John W. Bagby[1]
& John C. Ruhnka[2]
Today, there is an electronic commerce component in most business transactions and many government interactions with individuals and other firms. For example, increasingly eCommerce and eGovernment transactions use electronic means for ordering, electronic commercial documentation, electronic authentication or signatures, electronic payments and some electronic performances and deliveries, the latter primarily of electronic and intangible products. Many of these methods risk fraud, errors and irregularities as hackers continually improve the effectiveness of their illegal methods that too easily evade traditional controls and information assurances. It is widely argued that intangible assets such as intellectual property (IP) will soon eclipse tangible assets as the dominant source of value. For example, works protected under copyright, patented inventions, trade secret information, know-how and/or trademarked commercial symbols are key components to nearly all business models that use computers to communicate over electronic networks.
The public Internet is a critical infrastructure overtaking private, dedicated infrastructures in the “electronification” of transaction processing. Key to the Internet’s fulfillment of this promise are the two major functions of the domain name system (dns) that facilitate the ubiquity, network effects and cost efficiencies of a public infrastructure approach to electronification.[3] The first is a functional matter involving the message routing of computerized telecommunications. Domain names are the essential mechanisms for network addressing that accurately direct Internet queries and reliably permit the processing of transactions. Domain names direct queries to the server hosting the desired content and they ensure the precise and intended processing of transactions, replies, payments, orders, confirmations and other information transfers. The reliability of directing Internet queries to the same server from anywhere in the world is called universal resolvability.[4] The second purpose is that domain names increasingly represent brand image to users: corporate, governmental and consumer. Brand image is essential to building goodwill. Additionally, it also serves to attract initial eCommerce business[5] and to generate repeat traffic using both online components and offline components of the supply chain.
Initially, the Internet was primarily a United States’ government-developed and controlled system. However, since the 1990s, Internet governance is moving towards privatization, including some aspects of competition. Nevertheless, some recent events and political pressures begin to suggest that Internet governance may swing back towards government control. The widely divergent views of the proper role for the dns may fragment Internet governance, raising compliance burdens. For example, many nations increasingly expect dns to exert functional control as a method to regulate Internet content. By contrast, some nations attempt few if any regulations over the dns system, other than to preserve its functionality. The dns is experiencing growing pains as its evolution may be seen as briefly experimenting with privatization while moving back to a partially government-administered system. A growing disconnect between the private and governmental systems complicates dns governance and may further threaten functionality and IP rights.
The United States approach has evolved to tie the dns more closely to consumer protection, a segue that has permitted the United States to primarily rely on trademark law, as argued here. Indeed, the most useful domain names are derived from each firm’s most easily recognizable, unique marks, tradenames and trade dress. However, as widely divergent approaches in national laws remain unreconciled, there develops a potential for conflicting regulation and ultimately potential losses of reliable functionality. The implications of this dns policy disorder for eCommerce and eGovernment is discussed here. This paper also reviews several key public policies that are emerging from the legislation, litigation as well as non-governmental and competitive events that amount to recent and determinative dns governance. This expose is provided with a view to subjecting the resulting dns governance structure to economic and political analysis to enable its refinement as optimal public policy.
The Internet, originally designed as a robust communication network for defense and research purposes, has grown well beyond the simple early communication of simple text files by university and government researchers, now include audio and visual media, electronic agent activities such as appelet and serious transaction implementation between government agencies, consumers and businesses. Similarly, government and law enforcement functions have increased in most nations. The United States’ government conceded that this expansion was valuable and eventually abdicated most functionality control over the dns.[6]
This Internet privatization has achieved a considerable laissez-faire, self-regulatory structure with functionality regulation residing in the International Corporation for Assigned Names and Numbers (ICANN). ICANN sets standards and Internet policies and controls some of the mechanisms for registration of domain names.[7] ICANN also sponsors an arbitration-like[8] dispute resolution mechanism for domain name rights – the Uniform Dispute Resolution Procedure (UDRP). The United State’s abdication of dns regulation risks piecemeal, national approaches to Internet regulation. Internet or dns governance is approaching a crisis in which non-governmental organizations (NGO), private-sector self-regulators and governments vie for dominance. If forces in this emerging dns governance crisis cannot forge consensus on the functionality aspects, it can be expected that the reliability and stability of eCommerce systems will be in jeopardy.
From the beginning of its dns governance authority in late 1999, ICANN has experienced considerable and continuing controversy. For example, there has been are policy disputes over the expansion of top level domain names (TLD), e.g., .biz, .info, .name, .aero. Each new TLD triggers a flood of preemptive registrations by trademark owners already holding domain name registrations in such traditional TLDs, as .com or .net. ICANN continues to use the international, consensus-building processes. This may leave ICANN with the near impossible task of satisfying multiple and conflicting expectations for the dns. There are at least two opposing constituencies: vocal critics trying to slow down its processes and others urging ICANN to move more quickly in dispute resolution and trademark protection. One argument is that ICANN is monopolizing dns and therefore many aspects of Internet governance.[9] However, another vision is that ICANN is weakening and if reform is not quickly forthcoming, ICANN will become unable to adequately control the Internet.[10] Few reforms are likely to satisfy many nations’ political attempts to use the dns as a convenient device for content regulation.[11] It may be that the current private Internet regulatory system is unsustainable due to the participants’ competition for control and profits.
One credible worst case scenario is that there would be differential national treatment of registrations, concordance and transfer of traffic. Without coordinated and universal resolution, traffic would be lost, double-even multiple addressing would be inevitable, breaches of privacy and confidentiality could become rampant and general anarchy prevail as traffic becomes misdirected for queries, payments and downloads.[12] The loss of interoperability could weaken critical mass making systems at least somewhat incompatible.[13] Other scenarios would find at least some of these difficulties frustrating reliable and secure Internet communications even if some cooperation among governments progressively mitigated communication failures. In a less than worst-case scenario, transactions costs would escalate to provide security.
Secure eCommerce depends on a reliable addressing system inherent in the exclusive treatment of domain names as the sole means for directing communications. Such disaster could be avoided only with a strong recapture of the system by a single authority or a consortium steadfastly committed to assurance of interoperability standards. Of course, the interests of many industrialized nations align reasonably well with universal resolvability and its promise of uninterrupted and reliable functionality. It seems reasonable to predict continuing skirmishes among non-governmental, self-regulatory organizations (SRO) each possessing some claim of authority over aspects of the dns.[14] Unless resolution of these “sovereignty” disputes eventually reaches an acceptable regulatory equilibrium, two major outcomes seem likely: either meaningful multi-national governance and standards-setting will fill the power vacuum or a chaos in functionality will trigger national action to control cross-border Internet traffic.[15]
However, many developments in United States’ law now strongly signal that trademark will continue as a central force in dns rights. This magnifies the influence of the United States’ Lanham Act, the Anti-Cybersquatting Consumer Protection Act (ACPA) and the various international trademark treaties, including the former Madrid Protocol and the newly ratified Madrid Agreement.
The trademark laws prevailing in other major nations or affiliated trading groups (EU, NAFTA) will become important because the United States is no longer the primary market or audience for the Internet. Indeed, the diffusion of technology in many other parts of the world is substantial.[16] Therefore, the dns policies of other nations are of increasing importance. It may become necessary for private and public sector eCommerce participants to manage their capabilities to accommodate foreign and international law particularly when their activities cross national borders.
The Internet dns regulatory environment can be viewed as an essential regulatory element in eCommerce supply chains. There are developing three broad categories of national dns regulatory perspective: (1) laissez-faire, (2) close regulation and (3) a middle-ground. First, some nations have a generally laissez-faire approach, employing only weak intervention into dns regulation. For example, Israel is such a nation because it has few substantive dns regulations. The cyber-libertarian model prevalent among the early Internet communities would likely have fewer criticisms of approaches in this genre. For the purposes of this ontology, it may be most useful to presume that a few exceptions exist to the traditional libertarian anarchy permitting the adoption and deployment of universal resolvability standards.
On the other end of a regulatory intervention continuum lie schemes that employ very close dns regulation. The dns regulation is used to control (block, monitor) user access to particular classes of Internet content, direct traffic, tax eCommerce, conduct law enforcement and/or exert protectionism for political regimes, domestic content or ethical and social norms. For example, China may the archetype due to the well-documented efforts to block content and harness the Internet using many methods, including dns regulation. Some other nations take less draconian approaches but nevertheless seek to foster national pride by requiring firms to have a strong local presence before using ccTLDs. For example, France (.fr) and Australia (.au) have been known to require domestication of firms before use of their country code top level domain names (ccTLD).[17]
There is a broad middle-ground, arguably occupied by the United States and several other major industrialized nations, that impose some dns regulation beyond bare functionality. These nations would more narrowly target particular subjects for dns regulation guided primarily by adverse experience with the Internet’s anarchy and this causes interference private property. The United States may be the exemplar, having evolved through dns registration privatization yet permits legal remedies for Internet fraud, crimes and infringement, gambling, pornography and defamation. While consensus among nations to occupy a narrow band of regulatory styles could minimize functionality difficulties, the pressures to adopt varying approaches may be stronger and seem likely to cause fragmentation that would upset interoperability.
Going forward, one promising method to avoid rampant incompatibility, lost or misdirected traffic may be to assure the dns remains on a single or compatible set of related standards effected through multi-lateral international negotiations.[18] For example, international trade treaties have already addressed Internet compatibility.[19] Any updates should restrain incompatible national standards and thereby maintain world-wide interoperability. The World Intellectual Property Organization (WIPO) and the World Trade Organization (WTO) are two logical focci for international standardization and prohibition of local standards that would introduce debilitating incompatibility. Any further weakening of ICANN or prospects for maverick national dns regulation also strongly suggests that research is immediately necessary into the likely effects of inconsistent system regulation, multiple and incompatible assignment authorities, competing dns regulations and remedies to preserve universal functionality achievable without the assistance of the nation imposing the incompatibility. Both private and public sector participants in eCommerce, that are becoming dependant on eCommerce systems, should follow such International developments closely, with a view to revising their dns strategies as needed.
