutions required that every domain name holder, who registered a domain name with Network Solutions, agree to the Dispute Policy, which was implemented with the concurrence of the National Science Foundation. The Policy does not resolve disputes; it was not intended to resolve disputes. It was and is intended to provide trademark owners with an administrative avenue to deal with domain name holders, while providing domain name holders with five possible alternatives and the time to consider them. At the same time, the Policy attempts to extricate the registrar from the equation. In the absence of clear authority over this kind of situation, it was the only practical approach.
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In certain circumstances, if the domain name holder fails to choose any of the options, we will use our limited discretion to suspend a domain name. Please understand, when a name is ''suspended,'' the domain name holder is not changed and the name is not deleted. It is simply placed in suspension so that neither claimant (trademark owner or domain name holder) can use it until they resolve the dispute. This, of course, is the provision to which domain name holders have objected. Some domain name holders believe it is the registrar's duty to permit the domain name to continue in use and, thus, to incur liability as a contributory infringer or diluter. We do not agree. The Internet is a volatile and fragile new medium and marketplace. A registrar must find ways to resolve issues for the benefit of Internet growth, and its own viability.
Size of the Problem
Let us look at the results of the Policy. Network Solutions has received 3,137 complaint letters from trademark owners against domain name holders. Of those 3,137 complaints, 1,711, or about half (54%) resulted in the application of the Dispute Policy. Of these 1,700 cases, 659 (or about 38%) are currently suspended under the terms and conditions of the Dispute Policy . . . 659 out of the approximately 1,560,000 domain names currently registered, or four hundredths of 1%. The proof is in the numbers, and I suggest that, on balance, our Dispute Policy is working very well. It has significantly reduced the time and cost of conflict between the parties. It is a practical solution to a difficult problem we face every day. The problem is no different than other intellectual property issues (such as copyrights) arising in this new medium.
Page 68 PREV PAGE TOP OF DOCA View To The Future
Someday, we believe, there will be no need for a domain name Dispute Policy. Time has a way of resolving things. Sufficient legal precedent which defines the legal relationship between trademarks and domain names will have evolved and such disputes will have diminished. This is exactly what happened in other new mediums throughout history. We should not overreact to a situation that will eventually resolve itself.
In summary: we believe that the world's population, not just American citizens, should have open, immediate, and inexpensive access to the Internet. It is a wonderful medium for world information, and for eliminating closed societies and governments. On the other hand, the intellectual property rights of world commerce must be respected and facilitated. We must all try to align and further these two interests, and work our way through it.
We are accustomed to immediate results; immediate solutions. Well, that is not the situation before us. It is too complex and too important to rush to judgment. Until there is a solution, we believe there is no better alternative to our current Dispute Policy, which maintains a cost-effective approach and lets the Internet grow. We address the issue every day and we try to make it fair for both sides.
I would like to thank you, Mr. Chairman, and the Members of the Subcommittee for allowing me to reflect briefly on these issues. I will be happy to answer any questions that you have to the best of my ability.
RESPONSE TO THE DEPARTMENT OF COMMERCE NOTICE OF INQUIRY AUGUST 18, 1997
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What trademark rights (e.g., registered trademarks, common law trademarks, geographic indications, etc.), if any, should be protected on the Internet vis-a-vis domain names?
Given the state of the law at present, it is unclear what rights should be protected with respect to domain names. Owners of valid trademarks are protected from infringement and dilution of those trademarks by federal statutes enacted in virtually every country of the world. If trademark laws apply to domain names, anyone who obtains a domain name under a registrar's policies of issuance must do so subject to whatever liability is provided for by law.
A domain name can be more than a mere Internet address. At the present time, it also identifies the Internet site to those who reach it, much like a person's name identifies a particular person, or more relevant to trademark disputes, a company's name identifies a specific company.
Confusion on the part of the public, as to the origin or source of goods and/or services, is exactly what the trademark laws were designed to protect against. Although some trademarks are easily discerned, such as Pepsi or Ford, other trademarks, such as Disc or Acme, are more difficult to protect. Federal trademark statutes do not specifically address the issues presented on the Internet. Case law, however, is beginning to emerge. Unauthorized use of a domain name by a domain name holder, which includes a protected trademark, to engage in commercial activity over the Internet has been held to constitute ''use in commerce'' in violation of federal statutes. Such use has been held to be in direct conflict with federal trademark law. How the trademark laws of the world will be applied or interpreted remains to be seen. For all of the instances when a domain name is considered by the trademark owner to be ''close enough'' to its protected trademark to be disputed, it is for the trademark owner, in its discretion, to police its own trademark rights.
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Until legislation or case law defines the relationships between the various intellectual property rights and domain names, there can be no answer to ''what trademark rights, if any, should be protected on the Internet vis-a-vis domain names.'' As with each new medium (radio, television and, now, the Internet), the law will continue to be the law and will continue to apply to the actions of the Internet's participants until a more suitable framework for addressing the complexity and global nature of these disputes can be implemented.
Should some process of preliminary review of an application for registration of a domain name be required, before allocation, to determine if it conflicts with a trademark, a trade name, a geographic indication, etc.? If so, what standards should be used? Who should conduct the preliminary review? If a conflict is found, what should be done, e.g., domain name applicant and/or trademark owner notified of the conflict? Automatic referral to dispute settlement?
It has been proposed that applications for domain name registrations be reviewed to determine if the domain name ''conflicts'' with a trademark, a tradename, a geographic indication, etc. While this is an interesting concept, and one that has certain appeal to the trademark bar and trademark owners, it is a concept that would be neither reasonable nor practical in practice.
To conduct a pre-registration review of a domain name application would probably require something like the ''notice of publication'' period in the trademark registration process. To establish such a process in the domain name registration system would impose an inordinate cost and burden. A representative indicator of the effect of such a requirement lies in the U.S. Patent and Trademark Office (U.S.P.T.O). Its trademark registration process includes a 16-month pendency period between the time an application is submitted and the time an application is granted. Network Solutions, as one of approximately 200 registries worldwide, is currently registering a volume of domain name applications that is several times larger than the volume of U.S.P.T.O. applications each year. Significant additional time and cost would be involved by applying a U.S.P.T.O.-type process to domain name registrations.
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Determination of trademark infringement involves the application of up to 16 different factors. In different parts of the world, courts apply varying degrees of emphasis to those factors. A domain name registrar should not be expected to have the knowledge, expertise and experience of an intellectual property attorney or a judge on a global basis and, without that, determination of infringement cannot be rendered. Additionally, having to make such evidentiary determinations would expose a domain name registrar to significant liability in the event a wrong decision was made.
The entire issue of pre-registration determinations becomes even more difficult and unreasonable when considering the global nature of the Internet. Pre-registration determinations of trademark conflict would require the availability of a database of trademark registrations from every country in the world. Such a database does not exist.
Aside from a preliminary review process, how should trademark rights be protected on the Internet vis-a-vis domain names? What entity (ies), if any, should resolve disputes? Are national courts the only appropriate forum for such disputes? Specifically, is there a role for national/international governmental/nongovernmental organizations?
Trademark rights should be policed and protected on the Internet in the same manner as they are in other aspects of commerce. It should be each trademark owner's responsibility to monitor domain name registrations, and to take appropriate action against a domain name registrant when the trademark owner, in its discretion, believes its intellectual property rights are being violated. The same forums that deal with intellectual property rights in international commerce are also the appropriate forums to resolve disputes when domain name registrants and trademark owners are residents of different nations.
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How can conflicts over trademarks best be prevented? What information resources (e.g. databases of registered domain names, registered trademarks, trade names) could help reduce potential conflicts? If there should be a database(s), who should create the database(s)? How should such a database(s) be used?
Conflicts over trademarks cannot be prevented, but they can be reduced. Nothing will eliminate either the intentional or unintentional registration and use of a domain name on the Internet by someone who either seeks to confuse the public as to the source of the product or service or, alternatively, was unaware that his/her actions caused such confusion. The question, however, starts with the premise that the millions upon millions of potential domain names will, in fact, conflict with trademarks. The premise is incorrect and will, if applied, forever change the nature and direction of this global communications medium. In fact, to date Network Solutions has applied its Domain Name Dispute Policy to about 1,300 domain name registrants, or approximately one tenth of the one percent of the total number of domain name registrants in the database.
The conflicts, which will occur on a global basis, can be drastically shortened and resolved with minimal cost to both the trademark owners and domain name holders of the world through the passage of a simple rule of civil procedure to be enacted, jurisdiction by jurisdiction, as it proves successful. The procedure would have the following goals:
Allow for the rapid expansion of the Internet;
Keep any technical portion of the solution simple and universal;
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Keep the ''first-come, first-served'' assignment of second-level domain names;
Allow registries world-wide to follow their own procedures for disputes;
Limit government involvement, administration and regulation to increase global commercial investment in the use of the Internet; the model for commerce would be contractual rather than regulatory;
Allow for the necessary divergence of trademark law and legal systems worldwide;
Prevent the formation of an ''administration'' over disputes, including personnel and regulations;
Use only existing global legal systems;
Protect trademark owners to the maximum extent possible; in instances where a domain name directly conflicts with an identical federal registered trademark, allow for an administrative alternative to judicial proceedings for domain name holders;
Protect domain name holders' rights to use their own names or their assignment of domain names which predate trademarks; and
Allow jurisdictional prerequisites for personal jurisdiction over the disputants to be unaffected worldwide.
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Should domain name applicants be required to demonstrate that they have a basis for requesting a particular domain name? If so, what information should be supplied? Who should evaluate the information? On the basis of what criteria?
No. Inherent in this question is the concept of prescreening and the accompanying delays and bureaucratic review that will bring this medium to a standstill. Proposals have even surfaced that would require such invasions of privacy as the production of the tax returns, social security numbers and corporate charters. Who is qualified to review these materials and who would make such decisions? Who would decide what an appropriate ''basis'' would be? How would these decisions be appealed?
How would the number of different gTLDs and the number of registrars affect the number and cost of resolving trademark disputes?
An increase in the number of different TLDs would, in all likelihood, significantly increase the number and cost of resolving disputes over the registration and use of domain names. Ignoring the ISO3166 two letter country code TLDs, trademark owners presently have to monitor and ''police,'' if they so choose, three TLDs: .com, .org, and .net. A domain name in any one of the TLDs could be the subject of a dispute initiated by a trademark owner that believed the registration of the domain name violated the trademark owner's intellectual property rights. All other things being equal, a trademark owner could currently be involved in up to three separate disputes, each with its corresponding cost, if the trademarked word or phrase was registered as a domain name in each of the three TLDs. It logically follows that there is a direct relationship between the number of TLDs and the potential number and costs of disputes related to the protection of trademark rights.
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An increase in the number of worldwide TLDs could also affect costs to individual companies as they seek to protect their trademarks on the Internet by registering all their trademarks as domain names in each of the worldwide TLDs. If, for example, there were a total of 50 TLDs, a large company with 1,000 trademarks could decide to incur the costs (time and resources) associated with registering and maintaining 50,000 domain names (50 times 1,000). Such a burden would be unreasonable.
