{1} There is little debate amongst cyberspace historians that America is the birthplace of the Internet. When conceived some 30 years ago, the Internet was used by the U.S. military in times of war and structured to fit specific, esoteric needs. However, most people failed to realize that its application was far more reaching. The U.S. government, in particular, could never have realized that the Internet would soon spark a brush fire of worldwide fascination. In fact, it represented one of the most remarkable mediums of telecommunication the world would ever experience.
{2} However, inventing this new form of communication has not been the U.S. government's only claim to fame. Until now, the American government has played the key role in the modern development and maintenance of the Internet. Sponsored by certain administrative agencies within the U.S. government, a single American company, Network Solutions Inc. ("NSI"), was chosen as the first registrar of Domain Names for interested parties around the world. Although various international affiliates have joined this effort, NSI remains the largest monopoly in the Domain Name registration business. As a result, NSI's administrative policies have had far reaching effects. Unfortunately, many argue that these policies have done as much to harm Internet users as to help them.
{3} One of the first legal dilemmas to develop over the Internet grew out of NSI's Registration Policy and involved issues of Trademark law. As the Internet grew in popularity, so did the number of Domain Name registrations by American companies and individuals. This growth lead to widespread disputes over the selection of Domain Names and the misappropriation of famous registered Trademarks. NSI's Registration Policy was simply not designed to protect against such wrongdoings. Soon enough, companies and individuals from overseas began to register with NSI as well, and Trademark disputes arose on an international level. Amongst other things, this left the question of jurisdiction and the need for uniform international Trademark laws largely unanswered.
{4} In a feeble attempt to resolve such disputes, NSI eventually created and implemented a Dispute Resolution Policy. It was, in essence, an attempt to correct the mistakes which NSI had already made. Unfortunately, this policy was also inadequate to resolve the problems at hand. The Trademark disputes that arose out of NSI's Registration Policy were only exacerbated by implementation of the Dispute Resolution Policy. NSI changed its policy on several occasions in an effort to correct these lingering Trademark problems, but each modification proved unsuccessful. Therefore, Trademark disputes have continued to emerge both in the U.S. and around the globe.
{5} NSI's monopoly on the Domain Name registration business will end in March 1998 when its 5-year contract with the U.S. government terminates. In preparation, the global Internet and Intellectual Property communities have joined in the search to find an appropriate replacement for NSI. Discussions concerning viable candidates focus on the need for a more internationally structured Registration Policy, and on the adoption of a new Dispute Resolution Policy that will consider the Intellectual Property rights of Trademark owners throughout the world as well as provide a forum where international disputes can be heard.
{6} Although commentators have suggested a number of possible replacements for NSI, each one tends to highlight the respective concerns of its proponent. Various interest groups differ on which factors they believe are most important to the implementation of a new administration. Non-U.S. companies, for example, are seeking a new Registration Policy that does not favor U.S. Domain Name applicants, while U.S. Trademark owners are in search of a new Dispute Resolution Policy that will protect their Trademark rights in both the U.S. and abroad.
{7} However, though virtually every interest group accepts that the U.S. government has thus far maintained control over the Internet, they also agree that this control must come to an end. NSI and its respective policies are no longer capable of effectively and efficiently managing the Internet. Proper management must now be turned over to an international body that can fairly administer to the needs of Internet users worldwide. However, establishing this new administrative body, whose policies must be created through equal representation of global interest groups, will be no easy task. Not only will a global consensus be difficult to reach, but the element of time is of particular importance as well. With only four months remaining in NSI's contract, the global Internet community must act expediently.
{8} Accordingly, this essay seeks to address the policy concerns of a new administrative body. By focusing on the failures of NSI's policies, goals for the new policies should become clear to all. Part I of this paper will provide a brief history on the creation of the Internet. Part II will discuss how the Internet is presently maintained by the U.S. government and its assignment of certain U.S. parties to facilitate this maintenance. Part III will explain the role of NSI and the effect of its ability to implement policy decisions. Part IV will discuss the Registration Policy and the impracticability of NSI's continued monopolization over this registration process. Part V will provide examples of the various domestic disputes that are direct results of this policy. Part VI will examine the similar cases in the international arena. Part VII will then discuss the effect of NSI's Dispute Resolution Policy and how it has been applied to Domain Name holders. Part VIII will share some of the recent commentary regarding possible replacements for NSI. Finally, Part IX will present the author's opinion that NSI has proven to be a wholly inadequate service. NSI's Registration Policy and Dispute Resolution Policy have failed to demonstrate that they can fairly and efficiently serve the needs of the Internet and Intellectual Property communities in the years ahead. These failures, however, should lend valuable insight into prospective policy changes that must be made soon.
