Legal and Regulatory Issues in the Information Economy/Domain Name Disputes

What are domain names?
Domain names provide the address of companies in the Internet and are equivalent to the business address in the physical world. As more and more companies use the Internet, the number of disputes arising from the use of domain names is increasing as well.

Domain names are divided into hierarchies. The top-level of the hierarchy appears after the last dot (.) in a domain name. In “microsoft.com”, the top level domain name is .com, the most common top-level domain name, indicating that the domain name is owned by a commercial enterprise. Other common top-level domain names are .org (for non-profit organizations), .net (for network and Internet related organizations), .edu (for four-year colleges and universities), and .gov (for government entities).

Aside from these generic domain names, each country has a unique top-level domain name. For instance, .ca indicates a domain in Canada, and .ie indicates an Irish domain.

When and how can disputes over domain names arise?
The disputes that arise over domain names involve “second level” domain names, which refer to the name directly to the left of the top-level domain name in an Internet address. For instance, in the address “www.microsoft.com”, the second level domain name is Microsoft.

Two identical second level domain names cannot coexist under the same top level domain. For example, even though both the Delta Faucet Company and Delta Airlines would like the “delta.com” domain name, only one Delta company can have delta.com. Unfortunately for the Delta Faucet Company, that Delta company is Delta Airlines. Therefore, Delta Faucet Company must use deltafaucet.com.

Some well publicized examples of domain name disputes are:


 * mcdonalds.com - This domain name was taken by an author from Wired magazine who was writing a story on the value of domain names. In his article, the author requested that people contact him at ronald@mcdonalds.com with suggestions on what to do with the domain name. In exchange for returning the domain name to McDonalds, the author convinced the company to make a charitable contribution.
 * micros0ft.com - The company, Zero Micro Software, obtained a registration for micros0ft.com (with a zero in place of the second ‘o’), but the registration was suspended after Microsoft filed a protest.
 * mtv.com - The MTV domain name was originally taken by MTV video jockey, Adam Curry. MTV at first showed little interest in the domain name or the Internet. But when Adam Curry left MTV, the company wanted to control the domain name. After a federal court action was taken, the dispute was settled out of court.
 * taiwan.com - The mainland China news organization Xinhua was allowed to register the domain name taiwan.com, to the disgust of the government of Taiwan.

Who controls the registration of domain names? How are disputes resolved?
Prior to December 1999, a company called Network Solutions Inc. (NSI) was almost solely responsible for the registration of second level domain names for the most popular top-level domains, including .com, .net, and .org. NSI dictated the policy on domain name registration and had a great deal of control over how domain names were registered, and how disputes would be resolved. To avoid having to arbitrate in disputes, NSI adopted a first-come, first-served arrangement. Under this scheme, NSI would not question an applicant’s right to have a particular domain name. If the domain name was available, the applicant was given the name.

This policy has now been replaced with the Uniform Domain Names Disputes Resolution Policy created by ICANN (Internet Corporation for Assigned Names and Numbers) and used by all accredited registrars. Under this new policy, a trademark owner can initiate a relatively inexpensive administrative procedure to challenge the existing domain name. In order to prevail, the trademark owner must show that:


 * 1) the trademark owner owns a trademark (either registered or unregistered) that is the same or confusingly similar to the registered second level domain name;
 * 2) the party that registered the domain name has no legitimate right or interest in the domain name; and
 * 3) the domain name was registered and used in bad faith.

Those disputing the grant of a domain name can go to the courts for this purpose. In the United States, the Anti-Cybersquatting Consumer Protection Act in November of 1999 made it easier for individuals and companies to take over domain names that are confusingly similar to their names or valid trademarks. However, they must establish that the domain name holder acted in bad faith.

One portion of this Act is related to famous individuals. This portion allows individuals to file a civil action against anyone who registers their name as a second level domain name for the purpose of selling the domain name for a profit. Take the case of the domain name juliaroberts.com. An individual who intended to sell it later to actress Julia Roberts registered the name. Citing bad faith on the part of the registrant, the court ruled that the domain name be transferred to its rightful owner.

Is there an international organization that can arbitrate disputes?
WIPO has set up an Arbitration and Mediation Center, described by its Web site as “internationally recognized as the leading institution in the area of resolving Internet domain name disputes”. Since December 1999, the Center has administered proceedings in the generic Top Level Domains (gTLDs) .com, .org, .net.

Following ICANN’s decision of 16 November 2000 to admit seven new gTLDs, WIPO has been working with the operators of the new gTLDs to develop domain name dispute resolution mechanisms for their domains. The Center has also been designated to provide dispute resolution services for these domains.

In addition, the Center administers dispute procedures in a number of country code Top Level Domains (ccTLDs), such as .ph for Philippines or .th for Thailand.