As long as domain name registries or registrars are susceptible to allegations of contributory infringement of intellectual property rights of trademark owners, an increase in the number of registries or registrars would, in all likelihood, significantly increase the number and cost of resolving disputes over the registration and use of domain names. More registrars would simply provide more candidates for trademark owners to include as a named party to litigation. The potential for cost growth would be compounded if the registries were located outside the United States. Registries located outside the United States increase the possibility that trademark-domain name disputes would take on an international character, with the proportional increase in cost and complexity.
An increased number of worldwide TLDs also increases the possibility of a type of dispute not yet seen. That dispute would be between two registrants, each with the same second-level domain name but in different TLDs, arguing over confusion and superiority of rights based upon the date of registration or activation of each second-level domain name in its respective TLD. The significance of the nature of these disputes lies in the fact they would not necessarily involve entities with trademarks. They would involve simply ''first use'' on the Internet.
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Where there are valid, but conflicting trademark rights for a single domain name, are there any technological solutions?
There may be some technical relief available. Registrars might employ a shared top-level home page with HTML ''links'' to each user. Therefore Delta Airlines, Delta Faucet and other Delta's would share a simple top-level home page, Delta.com, with ''links'' to each one's unique home page. This is a service that each registrar could provide. NSI has attempted to persuade disputing claimants to employ this tactic. All have declined, preferring to seek exclusive control at great risk and expense.
Are there any other issues that should be addressed in this area?
The legal issues related to the registration and use of domain names are complex and multifaceted. Answers are not readily at hand because of the absence of legislation pertaining to the relationships between domain names and intellectual property rights. Even when existing legislation may apply, it varies from country to country. Case law is just starting to evolve, and that too, will vary from country to country.
Beyond the applicability of existing and emerging intellectual property laws, legal issues must include consideration of international laws such are embodied in the Paris and Berne Conventions. These, and possibly others, must be examined for applicability to the area of DNS and the Internet.
Page 77 PREV PAGE TOP OF DOC In addition to intellectual property matters, the United States has federal statutes which limit or prohibit the use of specific words or phrases. For example, the U.S. Amateur Sports Act addresses the use of the words Olympic, Olympiad and Citius Altius Fortius (the Olympic motto). There are, in all likelihood, similar statutes in most countries of the world that must be considered when dealing with legal issues related to global domain name registration and use.
INSERT OFFSET RING FOLIOS 51 TO 113 HERE
Mr. COBLE. Thank you, Mr. Battista.
Mr. John Wood.
STATEMENT OF JOHN WOOD, SENIOR INTERNET CONSULTANT, PRINCE, PLC
Mr. JOHN WOOD. Good morning. My name is John Wood of PRINCE plc.
Mr. COBLE. Wait a minute. Mr. Wood, if you can pull that mike just a little closer to you so the reporter can hear you clearly. Thank you, sir.
Mr. JOHN WOOD. First time user. Good morning. My name is John Wood of PRINCE plc. PRINCE is a small UK-based corporation whose business is built in part on the Internet. While based in the UK, we provide consulting services to companies and organizations who desire to do business globally, often operating from very small organizational structures but wishing to compete successfully worldwide through the reach of the Internet and other foreign communications services.
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In order to reach its customers, PRINCE felt it was essential to use a .com domain name registration, since by 1995 .com had become associated with international commercial entities like itself. In February of 1995, PRINCE plc obtained the domain name PRINCE.com in the UK via Internet service provider Demon Internet Limited from Network Solutions, Inc. of Herndon, Virginia on a first-come first-serve basis.
In my testimony, I will outline PRINCE's concerns about these issues and why we are working with others in industry to address the areas of concern. First, PRINCE is a small corporation whose business is built in part on the Internet. Second, we believe that a secure and commercial-grade Internet is an absolute requirement for a full growth of electronic commerce as it is envisioned both here in the U.S., in the UK, Europe and elsewhere, and for the success of our own business.
The present system already has some areas of concern related to trademarks and domain names. Hoarding of domain names has already been mentioned; the collision between domain names and trademarks, prompting the U.S. courts to subject domain names to trademark law and the challenges already arising to the NSI dispute resolution procedure; issues of how famous trademark holders' rights might be recognized as a special category; reverse hijacking, where a trademark holder pursues a domain name already in use.
Over time, domain names have become electronic brand names by which consumers identify the brand with the Internet address. Consequently, they have obtained commercial value, leading to some of the problems noted above.
Page 79 PREV PAGE TOP OF DOC Now, however, we are facing additional challenges. In particular, the proposed introduction of seven new TLDs now under consideration in the private sector led initiative known as the gTLD-MOU. This is creating a potentially serious concern for trademark holders who are already encountering serious challenges in policing their marks and dealing with cyber-squatters.
WIPO has issued a set of proposed dispute resolution procedures for comment by November 21, 1997, which many in the industry, including my own company, are preparing to submit comments on. However, the guidelines, even with modification, cannot address all the problems which we had outlined above and, in fact, may exacerbate them.
The concern of many trademark holders is that multiple new gTLDs will create even more serious problems for trademark holders in policing their brands and in an environment where there are untested processes and procedures, thus adding to costs and confusion for end users.
In our view, the fundamental differences between domain names and trademarks are such that no real long-term resolution is yet proposed. Whereas domain names are unique and global, trademarks are multiple and enforced on a territorial basis. The situation is all the more urgent to address, because with rapid growth and the popularity of the Internet, famous trademark holders are being forced to dedicate increasing amounts of their resources to monitor domain name registrations and, where appropriate, litigating in far parts of the globe.
Conversely, legitimate domain name holders have come under attack from trademark registrants encouraged by dispute resolution policy into the belief that they are able to ''reverse hijack'' a domain name. This is what happened to my company.
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We had been operating, as most users of the Internet do, assuming that all is well in the operational and administrative underpinnings which make things happen: the assignment of domain names, the mechanism for dispute resolutions. It was a shock to us to learn that our address on the Internet PRINCE.com was about to be yanked away from us and literally, without warning, of such a problem existing.
My testimony here today is intended to paint the picture of the average user of the Internet for business purposes and to provide a road map of the issues which we at PRINCE believe should be adequately discussed and addressed before implementation of a significant new system occurs on the Internet.
Although my testimony may seem to indicate that there is no way to resolve these concerns, in fact, this is not my view nor PRINCE's experience. We believe that there are actions which can be taken in both the short term and the long term. For instance, in the long term, a power action through the international harmonization of the trademark laws will help alleviate the problem and significantly benefit global companies. The creation of a searchable global database of registered marks will also provide a significant resource to registrars and help to alert and avoid potential collisions.
In the near term, creation of a ''famous trademark'' database which all registrars such as NSI would search as a part of the domain registration process will be helpful. Further, although this is highly controversial with the Internet community, a publication period, even a brief one, would be useful for both trademark holders and would-be domain name holders, as it could reduce the number of potential litigations that may occur.
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We are particularly critical of cyber-squatting and raise questions about these practices and the negative impact on trademark holders. It seems to us that clear and effective administrative procedures could deal with this problem to a significant degree.
Finally, it should be noted that currently NSI registers approximately 3,000 domain names a day; yet it is only involved in 34 litigation proceedings. It is clear that there are serious concerns and that disputes between trademarks and domain names must be addressed in a thoughtful fashion.
More work is needed, including the involvement of the United States Patent Office and its counterparts in Europe and the rest of the world, along with WIPO and some broad and representative private sector entities.
My purpose is not to criticize either today's system nor the proposed new approach under discussion by WIPO, but to note that a collision is under way and one which, while we may not be able to avoid, can be managed through effective management and well thought out structures in order to avoid chaos in the marketplace.
Our end goal should be to ensure that end users, consumers, and businesses who rely on the Internet to reach each other to do business to obtain information have a high degree of certainty, that they know how to reach their intended destination, and that the companies who serve them by the Internet have the same certainty. Thank you very much, Mr. Chairman.
Page 82 PREV PAGE TOP OF DOC [The prepared statement of John Wood follows:]
PREPARED STATEMENT OF JOHN WOOD, SENIOR INTERNET CONSULTANT, PRINCE PLC
Good Morning. Thank you, Mr. Chairman, and members of the Subcommittee, for the opportunity to testify today, and to provide a viewpoint which may be somewhat unique in regard to the role of Internet Domain Names and Trademarks from the other witnesses. My name is John Wood and I am senior Internet consultant from Prince plc a UK Information Technology (IT) service provider, specializing in desktop migration services and information technology skills development since 1985.
In addition to my oral statement, I have provided a more detailed written statement. Following my statement, I will be pleased to respond to questions.
In February of 1995, Prince plc obtained the domain name ''PRINCE.COM'' in the UK via its Internet Service Provider (ISP), Demon Internet Limited. Like many other IT companies in general, and those serving a global clientele in particular, Prince felt it was essential that it had a .COM domain name registration since by 1995 .COM had become associated with international commercial entities like itself. Currently, entities such as ourselves wishing to have a .COM domain name space obtain it from Network Solutions, Inc. of Herndon, Virginia, who operate the .COM registry under a contract from the National Science Foundation, and issue them on a first-come first-serve basis.
I will begin my testimony by outlining why Prince plc is concerned about these issues, and why we are working with others in industry to address the areas of concern. First, Prince plc is a small corporation, whose business is built in part on the Internet. While based in the UK, we provide consulting services to companies and organizations who wish to do business globally, often operating from very small bases and organizations, but desirous to compete successfully through the Internet and other advanced communications services.
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Second, we believe that a secure, commercial grade Internet is an absolute requirement for the success of our business, and for the full growth of electronic commerce as it is envisioned both here in the U.S., in the UK, Europe, and elsewhere.
I will set the stage for my comments, with a brief background statement on the underlying infrastructure since often these discussions have the appearance and sound of alphabet soup. The accessing of Internet email and Web sites is done using an Internet address. Internet addresses are made up of a domain name (PRINCE.COM) that is the alphanumeric equivalent of its corresponding IP address (188.8.131.52) by which the Internet identifies every user.
The present system already has some areas of concern related to trademarks and domain names: first, hoarding of domain names by entities in anticipation that registered trademark holders will pay money for their corresponding domain namee.g. cybersquatting; second, the ''collision'' between domain names and trademarks, prompting the U.S. courts to subject domain names to trademark law and the challenges already arising to the NSI dispute resolution procedure; third, issues of how famous trademark holders rights might be recognized as a special category; and fourth, reverse hi-jacking, where a trademark holder pursues a domain name already in use.
Over time, domain names have become electronic brand names by which consumers identify the brand with the Internet address. Consequently, they have attained commercial value, leading to some of the problem areas noted above.
Now we are faced with additional challenges:
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In particular, the proposed introduction of 7 new TLDs, now under consideration in the private sector led initiative known as the gTLDMOU, is creating potential serious concerns for trademark holders who are already encountering serious challenges in policing their marks, and dealing with ''cybersquatters''. At present, WIPO has issued for comment by November 21, 1997, a set of proposed dispute resolution procedures, which many in the industry are undertaking to submit comments on. However, the guidelines, even with modification, cannot address all of the problems which we have outlined above and in fact, may exacerbate them.