I. How the Internet Started: Framework behind Policies
{9} The Internet was first conceived in the late 1960's under the sponsorship of the U.S. Department of Defense. The American government, in essence, wanted to establish a decentralized computer system that would not only be able to survive in case of military attack, but would also allow faster data transfer between the various branches of the military and other government bodies. [1] More specifically, the Internet is the outgrowth of a military program called ARPANET [2] which was designed to enable computers operated by the military, defense contractors, and universities conducting defense-related research to communicate with one another by redundant channels, even if some portions of the network were damaged in a war. Although ARPANET no longer exists, it provided an example for the development of a number of civilian networks that eventually could be linked with each other. [3] This is exactly what transpired, and in an attempt to "internetwork" such parties, the Address Number Authority ("IANA") was created and given the task of assigning unique addresses to each participating network. [4] The same protocol that was adopted in 1978 to link these networks together, TCP/IP v4.0, is still in use today. [5]
{10} With this brief history in mind, it is easy to understand that America has a legitimate claim as the birthplace of the Internet. For many years, it was a tool for only the American armed forces, and no one else. It was only a matter of time, however, before its true capability was recognized. What began as an experiment for military networking soon appealed to the international community as well. Although most Internet users and the author concede U.S. inception, this essay seeks to answer a more important question: Who should maintain the Internet now? As a truly global means of communication [6], there seems to be little rationale behind the American assertion that it still deserves (or is even obligated) to maintain the Internet as it sees fit. Frankly, there is a possessive attitude amongst some U.S. government officials that does little to assist in the ongoing discussions of the international community regarding the future of the Internet and its maintenance.
{11} For whatever reason, certain members of our government insist that the novel communications system we invented in the 1960's still requires a primarily American-based administrative and policymaking authority. Representative Charles Pickering (R-Miss.), for example, believes in protecting the interests of "Main Street" America, for what he feels is something "uniquely American." [7] Unfortunately, Mr. Pickering fails to see the true capability of the Internet. The Internet might be truly American in design, but in cyberspace, "Main Street" does not simply run through Mr. Pickering's hometown in Mississippi, nor simply down the halls of our White House in Washington, D.C. Instead, "Main Street" can be found in every corner of the world, just like the Internet. Similarly, Mr. Larry Irving, Director of the National Telecommunications Information Administration, believes that American bureaucrats, like himself, can do a better job "running the system" than his foreign colleagues. [8] It appears that Mr. Irving is oblivious to the Internet dilemmas created by the American government over the past five years.
{12} What is American in conception does not have to be American either in practice or administration. By assuming every American's unwillingness to "cede governance [of the Internet] to a global body," members of our government, such as Representative Pickering, are greatly mistaken. In fact, the very opposite sentiment is dominating the Internet community today, both domestically and abroad. American users who truly appreciate and admire the capability of the Internet should be offended by the likes of Representative Pickering and Larry Irving. They represent a possessive ideology that is both ignorant and destructive. If the Internet is to ever serve the world in an effective and efficient manner, it will be under the administrative democracy of an international governing body. However, the American government will have to make a dramatic change in its attitude if this is to occur. It must acknowledge that its days of ruling cyberspace will soon be over, for the future of the Internet depends upon it. In the meantime, the American government might also consider refraining from labeling the rest of us as supporters of their shortsighted ideology - it's rather offensive.