The United States privatization of the dns has left little room for direct dns regulation. Unlike the recent efforts of some other nations, there are various features of United States law that would inhibit use of dns regulation as an indirect method to regulate content, traffic or eCommerce, to facilitate tax compliance or law enforcement or to exert protectionism for political regimes, domestic content or ethical and social norms. Consider a prominent example, already thoroughly litigated in the United States, the First Amendment. Its protection for freedom of speech/press/association prohibits most content regulation, except to address[20] obscenity,[21] defamation and privacy,[22] fraud,[23] treason/sedition/terrorism,[24] infringement,[25] or incitement/hate speech[26] as well as some restrictions on the time, place and manner of expression with conceivable impact for speech on the Internet.[27]
Despite the United States’ imposition of these important safeguards from indirect dns regulation, trademark law nevertheless emerges from the background as a major constraint on the private dns regulatory scheme.[28] On first impression, the trademark constraint on dns regulation might also appear indirect. However, on closer examination, trademark is intimately involved with the very nature of domain names. Most domain names are used for one of two reasons. The most desirable and defendable domain names are necessarily based on existing or forthcoming trademarks.[29] Existing trademarks used as domain names are efficient and convenient because they already tap into consumer brand image recognition. This easily permits newcomers to the website to gain access quite simply and accurately – they use existing knowledge of the owner’s mark(s). Of course, some domain names are not initially based on existing trademarks – at first they are arbitrary, fanciful, newly coined or are familiar generic terms or otherwise are in the public domain. However, successful domain names can quickly become trademarks.[30] Either way, the dns regulatory system does not trump trademark law in the United States. Therefore, trademark law constrains dns rights and it focuses dns dispute settlement primarily towards trademark infringement methods. Existing trademarks are generally well-protected from confusingly similar domain names if the latter are not registered to the trademark’s owner.
In this sense, existing trademark protection implicates a convergence. New eCommerce supply chains create or use existing trademarks precisely because of their clear usefulness in the function of dns addressing and this is directly derived from recognizable brand image. The convergence of domain names, when based on trademarks, must therefore comply with the primary trademark policies: (1) avoidance of consumer confusion and fraud, (2) the efficient reduction of search costs and (3) the prevention of dilution of famous marks. In practice, trademark law largely limits registration of domain names confusingly similar to existing trademarks. Trademark owners may use infringement remedies when trademark-based functionality is wrongly registered to anyone other than the trademark’s owner.[31]
Why does trademark law trump dns regulation nearly everywhere there is conflict? Domain names neatly fit into several of the common forms of trademark: words, names, symbols, devices, trade dress or any combination of these elements. In today’s converging supply chains, few areas will not involve both domain names and trademarks. Therefore, dns regulation remains as but a weak form of self-regulation, largely filling in the gaps of trademark law. By contrast, trademark confers strong property rights in a strengthening regulatory regime that is enforced through litigation and regulation by the United States Patent and Trademark Office (PTO). There should persist at least some residual state regulation. Owners of famous marks can be expected to support this merger as their interests are enhanced by ACPA. By contrast, cyber-libertarians will likely prefer International technical standards setting, self-regulation by ICANN and informal, arbitration-like dispute resolution like the UDRP.
Two aspects of domain name regulation provide increasingly convincing evidence of the dns merger into trademark law. First, trademark infringement standards necessarily cover domain name disputes when trademarks are involved. Infringement generally occurs when some unauthorized outsider uses the same or confusingly similar mark, weakening the mark’s distinctiveness and value. Infringement is measured by the likelihood of confusion standard[32] - the inquiry as to whether a wrongful use of the mark would confuse reasonable consumers about the source of products. An important inquiry is whether consumers are misled into believing the alleged infringer’s products or services were actually produced by the mark owner.
Consider the primary difficulty in dns addressing. A critical question is whether Internet users are attracted to an unrelated third party’s website believing they are in contact with the trademark owner, but are not. The trademark is infringed by confusion when reasonable consumers suffer this initial-interest confusion.[33] Trademark law necessarily protects domain names precisely because the mark is used in ways that attract consumers. Domain names allow consumers to interact with the mark owner, reach the mark owner’s website and possibly conduct eCommerce. Trademark infringement standards force recognition that domain names are clearly a use of the associated trademark. Domain names are not simply limited to some independent, addressing function as cyber-libertarians often argue. A key Internet issue is whether users are often attracted to unrelated third party websites in the belief that they are actually contacting mark owner. Thus U.S. trademark law limits domain name interference with existing trademarks precisely because both trademarks and domain names are used to attract user’s, customers, and business.
Litigation against an alleged cybersquatter requires service of process on the registered owner of an allegedly infringing domain name. Here the ACPA provides an interesting jurisdictional wrinkle. In situations where the trademark owner cannot locate or obtain legal jurisdiction over the owner of the domain name, the trademark owner can proceed in rem against the allegedly infringing domain name itself.[34] Under the ACPA, in rem domain name actions can be filed in the federal judicial district in which the domain name registrar is located. For example, VeriSign, the largest domain name registrar is located in the Northern District of Virginia. Alternately, the ACPA authorizes an in rem action to be filed in any judicial district where “documents sufficient to establish control and authority regarding disposition of the registration and use of the domain are deposited with the court.” This is accomplished by filing a court-stamped copy of an ACPA in rem complaint with the domain registrar. Thereafter, the registrar must deposit the disputed domain names with the court and must freeze any transfer of the domain names until the litigation is completed.
The second reason that United States trademark law is forcing a merger is the cybersquatting law ACPA. ACPA compels that domain name practice must accommodate trademark rights. In the late 1990s, Congress enacted ACPA primarily to protect the owners of famous marks from the proliferation of bad faith ransom demands by cybersquatters. This purpose is clear from the ACPA legislative history[35] and this purpose is reinforced by recent caselaw interpreting ACPA. Consider two recent cases involving marks on famous names: the exclusive London department store Harrods and several of Mattel’s brands.
In Harrods, Ltd. V. Sixty Internet Domain Names[36] the Argentine affiliate of Harrods registered 60 domain names with Network Solutions Inc.[37] All 60 registions were based on the Harrods name, most added words, such as harrodssouthamerica.com. The case illustrates that ACPA may operate in rem by permitting suit directly against the domain names in the Northern Virginia venue where they were registered at NSI’s principal place of business. ACPA’s in rem provisions favor mark owners because suit need not be brought in the alleged cybersquatter’s home venue. Application of in personam jurisdiction principles to Harrods Argentine affiliate, because it is domiciled in South America, arguably creates inconvenience for Harrods of London UK. The merger principle advocated here is well illustrated in this case because mark owners may bring suits for domain name infringement and dilution under ACPA’s in rem jurisdiction even if the cybersquatter is not acting in bad faith. ACPA’s remedy, when governed by in rem jurisdiction principles, clearly favors mark owners.
Despite Harrods apparent victory for the litigation convenience of mark owners, Mattel, Inc. v. Barbie-Club.com[38] limits the range of forum selections available. In Barbie, the ACPA in rem jurisdiction is restricted to the venue where the domain name registry is located. Several of the toy maker Mattel’s famous marks, including Barbie, Matchbox and Hot Wheels were included among some 54 domain names registered in varying ways, including misspellings and words added to Mattel’s famous marks. Mattel’s suit in New York was dismissed because the targeted domain names were registered outside New York. Although ACPA’s in rem jurisdiction permits mark owners to challenge registration outside the alleged cybersquatter’s domicile, the in rem rights will not be interpreted to offend due process or international comity. Therefore, ACPA does not confer jurisdiction in venues unrelated to the alleged cybersquatter or the registry.
ACPA remedies for domain name infringement impose the traditional litigation costs (opportunity,). The threat of such costs, ICANN developed a must less costly arbitration-style procedure, the Uniform Dispute Resolution Procedure (UDRP). All dns registrars in the .com, .net, .org, .biz. .info, and .name TLDs must obligate registrants to the results of the UDRP procedure for disputes involving domain names they register. Unlike the ACPA remedies that require service of process on a domain name owner or a due process compliant alternative such as the in rem procedure, the UDRP binds registries and registrants. Studies show that the UDRP provides quicker and arguably less (process) costly procedure. The sole UDRP remedies[39] are is the cancellation or transfer of a challenged domain name upon a convincing showing by the mark owner that the registrant had a “cyberstalking” motive.[40]
The UDRP procedure lowers barriers for international domain name disputes because hearings are ex parte.[41] The UDRP remedy limitations (e.g., registration cancellation or transfer to mark owner) may be a UDRP drawback given that economic damages are recoverable under ACPA litigation.UDRP is available either before or after litigation but UDRP findings do not preempt subsequent court litigation of the same issue. UDRP awards may be appealed, a significant departure from remedies available in many other ADR forms, most notably, traditional arbitration practice.[42] UDRP had resolved over 7,309 domain name disputes involving almost 13,000 domain names by 2002. Importantly to the merger thesis argued here, nearly 70% of UDRP awards favor mark owners.[43] There may be a slowing of mark owner successes perhaps due to at least two factors: (1) dot-com bubble burst and (2) cybersquatting incentives are diminishing and a huge backlog of such cases are clearing.
Projecting the future trajectory of dns regulation is speculative but potentially worthwhile given this article’s merger thesis. Two plausible observations emerge. First, it can be argued that the dns is merging into trademark and dns system’s unique, non-trademark aspects will serve, at most, to fill in gaps in trademark law. Second, the dns is a hybrid of IP rights, temporally it relies predominantly on trademark but is beginning to exhibit sufficient sui generis aspects to independently evolve into a new form IP.[44] Under either scenario, it is useful to consider the conceptual, political and economic justifications for dns, comparing these to other IP rights as this may provide guidance on the unique nature and ultimate direction of dns. Further, such comparisons can reveal obstacles to the complex interplay of forces and authorities likely to impact this evolution.