The concern of many trademark holders is that multiple new gTLDS will create even more serious problems for trademark holders in ''policing'' their brand in an environment where there are untested processes and procedures thus adding to cost and confusion for end users.
In our view, the fundamental differences between domain names and trademark are such that no real long term resolution is currently in sight. Whereas, domain names are unique (there is only one PRINCE.COM) and global, trademarks are multiple (there are over 1,000 marks with reference to PRINCE) and enforced on a territorial basis (under U.S. federal or state law etc.). The situation is becoming all the more urgent because, with the rapid growth and popularity of the Internet, which we all hope will continue, ''famous trademark holders'' are being forced to dedicate increasing amounts of their resources to monitoring domain name registrations and where appropriate, litigating in far flung parts of the globe. Conversely, legitimate domain name holders have come under attack from trademark registrants encouraged by the dispute resolution policy into the belief that they are able to ''reverse hijack'' a domain name. This is what happened to my company.
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We had been operating, as most users of the Internet do, assuming that all was well in the operational and administrative underpinnings which make things happen: the assignment of domain names, and the mechanism for effective dispute resolutions, and the infrastructure by which data is sent from and received by servers and computers on the Internet, thus, delivering the millions and millions of packets of data which the Internet carries each day across the globe.
It was a shock to us to learn that our address on the Internet PRINCE.COM, was about to be yanked away from us, and literally, without warning of such a problem existing. My written statement provides the background to the situation, but my testimony here today is intended to paint the picture of the average user of the Internet for business purposes, and to provide a roadmap of the issues which we, at Prince, believe should be adequately discussed, and addressed, before implementation of significant new systems in the Internet.
While the current domain name system may have worked effectively in the past, it is increasingly in need of formalization and standardization as we move to a commercial grade Internet. Today, estimates are that over 60 million people use the Internet. By my last rough analysis, companies like AT&T and Bell Atlantic here in the U.S. have over 100 million consumers as customers. In the Europe, a similar picture exists. In short, as consumers increasingly use the Internet, the growth will be exponential; and we will move from 60 million users today to over 200 million, or more by the turn of the century. The current legal framework will not be able to cope.
The way ahead must be a global commercial solution. It must represent the conflicting interests and hold them accountable. It must also afford clear legal definition and redress, in order to provide a stable and secure commercial environment for the development of electronic commerce. In our view, in the long term, this will necessitate the need for parallel action through the international harmonization of the trademark law(s) and a searchable global database of registered marks.
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In the near term, creation of a ''famous trademark'' database, which all registries, such as NSI, would search as part of the domain name registration process could be helpful. Further, a publication period (even a brief one) would be useful for both existing trademark holders and would-be domain name holders as it could help to reduce potential litigation down the road.
Finally it should be noted that currently NSI registers approximately 3,000 domain names a day, yet it is only involved in 34 litigation proceedings. It is clear that there are serious concerns, and that disputes between trademarks and domain names must be addressed in a thoughtful fashion, and that more work is needed, including the involvement of the U.S. Office of Patents and Trademarks and its counterparts in Europe and other parts of the world, and, of course, WIPO, along with a broad and representative group of private sector entities, both commercial and non-commercial in nature.
My purpose is not to criticize either today's system nor the proposed new approach under discussion via the WIPO comment process, but to note that a collision is underway, and one, which while we may not be able to avoid, can be managed and, through effective management and well through out structures, can help to avoid chaos in the marketplace. Our end goal should be to ensure that end usersconsumers and businesseswho rely on the Internet to reach each other, to do business, and to obtain information, have a high degree of certainty that they know how to reach their intended destination and that the companies who serve them via the Internet have that same certainty.
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The domain name represents the alphanumeric equivalent of an Internet Protocol (IP) address. The IP address comprises four sets of number separated by dots, e.g. the PRINCE.COM domain name corresponds to the IP address 184.108.40.206. Domain names can contain letters A through Z and/or the numerical digits of 0 through 9 or other characters from the ASCII character set. In all, there can only be up to 24 characters in a domain name. The IP address and the domain name together constitute the Internet address of the computer or host that is connected to the Internet. The translation or resolution of the domain name to its corresponding IP address occurs ultimately on a root server via a configuration file or ''root zone file''. Addresses are needed so that users can find computers which contain information they want. Domain names are easier to remember for many users than a string of numbers, so they have become more popular. The domain name hierarchy is read from right to left within the domain name space. Levels are delineated by dots. Therefore, the top level domains (TLDs).EDU, .ORG., .NET, .COM, .GOV, .MIL, AND .INT, or the country code domains names based on ISO 3166 two letter extensions e.g., .DE, are found in the extreme right of the domain name space. It is to be pointed out that the requirements and standards for the administration and management of the TLDs varies from country to country. Thus, where the company designation appears in the string is dependent on the registration authority you use. To the immediate left is the second level domain, e.g. .CO, .UK.
The Internet Assigned Numbers Authority (IANA) has overall authority for IP addresses and domain names. The administration of the central database and directory containing all of the Internet addresses and domain names is carried out by the InterNIC (Internet Network Information Center). The TLDs including .COM since 1993 have been managed by Network Solutions, Inc. (NSI) based in Herndon, Virginia, under a five year Co-operative Agreement with the National Science Foundation (NSF). This agreement is due to expire on March 31, 1998. NSI administers domain names to would-be domain name holders on a first-come first-serve basis. Further, it is important to note that the domain name holder does not own the domain name, but merely has a right of use granted to it by the registrar, in this case NSI.
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2. The Collision.
With time domain names have become more than mere Internet addresses. They have become electronic brand names associated with products, services, even new movies. e.g., WWW.MICROSOFT.COM, WWW.KISSTHEGIRLS.COM. Consequently, in the 1995 MTV case(see footnote 1) the U.S. courts subjected domain names to trademark law. In Hasbro, domain names became subject to the federal dilution statute(see footnote 2). However, Domain names and trademarks have made for unhappy bedfellows.
This collision is exacerbated by the fact that trademarks are territorial (state or federal) and multiple (from any of 42 classes), while domain names are global and unique. Thus, in the realm of domain names, there is no co-existence of identical names related to dissimilar goods and services as is the case with trademark law. This reality has led to a phenomenon called ''cybersquatting'' or domain name piracy, whereby domain names were being registered by a party other than the corresponding trademark registrant with the intent of selling the domain name to the latter for a profit.
With regard to the designation of origin characteristic of a trademark, when it is applied to an ISO country code domain, the ability to know the country of origin is normally self evident. However, the non-country specific TLDs.COM, .NET, .ORG, give no hint of the geographic location of the domain name holder. Nor do domain names necessarily identify the goods or services to which they relate e.g., CANDYLAND.COM. It is also difficult to see how goodwill could attach to what is essentially an Internet address. However, the greater challenge is to create a legal framework that allows for global enablement and enforcement of trademark rights in general and famous marks in particular that relate to domain names. At the heart of the challenge is a way to resolve the thorny issues revolving around venue and jurisdiction determinations.
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3. Case Study: PRINCE.COM
Prince plc, is a UK Information Technology (IT) service provider, specializing in desktop migration services and information technology skills development since 1985. In February of 1995 Prince plc obtained via its Internet Service Provider (ISP), Demon Internet Limited, the domain name ''PRINCE.COM''. Like many other IT companies in general, and those serving a global clientele in particular, Prince felt it was essential that it got a .COM domain name registration, because by 1995 .COM had become associated with international commercial entities like itself.
After almost two years of unopposed use of the domain name PRINCE.COM, on January 16, 1997, Prince Sports Group, Inc. (a New Jersey Corporation) through its U.S. Counsel, Sughrue, Mion, Zinn, Macpeak & Seas wrote Prince a letter asserting that Prince's use and registration of the Internet domain name PRINCE.COM was an infringement, an act of unfair competition and dilution of its US trademarks. Accordingly, to avoid legal action in the U.S. it requested that Prince assign the domain name to it. Why should we, Prince retorted? How could an IT business in the UK be confused with a tennis racket manufacturer in the US? Besides, we had got there first, and thus played by the rules in place in February of 1995. In the real world, we could of co-existed Prince Sports Group in classes 9 and 28 (for tennis rackets) and Prince plc in class 41 (for computer training services. But not in cyberspace.
For Prince Sports Group, its salvation appeared to exist in the Revised Dispute Resolution Policy (September, 1996) of Network Solutions, Inc. The policy seemed to focus on protecting Federal or Foreign Trademark Registrations (albeit to the detriment of State trademark registrations and common law rights, see article 5) from pirate domain name holders and/or infringement of their trademark rights. Further, it appeared to assert trademarks rights with a lower burden of proof than required by the courts, by requiring only the furnishing of a certified copy of trademark registration and a warning letter to get the process rolling. Once the certified copy of the registration and warning letter had been produced to NSI it would trigger an NSI notification letter to the domain name holder. Depending on the response, the domain name may first be put ''on hold'', then later be given to the complainant. The ''on hold'' status in effect meant an injunction against the domain name holder's use of the domain name. Thus, the domain name holder loses any value the Web site may have accrued and all that it has invested in it.
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Unlike a trademark application, there is no waiting/publication period nor search undertaken by the registry body before a domain name is granted. Thus, the domain name holder is unaware that there might be a conflict over its domain name registration. We certainly were oblivious to our predicament. Interestingly, Prince plc learned after its registration of PRINCE.COM that in fact there are some 53 domain names registered containing the word ''prince'', and over 1000 trademarks, service marks etc. with the word ''prince'' in them.
On February 25, 1997, NSI sent Prince a dispute notification letter giving Prince plc 30 days to respond in one of three ways (1) provide proof of the existence of a corresponding trademark registration to its domain name; or (2) evidence of litigation in a court of competent jurisdiction in the United States; or (3) an indication of a willingness to be assigned another domain name. At the same time, we received from NSI our renewal notice for the domain name. We were therefore placed in a catch 22 situation, if we did not agree to renewal, we would lose the domain name, if we agreed to the renewal we would be contracting to comply with the dispute resolution policy which was not in place when we obtained the domain name in February 1995. The original dispute resolution policy did not in fact get implemented until July 1995.
Prince was therefore faced with a 30 day period in which to act or lose its name. At that point the process seemed to be a victory for reverse hijacking. Namely, trademark registrants taking away domain names from bona fide domain name holders. Further, NSI's private dispute resolution policy appeared to be in effect a mechanism for the adjudication of Prince's legal rights. Finally, the scope of the impact of NSI's dispute resolution policy is such that it forces foreign non-U.S. domain name holders at great cost to fight for their rights in the U.S. or lose their domain name.