II. How the Internet is Managed: Who Creates the Policies?
{13} Theoretically, the Internet is a cooperative association with no centralized control. In reality, however, the exact opposite is true. Although we claim that the Internet is not owned or regulated by any individual or government agency, there are a number of volunteer U.S. agencies which perform certain regulatory functions. Internet Domain Names, for example, are registered by the Internet Network Information Center ("InterNIC"), which is a collaborative organization established by the National Science Foundation ("NSF"). In 1992, under a grant from the NSF, InterNIC delegated the actual responsibility for registering Domain Names to a private company located in Herndon, Virginia, called Network Solutions Inc. ("NSI"). [9]
{14} NSI's expertise with the TCP/IP protocol uniquely positioned the company to assume the task of global Internet address management. Since 1993, it has been the global registrar for the international Top Level Domains ("TLDs") of .com, .org, .net, .gov, and .edu. [10] In March of 1995, Science Applications International Corporation ("SAIC") of San Diego acquired NSI as a wholly-owned subsidiary. Since then, NSI has expanded to focus its services on networking, specializing in internetworking and interoperability solutions for diverse, distributed networks. [11]
{15} As one can see, primarily U.S.-based organizations have managed the Internet up to this point. In particular, NSI has been the dominant force in its role as the world's largest Domain Name registrar. There are, of course, other independent Domain Name registrars in various foreign countries, but these registrars are generally limited to the registration of Domain Names that end in their own country codes. [12] NSI does not operate with this restriction.
{16} The U.S. government, under the auspices of the NSF, InterNIC, and NSI, has in essence taken the helm of the Internet since 1992. [13] The U.S. has assumed direct oversight of the maintenance of the Internet and the development of administrative policies by which Domain Name users must abide. This ability has certainly not derived from NSI's status as the world's premeir Domain Name registrar. Rather, the ability has derived from the unique services the U.S. (or more specifically, NSI) has to offer. [14]
{17} The most troubling result of a single company like NSI acting as the sole provider for such sought after, high-demand services is that policy decisions are not made through a bureaucratic process which would otherwise consider issues important to other parties. Since the U.S. government first sponsored NSI in 1992, there is no evidence, to this author's knowledge, that representatives of international organizations ever took part in determining how the Internet should be managed. Instead, NSI was simply assigned the right to register Domain Names for Internet users across the globe, and sought no consensus regarding the policies it implemented. In the last five years, NSI has been afforded the means to rule cyberspace from Herndon, Virginia by completely monopolizing the Domain Name registration market. While some might marvel at its status, most Internet critics do not. A closer look at NSI actually reveals the image of a company whose monetary success is gravely overshadowed by the inefficiencies of its policies.
{18} Suggesting that NSI is no longer capable of adequately servicing the international market with regard to Domain Name registration is rather redundant. When NSI's contract expires in March 1998, the U.S. government is supposed to officially relinquish control over the Domain Name registration business. A new regulatory body must be formed, and there is no lack of debate over who the new regulatory body should be There does seem to be a general consensus within the Internet and Intellectual Property communities, however, that the new regulatory body must be global, impartial, comprehensive, anchored in a legal authority, and free from the shadow of any one independent government. [15] A truer statement could not be made. The best way to support this consensus is to briefly examine the role NSI has played thus far and to consider each of its policy failings in turn. This examination alone should highlight the reasons why a new globally oriented regulatory body is necessary.
III. The Role of Network Solutions Inc. (NSI): Who Benefits from the Policies?
{19} With NSI playing the role of the world's principal registrar, the U.S. government and NSI have had the ability to implement administrative policies at their own discretion. The exponential growth of the Internet, due mostly to the connecting of commercial organizations to the Internet over the past few years, has had a directly proportional effect on the registration activity of NSI. This increased activity, along with the corresponding growth of operating costs, has resulted in funding requirements that have exceeded NSI's budget. As a result, the NSF determined that it was appropriate for Internet users, instead of the U.S. federal government, to begin paying the costs of Domain Name registration services (i.e., Registration fee = $100.00, Maintenance fee = $50.00 per year), and to implement a policy to that effect. [16]
{20} Naturally, NSI has enjoyed handsome rewards for its services, tallying revenues over $30 million in the first nine months of 1997. [17] However, this financial success has not diminished the number of registrations filed at NSI. In fact, registrations continue to increase exponentially every quarter. [18] With this kind of leverage, what's to stop NSI from raising the price of admission even further? Logically, with continued increases in registration, operating costs for NSI will also continue to increase, and such increases will always justify higher registration charges. However, by monopolizing the market, NSI finds itself in a unique position. Until it is recognized as an unfair monopoly [19], global Internet users seeking to register their Domain Names will never lose their way to Herndon, Virginia, regardless of the price of admission. Simply put, there is no cheaper place to shop for such services.