This section introduces some arguments that there is occurring an “over-expansion” of trademark beyond its limited roots in unfair competition as they will apply to dns. As the traditional limits of trademark are overcome by legislation subsequent to the original Lanham Act, trademark assumes a stature more analogous to IP rights conceptually justified on Lockean social contract principles. Arguably, trademark rights are approaching other forms of IP and therefore may defy the Constitutional limits on federal IP rights.[45] Several limiting principles in traditional trademark practice served fairly well for some time to confine trademark to but a weak form of IP. For example, the “use in commerce” requirement prevents the warehousing of inactive, idle marks if the effect would be to preempt competitive use. The functionality doctrine prevents monopolization over a product’s feature affecting its purpose, action or performance, or the facility or economy of processing, handling or use. Indeed, the functionality of the dns should arguably be interpreted consistent with this traditional trademark limitation. The categorization of marks along the spectrum of distinctiveness prevents monopolization over the best descriptors of products and services, e.g., generic terms or descriptive terms without secondary meaning not protectable standing alone. Abandonment returns marks to the public domain for acquisition and use by others. Federalization of the formerly state-created rights of unfair competition and dilution, has expanded the rights of mark owners considerably beyond the limited context of consumer confusion retained as states’ rights under the auspices of police powers.[46]
A potentially useful perspective for analysis of dns governance, that emphasizes the merger into trademark proposition, compares different IP forms to identify when innovation, creativity and investment generally occur. This supply/value chain analysis helps identify how innovation is incentivized by different approaches to the timing and rewards of IP. Under the Lockean vision of IP as social contract, [47] as implemented by the U.S. Constitution’s IP clause, the promise of rewards motivates innovation, creativity and/or investment.[48] However, the timing of these four factors differ significantly among the various IP forms. For example, patent, copyright and trade secret activities are decidedly front-end loaded, particularly for the investment, creativity and innovation; rewards can inure throughout the life cycle. By contrast, in the emerging trademark system on which the dns is based, while some initial innovation and creativity essential to the IP occur up front, the rewards as well as the investment occur throughout the IP’s life cycle. How, can recognition of this fundamental difference by used to optimize the dns system? Consider the comparison with a view to the acceptability of restraints on any further trademark expansion.
In the patent system, research investment and brute force experimentation are early-stage activities that lead to innovation and conception of an invention. Rewards other than an employed inventor’s paycheck are largely delayed until after patenting. Of course, the promise of commercialization is sometimes used to incentivize an underwriting of expenses in creation when provided by employers, venture capitalists or government grants. In addition, patenting expenses are unique to the patent system and stand as a substantial early to mid-stage barrier to acquisition of IP rights. Furthermore, underwriting and IP acquisition costs often require the inventor, intent on commercialization, to cede at least some rights through technology transfer contracting. As with trade secrets and some copyrighted properties, additional mid-stage investment is needed for development and subsequent commercialization. Furthermore, if additional innovation becomes necessary (e.g., improvements) such investments and rewards are delayed to mid-stage and late stage of the life cycle. As with all forms of IP, some rewards are delayed throughout the life cycle when arising as infringement damages. Creator’s are incentivized by various means throughout the life cycle, in terms of reputation enhancement, employment, licensing/assignment fees and/or royalties. The cash flow sources for rewards largely use existing distribution channels, although business model innovation is also accommodated by the patent incentives and rewards system.
The research, innovation and creative investment leading to the fixation of a work is initially rewarded by ostensibly bestowing property rights on the author(s). However, thereafter technology transfer through assignment/licensing is largely responsible for enabling distribution. Therefore, under the current and prevailing business models for revenue generation in copyrighted works, the vast majority of revenue is derived from independent channels of distribution that underwrite and typically receive transfer of ownership of the profitable works. Infringement rights for the long copyright term are bestowed largely on owners rather than authors and this translates into incentives for owners to maintain distribution infrastructure, provide venture financing to underwrite particular authors/performers and/or their particular projects. The distribution revenue model is largely an indirect incentive to authors because there were traditionally limited alternatives to the accepted supply chain. Authors of copyrighted works are incentivized through reputation, employment, licensing/assignment and/or royalties resulting in cash flows using the popular distribution channels and extending throughout the copyright term.
The trade secret supply chain resembles a hybrid of the patent and copyright supply chains but has a unique challenge in maintaining commercial exploitability of the property rights. Rather than rely on governmental property rights regime supported by civil and criminal infringement remedies, trade secret owners must undertake reasonable security precautions, including employment practices, that maintain secrecy. The creation of trade secrets often requires front-end research investment, sometimes brute force experimentation, that can lead to innovation and conception. Trade secret creators are largely rewarded when the secret is embodied in marketable tangibles. However, for intangibles the secret’s value can be realized at nearly any appropriate point along the distribution chain (e.g., employment in the research process, fees derived from its use in manufacturing processes or as marketing technique, and royalties or component profits when finished product are sold). The creator is incentivized either through employment, licensing/assignment fees and/or royalties for cash flows derived from available distribution channels.
The trademark system stands on somewhat different conceptual footing, incentives for early-stage activities seldom need be substantial. Instead, investment enhancing the value of marks are probably more accurately classified as goodwill building or brand image enhancement derived from advertising and promotional activity. Consider the research, innovation and creative investment leading to development of the mark itself. With some exceptions for successful consumer products companies, the front-end investment for developing a logo, tradename or slogan is comparatively small in relation to the front-end expenses needed to develop other forms of IP. Goodwill develops over time as product reputation and brand image combine to create a positive reputation provoking repeat business or recommendations. However, the intangible asset goodwill is inadequately addressed by contemporary conceptual economics,[49] practical accounting standards[50] and financial valuation. This factor alone may explain the success of mark owners in transforming trademark from its consumer protection roots into “real IP.” Marks accrete in value over time, enhanced by positive reputation and promotional investments. The mark’s initial creator is largely rewarded through employment or third-party service fees that are dwarfed by the value of the most successful and “famous marks.”
Most other forms of IP are largely front-end loaded with investment for creation and rights acquisition, trademark stands on different footing. Investment to enhance mark value, as well as the rewards for mark appreciation, occur over the mark’s life cycle. Goodwill and brand image accretion are focused into marks as a cumulative result of consumer satisfaction with underlying products and services. Therefore, infringement disincentives increase with the mark owner’s goodwill investment, only partially focused through innovation – damages for dilution and special status for famous marks. Why the pressures to evolve trademark from its unfair competition roots in consumer protection to encouraging goodwill investment? A simple answer might be the strength of lobbying pressures on Congress and state legislatures to strengthen rights that protect expenditures, chiefly advertising, characterizing them as goodwill investments under expanding dilution rights. This tends to offset the most important trademark limiting principle - functionality and may explain trademark expansions inconsistent with the consumer protection conceptual foundation such as expanding intent to use registration.
Proposals to expand IP rights arise from time to time, probably best justified with technological advancements not well suited to the traditional IP forms. A public-policy retrospective of such efforts would likely yield mixed results.[51] For example, pressures in the United States to adopt database protections equivalent to that required under the European Union Directive on database protections would have significant impact on many information policy issues.[52] If such new sui generis rights largely reward initial sweat of the brow and then ongoing maintenance and if they abandon the critical creativity and invention (non-obviousness) IP requirements, this marks a continuing departure from traditional Lockean social-contract justifications for IP.[53]
There are various formulations and applications of the doctrine functionality throughout intellectual property law. Functionality plays a major role in patent law - it is the essence of usefulness for the patentability of utility inventions[54] and serves as a major obstacle to patentability for design patents.[55] Trade secret law largely protects functional information so long as it satisfies the competitive advantage[56] or independent economic value criteria.[57] Functionality is largely unprotected in copyright law so long as there are reasonable alternative modes of expressing the ideas.[58]
The precise use of functionality under trademark law is somewhat more obscure, largely confined to restricting the protectability of particular features of complex trade dress amalgam. The functionality limitation on trade dress furthers the deference in nearly all of IP law to the utility patenting system as the primary avenue for protecting functional features. The functionality limitation also preserves the IP system’s balancing between the protection of IP rights and safeguarding the public domain. Functionality preserves to the public domain those aspects of trade dress that are needed for competitive functioning of the trade dress by competitors. Trademark law’s functionality criteria can also be seen to serve as an extension of classification of marks along the spectrum of disctinctiveness and the resulting prohibition against protecting generic or descriptive marks.
What might be the role of functionality in domain name marks? Stated otherwise, how is it useful to analogize traditional trademark functionality with dns functionality as a method to clarify direction for dns governance policy? Two observations seem obvious, the first is encouraging, the second could be limiting. First, domain names perform the de facto functions of addressing, communication resolution and file transfer functions. Second, functionality is not clearly applicable outside the trade dress realm and the role of domain names as part of website trade dress is unclear. Should this latter difficulty prevent examination of a potentially promising analogy? The primary reason to pursue functionality is its pervasiveness, its longevity across all forms of IP and the need to address pressures to use IP to block innovation.
The answer provisionally given in this paper is that functionality shows promise to inform the understanding of any merger between the clearly functional aspects of the dns system and the occasional functional aspects of trademark law. Theories argued for the functional aspects of software and website look and feel[59] transition from strict trademark functionality, through consideration of aesthetic functionality and eventually bridging to dns functionality. Furthermore, if the dns system is evolving through an interim merger with trademark law into a sui generis hybrid form of IP, then policies from throughout IP law should be relevant. Therefore, IP policies that approximate functionality must be examined to better understand this emerging form of IP. Of course, if the analogy proves uninformative about the trademark aspects of domain names, then functionality can be clearly rejected as unenlightening.
De facto functionality is arguably the primary purpose of the dns system. Domain names are used by individual humans and by various electronic agents to resolve the addressing of queries and file transfers. A query must use a domain name in a fairly standardized form, the uniform resource locator (URL), to summon the download of files for display, interaction and/or execution (e.g., webpages, apeletts, text, graphics, media, other communications). The dns is arguably functional within the physical aspects of trademark functionality because it is essential to use of a product.[60] Human cognition in accessing websites in eCommerce is essential to the use of this distribution channel in the acquisition of files and consummation of transactions for both the underlying products and services marketed thereon.[61]
One problem with applying trademark functionality to dns governance is that domain names protectable under trademark law are not functional to the whole class of products in the same way that the physical aspects of trade dress might be useful to a whole class of products. Instead, dns functionality serves only to direct traffic to the mark owner’s site(s) and not to competitors or hijackers. The proper role for functionality in analysis of dns requires resolution of its classification as an element of trade dress or the recognition they serve as nothing more than an imbedded mark useful only in addressing. Indeed, critics of this approach can argue that the de jure functionality in trademark law is too different from the de facto functionality in the dns system to provide useful analogies of sufficient power that support or refute either the merger or sui generis hypotheses. Furthermore, the PTO’s focus on trade dress aspects of functionality inhibits treatment of domain names as marks except in exceptional circumstances.