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However, nothing is ever what it seems. We discovered that NSI interpreted its Article 7's reference to ''competent jurisdiction'' to mean any jurisdiction recognized as being competent by U.S. Courts. Thus, in the Harrods case it had allowed Harrods to defend its name in a UK court. Further our counsel Willoughby and Partners concluded that the letter of January 16, 1995 was designed to comport with Article 5 (b) of NSI's guidelines. That is to say the threat of proceedings was designed to act as a trigger mechanism by which under the dispute resolution policy it could attain the domain name. Accordingly, a cause of action existed under section 21(1) (C) of the 1994 UK Trademarks Act against abusive use of a trademark by virtue of it being used as a threat. A complaint was filed on April 28, 1997 including this cause of action. The court agreed with Prince arguments and issued a decision in similar terms on July 18, 1997. NSI for its part, on the basis of the suit did not place the domain name on hold. Consequently, Prince Sports Group filed an action on July 18, 1997 in U.S. District court for New Jersey alleging with regard to Prince plc, federal unfair competition common law unfair competition and Federal Trademark Dilution. It made NSI a co-defendant alleging breach of contract. Prince filed in response on September 17, 1997, a motion to dismiss for lack of jurisdiction. The pivotal issue for Prince plc was whether contact with a state based only on having a web site was sufficient enough to grant jurisdiction and venue over the foreign party. Due to the fact that Prince Sports Group withdrew its action on October 15, 1997 we will never know the answers in this case. Also Prince plc argued for a summary dismissal on the merits, because Prince plc's computer services were so completely unrelated to Prince Sports Groups tennis racquets that as a matter of law no consumer confusion was likely. However, in Bensusan Restaurant Corp. v. King, 937 F. Supp. 295 (S.D.N.Y. 1996); aff'd U.S. Court of Appeals for the second circuit at 1997 WL 560048, Civ.A. No. 969344, the court held that a Web site that advertises a defendant's services, standing alone, does not constitute sufficient contacts. However, as electronic commerce becomes more and more significant the pressure to afford jurisdiction and venue over a party will grow.
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If the case had gone to trial it would have focused on two significant issues i.e. famous marks and the scope of the dilution statute. Currently, major trademark holders are being forced into devoting increasingly large amounts of their resources to monitor domain name registrations around the world and where necessary file actions in protection of their famous marks. On the other hand it should be pointed out that the tendency to enter the litigation arena in the U.S. is buoyed by the Hasbro decision, which subjected domain names to the dilution doctrine and enabled the plaintiff to stop a domain name holder using its domain name or registering a ''similar'' domain name where dilution was found to exist. Due to the wide scope of the decision it could have a chilling effect on those with a legitimate right to a domain name, but who are not the holders of a famous mark. A solution might be the creation of a famous mark database which registries would have to consult to avoid a conflict.
Although the issues are multiple and the complexities great, the size of the problem and thus the ability to secure a solution is manageable at this juncture. Currently, NSI registers approximately 3,000 domain names a day, but it is only involved in 34 active litigations and cited in perhaps no more than 300 related litigations. However, the problem is only going to grow with time. So the time to act is sooner rather than later. But only after careful consideration of all the issues and upon the creation of a comprehensive legal framework.
INSERT OFFSET RING FOLIOS 114 HERE
Mr. COBLE. Mr. Wood, some recent months ago, I had the good fortune of being in your town
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Mr. JOHN WOOD. Thank you, sir.
Mr. COBLE [continuing]. With intellectual property representatives from Asia, Europe, and North America. And I award high marks to London. We had a very fine visit there. I think you will agree, Mr. Kirk.
Mr. KIRK. Yes.
Mr. COBLE. You were very hospitable and we enjoyed being there very much.
Mr. JOHN WOOD. Well, come back soon, sir.
Mr. COBLE. We would like to do that.
Mr. Doug Wood.
STATEMENT OF DOUGLAS J. WOOD, EXECUTIVE PARTNER, HALL, DICKLER, KENT, FRIEDMAN & WOOD, ON BEHALF OF THE COALITION FOR ADVERTISING SUPPORTED INFORMATION AND ENTERTAINMENT (CASIE)
Mr. DOUG WOOD. Thank you, Mr. Chairman. Recently, a commentator summed up the Internet in a simple phrase that, for the first time in history, boundaries have no relevance. And any of us who make our living or part of our living in the Internet business I think appreciate that comment more than most. With that demise of the traditional boundaries, however, we have faced some new opportunities and some new dangers in the subject matter of this committee's hearings today on the trademark issues.
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For the Internet to become the commercial vehicle that people envision today, it is going to need the support of the global brand and regional brand owners, the trademark owners that we are concerned about today. Without it, it is simply not going to become a viable commercial medium. And also, I think it is safe to say that the United States or any foreign government is not ready to pay the costs of the Internet on a continuing basis either. So that is why it is so important that the commercial sector be listened to in this issue.
I am outside legal counsel for CASIE. And as the Chairman has indicated, it is a joint coalition of the Association of National Advertisers and the American Association of Advertising Agencies. The ANA and four A's represent the bulk of the investment, the dollars invested on much of the World Wide Web, the part of the Internet, the commercial sector of the Internet that has spent millions and will continue, and probably before the end of this decade are expected to spend billions of dollars in developing and building the Internet.
That all comes with one catch, however. And that is protection of their brand names and their trademarks. As indicated by an earlier speaker, Pepsi put the value of their trademark at 30 billion. And that may be an underestimate. These brands have been leaders in the world for many, many years and need to be addressed and protected.
The membership of the ANA includes companies like Pepsi and Coca-Cola, Visa, American Express, Kodak, Polaroid, Reebok, and the likes of the people who have true global trademarks. It also includes many companies with regional trademarks that are just as equally important, Procter & Gamble among them.
Page 95 PREV PAGE TOP OF DOC The 4 A's is the largest advertising association in the world and includes the leading advertising agencies throughout the globe. As a collective group they have, as I said, spent the bulk of the investment or a huge part of it, and also are some of the most technically savvy in the group.
As the Internet has grown, we have heard the reference to cyber-squatters and trademark warehousers. We have had trademark squatters and trademark warehousers before. That is not a new concept for trademark owners, people trying to take advantage of trademark rights. But on the Internet, it is rather unique because of this unusual domain address system that we have, this second level domain and the limited number of generic top level domains, the .com, .org and .net.
These issues, in our view, fall into essentially four different categories that need to be addressed: One is the brand development protection; the second is the domain name dispute resolution system for the second level domain names, the Coca-Cola and Coca-Cola.com; the addition and potential proliferation of additional gTLDs; the gTLD MOU has proposed by firm, dot store, dot a number of others; and, finally, and perhaps most importantly, the portability issue, the portability of going from one domain to another.
The Internet, we want to point out, as I think everyone has said here, and the Chairman's comments I think indicated it earlier as well, it is a little premature to be coming to a regulatory solution to this. The Internet is very much a self-healing organizationorgan. And it has shown quite a bit of ability in the past to address its own problems. And that is what the likes of NSI and the International Ad Hoc Committee are trying to do, unfortunately, more separately than together; but they are, nonetheless, each trying to find those solutions somewhere in the Internet world.
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On the brand development and protection, unfortunately, on the Internet, all trademarks are not created equal. There are those that are truly unique marks, like Coca-Cola, Pepsi, Reebok and others. As to those, they deserve the right to have complete exclusivity on the generic top level domains. No one, in the view of these companies, should be allowed to use the name Coca-Cola or otherwise on any of the proposed gTLDs.
But they are not the bulk of the users of the Internet. The bulk of the users, of trademark users, are those users that have names that are regional trademarks, are not global trademarks, are marks like Exxon, for example. As was mentioned earlier, it is Exxon in the United States but it is Esso overseas. Nonetheless, they are very important and very valuable marks.
Those brands need to be protected on the Internet to the extent that use by others will prove confusion under standard trademark theories and also prevent the natural expansion of the global markets. But that is the dilemma.
Delta, for example. Delta.com. Who should that be owned by? Delta Airlines, Delta Facilities or its current owner, Delta.com Development, an Internet service provider? Or, Yale.com. Should it be owned by Yale University, Yale Lock Company, or its present owner, Yale Materials Handling Company, a forklift manufacturer?
There are not easy solutions to any of those issues, and it is possible that a directory-based system similar to some that have been proposed may be the answer.
Page 97 PREV PAGE TOP OF DOC Third, the geographically dispersed companies that have marks that are identical or very similar and in their individual regions have every right to use of the mark; as to those, again, perhaps a directory is a solution.
And, finally, there are those domain names that use totally generic words as their second level domain, soap.com for example, or toys.com. By doing so, they effectively monopolize an entire category.
Now as to those, no one should have any single exclusive ownership of toys.com per se, and, again, perhaps a directory solution is a direction to go.
But let me just say as to the directory solution which people have mentioned earlier in the testimony today, that is not necessarily the solution that it first appears to be. It will depend entirely on how sophisticated these directories are, how these directories themselves police the inclusion of names in their directory. There is nothing to prevent somebody, for example, on a standard directory, as they do in the yellow pages, of putting a bunch of A's in the front of their name so they get there first on the list. And if you have that kind of allowance in these directories, the Coca-Colas in this world will just simply find themselves preceded by AAAA Coca-Cola, ABAA Coca-Cola, and the like. So the directory needs to also be policed. So the directory solution is not necessarily a panacea.
But, most importantly, from the perception or perspective of CASIE, is the need for portability. The proposals differ in substantial degree on this issue. Under one concept, .com, .org, .net, or any of these new gTLDs would be owned exclusively by a given registrar. Under another proposal, these databases should be shared equally among everyone. There is a difference between moving your address and moving your long distance telephone carrier. It is important, and CASIE is adamant on its position, that there be possibility of these trademark second level domains. So if I want to move my domain from one registrar to another, I don't have to change it from Coca-Cola.com to Coca-Cola.firm. We don't believe that makes any sense whatsoever.
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Thank you for the time to testify today, and CASIE remains available for any other questions you have.
[The prepared statement of Mr. Douglas Wood follows:]
PREPARED STATEMENT OF DOUGLAS J. WOOD, EXECUTIVE PARTNER, HALL, DICKLER, KENT, FRIEDMAN AND WOOD, ON BEHALF OF THE COALITION FOR ADVERTISING SUPPORTED INFORMATION AND ENTERTAINMENT (CASIE)
The Issues Before this Subcimmittee
The controversy surrounding the protection and development of brand names and trademarks on the Internet is the subject of this Testimony and the Subcommittee's Hearing.(see footnote 3)
Trademarks and brand names are among the most valuable assets owned and/or developed and promoted by the American and global marketing communities. In many ways, the value of an established and respected brand name is immeasurable. While the Internet provides unprecedented means to increase global awareness of brand names, it also presents new challenges and threats to these assets on a global scale in diverse jurisdictions applying incompatible trademarks laws.
Therefore, these hearing are critical to the debate on the resolution of the many complicated trademark issues that challenge the future of the Internet as a viable commercial medium.
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Why CASIE is Testifying
CASIE is a coalition of the Association of National Advertisers, Inc. (''ANA'') and the American Association of Advertising Agencies (''AAAA''), two trade associations that collectively represent most of the major players in the global advertising and advertising agency industries. CASIE's purpose is to foster the growth of advertising supported information and entertainment on the Internet.