{21} One important factor that facilitates NSI's monopoly status is that both domestic and international companies, for whatever reason, have always sought the ".com" TLD for their Domain Name. [20] Being the sole registrar of these TLDs, NSI has always profited from this enormous advantage. International companies have always had to come to Herndon, Virginia to register their ".com" TLDs, regardless of whether they've already registered for their country codes in their own country. With so many of the world's Internet users as clientele, not only are NSI's profits astounding, but so is their obvious ability to manipulate the Internet registration business worldwide.
{22} This manipulation manifests itself in NSI's ability to implement certain policies (with regard to Domain Names) which it believes are legitimate. [21] For example, every Domain Name registrant must comply with NSI's formal Registration Policy to be issued a Domain Name. Similarly, every registrant must also submit to the Dispute Resolution Policy. Before discussing these policies in more detail, one must ask the question: Who drafted them? Were there any international interest groups present in those smoke-filled conference rooms? Were legal representatives from the international community invited to voice the important global concerns of the worldwide Internet community? And more specifically, was anyone invited to voice the potential Trademark ramifications these policies could create? The answer to these questions is "No," [22] and unfortunately, it has been the global Internet community that has suffered - not NSI.
IV. NSI's Registration Policy: How Effective is it?
{23} Although the registration process functioned well when the Internet was populated only by the military and academic institutions, things began to go astray as soon as the rest of the world jumped on board. Since networks are built on an underlying naming and numbering infrastructure, some authority must exist, for example, to assign network addresses to ensure that numbering collisions do not occur. This is of paramount importance for an environment that consists of multiple service providers. [23] While NSI has been able to prevent "numbering collisions" from occurring, it made no effort to similarly prevent "naming collisions." [24] Simply put, NSI will activate a Domain Name upon request, on a "first-come, first-serve" basis. There is absolutely no examination by NSI of the user's right to choose a particular Domain Name, and as far as NSI is concerned, Trademark violations are the requestor's responsibility. [25]
{24} With little surprise, this policy has resulted in a number of well-known Trademarks being incorporated into Domain Names that are registered to individuals or organizations that have no previous connection with those marks (e.g., Brian Berlandi registering the Domain Name "pepsi.com"). [26] These individuals or organizations have been commonly referred to as "Cybersquatters."
{25} To counteract this problem, NSI eventually established a "one-Domain-Name-per-company" rule, which forced companies to choose a single mark as its Domain Name. This requirement was supposed to result in fewer famous Trademarks being available for unauthorized users. Unfortunately, it hasn't come close to alleviating the problem. Even if an individual or organization can register only one Domain Name, there is still nothing to prevent that registrant from trying to obtain a Domain Name that includes a famous mark to which it has no previous connection. To make matters worse, NSI expressly states that it is not in the business of "checking" Trademarks. [27] Bruce Keller, counsel at the International Trademark Association ("INTA"), has analogized the system to that of state incorporation. Keller stated: "When one incorporates a company in a state, that state doesn't bother to see if there are conflicts with Trademarks that may be registered in other states - it just checks with its own Secretary of State's Office to see if the same name has already been registered in its jurisdiction." [28]
{26} In essence, NSI's Registration Policy passes the burden of Trademark searching to its Domain Name applicants. This policy requires that the applicant be responsible for the selection of its own Domain Name, and that by completing and submitting its application, the applicant thereby represents that the statements within it are true. The policy also requires that the applicant represent that, to the best of its knowledge, the Domain Name selected does not interfere with or infringe upon the rights of any third party, and that the Domain Name is not being registered for any unlawful purpose. [29]
{27} Expecting its applicants to meet such high expectations, one might think that NSI is naive. By implementing a Registration Policy that is nothing more than a "paper formality," applicants will continue registering for Domain Names that they are legally not entitled to receive [30] because there is no deterring factor. However, the failure of this policy is not simply a matter of opinion since it is evidenced by the number of recent disputes which have resulted from its inadequacy.