Trademark law is based on a pro-competition goal, buttressed by a policy that preserves to the public domain aspects of marks that are functional for the benefit of all competitors in that line of business.[62] The functionality exclusion is largely interpreted to deny trade dress protection or registration for a mark’s physical shape or configuration if it constitutes a product’s feature affecting its purpose, action or performance or the facility or economy of processing, handling or use.[63] Consider the example of website look and feel as a form of trade dress; protection extends only to distinctive visual and design elements but not to functional aspects.[64] The trademark functionality exclusion serves to deny registration or protection for design aspects of marks that are deemed functional.[65]
The courts appear to still be searching for a stable, bright-line test for trademark functionality.[66] This quest may become even more problematic in the dns context because functionality is used in at least three distinct senses:
1. common functionality - a “lay conception” of functionality, a/k/a, de facto functionality,[67]
2. utilitarian functionality – basis for exclusion of a mark’s registration or other rights in functional design elements of a mark, a/k/a, de jure functionality,[68]
3. aesthetic functionality – a significant variant of de jure functionality[69]
The common conception of functionality is utilitarian in the broadest sense - addressing whether the feature in question simply performs some function. Website and computer interface “look and feel” elements generally have de facto functionality because they perform navigation, launch and operational functionality. De facto functionality describes the dns system’s operations in providing universal resolvability resulting in accurate and reliable website addressing and navigation.
Contrast the mere lay conception of de facto functionality with the utilitarian, de jure functionality envisioned by the trademark exclusion.[70] Classifying a design feature as de jure requires consideration of four inquiries, also known as the Morton-Norwich factors:
(1) the existence of a utility patent that discloses the utilitarian advantages of the design sought to be registered;
(2) advertising by the applicant that touts the utilitarian advantages of the design;
(3) facts pertaining to the availability of alternative designs; and
(4) facts pertaining to whether the design results from a comparatively simple or inexpensive method of manufacture.[71]
A preponderance of these factors are needed to trigger the functionality exclusion, and this results in prohibiting protection for a functional feature of a mark that “works better” than competing design features, that is, when they have unique and significant functionality. Stated otherwise, as consumers become aware that there are other, equally or more effective alternatives for use by competitors, then exclusion of the mark’s design feature due to functionality becomes less compelling.[72]
The third sense of functionality is aesthetic functionality,[73] an apparently persistent[74] form of de jure functionality that exists if the design feature confers a significant benefit that cannot practically be duplicated by the use of alternative designs and is difficult to evaluate from a purely utilitarian standpoint.[75] Stated otherwise, consumer demand might be enhanced significantly with a more memorable and aesthetically-pleasing design.[76] Aesthetic functionality has historically caused considerable confusion with the separate exclusion for purely ornamental design aspects.[77] Aesthetic functionality may be more closely related to dns functionality and to the functionality of website look and feel as users demand standardized navigation features and exhibit other cognative expectations that facilitate functionality.[78]
This analysis illustrates one set of limits on this paper’s assertions of merger between the dns and trademark law. Not all domain names become marks, even after some use in commerce, for several reasons. First, and most notably, generic and descriptive names made part of a domain name are not registrable nor otherwise protectable as marks. Second, certain functional aspects of domain names are not registrable. The PTO’s own constraints on the prosecution of marks provide potentially important perspective on the evaluation of the alleged dns merger into the U.S. trademark regime. The PTO provided examination guidance for domain names as early as 1999[79] and more recently has institutionalized this in several sections of the TMEP.[80] The TMEP is the PTO’s statement of policy that requires PTO examiners[81] to refuse registration of several key domain name components.[82] The TMEP disintegration of domain name marks limits trademark, trade dress and service mark registration for several standard aspects of domain names and perpetuates trademark fundamentals in the domain name realm.
The PTO policy addresses the well-recognized, functional portions of each “composite” URL to isolate components that generally serve no source identification. For example, the common “preface” http://www instructs the use of the hypertext transfer protocol (http) and access through the World Wide Web interface.[83] The common or generic TLD suffixes (gTLDs) generally signify the type of entity[84] with the registered domain name so simply appending a gTLD to an otherwise unregistrable mark does not result in a registrable composite mark.[85] For example, in the domain name containers.com, the proposed second level domain “containers” is likely unregistrable as a generic term (or at least a descriptive term) for “transportation devices that confine contents,” so the addition of the gTLD “.com” does not render the generic mark “containers” registrable by simply appending “.com” resulting in “containers.com.”[86]
Domain names must be used in a manner likely to be perceived by potential customers[87] to identify the source[88] and not merely as an address to reach or access the source’s eCommerce website.[89] Advertising a mark owner’s products or services on the Internet is not itself a separate service.[90] Therefore, domain names associated with the eCommerce channel of distribution for products or services already distributed through traditional channels is not a separate activity deserving of registration for additional marks composed largely of the domain name. Finally, the PTO will consider phonetic equivalents of marks containing gTLDs (e.g., Acme Dot Com) the same as marks composed of gTLDs (e.g., Acme.com).[91]
If the PTO’s examination practice stands unchallenged, it will create a potentially huge class of unregistrable domain names - “composite” marks using generic or descriptive elements. The provocative irony in this is that PTO practice, as supported by trademark statutes and case law, nevertheless does not disturb domain name registration rights. By letting stand the dns registration system another class of quasi-marks is emerging, domain name rights unregistrable under trademark law but nevertheless developing a weak form of secondary meaning in consumer’s minds. Thus, domain names remain a form of sui generis intellectual property rights for domain name registrants.[92] Therefore, while unprotected under trademark law they nevertheless provide their owners with some exclusivity during the pendancy of their registration as domain names. While the PTO’s TMEP generally asserts such generic domain name marks are not source identifying under the standards of trademark law, they may nevertheless become exclusive property of the domain name registrant and useful for quasi-trademark function because of the exclusivity bestowed by the dns.
In recent years, Congress and ICANN have responded to the initial domain name litigation of the 1990s by expanding the range of potential remedies. This experience clearly showed that cybersquatters seldom intended to use the infringing domain names they registered. Therefore, it is prudent for trademark owners to consider all the risks of disputes over domain names closely related to their marks by understanding the risks and benefits of these remedies.[93]
The most basic activity involves domain name monitoring, an integral part of brand image management. There are two major focci for periodic monitoring: (1) registrations of marks and their derivatives at the major domain name registries and (2) website postings served to queries actually addressed to the marks or their derivatives. Nearly all other remedies depend on the initial determination that potentially infringing domain names are registered or that postings are accessible from them. There are various forms of Internet watch services now available, such as trademark monitoring services, that employ “bots” automated web search engines or spyders that frequently revisit sites of client marks or derivatives. Domain name registrars now offer notification services when particular domain names are registered or registration lapses. Failure to pursue infringements of marks using domain names could amount to an abandonment.
A second tier remedy is a “soft notice” sent by the registered mark owner. This is an informal letter, call or email message informing the offending domain name registrant of the mark owner’s rights that declares possible infringement. A third tier remedy, the “cease and desist” letter is generally sent by in house or outside counsel more formally threatening legal action. This is more confrontational so it is a harder form of notice that may recognize ongoing registration and use. Cease and desist letters can be expressed in the form of a demand and often carry the stigma of a repeat offender. There are reputation risks with this and nearly all the stronger remedies. For example, some negative publicity has accompanied some mark owner’s intimidation such as when the user was arguably acting in the “public interest” through criticism of the mark owner. Litigation to silence such criticism may allege defamation (“cybersmearing”) but risks First Amendment protection.
Settlement negotiations is a fourth tier of remedies. Mark owners cognizant of potential infringement can initiate negotiations threatening ACPA suit, UDRP proceedings or nominal compensation. Negotiations may become cost effective and optimize risk exposure where the total settlement costs are less than the likely litigation expenses discounted by the probability of successful resolution. That means that settlement amounts added to the opportunity costs of preparation and conduct of all settlement activities do not exceed the cost of UDRP arbitration to cancel the offending names or ACPA litigation.
The fifth tier of remedy gives mark owners access through the UDRP, an electronic arbitration-style proceeding. The likely favorable outcome for the mark owner is cancellation or transfer of infringing domain names to the mark owner.[94] The UDRP is cheaper and faster than federal litigation under ACPA. However, the UDRP does not permit awards to include economic damages[95] as are permitted under ACPA - a sixth tier of remedy. The United States’ Anticybersquatting Consumer Protection Act (ACPA) provides a strong deterrent because money damages as well as the equitable remedies of forfeiture, cancellation and transfer. ACPA imposes the traditional risks of litigation and considerable litigation costs[96] so ACPA litigation in the federal courts should be reserved for major mark confusion or dilution cases. The ACPA imposes very substantial risks in cost and time lost. making it a remedy of last resort. Finally, a seventh tier, traditional trademark infringement under the Lanham Act, can remedy domain name disputes based on the traditional infringement standards of likelihood of confusion,[97] false designation of origin,[98] or dilution.[99]
|
Basic Strategy |
Strategic Action |
Risk/Benefit Factors |
|
Monitoring: |
Periodic automatic (e.g., bots, crawlers & service providers) & manual queries of dns registries & web hosting for all marks & similar domain names |
Risks: direct labor cost, 3d party service provider fees, overconfidence from imperfect search algorithm Benefits: prompt identification of potential infringement; enables early dispute resolution |
|
Notice |
Simple warning of potential infringement, |
Risks: requires contact, some registrants intentionally inaccessible Benefits: low cost, notifies of alleged superior rights, may attenuate adverse publicity risk, may deter infringement |
|
Cease & Desist Letter |
Formal contact by in house or outside counsel, threatens legal action for continued usage |
Risks: requires contact, some registrants intentionally inaccessible, may elevate adverse publicity risk Benefits: low cost, notifies of alleged superior rights, may attenuate adverse publicity risk, may deter infringement |
|
Settlement Negotiations |
Negotiations to purchase domain name registered by opponent |
Risks: requires contact, some registrants intentionally inaccessible, may elevate adverse publicity risk, nuisance value rises with numerous domain names and derivatives Benefits: nuisance value may be as low as $100s to few $1000s, likely capped by costs of UDRP process & ACPA litigation |
|
UDRP
|
Arbitration-style online ADR method |
Risks: no economic damages available, trademark owners lose nearly 30% of UDRP proceedings Benefits: low cost, remedies include cancellation or transfer of infringing domain name, initially useful to clear out cybersquatting case backlog, trademark owners win nearly 70% of UDRP proceedings |
|
ACPA Litigation |
Civil litigation in federal court under ACPA |
Risks: full traditional litigation costs: discovery, opportunity costs, adverse publicity Benefits: economic damages & attorneys fees recoverable, most appropriate for serious domain name infringements: major mark confusion, dilution, obscenity |
|
Lanham Act Litigation |
Civil litigation in federal court under traditional trademark standards of infringement: confusion, false designation of origin, dilution |
Risks: full traditional litigation costs: discovery, opportunity costs, adverse publicity; burden of proof possibly higher for marks not yet famous name status Benefits: full range of trademark remedies available, precedents persuasive in ACPA enactment |
Few businesses have maintained success without a solid but evolving strategy to enhance their brands’ images. Traditionally, this was primarily the domain of top managers informed with marketing and financial data. With the convergence of traditional “bricks” economy into the “clicks” economy, brand image is now greatly impacted by the firm’s own online activities as well as the actions of outsiders.[100] The domain name component of brand image is now so important that the IT and transaction processing functions must are now more intimately integrated particularly as eCommerce functionality increases.