Based upon the latest estimates, ANA and AAAA members will spend more than $2 billion on advertising on the World Wide Web by the year 2000. Those numbers do not include the even higher investment in building and maintaining websites, expenditures that have been the major driving force in the growth of the World Wide Web service industry. In sum, ANA and the AAAA collectively represent an enormous amount of both the present and future investment in the Internet. And without that investment, it is quite possible that there would be no World Wide Web as we know it or commercial viability of the Internet.
The members of CASIE are not only global companies, but also own some of the most valuable global and regional trademarks and ''brands'' in the world. They are representative of the brand owners most affected by policies relating to the protection of trademarks on the Internet.
CASIE and Its Involvement in the Internet
ANA's membership is a cross-section of not only American industry, but most of the major global marketers, including retailers, manufacturers, and service providers. ANA has 225 corporate members and through them represents more than 7,400 separate advertising entities. Among its corporate members are such global giants as:
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United States-Based Members:
American Airlines; American Express; Anheuser-Busch; Apple Computer; AT&T; Bristol-Myers Squibb; Chase Manhattan Bank; Chevron; Chrysler Corp.; Citicorp; The Coca-Cola Co.; Colgate-Palmolive; Compaq; Delta Airlines; Digital; Dow Chemical Co.; DuPont; Eastman Kodak; Exxon; Federal Express; Ford Motor Co.; General Electric; General Motors; Grand Metropolitan; Hasbro; Hewlett-Packard; IBM; Intel; Johnson & Johnson; KPMG Peat Marwick; Lucent Technologies; MasterCard; McDonald's; Microsoft; M & M Mars Corp.; Mobil Oil Corp.; Motorola; Norelco; Northwest Airlines; Panasonic; Pepsico; Pfizer; Phillip Morris; Polaroid; Procter & Gamble; Reebok; RJR Nabisco; Rockwell International; Schering-Plough; Shell Oil; Smith Kline Beecham; Sprint; Texaco; Texas Instruments; Unocal; United Airlines; Upjohn; Viacom; Visa; Warner Brothers; Westinghouse; Xerox;
Allied Domecq; Bacardi; Bayer; Benckiser; Betts, Dearborn; BMW; Cadbury-Schweppes; Guinness; Heineken; The House of Seagram's; Hyundai LEGO; Loew's; Nestle; Nissan; Sega; Shiseido; Saab; Siemens; Sony Electronics; Unilever;
These marketers are among the most active users of the Internet. According to Fall 1996 numbers, 90% of ANA members reported having at least one website, with an average of 2.5 websites per company. Forty-nine percent of ANA members reported using the Internet for their company's intranet. In the last year, these percentages have only increased.
Page 101 PREV PAGE TOP OF DOC AAAA is the largest association of advertising agencies in the world. Similar to the ANA, its members are a cross-section of the advertising agency industry; local, national, and global. Among its members are the following U.S.-based global agencies:
Ammirati Puris Lintas; BBDO Worldwide; Bozell Worldwide; Campbell-Ewald Messner Vetere et al.; D'Arcy Masius Benton & Bowles; DDB Needham Worldwide; Grey Advertising; J. Walter Thompson Co.; Leo Burnett Co.; McCann-Erickson Worldwide; Ogilvy & Mather Worldwide; Saatchi & Saatchi; True North; Young & Rubicam;
The U.S. offices of other global agencies are members as well, including:
Bates Advertising (Bates Worldwide); DCA Advertising (Dentsu); Euro RSCG Tatham; Hakuhodo; Lowe & Partners/SMS (Lowe & Partners Worldwide); Publicis/Bloom (Publicis Communication); TBWA/Chiat Day (TBWA International); Wells Rich Greene (BBDP/GGT Worldwide);
AAAA's agencies represent many, if not most, of today's global marketers, both in the United States and throughout the world. As such, their interests and expertise are essential ingredients in the proper administration of the Internet. Their members also include some of the most creative and technically savvy people in the marketing industry.
Focus of CASIE's Testimony
Since January 1996, CASIE has been monitoring and evaluating the Internet issues which affect its members, including attending key meetings in Geneva, Switzerland, Washington, D.C. and New York City to meet with representatives of the three entities currently at the center of the debate regarding the future administration of the Internet. These entities are: (1) the interagency committee addressing global electronic commerce on the Internet chaired by Ira Magaziner, Senior Advisor to the President for Policy Development; (2) the interim Policy Oversight Committee (''iPOC'') of the now-defunct International Ad Hoc Committee (''IAHC''), proponent of the generic Top Level Domain Memorandum of Understanding (''gTLDMoU''); and (3) Network Solutions, Inc. (''NSI'') the contractor currently responsible for registering and administering commercial domain names in the United States.(see footnote 4)
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In these meetings, and through the experience of CASIE's members, CASIE has identified a number of issues which are critically important to its members' continued investment and participation in the Internet. Included among the many issues of concern to CASIE are protection of brand names and trademarks, the structure of Internet governance in the future, the selection of registrars to compete with NSI after its contract expires, the increasing registration of generic words as second-level domain names (''SLDs''), privacy rights in data obtained from consumers using the Internet, e-commerce encryption and security, copyright protection, and content restrictions.
As previously stated, this first issuethe protection and development of brand names and trademarks on the Internetis the subject of this Testimony and the Subcommittee's Hearing. It is important to note, however, that these other issues are also of critical importance; the regulatory and Internet communities are urged, at the appropriate time and in the appropriate forum, to thoroughly consider them as well.
Currently, the most important Internet trademark issues to CASIE's members are (1) brand development and protection, (2) domain name dispute resolution, (3) the effects of the proposed proliferation of new generic top-level domains (''gTLDs'') and (4) maintaining the portability of domain names when switching domain name registrars and/or Internet service providers (''ISPs'').
CASIE does not purport to have solutions to all of these issues. Instead, in this Testimony, CASIE articulates the concerns of its members and, where possible, endorses certain proposals which may lead to resolution of the issues. The Internet continues to evolve and our understanding must evolve along with it. The views expressed in this Testimony are preliminary views based on information available to date; however, CASIE's operational position may change, subject to developments in the industry.
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CASIE cautions this Subcommittee and all of the members of the Internet community to proceed slowly and carefully in addressing these issues. Unduly burdensome regulations could chill the substantial economic contributions of the advertising and marketing communities to the commercial development of the Internet.
Finally, CASIE urges all of the participants in the debate to recognize that technology may offer solutions far superior to hasty and restrictive over-regulation of the Internet. To date, the Internet has been a remarkably self-healing medium. Unlike traditional issues that have prompted government intervention to address concerns such as automobile safety and air quality, the Internet does not yet appear to require aggressive government oversight in order to improve its safety, security, accountability, or accessibility. We should not rush to regulate the Internet simply because regulation has been deemed necessary in different contexts in the past. Moreover, rapid changes in Internet technology will make it difficult, if not impossible, to promulgate effective, relevant legislation which can keep pace with the technology.
DEVELOPMENT AND PROTECTION OF TRADEMARKS ON THE INTERNET
I. BRAND PROTECTION
SUMMARY: Not all trademarks and brand names are created equal on the Internet and the protection to be afforded depends on the nature of the mark and a balancing of competing interests. Where possible, technological advances may provide solutions superior to regulation. In general, those unique, famous marks which are universally identified with one source, such as the COCACOLA mark, should receive the greatest protection. The owners of such marks should be able to prevent others from using their marks within every gTLD. Those marks which enjoy regional strength or fame should be protected to the extent that use by others could cause provable likelihood of confusion or dilution and to the extent that unjustified use by others limits the natural expansion of a brand into global markets. Finally, in those cases involving geographically diverse owners of identical marks with local reach, who have equal rights to a domain name, technological solutions, such as on-line directories, may work best.
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DISCUSSION: The most prevalent trademark debates on the Internet arises out of the registration of SLDs which function as, or incorporate, trademarks. CASIE's members are concerned about potential abuses of their trademarks and the denial of opportunities for using their brand names on the Internet.
Initially, domain names were intended to function as addresses, nothing more. The domain name trademark problems addressed by this Subcommittee might have been avoided if an Internet address were simply identified by the unique string of numbers assigned to it (known as the IP address) to direct the flow of data to the proper user.
A minority of Internet users have suggested ''turning back the clock'' to eliminate domain names and use only numeric IP addresses much like telephone numbers. While this solution is superficially appealing (if it is technologically possible), the proliferation of and enormous equity in domain names makes this suggestion unacceptable. Domain names have become extremely valuable commodities as the result of the owners' significant investments in their development and these owners will be loathe to part with them now. Nor is there any reason to take such a draconian approach. Instead, the focus must be on finding workable solutions to the trademark problems attendant to domain names and to use the technology that underpins the Internet as the source of the solutions.
The present trademark controversy over SLDs can be roughly divided into four categories, each of which raises different issues, requiring a careful balancing of how far to go to protect them. The firstand easiestcategory consists of those arbitrary or fanciful marks which are famous globally and are universally identified with one owner. Examples include the COCACOLA, PEPSICOLA, REEBOK, NIKE, KODAK, POLAROID, SEIKO, TIMEX, PANASONIC, and SONY marks.
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CASIE believes, and U.S. trademark law would support this belief, that the owner of such a mark should have the right to use it with any appropriate gTLD and, more importantly, the owner should have the right to prevent anyone else from using the mark within any gTLD. Thus, The Coca-Cola Company should be able to prevent the registration of the COCACOLA second level domain name or any confusingly similar mark (such as COCACOLA or COKE) within the gTLDs .COM, .NET, .ORG, etc. Traditional trademark principles serve well in this category because use of the mark by another would cause consumer confusion and/or could dilute the mark.(see footnote 5)
The second category consists of those strong, even famous, marks which enjoy regional or national recognition, but are not known globally. In some cases brand names owned by global marketers are used on a regional, rather than global, basis despite the worldwide markets addressed by those marketers. For example, Exxon Corporation uses the EXXON mark in the United States for gasoline, but uses the ESSO mark for the same product in Europe. Nonetheless, these marks may have asset values as high as some global marks.
What recourse should the owners of strong regional marks have if someone seeks to register a similar or identical domain name? At first blush, many agree that a company such as Exxon probably should have the exclusive right to register its EXXON mark as an SLD within .COM, the primary commercial domain currently used on the Internet. But should a company such as Exxon be able to prevent the registration of the same or similar mark in other domains, e.g., .EDU or, if the proposed additional gTLDs are created, .ARTS or .NOM? Is there a likelihood of confusion (the standard test in the U.S. for trademark infringement) or the risk of dilution of the goodwill associated with the mark (a standard only recently adopted on a federal basis in the U.S.(see footnote 6))? Conversely, would allowing a conflicting use unreasonably limit a company's expansion of an established regional brand into the global market?
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There is no clear answer to these questions and a further analysis of the facts only makes these questions harder to resolve. For example, what if two identical marks exist for different products and each mark has regional strength or strength for certain goods? For instance, who should be entitled to register DELTA.COM (Delta Airlines, Delta Faucets, or its present owner, deltaComm Development, an Internet service provider), YALE.COM (Yale University, Yale Lock Company, or its present owner, Yale Materials Handling Company, a forklift manufacturer), or AMERICAN.COM (American Airlines, American Greetings, or its present owner, American Internet, a company that services computer networks)?