V. Domain Name Disputes: The Policy in Action
(A) Cybersquatting Cases
{28} The disputes that most clearly exemplify the inadequacy of NSI's registration policy are those involving "cybersquatters." [31] These people are commonly described as individuals attempting to profit from the Internet by reserving Domain Names, and later reselling or licensing them back to the companies that invested millions of dollars developing the goodwill of their Trademark. Although many of us find this practice patently offensive, cybersquatters view it as merely a service. Regardless of one's views as to the morality of such conduct, the issue is whether such conduct is illegal. Many cybersquatters contend that because they were the first to register the Domain Name through NSI, it is theirs. [32]
{29} Most courts have disagreed with this sentiment, however, especially after witnessing pioneering spirits like Dennis Toeppen register almost 250 Domain Names that incorporate well-known trademarks belonging to other parties (e.g., "eddiebauer.com," "deltaairlines.com," "niemanmarcus.com," "intermatic.com," etc.). Although some may see Mr. Toeppen as a self-serving predator, he prefers to describe himself in more august terms, such as an arbitrageur of entrepreneurial respect. [33] In Intermatic, for example, the issue was whether the Plaintiff, as owner of the "Intermatic" Trademark, could preclude the use of the Trademark as an Internet Domain Name by the Defendant, Toeppen, who had made no prior use of the "Intermatic" name before registering it as a Domain Name. Although the court held for the Plaintiff, it did not rule that the Defendant's use of the mark was proven to cause a likelihood of confusion. Rather, such use was sufficient to show that the mark would have likely been diluted, pursuant to 15 U.S.C. § 1125(c) (1995) and the Illinois Anti-Dilution Act, Ill. Rev. Stat. ch. 140 @ 22. [34] Other courts, however, have held that one's use of another's federally registered Trademark as a Domain Name is enough to warrant the issuance of a Preliminary Injunction because it will likely cause confusion in the marketplace. [35]
{30} As Trademark owners continue to spend their time and money in federal court to protect their marks from those who "first came" and were "first served" to/by NSI, onlookers have begun to question the morality of these despicable "cybersquatters". In addition, they have begun to doubt the effectiveness of NSI's Registration Policy which clearly appears to be at the root of the problem. [36] By implementing a Registration Policy that fails to address Trademark issues until after Domain Names are registered, NSI is effectively assisting the efforts of "cybersquatters" like Mr. Toeppen. Naturally, while NSI claims that the concept of a "preliminary review process" for all Domain Name registration applications is "interesting," it dismisses the idea as both "unreasonable and impractical." NSI claims that such a process would impose an "inordinate cost and burden." [37] One must wonder whether the "inordinate cost and burden" to NSI would be greater than that being felt by its clients, who continue to spend millions of dollars fighting people like Dennis Toeppen simply because NSI hands out Domain Names to applicants like they are candy.
(B) Non-Cybersquatting Cases
{31} There have been other cases where it has been unclear whether the Defendants intended to trade off the Plaintiff's goodwill by registering a Domain Name that was identical to the Plaintiff's established Trademark. [38] In most of these cases, both parties had the same, or similar company names. In the proverbial "race" to the registrar, one party always had to win, and it just so happened that in each case, the party whose company name was not a federally registered Trademark was the winner. Naturally, these Defendants did not face as much hostility from the domestic and international Trademark community, for their intent was not malicious. The cases do illustrate, however, the same underlying inadequacies with NSI's Registration Policy as do the "cybersquatting" cases.
{32} In Actmedia Inc., for example, the Plaintiff owned a federal registration of the mark "Actmedia" and had been using the trade name for a number of years. Around February 1996, when the Plaintiff attempted to reserve the Domain Name "actmedia.com" as its Internet address, it discovered that the Defendant, without authorization, had already reserved the Domain name for itself. In this case, the Northern District of Illinois found that the Defendant's reservation of the Domain Name "actmedia.com" precluded the Plaintiff from registering the same Domain Name and incorporating its federal Trademark. [39] The court, however, made no reference to the Defendant's intent to "palm-off" Plaintiff's goodwill.
{33} This dispute, regardless of the grounds on which it was ultimately decided, was simply another result of NSI's "first-come, first-served" Registration Policy. In Actmedia, the court spoke of the Plaintiff's lack of "authorization" for the Defendant's actions as the underlying reason for its holding. After a closer look at the case, however, one should ask: What about the actions of NSI? What about NSI's lack of "authorization?" It is not hard to see that this Registration Policy lays the foundation for many such Trademark issues. Not surprisingly, many companies began to reach the same conclusion. Lawsuits ensued which named both the unauthorized Domain Name registrants and NSI as the Defendants. [40]
{34} Domain Name disputes are useful to demonstrate the inadequacies of NSI's Registration Policy. In reality, such disputes do not only arise because self-serving individuals like Dennis Toeppen desire to profit from the good name of another party, or even because two parties legitimately contend that they are entitled to a single Domain Name. More often, they occur because NSI facilitates them. Each case sheds considerable light upon NSI's lack of administrative control and policy failure. If NSI had given any effort whatsoever in "checking" these Domain Names before they were granted to the first applicant, most of these legal battles would have never occurred.