It is advisable to formulate and periodically review the firm’s domain name strategy. Just a few years ago, the costs of dns management were small and devolved to the IT function or eCommerce enthusiasts. Many firms simply registered a few domain names without considering them as part of the firm’s IP assets. However, in recent years many new domain name risks have emerged: cybersquatters, cybersmearers, traffic diversion losses, corporate or brand identity theft, customer confusion and dissatisfaction and related IP infringement. As with the responsible stewardship of any other asset, tangible or intangible, there are several key steps for success in a changing environment. Responsibility should reside in competent individuals, preferably teams knowledgeable in the various aspects of brand image management, eCommerce architecture, Internet developments, trademark law developments and the evolution of dns practices. Scenario assessment helps to identify risks, specify and test responses to minimize losses, restart systems and recover lost data and business transactions. As new products are envisioned, registrations should be sought for additional domain names. It is hard to imagine naming new products that are intended to become valuable brands without first acquiring rights to both the marks and domain names as well as their major variations or nicknames.
The ongoing implementation of a dns strategy likely depends on accurate and complete information. Many firms should carefully consider conducting a dns audit - a comprehensive review of the firm’s domain names, their usage and the performance of in-house or third party web-site hosting. This review should cover the relationship between the firm’s domain names and their trademarks as well as interaction with other forms of IP (e.g., trade secrets, trade dress). Ultimately, this review should inform the assessment of domain names as components of brand image valuation. While many firms archive and regularly review such records, many others likely have spotty records and need to build the recordkeeping, monitoring and audit regimen into their best practices.
The most robust strategy should include review of all brand image component, e.g., traditional strengths of marks, ownership/control over dns components, wherewithal in dns monitoring, policies and commitment of supply chain affiliates in using various dns affiliations (linking, framing, referrals, search results). Due diligence likely requires careful domain name recordkeeping in preparation for business start-up activities such as purchase, sale or financing of product lines, brands, divisions or other business segments.
Key inquiries in a dns audit require both careful ongoing recordkeeping as well as some brainstorming and conjecture. First, the firm or its consultants should track all its domain name registrations, review the promptness of its registration maintenance and payment of recurring fees and monitor domain name expirations for conscious renewal or deliberate abandonment. The dns audit’s scope should be expanded by the results of periodic reviews of the brand image of existing products and services, the potential or planned introduction of new products and by developing variations on existing brands (e.g., nicknames, likely misspellings). This data and other records enables the audit to then extend to review results of searches of trademark and domain name registries covering the marks and domain names identified. The data reviewed should also include summaries of ongoing monitoring of affiliate and competitor use of domain names. In firms with well-developed IP portfolios the IP audit program may provide some useful synergy as information should be shared to identify assets, infringers and the firm’s own potential infringement of other firm’s IP and domain names.
Second, domain names and brand assets must be evaluated on an ongoing basis. It becomes important to determine past and current values of every component of brand image. Over time, it should become useful to establish methods to estimate future cash flows associated from the goodwill component of each brands image. This should enable the prioritization of brand images permitting the management of such resources. Third, the infrastructure of eCommerce may also be involved. For example, the use of internal vs. third parties for hosting websites or for the acquisition, ownership and management of domain names can jeopardize the firm’s domain name assets. Fourth, the dns audit should track changes in dns governance to test the assumptions that domain names are under control. The fragmentation of jurisdiction risk a potential loss of control over dns assets, disruption of eCommerce traffic and transactions and other future risks.
Domain name assets are crucial both to functionality and brand image for eCommerce and eGovernment transactions. Several mechanisms can be deployed to protect such assets. For example, “defensive” domain name registrations preempt capture and misuse of marks as domain names by mark non-owners. Adopters of this strategy must usually register a significant number of permutations from the basic marks including sound-alike misspellings and all such domain names in all relevant TLDs, e.g., .com, .net, .org. Defensive registrations are likely intended to preempt mark non-owners from capturing identical or sound-alike names either to divert or interfere with Internet traffic directed to the trademark owner’s businesses or conduct cybersquatting. Such strategies could require additional defensive registrations each time new generic TLDs (e.g., .biz, .info, .name, .aero) or new ccTLDs are made available (e.g., EU’s ccTLD .eu). Annual registration fees and monitoring due diligence could become costly.[101]
Approximately 29 million domain names are currently registered in all generic TLD registries worldwide – but the increase in registered domain names appears to be slowing. Despite the introduction of new generic and ccTLD registries, business and trademark owners appear to be not as ready to do all conceivable preemptive registrations. The advent of the lower-cost UDRP arbitration in the event of cybersquatting and its effectiveness even against foreign infringing registrations has likely contributed to this slow down. The bottom line is that the increasing alignment between existing trademark rights and rights in domain names is generally good news for businesses and organizations with existing brand image as they move into eCommerce. Mark owners dependent on eCommerce are becoming vigilant to assure their web sites and metadata are organized to maximize opportunities to attain status as a top result on major search engines.[102] Geographic routing outside the ccTLD system could further complicate while still offering relief from some of these burdens.[103]
Contrary to cyber-libertarian protestations, the developments of recent years suggest that the Internet is currently governable. Political pressures in many nations and even in the United States will seek passage of laws targeted to the Internet and intended to preserve cultural values, protect local consumers and industries, regulate Internet content and expression, tax eCommerce, prohibit cyber-crime and cyber-terrorism and vindicate IP infringement. Many of the early examples of these laws were neither well-conceived nor well-balanced. Of greatest interest in the domain name-brand image developments, the dns and Internet service providers (ISP) will become primary focal points for such regulations.
The dns may be poised to shift back to governmental controls if the current NGO/SRO model fails to work well. This re-assumption of government authority will most likely be in a piecemeal fashion. The privatization movement with NSI then ICANN provided an interesting experiment in competition while attempting to encourage uniformity. Unfortunately, the stability permitted by a confined set of regulatory focci is now threatened with fragmentation. Going forward, both private and public-sector Internet users must recognize the central importance of domain names as IP, the strategic need for much closer management of dns as major components to brand image value, the key role played by the dns audit and the ongoing need to understand, even participate in public policymaking impacting dns regulation. The dns, as the “main entrance” to eCommerce for firms, governments and NGOs, is a major source of brand image value that must be well-managed.
Pro-active, dns management systems can be designed within reasonable cost constraints. However, in recent years there have been many examples of private sector firms, NGOs and even government units that have failed to invest sufficiently in dns strategic management. Much of the litigation reflects firms in reactive mode suffering surprise at the risks of losing eCommerce functionality with attendant brand image damage. Recent experience illustrates that the litigation and opportunity costs are significant. It is time to transcend to building and improving an informed dns strategy that forms a major component of the firm’s brand management program. Such plans should also include crisis management scenarios with action plans to retrieve lost domain names, repair tarnished brand images, vindicate dns and IP asset infringements.
[1] Professor of Information Sciences and Technology, Co-Director - Institute for Information Policy, The Pennsylvania State University.
[2] Professor of Business, University of Colorado at Denver.
[3] Various forms of the “digitization” perspective is avoided here in lieu of “electronification” for three reasons: first, analog persists despite premature rumors to the contrary, second, the substantial storage and transmission efficiencies of digitization are clearly enabling but not so clearly a permanent substitution, and third, “electronification” more accurately describes the technological revolution than does digitization.
[4] See, e.g., Statement on Completion of “A Unique, Authoritative Root for the DNS,” Doc.No.ICP-3
(July 9, 2001) http://www.icann.org/icp/icp-3-background/lynn-statement-09jul01.htm (accessed last on August 15, 2004) and The Domain Name System: A Non-Technical Explanation – Why Universal Resolvability Is Important, InterNIC (Oct.5, 2002) http://www.internic.net/faqs/authoritative-dns.html (accessed last on August 15, 2004).
[5] See e.g., trademark cases discussing infringement liability under the initial interest confusion theory, Grotrian, Helfferich, Schultz, Th. Steinweg Nachfahren v. Steinway & Sons. 523 F.2d 1331, (2d Cir. 1975); Brookfield Commun., Inc. v. West Coast Ent. Corp., 174 F.3d 1036, (9th Cir. 1999) and Playboy Enters., Inc. v. Terri Welles, Inc.,78 F. Supp. 2d 1066 (S.D. Cal. 1999).
[6] See e.g., Emmanuel A. Caral, Lessons From ICANN: Is Self-Regulation of The Internet Fundamentally Flawed? Int’l.J.L.& Info.Tech. (Mar. 2004) (discussing dns regulatory pressures & ICANN political difficulties; arguing self-regulation dominates code layer but is not subject to the accountability and democratic legitimacy of the government regulation (physical) layer).
[7] See e.g., A. Michael Froomkin, Habermas@Discourse.Net: Toward A Critical Theory Of Cyberspace, 116 Harv. L. Rev. 749 (Jan. 2003) (discussing the standards setting difficulties in dns).
[8] Dluhos v. Strasberg, 321 F.3d 365 (3d Cir, 2003) (UDRP is not arbitration for purposes of the Federal Arbitration Act (FAA), therefore not entitled to lenient standard of appellate review instead subject to normal appellate review).
[9] In early 2002, ICANN’s president issued his “Case for Reform” of the whole Domain Name registration/rights framework. See e.g., Committee on ICANN Evolution and Reform, http://www.icann.org/committees/evol-reform/links.htm (accessed last on August 23, 2004).
[10] If ICANN becomes ineffective, governments all over the world will likely grab its powers.
[11] See e.g., Kim G. vonArx, Now And Then: Icann's Reform And Its Problems, 2003 Duke L. & Tech. Rev. 7 (recounting ICANN reform difficulties).
[12] See e.g., Lawrence Lessig, The Future of Ideas: the fate of the commons in a connected world, (2001) Random House, New York.
[13] Nations or affiliated trading groups significantly departing from uniform technical standards risk a lock out from international eCommerce. This threat is an important deterrent in nations supporting open and borderless markets while simultaneously emboldening repressive and closed economies to adopt non-uniform address standards by their national ccTLD administering organizations. See e.g., Milton L. Mueller, Ruling the Root: Internet governance and the taming of cyberspace (2002, MIT Press, Cambridge MA).