One suggested solution for this last category is the creation of a directory, technology permitting, similar to a telephone directory, which would allow Internet users to choose from a variety of listings which share the same name. For instance, when a user types DELTA.COM into a search engine, the user would be presented with a directory of all registered ''Delta'' entities from which to choose.(see footnote 7)
The third category consists of the variety of marks used on products or services throughout the world, none of which are necessarily strong enough to justify precluding registrations by others. Examples of these include suggestive marks such as RELIABLE for repair shops, transportation services, courier services, or house cleaning services(see footnote 8) or BEAUTY for make-up, hair salons, or photography studios.(see footnote 9) In those cases, should one trademark owner be able to prevent others from registering domain names using the mark?
Page 107 PREV PAGE TOP OF DOC The reality is that, to date, suggestive domain names have been registered on a first come, first servedor, more accurately, first come, only servedbasis. Thus, the company that enters the Internet marketplace first obtains an inexpensive monopoly on an address that, if examined under traditional trademark theories, would never be available on an exclusive basis.
The final category are those domain names which are entirely descriptive of the category they embrace. Examples include SOAP.COM for soaps and detergents(see footnote 10) or TOYS.COM for toy manufacturers and retailers.(see footnote 11) Others are generic words that seem totally misplaced in their association. ADVERTISING.COM for example, is owned by an on-line dating service.(see footnote 12) It is impossible to justify under any accepted principals of trademark law that any one company should have exclusive rights to such a domain name. In this instance, the directory solution is particularly attractive.
CASIE does not offer a simple solution to all of the brand and trademark protection problems which are illustrated in these categories. As the directory example demonstrates, however, new technology may be an integral part of any solution. In considering how to address these issues, CASIE urges exercising caution, recognizing that the amount of protection granted to a trademark owner must be balanced against the weight of the interests at stake and that a ''one size fits all'' solution to trademark protection would likely prove prohibitive to any future investment in the Internet by brand owners.
II. DOMAIN NAME DISPUTE RESOLUTION
Page 108 PREV PAGE TOP OF DOC SUMMARY: Brand owners want an efficient, inexpensive, reliable, and consistent method to resolve second level domain name disputes. The current combination of NSI's dispute resolution procedure with conflicting court opinions based on different countries' trademark laws is cumbersome and expensive and has created disparate and unfair results. An administrative challenge procedure based on the model proposed in the gTLDMoU may be preferable, but before it is workable, any system of arbitration must provide arbitrators with the authority to engage in fact-finding, to alter second level domain names to resolve disputes, and to enforce their decisions. Finally, a realistic ability to resort to judicial resolution must be available, at least in the short term, while the administrative process evolves.
DISCUSSION: To date, trademark owners have resorted to a variety of methods to attempt to protect their rights regarding domain names, including instituting suits in local courts throughout the world or submitting to NSI's dispute resolution procedure. The results generated by these competing forums have created a patchwork of conflicting opinions based on different substantive bodies of trademark law.
The current NSI domain name dispute resolution policy is not the answer to this problem because it is inequitable and contravenes accepted principles of trademark law. In fact, earlier this year, the International Trademark Association's Internet Subcommittee released a paper which ''propose(d) that the current NSI Dispute Policy be recognized as a failure and eliminated, (and) that domain name disputes be left to the courts.'' In brief, NSI's current dispute resolution procedure automatically favors a trademark owner, even when (1) the cited registration is not for Internet-related services, (2) the challenger is not using the mark on the Internet, or (3) the mark at issue has very limited notoriety. Through rigid application of its policy, NSI may suspend SLDs with disregard for domain name registrants' rights, which, in our view, could damage the registrants' businesses and brand equity.
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The unsatisfactory results of the last five years demonstrate that NSI's approach is unacceptable. Resort to local courts would continue to be expensive and slow and would generate conflicting results under the radically different trademark laws of various countries.
On the other hand, the gTLDMoU recommends establishing a self-regulatory process administered by the World Intellectual Property Organization (''WIPO''), in which owners of international trademarks can bring domain name disputes in on-line proceedings before Administrative Challenge Panels (''ACP'').(see footnote 13)
The WIPO-administered approach is a good beginning but should not be considered a finished work. In general, an alternative dispute resolution process is attractive because it would offer consistency and would be relatively inexpensive. There are, however, a number of issues which remain to be resolved if such an administrative process is undertaken:
(1) Any administrative body or arbitrator must have the authority to engage in fact-finding. This function will be particularly important in cases involving ''cybersquatters,'' those registrants of domain names who do not have a legitimate interest in a mark, but hold the registration for ransom from the legitimate owner of the mark. In those cases, the trademark owner needs immediate and inexpensive access to a body which can determine the rights in the domain name.
Such a solution is far preferable to the suggestion of some that potential domain name registrants be required to demonstrate rights in the second-level domain name before it is registered or to wait for a registrar to determine rights in the name before it is registered. It would be counterproductive, anticompetitive, and unfair to slow down the domain name registration process for the sake of stopping the registration of infringing names. At most, CASIE would be amenable to requiring potential registrants to sign declarations stating that they believe they are entitled to a particular domain name and that, to the best of their knowledge, no one else has superior rights to the name (much like a trademark application).
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(2) In those categories discussed above in which more than one party may have legitimate rights to a domain name, an arbitrator should have the authority to adjust the domain name to remedy the situation. For example, a challenge between competing domain name owners might be resolved by altering the second level domain names. Or, if additional gTLDs are created, the competing SLDs could be moved to different gTLDs which reflect the owners' different products or services.
(3) Most importantly, an arbitrator must have the authority to enforce its decisions. It is not clear at this point whether it would be sufficient for the arbitrator to have enforcement ability only over the domain names or whether the arbitrator also would need enforcement power over the parties, such as the ability to mandate actions or levy fines. This subject requires substantial debate and attention.
(4) Finally, it is important to stress that, given the evolving nature of the gTLDMoU proposal, local courts must retain jurisdiction to resolve disputes de novo, should any party contesting ownership of a second level domain name feel the administrative procedure denied them due process or failed to address material issues. While this availability necessarily retains some of the cumbersome and expensive aspects of the present system, it would be foolish to assume brand owners are prepared to leave decisions regarding such valuable assets to an unproven system, regardless of how attractive it may be in theory. It remains unclear to CASIE how effective local courts will be in resolving disputes between companies and individuals who are dissatisfied with the gTLDMoU alternative dispute resolution procedures. That lack of clarity must be addressed.
Page 111 PREV PAGE TOP OF DOCIII. gTLD PROLIFERATION AND DOMAIN NAME PORTABILITY
SUMMARY: The addition of new gTLDs may be desirable as a technological and business solution to current problems with trademarks on the Internet. However, the creation of new gTLDs should be gradual and controlled to prevent a proliferation of gTLDs which contribute to, rather than lessen, consumer confusion. If and when new registrars are permitted to compete with NSI, all of the gTLDs should be available to all of the registrars in a shared database so that owners' domain names are portable between registrars. This portability will ensure that changes in registrars are transparent to the public and will enable domain name owners to preserve the equity they have created in their domain names.
DISCUSSION: Currently, NSI administers the registration of SLDs in the three commercial gTLDs: .COM, .NET and .ORG. Registrants can choose which gTLD they want to use, although each gTLD was intended to operate as a designator of the type of entity registering the domain name. In practice, however, NSI has not uniformly prohibited a company or individual from registering in any of the gTLDs, a practice that has been one of the primary reasons cybersquatters have been so successful.(see footnote 14)
For different reasons, both the gTLDMoU and NSI recommend the creation of additional gTLDs. In theory, adding gTLDs may be an effective solution to certain trademark issues on the Internet. For example, with the addition of the .ARTS gTLD for entities offering cultural and entertainment activities and .FIRM for commercial business entities, the Getty Museum could register the domain name GETTY.ARTS and would not be likely to cause confusion with a Getty Oil Company domain name at GETTY.FIRM. In such a case, the technology would obviate the need for regulation. However, in order for this solution to be effective, entities must use the proper gTLD so that consumers can draw reliable inferences about an entity from its gTLD.(see footnote 15) It is important to remember, however, that the simple solution of adding gTLDs to resolve disputes is not the panacea it may at first appear. Owners of internationally famous marks and owners of strong, fanciful regional marks have justified concerns that the uncontrolled addition of new gTLDs may make their trademark policing and enforcement efforts complicated and costly and may, in fact, open the door to a new generation of cybersquatters.
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As in almost all things, the gTLDMoU's and NSI's respective approaches to the addition of gTLDs are radically different. For CASIE's purposes, the gTLDMoU proposal is far superior to that of NSI.
The gTLDMoU proposes the creation of seven new gTLDs(see footnote 16)
.FIRMfor businesses or firms
.STOREfor businesses offering goods to purchase
.WEBfor entities emphasizing activities related to the World Wide Web
.ARTSfor entities emphasizing cultural and entertainment activities
.RECfor entities emphasizing recreation/entertainment activities
.INFOfor entities providing information services
.NOMfor those wishing individual or personal nomenclature
Under the gTLDMoU, additional gTLDs would be created on a controlled, as-needed basis determined by the iPOC.
Page 113 PREV PAGE TOP OF DOC The gTLDMoU plan also calls for the addition of new registrars to compete with NSI's domain name registration services via a shared database of all SLD registrations worldwide. The registrars would have to meet certain financial and other eligibility requirements. In fact, the iPOC has already met with potential registrars and currently is in the process of appointing the registrars. The proposed registrar oversight organization, the Council of Registrar (''CORE''), will be holding its first annual meeting in Tokyo, Japan, on November 8, 1997.
One of the most significant aspects of the gTLDMoU plan is that SLDs are ''portable''a company can choose to use any registrar to register and/or administer its SLD and can change registrars at any time. Such a move would not require a change in Internet address and would be transparent to consumers, much like a change in long-
distance telephone carriers. No registrar would have exclusive rights to register domain names in a gTLD: every registrar could register domain names in every available gTLD.
By contrast, NSI proposes that, upon the expiration of its contract with NSF, NSI would keep and ''own'' the .COM, .NET and .ORG gTLDs and all of the domain names registered in those gTLDs.(see footnote 17) Marketplace demands, without meaningful administrative controls, would dictate whether new registrars and new gTLDs are formed to compete with NSI. If new registrars do materialize, they would not be allowed to register domain names in NSI's gTLDs, but would have to create their own gTLD, which they could promote to potential registrants.
Any proposal, including NSI's, that does not allow complete portability is unacceptable to CASIE for three reasons. First, it would allow for virtually uncontrolled proliferation of gTLDs. As a result, conflicting gTLDS could emerge to cause greater consumer confusion, rather than lessen it. For instance, if an independent registrar created the gTLD .TIME and another registrar created the gTLD .WATCH, consumers would not know within which gTLD the owner of the TIMEX mark had registered. In addition, the TIMEX mark owner would bear the burden of monitoring the addition of new registrars and new gTLDs and might have to maintain multiple redundant registrations.
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Second, the failure of such plans to impose minimum eligibility requirements on registrars would contribute to the instability of the electronic marketplace. If a registrar went out of business because it was undercapitalized or because only a small number of website owners wanted to use its gTLD, any domain names registered with the registrar could disappear overnight. Thus, a website under, e.g., a .DRINK domain name might be here today, but gone tomorrow. This lack of security would discourage investment in brand name protection and development on the Internet.
Finally, the lack of portability of an SLD together with its gTLD poses a significant problem for brand owners. Since brand names are often embedded in the domain name, changes are undesirable. In addition, the task of notifying customers of a change should a registrant change to another gTLD is unnecessary and cumbersome. Under NSI's plan, second level domain names would not be portable among registrars unless an owner is (1) willing to change the gTLD and (2) the domain name is available within the new gTLD. To illustrate the differences between the gTLDMoU and NSI's plans, under the gTLDMoU, The Coca-Cola Company could register the domain name COCACOLA.COM with any registrar and/or ISP and later change registrars or ISPs without notifying its customers or changing any of its materials on the Internet. Under the NSI plan, The Coca-Cola Company could register the domain name COCACOLA.COM only with NSI. If The Coca-Cola Company later decided to switch registrars, it would have to switch gTLDs, e.g., to COCACOLA.FIRM (or whatever gTLD its new registrar owned), notify its customers, and make all of the necessary programming and creative changes on its Internet and supporting materials. Under the gTLDMoU proposal, a change in registrars would be transparent to the consumer. The result is better for both the brand owner and the public.
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CASIE's primary concern is that the Internet be a stable medium for the delivery of product and service information and commercial messages to consumers, as well as a secure environment for global commerce. Any system must respect brands, minimize consumer confusion, and avoid unnecessary administrative expenses in doing so.
CASIE would like to thank the Subcommittee for this opportunity to present its views and remains at the Subcommittee's disposal should any of its members or staff have any questions regarding CASIE's submission and testimony.
The following are explanations for the acronyms used in CASIE's Testimony:
ACP Administrative Challenge Panels
ACPs are the alternative dispute resolution panels proposed in the gTLDMoU to resolve domain name disputes. Under the gTLDMoU plan, the ACPs would be administered by WIPO.
CORE Council of Registrars
CORE is the domain name registrars oversight committee proposed in the gTLDMoU.
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gTLD Generic Top Level Domain
gTLDs are the domain names that appear ''after the dot,'' for example, .COM, .ORG, .NET, .EDU, .GOV and .MIL.
gTLDMoU Generic Top Level Domain Memorandum of Understanding
The gTLDMoU is the proposal for future governance of the Internet promulgated by the IAHC in May 1997, and offered for signature by parties interested in endorsing the proposal.
IAHC International Ad Hoc Committee
The IAHC was formed several years ago by various trade associations and quasi-governmental organizations concerned about future governance of the Internet. After completing the gTLDMoU, the IAHC was dissolved. Its successor is the iPOC.
iPOC Interim Policy Oversight Committee
The iPOC is the organization proposed by the gTLDMoU to be responsible for the oversight and administration of the Internet. The iPOC has replaced the IAHC and is in place until the full POC is appointed.
ISP Internet Service Providers
Page 117 PREV PAGE TOP OF DOC ISPs are companies that provide initial access to the Internet network by users such as consumers and corporations.
NSI Network Solutions, Inc.
NSI is the company which currently holds an exclusive contract with NSF to register all SLDs in the United States under the .COM, .ORG and .NET gTLDs. NSI's contract with NSF expires on March 31, 1998, although NSF does have an option to extend the contract for six months.
NSF National Science Foundation
NSF is an agency of the United States government dedicated, in part, to the development of new business in the science and technology sector. NSF contributed to the early development of the Internet and has appointed the various entities which currently administer the Internet, including NSI. NSF has announced that, upon the expiration of its contract with NSI on March 31, 1998, it will not renew the NSI contract and plans to relinquish control of the Internet to the world community, although there are rumors that NSF may exercise its option to extend the NSI contract for six months.
SLD Second Level Domain Name
SLDs are the identifying letters and numbers that immediately precede the gTLD in an Internet address, e.g., COCACOLA.COM.
WIPO World Intellectual Property Organization
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WIPO is an arm of the United Nations based in Geneva, Switzerland, which reviews and proposes global laws and treaties relating to intellectual property. Under the gTLDMoU, WIPO would administer the ACPs.
Mr. COBLE. Thank you, Mr. Wood.
Gentlemen, thank you all for your testimony. And I apologize to Mr. Stimson and Mr. Kirk again because I had to momentarily leave. But I will examine your statements in more detail subsequently.
Mr. Battista, you indicated that many people anticipate or prefer immediate results and immediate solutions. We live in an era now when you want instant satisfaction to all problems. Earlier today, the commissioner indicated that we were not ready to mark up today. Well, in this city, generally, and on this Hill specifically, when people start speaking in terms of marking up, the implication is that there is legislation waiting to be dropped in the hopper. Don't anyone have any anxiety surrounding that fear today. That iswe are not there yet. And I don't think we should be there yet, unless someone by dark of night has gone out and hammered out legislation unknown to me. So with that in mind, let me visit with you for a minute or two.
Mr. Battista, the responses to the Department of Commerce inquiry attached to your written testimony indicate that you believe that until legislation or case law defines the relationship between the various intellectual property rights and domain names, there can be no answer as to what trademark rights, if any, should be protected on the Internet vis-a-vis domain names. Do you believe it is wise for this subcommittee to prepare legislation which does define those relationships?
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Mr. BATTISTA. Mr. Chairman, we would agree with Mr. Lehman that spoke earlier, that we are still in that evolutionary role. And we believe the testimony that the size of the problem at the present time impacting a key part of the commercial enterprise and trademark owners and domain name holders is not of the scope that requires legislation at this time.
We believe that the precedents now being established, some of which, the dispute policy we have put in place, are starting to make it clear to both domain name owners and trademark owners that there are two sides of the story and that intellectual property rights must be respected in any commercial environment.
So, in conclusion, at this time we do not believe that legislation is the avenue, but we do believe that the evolution of core precedent is the right approach.
Mr. COBLE. Mr. Kirk, some would argue that the market will take care of itself as the Internet evolves. And, in fact, we see some evidence of that in particular cases. The implication to this position is that Congress should stay out of the way and out of the fray. What are your thoughts on this?
Mr. KIRK. Mr. Chairman, we would agree with the witnesses that have spoken today that it is premature for legislation. The market is developing; the legal precedents are developing, at least in the United States; the antidilution statute, et cetera, are all moving in the right direction.
Page 120 PREV PAGE TOP OF DOC However, there does remain the problem that trademark owners are being put to unnecessary expense; albeit a few cases, still they are being put to that expense. There is the problem of trademark owners who share the same mark for different goods and services or share the same mark in different territories.
It is in that direction that we believe that more work should be done, looking at the possibility of a directory system. And we believe that could be implemented along the lines that Mr. Doug Wood just indicated, in a way that the discrimination of the registration system could take into account some of the problems created registering a trademark as a domain name by simply putting a dash or a ''.'' or ''US'' in the front or the rear of the name. It would certainly seem that certainly technology is sufficiently advanced today that all of these could be taken care of in a very quick, up-front screening procedure that would not delay the process at all.
Mr. COBLE. And I am not in disagreement with that conclusion. I would imagine that would probably be close to the unanimous opinion in this hearing room.
Mr. Stimson, your written testimony indicates an endorsement of the IAHC plan. What role, if any, do you see this subcommittee having in endorsing this or any other proposed plan for the future of assigning domain names? And we sort of envisioned a little bit the shadow of this all morning. But I will be glad to hear from you.
Mr. STIMSON. Well, Mr. Chairman, I want to emphasize that INTA has endorsed the IAHC plan as the best plan which has currently been presented. We do have a number of concerns with the IAHC plan, specifically on the issue of creating new gTLDs. Also we have some concerns about the dispute resolution provisions. And, INTA has put forward some other proposals. As I mentioned in my testimony, we are very willing to look at other proposals because we think IAHC is definitely not a perfect proposal. There is room for improvement.
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I would just, at the expense of perfect harmony or the danger of having perfect harmony on the panel, just echo what has been said: that I don't see this is an issue for the subcommittee at this time. I certainly would not urge them at this point to endorse a specific plan, because I think that plans are being developed, and there may well be improvement on the IAHC plan. I think there is U.S. Government involvement already in the system, and so there may be involvement by this subcommittee or the Science Subcommittee in deciding what the government's role should be in the Internet. But on the specific issue of domain names and trademarks I don't see anything that the subcommittee needs to do at this point.
Mr. COBLE. Thank you Mr. Stimson. As an aside, on my way back from my brief departure earlier, I stopped in the men's room. Oftentimes you can exchange some good ideas in the men's room. And my friend, I think he was with NSI, he and I were talking about today's hearing. And I thought it was appropriate that he used these words. He said: I think the importance of today's hearing is that we flush out the problems.
And I thought that was appropriately timed. And that is why we are here. We are here to flush out problems and issues and engage in dialogue. And I think, with that in mind, I think it is been a good hearing.
Mr. John Wood, share with us if you will, some idea, or your opinion of the difficulties a unified international registry system faces in terms of dispute resolution, terminology, jurisdiction for disputes, foreign and common law interpretation, or other similar ancillary problems.
Page 122 PREV PAGE TOP OF DOC Mr. JOHN WOOD. Thank you, sir. I think that it is very important to realize that we don't live in a vacuum, but that trademark law has been developed on the national basis, both in terms of enablement and enforcement.
The first issue that arises is clearly the issue of jurisdiction and venue. Where is it that one gains redress? If we take different situations for example, we have a domain name holder like yourself that was in the UK; Network Solutions is obviously placed here in the United States. The question that arises, then, is one of extraterritorial reach, a question of constitutionality, and a question of, quite candidly, the cost of flying either one party from one country to the other.
There is also, obviously, the question of the level of rights, the types of rights that the individuals have. The issues are, for example, does one of those parties have a strong mark or a less strong mark, the issue of famous marks and definitions.
So if one looks at, first and foremost, the issue of where is this going to occur, you immediately run into the issue of sovereignty and constitutionality and also the issue of due process. Systems operate at different speeds and in different ways.
If one then looks at the parties involved, you will find that they have state marks, in some situations common law rights. Those are different and placed in different parts of the world on a different level than, say, a Federal trademark.
In our own case, clearly, what the system seems to suggest is the fact that you need a Federal trademark registration. The first suggestion was that you had to have some kind of demonstrable right. However, how that may be demonstrated may be different in different jurisdictions.
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The next level of questions is obviously the issues that relate to how the case could be resolved. If we use arbitration panels, what will be the criteria for those arbitration panels? Will you have the ability to gain redress? Will it cut your rights off from actually going into your national courts? Very quickly, because this is a global media, we could escalate the costs and run into dead ends. So there is a real need to recognize that there will need to be a tiered system that recognizes that small players, such as ourselves, and large players need to be on a free and fair and equal playing field.