[14] Consider the ongoing disputes between ICANN, the provisional SRO over dns, VeriSign, an aggressive registry competitor with continuing aspirations for introducing new products and services and other dns registries. Various disputes allege antitrust violations and breach of contract as these entities vie for power over dns matters. See e.g., Matt Hicks, VeriSign Takes ICANN to State Court, eWeek- Enterprise News and Views, Aug.30, 2004 http://www.eweek.com/article2/0,1759,1641016,00.asp (accessed last Aug.31, 2004).
[15] Daniel Benoliel, Cyberspace Technological Standardization: An Institutional Theory Retrospective,18 Berkeley Tech. L.J. 1259 (Fall, 2003).
[16] For example, penetration of mobile commerce using wireless or cellular telephony is greater in Europe and Japan than in the United States. Similarly, the much larger population of Asia translates to larger proportions of the world’s Internet users, 33%, when compared with North America or Europe. Latin America and Africa together have less than 20% of Internet users worldwide. There are over 165 million Internet users in North America; over 140.6 million users Europe and over 100 million users in the Pacific Rim. However, considering the latter has a population nearly eight times larger than North America or Europe, the greatest Internet usage growth potential lies in the Pacific Rim even though Internet usage is currently more widespread in North America and Europe. See The Economist, July 19th, 2003, at 47.
[17] However, some nations are beginning to discover that close regulation inhibits the commercial efficiencies of eCommerce. For example, in 2002 Australia weakened these requirements by permitting foreign firms to use .au if the attached domain name is registered as a trademark in Australia.
[18] Milton L. Mueller, Ruling the Root: Internet governance and the taming of cyberspace (2002, MIT Press, Cambridge MA).
[19] See Management of Internet Names and Addresses, National Telecommunications and Information Administration, United States Department of Commerce, Docket Number: 980212036-8146-02, http://www.ntia.doc.gov/ntiahome/domainname/6_5_98dns.htm (accessed last on August 23, 2004); see also, The Recognition Of Rights And The Use Of Names In The Internet Domain Name System,
Report of the Second WIPO Internet Domain Name Process World Trade Organization, (September 3, 2001) http://arbiter.wipo.int/processes/process2/report/pdf/report.pdf (accessed last on August 23, 2004).
[20] Remedies can include penalties (civil and criminal, federal and state), private rights of action for damages or equitable remedies and various forms of enforcement by regulatory agencies or private rights created under contract.
[21] See, e.g., Miller v. California, 413 U.S. 15 (1973) (Miller Test – the basic obscenity test reliant on contemporary community standards, including the factors of - appeals to prurient interest, is patently offensive and lacks serious literary, artistic, political or scientific value). See also, Truth in Domain Names provisions (TDN Provisions) of the Prosecutorial Remedies and Other Tools to end the Exploitation of Children Today Act of 2003 (PROTECT Act), Pub. Law No. 108-21, 117 Stat. 686 (2003) (codified at 18 U.S.C. §2252B (2004)). The TDN Provisions are contained in §521 of the PROTECT Act, that criminalizes the knowing use of misleading domain names to direct either adult Internet traffic to obscene material or child Internet traffic to material … harmful to minors, it exempts domain names that clearly indicate sexual content and it defines “material … harmful to minors” as applicable to minors in the terms of the Miller Test:
§ 2252B. Misleading domain names on the Internet
(a) Whoever knowingly uses a misleading domain name on the Internet with the intent to deceive a person into viewing material constituting obscenity shall be fined under this title or imprisoned not more than 2 years, or both.
(b) Whoever knowingly uses a misleading domain name on the Internet with the intent to deceive a minor into viewing material that is harmful to minors on the Internet shall be fined under this title or imprisoned not more than 4 years, or both.
(c) For the purposes of this section, a domain name that includes a word or words to indicate the sexual content of the site, such as ‘sex’ or ‘porn’, is not misleading.
(d) For the purposes of this section, the term ‘material that is harmful to minors’ means any communication, consisting of nudity, sex, or excretion, that, taken as a whole and with reference to its context—
(1) predominantly appeals to a prurient interest of minors;
(2) is patently offensive to prevailing standards in the adult community as a whole with respect to what is suitable material for minors; and
(3) lacks serious literary, artistic, political, or scientific value for minors.
(e) For the purposes of subsection (d), the term ‘sex’ means acts of masturbation, sexual intercourse, or physcial contact with a person’s genitals, or the condition of human male or female genitals when in a state of sexual stimulation or arousal.
[22] See e.g., New York Times Co. v. Sullivan, 376 U.S. 254 (1964).
[23] There are numerous disclosure requirements under local, state and federal laws that constitute a form of compelled speech. These are reinforced with requirements for forthrightness and truthfulness under various antifraud regimes, many associated with commercial transactions, quite notably, the financial disclosure requirements of the federal securities laws, see e.g., 15 U.S.C. §78j(b) (2004) and SEC Rule 10b-5, 17 CFR §240.10b-5 (2003). The constitutional limitations on regulation of commercial political speech are notable, see e.g., Central Hudson Gas & Electric Corp. v. Public Service Commission, 447 U.S. 557 (1980).
[24] See e.g., Brandenburg v. Ohio, 395 U.S. 444 (1969).
[25] See e.g., 17 U.S.C. §502(a) copyright example of infringement rights that exist under various intellectual property laws.
[26] See e.g., Richard Delgado, About Your Masthead: A Preliminary Inquiry into the Compatibility of Civil Rights and Civil Liberties, 39 Harv. C.R.-C.L. L. Rev. 1 (Winter, 2004).
[27] For example, campaign finance legislation impacts form, time, place and manner of political speech, see e.g., 2 U.S.C. §431 et. seq. Prohibitions are valid for some forms of speech on private property, compare, Lechmere v. National Labor Relations Board, 502 U.S. 527 (1992) (enforcing private property limitations on free speech – handbilling in employer’s parking lot) with Intel v. Hamidi, 71 P.3d 296 (Cal.2003) (limiting private property limitations on free speech – computer email system).
[28] Chander Anupam, The New, New Property, 81 Tex. L. Rev. 715 (Feb. 2003) (arguing against strong IP rights in dns).
[29] Existing trademarks are usually the best domain names precisely because they incorporate existing consumer brand image recognition and good will thereby permitting website search using that organization’s or business’s name to access its web site or eCommerce facility, simply and accurately and largely based on the user’s preexisting knowledge of the owner’s marks.
[30] See infra text accompanying note 54 to 92.
[31] See infra Table 1 for remedial hierarchy.
[32] See e.g., Lambert Pharmaceutical Co. v. Bolton Chemical Corp., 219 F. 325 (S.D.N.UY. 1915).
[33] See e.g., Brookfield Communications, Inc. v. West Coast Entertainment Corp., 174 F.3d 1056 (9th Cir. 1999).
[34] See e.g., Catherine T. Struve & R. Polk Wagner, Realspace Sovereigns in Cyberspace: Problems with the Anticybersquatting Consumer Protection Act, 17 Berkeley Tech. L.J. 989 (Summer, 2002) (comparing in personam and in rem jurisdiction for Internet matters).
[35] Jason M. Osborn, Effective And Complementary Solutions To Domain Name Disputes: ICANN's Uniform Domain Name Dispute Resolution Policy And The Federal Anticybersquatting Consumer Protection Act Of 1999, 76 Notre Dame L.Rev. 209 (2000).
[36] Harrods, Ltd. V. Sixty Internet Domain Names, 302 F.3d 214 (4th Cir.2002).
[37] In 2000, NSI was purchased by the network security firm VeriSign in VeriSign stock. See e.g., Farmer, Melanie Austria, VeriSign buys Network Solutions in $21 billion deal, CNET News.com (March 7, 2000) http://news.com.com/2100-1023-237656.html?legacy=cnet (accessed last on August 24, 2004).
[38] Mattel, Inc. v. Barbie-Club.com, 310 F.3d 293 (2d Cir. 2002).
[39] UDRP §4(i), Uniform Domain Name Dispute Resolution Policy, ICANN (August 26, 1999, published October 24, 1999).
[40] The mark owner must prove the registrant achieved “Registration and Use in Bad Faith” defined in the UDRP policy as:
(i) Circumstances indicating that the registrant registered or has acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of the documented out-of-pocket costs directly related to the domain name; or
(ii) The registrant has registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, and the registrant has engaged in a pattern of such conduct; or
(iii) The registrant has registered the domain name primarily for the purpose of disrupting the business of a competitor; or
(iv) By using the domain name, the registrant has intentionally attempted to attract, for commercial gain, Internet users to its web site or other on-line location, by creating a likelihood of confusion with the complainant's mark as to the source, sponsorship, affiliation, or endorsement of the web site or location or of a product or service on the web site or location.
UDRP §4(b), Uniform Domain Name Dispute Resolution Policy, ICANN (August 26, 1999, published October 24, 1999).
[41] In this context, the UDRP envisions an electronic ADR implicating a balance between due process concerns and a composite of cost considerations. For example, parties and their witnesses need not be present at the arbitration.
[42] See www.icann.org/udrp.
[43] Geist, Michael, Fair.Com?: An Examination Of The Allegations Of Systemic Unfairness In The ICANN UDRP, 27 Brook. J. Int'l L. 903 (2002) (UDRP outcomes favor trademark holders, potential biases in single member panels when compared with three member panels).
Consider the UDRP data from the WIPO, the largest of the four UDRP dispute resolution entities, cumulative statistics accessible at: http://arbiter.wipo.int/domains/statistics/cumulative/results.html (updated Sept. 18, 2004).
|
Decision type |
gTLD Cases |
ccTLD Cases |
Total Cases |
|
Transferred |
4006 |
117 |
4123 |
|
Complaint denied |
843 |
16 |
859 |
|
Cancelled |
41 |
1 |
42 |
|
Withdrawn-Terminated |
1202 |
44 |
1246 |
|
Total |
6092 |
178 |
6270 |
The other three ICANN approved UDRP dispute resolution entities are Asian Domain Name Dispute Resolution Centre (ADNDRC) http://www.adndrc.org/adndrc/index.html, CPR Institute for Dispute Resolution (CPR) http://www.cpradr.org/ and National Arbitration Forum (NAF) http://www.arb-forum.com/domains/.