So that, therefore, there needs to be choice so that redress is quick in terms of, say, a piracy situation, but is fair where it concerns, say, a small player like ourselves in the arena with, say, a large famous trademark holder, or in an arena that is far from part of the world, say Singapore.
So there are a large number of issues which really mean that we need to stop, take stock, and look at the complexities of it.
Another aspect is arbitration. Some countries are not overwhelmingly disposed to arbitration; for example, Belgium. So we have to consider the ways in which rights can be fairly addressed, but in speedy process, because the Internet does demand that. Thank you.
Mr. COBLE. Thank you, sir.
Mr. Wood, I previously addressed you or introduced you as Doug. Do you prefer Doug or Douglas?
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Mr. DOUG WOOD. Doug is fine.
Mr. COBLE. Doug.
Mr. DOUG WOOD. Yes, sir.
Mr. COBLE. Mr. Doug Wood, let me ask you a question. Incidentally, I think everyone is entitled to be called the name of his choice. That is why I ask you that. If I were a Doug, I would be a Doug, too, I think.
Mr. DOUG WOOD. Interestingly, there is an old joke in the advertising industry that if you are an account executive, and your client is introduced to you, and the client says to you, ''I am sorry, what was your name?'' the proper answer is, What would you like it to be?
Mr. COBLE. I can't improve on that.
Mr. Doug Wood, in your written testimony, you described the Internet as a remarkably self-healing medium. I am revisiting this issue. Would you say the organizations you represent are more concerned, A, about government interference in this area; or, B, is there a perceived need for some governmental involvement to ensure the integrity of trademarks?
Mr. DOUG WOOD. Oh, I think it is clearly A, Mr. Chairman, that we are concerned with government intervention at this stage of the game. There are some very legitimate proposals that are on the table from NSI and from the IAHC and others who have made some suggestions. There is a great deal of dialogue going on, and we believe that at least in the short-term, if given time, that a lot of these issues will be resolved.
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One of the things that I think this committee can do to help that process is to urge the National Science Foundation to extend the network Solution, Inc. contract for an additional six months. I believe under their contract they can extend it another six months, giving us more time as an industry, and move back this March deadline to at least another six months, allowing for more time. But absolutely, I think it is A; we believe this system should be allowed to evolve with some time now.
Mr. COBLE. Well, gentlemen, you all have been very helpful and I appreciate you for coming this morning. I don't want anybody to think that we have slammed the door on legislation. I am not saying that there absolutely won't be any. But we must visit this in a deliberate, thorough manner and continue to flush out the problems, as my friend and I discussed earlier. And with your help I hope that we will come up with perhaps, Mr. Battista, not an immediate solution, but a solution with which we can all live.
I thank you all for your testimony. I thank those in the hearing room for your attendance. This concludes the Oversight Hearing on Internet Domain Name Trademark Protection. The record will remain open for one week, so if you all have any additional information you would like to submit to us, you have seven days in which to do that.
Thank you again. The subcommittee stands adjourned.
[Whereupon, at 11:40 a.m., the subcommittee adjourned.]
A P P E N D I X
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Material Submitted for the Hearing
INSERT OFFSET RING FOLIOS 115 TO 134 HERE
[The appendix material is being held in the subcommittee's file.]
INTERNET DOMAIN NAME TRADEMARK PROTECTION
COURTS AND INTELLECTUAL PROPERTY
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED FIFTH CONGRESS
Page 127 PREV PAGE TOP OF DOCFIRST SESSION
INTERNET DOMAIN NAME TRADEMARK PROTECTION
NOVEMBER 5, 1997
Serial No. 62
Printed for the use of the Committee on the Judiciary
For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
COMMITTEE ON THE JUDICIARY
HENRY J. HYDE, Illinois, Chairman
F. JAMES SENSENBRENNER, Jr., Wisconsin
BILL McCOLLUM, Florida
GEORGE W. GEKAS, Pennsylvania
HOWARD COBLE, North Carolina
LAMAR SMITH, Texas
STEVEN SCHIFF, New Mexico
ELTON GALLEGLY, California
CHARLES T. CANADY, Florida
Page 128 PREV PAGE TOP OF DOCBOB INGLIS, South Carolina
BOB GOODLATTE, Virginia
STEPHEN E. BUYER, Indiana
SONNY BONO, California
ED BRYANT, Tennessee
STEVE CHABOT, Ohio
BOB BARR, Georgia
WILLIAM L. JENKINS, Tennessee
ASA HUTCHINSON, Arkansas
EDWARD A. PEASE, Indiana
CHRISTOPHER B. CANNON, Utah
JOHN CONYERS, Jr., Michigan
BARNEY FRANK, Massachusetts
CHARLES E. SCHUMER, New York
HOWARD L. BERMAN, California
RICK BOUCHER, Virginia
JERROLD NADLER, New York
ROBERT C. SCOTT, Virginia
MELVIN L. WATT, North Carolina
ZOE LOFGREN, California
SHEILA JACKSON LEE, Texas
MAXINE WATERS, California
MARTIN T. MEEHAN, Massachusetts
WILLIAM D. DELAHUNT, Massachusetts
Page 129 PREV PAGE TOP OF DOCROBERT WEXLER, Florida
STEVEN R. ROTHMAN, New Jersey
THOMAS E. MOONEY, Chief of Staff-General Counsel
JULIAN EPSTEIN, Minority Staff Director
Subcommittee on Courts and Intellectual Property
HOWARD COBLE, North Carolina, Chairman
F. JAMES SENSENBRENNER, Jr., Wisconsin
ELTON GALLEGLY, California
BOB GOODLATTE, Virginia
SONNY BONO, California
EDWARD A. PEASE, Indiana
CHRISTOPHER B. CANNON, Utah
BILL McCOLLUM, Florida
CHARLES T. CANADY, Florida
BARNEY FRANK, Massachusetts
JOHN CONYERS, Jr., Michigan
HOWARD L. BERMAN, California
RICK BOUCHER, Virginia
ZOE LOFGREN, California
WILLIAM D. DELAHUNT, Massachusetts
MITCH GLAZIER, Chief Counsel
Page 130 PREV PAGE TOP OF DOCBLAINE MERRITT, Counsel
VINCE GARLOCK, Counsel
DEBBIE K. LAMAN, Counsel
ROBERT RABEN, Minority Counsel
C O N T E N T S
November 5, 1997
Coble, Hon. Howard, a Representative in Congress from the State of North Carolina, and chairman, Subcommittee on Courts and Intellectual Property
Battista, Gabriel A., Chief Executive Officer, Network Solutions, Inc.
Kirk, Michael K., Executive Director, American Intellectual Property Law Association
Lehman, Hon. Bruce A., Assistant Secretary of Commerce and Commissioner of Patents and Trademarks, Patent and Trademark Office, United States Department of Commerce
Stimson, David, President, International Trademark Association
Page 131 PREV PAGE TOP OF DOC Wood, Douglas, Executive Partner, Hall, Dickler, Kent, Friedman & Wood, on behalf of the Coalition for Advertising Supported Information and Entertainment (CASIE)
Wood, John, Senior Internet Consultant, Prince, PLC
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
Battista, Gabriel A., Chief Executive Officer, Network Solutions, Inc.: Prepared statement
Kirk, Michael K., Executive Director, American Intellectual Property Law Association: Prepared statement
Lehman, Hon. Bruce A., Assistant Secretary of Commerce and Commissioner of Patents and Trademarks, Patent and Trademark Office, United States Department of Commerce: Prepared statement
Stimson, David, President, International Trademark Association: Additional information
Wood, Douglas, Executive Partner, Hall, Dickler, Kent, Friedman & Wood, on behalf of the Coalition for Advertising Supported Information and Entertainment (CASIE): Prepared statement
Wood, John, Senior Internet Consultant, Prince, PLC: Prepared statement
Page 132 PREV PAGE TOP OF DOC
Material submitted for the hearing
(Footnote 1 return)
(Footnote 2 return)
Section 43 (C) of the Lanham Act, 15 U.S.C. §1125 (C); Hasbro cite.
(Footnote 3 return)
Many of the acronyms used on the Internet are confusing. To assist the reader, attached is an Appendix explaining the acronyms referred to in this Testimony.
(Footnote 4 return)
As the Subcommittee is no doubt aware, the National Science Foundation (''NSF'') has announced that it does not intend to renew its contract with NSI upon its expiration in March, 1998, but instead intends to transfer responsibility for the Internet to the world community. There are also unconfirmed rumors that NSF will extend the NSI contract for six months. CASIE supports this extension so that decisions that need to be made are considered without pressure of an impending deadline.
(Footnote 5 return)
Of course, this discussion presupposes that the mark in question is easily categorized as unique, famous, and global. Deciding which marks qualify for such protection can be very complicated and is beyond the scope of this Testimony.
(Footnote 6 return)
Federal Trademark Dilution Act, 15 U.S.C. §1125(c) (1996).
(Footnote 7 return)
An interesting example of a directory approach appears at CLOTHING.COM, a website that claims to link to over 500 clothing sites.
(Footnote 8 return)
RELIABLE.COM is presently owned by a general office supply company.
(Footnote 9 return)
Interestingly, BEAUTY.COM is owned by a broker of Internet domain names. At its website, it claims that the average sale price of names that it has brokered is $4,855 and that the minimum bid it accepts is $1,000.
(Footnote 10 return)
SOAP.COM is presently owned by Hill Manufacturing Company, an Atlanta based office services company that supplies, among other things, cleaning products.
(Footnote 11 return)
TOYS.COM is currently owned by an on-line toy store.
(Footnote 12 return)
Perhaps the most extreme example of warehousing generic terms can be found at the website of Imediat Digital, an entity that describes itself as a design company. It claims to own: cologne.com, makeup.com, perfume.com, exercise.com, vitamins.com, and automobile.com, among many others.
(Footnote 13 return)
There are also options for arbitration and mediation in the proposed WIPO proceedings. These options, however, require the consent of both parties. The ACP procedure is a mandatory first step under the gTLDMOU and is therefore the centerpiece of the proposal.
(Footnote 14 return)
In addition, each country has been assigned an ISO 3166 two-letter country code gTLD, such as .GR for Germany, .JP for Japan and .US for the United States. However, the vast majority of commercial domain names do not include these codes and are unlikely to do so in the future.
(Footnote 15 return)
Under this approach, the gTLDs would function as the International Classes of goods and services function for trademark registrations.
(Footnote 16 return)
Based on recent questionnaires published by the iPOC, there is reason to believe that these seven new gTLDs may be modified or that additional gTLDs, e.g., .XXX, will be added. This memorandum, however, proceeds under the assumption that these seven new gTLDs will be the initial additions.
(Footnote 17 return)
At some public seminars conducted by organizations interested in the issues at hand, NSI representatives have intimated that NSI would be willing to share the present gTLDs, but it is unclear what their concept of sharing entails or how their plan would be implemented.