Two conclusions from the six year cumulative history of UDRP case dispositions become immediately apparent. First, the UDRP has served an important initial purpose of cleaning out a backlog of cybersquatting cases but the prevalence of the process has leveled off. Second, by some measures, mark owners prevail in over 80% of UDRP decisions. However, nearly 20% of the UDRP case filings are withdrawn or terminated by mark owners before final resolution. Cases may be abandon due to many of the traditional pre-trial case resolution reasons including, inter alia the parties’ settlement by litigation or confidential agreement, recognition of a weak case by the mark owner or such a recognition by the alleged cybersquatter. Without a clearer understanding of the characteristics of these withdrawn and/or terminated cases, it is speculative to adjust the major observation that mark owners win so frequently. But see Samuels, Jeffrey M. & Linda B.Samuels, Internet Domain Names: The Uniform Dispute Resolution Policy, 40 Am. Bus. L.J. 885, 896 (Summer 2003) (arguing for adjustments to UDRP decision data that do not show mark owners prevailing overwhelmingly).
[44] Some of the key foundations supporting the evolution of dns into a sui generis form of intellectual property are falling into place, see e.g., Kremen v. Cohen, 337 F.3d 1024 (9th Cir. 2003) (dns is an intangible form of personal property).
[45] U.S. Const. art. I, § 8 cl.8. (limiting Congress’ legislative powers to establish IP schemes to those intended to “promote the Progress of Science and useful Arts” and limiting the monopoly to “Limited Times”).
[46] It is conceded that the federal qualification regime of marks (registration, prosecution) by the Patent and Trademark Office (PTO) serves to reduce uncertainty while protecting the public domain consistent with traditional trademark limitations. The presumption of validity further recognizes the complexity of judgments on such key mark factors as confusion, similarity and protects the public domain.
[47] See John Locke, Second Treatise of Government, §§ 138-40, in Two Treatises Of Government (P. Laslett rev. ed. 1963) (3d ed. 1698).
[48] See generally J. Hughes, The Philosophy of Intellectual Property, 77 Geo. L.J. 287 (1988).
[49] But see Karl M. Manheim & Lawrence B. Solum, An Economic Analysis of Domain Name Policy, 25 Hastings Comm. & Ent. L.J. 359 (Spring/Summer, 2003) (economic analysis of dns governance).
[50] It is argued here that mark owners are generally dissatisfied by the inability of modern accounting standards to adequately, immediately or accurately capture goodwill valuation. This disappointment arguably contributes to political pressures from mark owners to expand trademark with state and federal causes of action for dilution, ACPA and UDRP preferences for mark owners, limitations on expanding the trademark functionality doctrine into the functionality of dns addressing.
[51] Consider the underlying political pressures, stakeholder activities, and the ultimate validity of some sui generis IP laws, including database protections, boat hull designs, plant patents, mask works.
[52] Directive 96/9/Ec, On The Legal Protection Of Databases (March 11, 1996) European Parliament And Of The Council, http://europa.eu.int/ISPO/infosoc/legreg/docs/969ec.html (accesses last Aug.31, 2004).
[53] See e.g., Andrew L. Dahm, Note: Database Protection v. Deep Linking, 82 Tex. L. Rev. 1053 (March, 2004).
[54] Provisionally, de facto functionality lies at the heart of the ultimate reasoning for utility patents – the novel and non-obvious functional aspects of an invention are the protectable aspects. 35 U.S.C §101.
[55] Functionality is not protected under design patents in deference to functionality as the primary purpose of utility patents. Therefore, functionality serves as a basis to deny design patents for designs deemed “primarily functional rather than ornamental” see e.g., Power Controls Corp. v. Hybrinetics, Inc., 806 F.2d 234 (Fed.Cir.1986).
[56] Restatement of Torts, §757 comment b.
[57] Uniform Trade Secrets Act §1(4).
[58] Copyright law protects only the form of the expression and not the underlying idea, procedure, process, system, method of operation, concept, principle, or discovery, several of these listed items amount to functional aspects. 17 U.S.C. §102(b). See e.g., Baker v. Selden, 101 U.S. 99 (1879). Software functionality receives much less copyright protection than might be possible under utility patent law, see e.g., Computer Assocs. Int'l, Inc. v. Altai, Inc., 982 F.2d 693 (2d Cir. 1992); Lotus v. Borland, 49 F.3d 807 (1st Cir. 1995).
[59] See e.g., Xuan-Thao N. Nguyen, Should It Be A Free For All? The Challenge of Extending Trade Dress Protection to the Look and Feel of Web Sites in the Evolving Internet, 49 Am. U.L. Rev. 1233 (August, 2000) (arguing for extension of trade dress protection to website look and feel).
[60] The product vs. service dichotomy is well represented in trademark and service mark law because of distinctions between products and services. The distinction may become particularly important as electronic information, intangibles and other forms of IP become key to the eCommerce channel of distribution and such intangibles are definitively classified within the products vs. services dichotomy. The PTO expends considerable effort distinquishing products and services and more recently classified the online aspects of product vendors or service providers. See e.g., Trademark Acceptable Identification of Goods and Services Manual, U.S. PTO, accessible at: http://tess2.uspto.gov/netahtml/manual.html (accessed last: 9/30/2004) and Classification and Identification of Goods and Services Issues, PTO Examination Note - 98/1 (Aug. 17, 1998) accessible at: http://www.uspto.gov/web/offices/tac/notices/exam9808.htm (accessed last: 9/30/2004).
[61] See, e.g, Stacey L. Dogan, An Exclusive Right to Evoke, 44 B.C. L. Rev 291(March 2003) (arguing for limits on IP owners developing exclusive rights to evoke).
[62] Functional aspects of product design cannot be protected by trademark otherwise competitors could not compete effectively. See e.g., Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159, 164, (1995):
The functionality doctrine prevents trademark law, which seeks to promote competition by protecting a firm’s reputation, from instead inhibiting legitimate competition by allowing a producer to control a useful product feature. It is the province of patent law, not trademark law, to encourage invention by granting inventors a monopoly over new product designs or functions for a limited time, after which competitors are free to use the innovation. If a product’s functional features could be used as trademarks, however, a monopoly over such features could be obtained without regard to whether they qualify as patents and could be extended forever (because trademarks may be renewed in perpetuity).
The functionality limitation is reinforced by a recognition that trademarks have potentially unlimited duration so that the functionality exclusion serves to preserve the public domain and relies on patent law to qualify novel and functional design elements. See e.g., LeSportsac, Inc. v. K-Mart Corp., 754 F.2d 71, 75 (2d Cir. 1985) (functional symbols not protectable under §43(a))
[63] Restatement of Torts (First) §742 (1938). Inwood Laboratories, Inc. v. Ives Laboratories, Inc., 456 U.S. 844, 851 (1982) (a product feature is functional if it is essential to the use or purpose of the article or if it affects the cost or quality of the article). Consider some functionality examples from leading cases, inter alia, Kellogg Co. v. National Biscuit Co., 305 U.S. 111 (1938) (any competitor is free to produce similar “pillow shape” cereal biscuits upon expiration of National Biscuit Co.’s patents for the producing machines); Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159 (1995) (color alone may serve as a trademark, Qualitex green-gold ironing board covers acquired secondary meaning and is not functional i.e., exclusive use of the feature does not put competitors at a significant non-reputation-related disadvantage); TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23 (2001) (utility patent covering road sign stability device is strong, but not conclusive evidence, of functionality; competitive necessity is factor in finding aesthetic functionality).
[64] Compare particular components of the trade dress protected at Taco Cabana restaurants with the traditional, 6.5 oz. ribbed Coke bottle. The restaurant’s garage doors are functional serving to control climate while permitting dining room enlargement in fair weather. Standing alone, the garage doors likely functional for competing restaurants to use. However, when combined with the other “Mexican patio café-style” components (e.g., artifacts, bright colors, paintings, murals), a distinctive combination combines to protect trade dress even without acquiring secondary meaning. By contrast, the Coca-Cola bottle’s vertical ribbing and hourglass shape are not clearly functional, instead primarily ornamental, and thus unneeded to provide container strength or a more effective hand grip. See Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992). [need look & feel copyright, trademark/dress examples, cases & law reviews]
[65] Prior to the Technical Corrections to Trademark Act of 1996, Pub. L. No. 105-330, 112 Stat. 3064, the functionality exclusion was largely a common law matter although the PTO likely addressed functionality by excluding functional elements if they were generic or highly descriptive. The revised Lanham Act prohibits registration on the Principal Register, 15 U.S.C. §1052(e)(5), or on the Supplemental Register, 15 U.S.C. §1091(c), if the matter, taken as a whole, is functional, or is functional even if it has become distinctive, 15 U.S.C. §1052(f), see also TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, 34-35 (2001). In addition, functionality can be raised as a ground for cancellation, 15 U.S.C. §1064(3), and functionality is a statutory defense to infringement, 15 U.S.C. §1115(b)(8).
[66] See e.g., Mark Alan Thurmon, The Rise And Fall Of Trademark Law's Functionality Doctrine, 56 Fla. L. Rev. 243 (April, 2004) (proposals to address the social costs from evolving case law on functionality).
[67] De facto functionality is not a basis for excluding functional design elements nor for denying mark registration. See In re Ennco Display Systems Inc., 56 USPQ2d 1279, 1282 (TTAB 2000) and In re Parkway Machine Corp., 52 USPQ2d 1628, 1631 n.4 (TTAB 1999).
[68] The de facto/de jure distinction originated in In re Morton-Norwich, 671 F.2d 1332, 1337 (CCPA 1982). However, the Patent and Trademark Office (PTO) has attempted to eliminate the distinction in the Trademark Manual of Examining Procedure (TMEP) §1202.02(a)(iii)(B) “De Jure” and “De Facto” Functionality, citing three recent Supreme Court discussions of functionality that have declined to perpetuate the distinction, see Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159 (1995); Wal-Mart Stores, Inc. v. Samara Brothers, Inc., 529 U.S. 205 (2000); and TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23, (2001). Furthermore, the de facto/de jure distinction was not mentioned in the Technical Corrections to Trademark Act of 1996.
[69] See e.g., M-5 Steel Mfg., Inc. v. O’Hagin’s Inc., 61 USPQ2d 1086 (TTAB 2001); Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159 (1995); TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23 (2001) and TMEP §1202.02(a)(iii)(C) Aesthetic Functionality.
[70] Inwood Labs., Inc. v. Ives Labs., Inc. 456 U.S. 844, 850 n.10 (1982).
[71] In re Morton-Norwich, 671 F.2d 1332 (CCPA 1982). See the PTO’s implementation of the Morton-Norwich factors in the Trademark Manual of Examining Procedure (TMEP) at §1202.02(a)(v) Evidence and Considerations Regarding Functionality Determinations.
[72] Another factor used in some cases suggesting functionality may be present is whether the design feature lowers production costs, Schwinn Bicycle Co. v. Ross Bicycles, Inc., 870 F.2d 1176 (7th Cir. 1989).
[73] Restatement of Torts (First) §742 comment a (1938); Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159, 164 (1995):
The functionality doctrine prevents trademark law, which seeks to promote competition by protecting a firm’s reputation, from instead inhibiting legitimate competition by allowing a producer to control a useful product feature. It is the province of patent law, not trademark law, to encourage invention by granting inventors a monopoly over new product designs or functions for a limited time, after which competitors are free to use the innovation. If a product’s functional features could be used as trademarks, however, a monopoly over such features could be obtained without regard to whether they qualify as patents and could be extended forever (because trademarks may be renewed in perpetuity).
[74] Supreme Court dicta recently re-validated aesthetic functionality, see TrafFix Devices, Inc. v. Marketing Displays, Inc., 532 U.S. 23 (2001).
[76] Id. Aesthetic functionality may be appropriate only when utilitarian functionality is difficult to determine. See e.g., M-5 Steel Mfg., Inc. v. O’Hagin’s Inc., 61 USPQ2d 1086 (TTAB 2001) (product designs for metal ventilating ducts and vents for unobtrusive tile or concrete roofs that match the appearance of surrounding roof tiles, therefore more pleasing in appearance) and Brunswick Corp. v. British Seagull Ltd., 35 F.3d 1527 (Fed. Cir. 1994) (color black for outboard motors aesthetically functional without utilitarian effect due to competitive advantages in the coordination with a variety of boat colors and appearance of reducing the size of the engines).
[77] See TMEP §1202.03 Refusal on Basis of Ornamentation.
[78] For example, consider the more common aspects of website navigation including those in the early stages of standardization such as the use of buttons to launch features, reliance on pop-ups and “mouse-overs” to identify functions, provide help or provide warnings, location and nested structure of side-bars or file-folder tabs and labels, search and help query boxes).
[79] Marks Composed, In Whole Or In Part, Of Domain Names, U.S. PTO Examination Guide No. 2-99 (September 29, 1999) http://www.uspto.gov/web/offices/tac/notices/guide299.htm (accessed last on 9/26/2004).
[80] Substantive Examination of Applications, Trademark Manual of Examining Procedure (TMEP), 3d ed. (Jan. 2002) Chapter 1200.
[81] The TMEP thereby signals trademark attorneys to avoid prosecution uncertainties and expense by avoiding mark components the PTO will likely disallow.
[82] The TMEP is binding “on the [PTO] office” but not on applicants. Essentially the TMEP represents policy statements of the PTO with authoritative status that clearly lies below constitutions, statutes or informally promulgated (notice and comment) rules. Nevertheless, such regulator policy is akin to prosecutorial intent and therefore still susceptible to some deference at the option of courts, see e.g., Ciritkon, Inc. v. Becton Dickenson Vascular Access, Inc., 120 F.3d 1253 (Fed. Cir. 1997); Refac Int. v. Lotus Dev. Corp., 81 F.3d 1576 (Fed. Cir. 1996); and Racing Strollers, Inc. v. TRI Indus, Inc., 878 F.2d 1418 (Fed. Cir. 1989).
[83] There are other transfer protocol instructions (e.g., ftp:, https:, mailto:, urn:) and other hypertext interface systems (e.g., www2, no-www specification).
[84] For example, .com generally refers to commercial entities, .biz is generally available for businesses and .edu is largely restricted to post-secondary educational institutions accredited by bodies recognized by the U.S. Department of Education. There are eleven other ICANN approved gTLDs in current use (i.e., .aero (airline industry), .coop (cooperatives), .gov (U.S. federal government agencies), .info (information industry), .int (international organizations), .mil (U.S. military), .museum (museums), .name (individual persons), .net (network infrastructure), .org (generally not-for-profit organizations), .pro (professionals) and several more proposed for near term availability and nine proposed gTLDs: .asia, .cat, .jobs, .mail, .mobi, .post, .tel, .travel and .xxx. See, Public Comments for Proposed Sponsored Top-Level Domains ICANN (March 31, 2004) http://www.icann.org/tlds/stld-apps-19mar04/stld-public-comments.htm (last accessed: 9/26/2004).
[85] TMEP §1209.03(m) Domain Names and §1215.04 Descriptiveness.
[86] In re Martin Container, Inc., 65 USPQ2d 1058, 1060-1061 (TTAB 2002) and Goodyear’s India Rubber Glove Mfg. Co. v. Goodyear Rubber Co., 128 U.S. 598, 602 (1888) (“Company” indicates formation of an association or partnership but does not make a generic mark registrable). See also In re CyberFinancial.Net, Inc., 65 USPQ2d 1789, 1792 (TTAB 2002) (generic term “bonds” does not identify source so combining with the .com gTLD does not create a composite term “capable of identifying and distinguishing applicant’s services.”) and TMEP §1215.05, Generic Refusals. However, the addition or deletion of a gTLD to or from the drawings required as part of a trademark application does not materially alter the mark, TMEP §1215.08(a) Adding or Deleting TLDs in Domain Name Marks, such that the character of the mark would create a different commercial impression, a prohibited form of amendment to a registered mark, TMEP §1215.08 Material Alteration.
[87] The developing computer and information science discipline of human computer interaction (HCI) holds promise as a cognitive perspective useful to this juxtaposition difficulty. HCI might better serve to specify an ontology arguably stretching from human cognition functionality (recognize and associate amounting to source identification) to mechanical functionality (computer, communications addressing) with possible mid-points anchored to explore the limits of trademark purposes. For example, consider the useful mechanical cognition served by electronic agents in doing search or other optimization – they hold promise of exhaustive and rapid search of which humans are incapable and thereby hold promise of reducing search costs, a classic economic justification for trademark. Therefore, electronic agent use of trademarks imbedded in domain names become available for both human use and for automated internal algorithm use in effecting eCommerce or search/evaluate/contact, a traditional and essential mark function. See e.g., See In re Standard Oil Co., 275 F.2d 945 (C.C.P.A. 1960) (perception of ordinary customer as to actual mark’s use determines eligibility for registration and not applicant’s intent or expectation).
[88] TMEP §1215.02(c) Agreement of Mark on Drawing with Mark on Specimens of Use (“consumers look to the second level domain name for source identification, not to the top-level domain (TLD) or the terms “http://www.” or “www.”).
[89] TMEP §1215.02(a) Use Applications and In re Eilberg, 49 USPQ2d 1955 (TTAB 1998) (domain name only served as Internet address and was not in sufficient proximity).
[90] TMEP §1215.02(b) Advertising One’s Own Products or Services on the Internet is not a Service.
[91] TMEP §1215.10 Marks Containing the Phonetic Equivalent of a Top-Level Domain.
[92] See e.g., Kremen v. Cohen, 337 F.3d 1024 (9th Cir. 2003) (dns is an intangible form of personal property).
[93] See e.g., Zohar Efroni, A Guidebook To Cybersquatting Litigation: The Practical Approach In A Post-Barcelona.Com World, Fall, 2003 U. Ill. J.L. Tech. & Pol'y 457 (discussing international and jurisdictional aspects of cybersquatting remedies processes).
[94] ICANN imposes on registrars that registration agreements with domain name registrants include mandatory submission to the UDRP, see Uniform Domain Name Dispute Resolution Policy, (August 26, 1999, implementation documents approved: October 24, 1999) http://www.icann.org/dndr/udrp/policy.htm (accessed 9.17.04).
[95] Economic damages include several components, including consequential damages, lost profits, tarnishment and dilution.
[96] Litigation costs can be defined as including several major components, including inter alia, damage payments discounted by the probability of non-payment, direct fees for attorney, witnesses and litigation consulting services, and should include the more speculative opportunity costs for employee involvement, brand image losses from adverse publicity, and other missed opportunities. (cite needed)
[97] See Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir. 1961); AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348–49 (9th Cir. 1979).
[98] 15 U.S.C. § 1125(a)(1)(B).
[99] 15 U.S.C. § 1125(c).
[100] See e.g., Thakker, Dharmesh, Keep Transactions Flowing Smoothly - Offline and Online, E-Commerce Times, Aug.16, 2004 http://www.ecommercetimes.com/story/35826.html (accessed last on Aug.16, 2004).
[101] Defensive and exhaustive registration are abating for all conceivable variations, misspellings, nicknames, as well as all these variations in every ccTLDs, again arguably due to the achieved objectives of ACPA and UDRP.
[102] Other strategies are now evident, including search engine business models emphasizing paid prominence and manipulation of searched terms to increase result prominence based on relevance algorithms. search engine rankings can be enhanced when your web site is linked to many other web sites - so-called “link popularity.” Internet search engines prioritize search result listings using this and other factors and domain names listed early on in search results receive much higher click through referrals than those listed later. A second suggestion is to be sure that your web site’s meta tag contains sufficient key words describing your products or services to reliably map search engine “key word” inquiries to your web site. “Meta tags” are coded tags attached to a web site and not visible to users that contain the key word search terminology used by search engines to map search inquiries. It is also important to determine current values for various components of brand image, including estimates of future cash flows associated from each brand image component.
[103] A final aspect of a DNS audit is ensuring that the web servers or “name servers” which service your various web sites or DNS “zones” are operational 24/7. A DNS zone is your exclusive electronic zone under a registered DNS domain name, and an organization may establish one or many zones under its registered DNS name. For example a business could have separate zones for different products or services, or for new orders, order fulfillments, or customer service, under its registered domain name. Assurance of continuous name server operation to connect users to such DNS zones can be assisted by having multiple name servers to service each important zone, in order to avoid service cut-offs should a server go down, as well as by locating name servers in different geographic or foreign markets which are important to commercial operations. This provides redundancy in case of technical problems in the Internet and also enables faster response to web site or mapping inquiries by foreign name servers. A third technique is to link your name servers to multiple ISP networks so that an outage in one ISP network does not cut off all web access. Finally, name servers need to be protected against “denial of service” or other viral or electronic attacks by up to date software and hardware security measures, as well as by ensuring adequate monitoring by competent technical support staff. See e.g., VeriSign DNS Assurance Services White Paper http://www.verisign.com/resources/wp/mdns/mdns.html (accessed last on August 25, 2004).