{35} Some claim that what NSI lacks, and needs, is the same type of registration process that has been implemented by the United States Patent and Trademark Office ("USPTO") for the administration of federal Trademarks. [41] The feasibility of such a process is open for debate. However, it is likely that such a process would help to discourage these types of lawsuits, which have inundated the court system and forced many Trademark owners to spend millions of dollars defending their Intellectual Property. At this point, it's not hard to believe that NSI can rave about its recent earnings while also claiming that implementation of the USPTO process would impose an "inordinate cost and burden".
VI. The Rise of International Domain Name Disputes: The Extent of the Policy
{36} It is not surprising that Domain Name disputes have not been confined solely to the U.S. Similar disputes in Europe have forced Trademark owners into local courts to defend their Intellectual Property rights. [42] In one case, the U.K. High Court ordered Michael Lawrie of the UK's Network Services Limited ("NSL") to hand over the Domain Name "harrods.com.uk" to the famous London department store. The Court held that the registration of this Domain Name, along with 50 other names corresponding to well-known companies, constituted infringement of the registered Trademarks as well as passing off. [43] Like NSI, Nominet UK, the organization responsible for the registration and maintenance of all ".uk" Domain Names, has similarly failed to implement any type of pre-registration "screening" process.
{37} Like NSI, Nominet UK leaves the pre-registration "checking" of Domain Names in the hands of the applicants. [44] Whether or not these applicants have used or will use such a facility is anyone's guess. Although such checking would certainly help diminish the likelihood of future disputes, Trademark owners in the UK can only remain hopeful that Domain Name applicants will use it wisely before applying to Nominet UK for registration. In the meantime, companies like Harrods should be on the lookout for relatives of Dennis Toeppen living in the greater London area.
{38} Another twist in the present Domain Name registration process highlights the dilemma created when a foreign applicant is granted a Domain Name by NSI, which incorporates the trade name of a U.S. company. [45] In Prince PLC v. Prince Sporting Goods, the Plaintiff, a UK information technology company, registered the "prince.com" Domain Name with NSI in February of 1995. According to Managing Director Sally Tate, Prince PLC began trading successfully over the Internet at that time, bringing in business from around the world. When the defendant, an American sporting goods manufacturer, wrote to the plaintiff and demanded that they hand over the "prince.com" Domain Name, it cited NSI's 1996 policy change as suitable grounds. [46]
{39} Apparently, NSI's new Dispute Resolution Policy gave preference for Domain Names to companies that held a valid U.S. or foreign registered Trademark. [47] Since Prince PLC did not hold a U.S. or UK registered Trademark, it maintained that having traded for 12 years with the same name, and having no need to register a Trademark, it had rights to the name under UK's common law. [48] Knowing that this argument would have failed with NSI, Prince PLC decided to retaliate. It determined that the only way to protect its Domain Name from being placed on "hold" and not incur the expense of litigating in the U.S. was to file suit in the UK. Essentially, Prince PLC cited a specific statute passed by the UK Parliament, which states that "any aggrieved person may bring an action for declaratory, injunctive, or monetary relief where a person threatens another with proceedings of infringement of a registered Trademark." [49] Surprisingly, NSI indicated that it would uphold the decision of the UK High Court, although contrary to the literal interpretation of its Dispute Resolution Policy. [50] In the end, Prince PLC prevailed and was allowed to keep its Domain Name. However, the fear remains among foreign companies that their common law Trademark rights will not be acknowledged by NSI or by U.S. courts. Whereas many foreign companies once relied upon "first come, first served," it now appears that this policy rule is not so reliable.
{40} When will these types of disputes come to a halt? It seems obvious that they won't, as long as Domain Name registrants are subject to the policies of NSI. With the "first come, first served" rule in effect, domestic Trademark holders simply await the further victimization of unscrupulous "cybersquatters." Luckily, they have been able to recapture their trade names in many instances thus far, but not without the time and expense of protracted litigation. Foreign Domain Name registrants, on the other hand, have yet to contend with American "cybersquatters." Instead, they will continue to find themselves combating U.S. Trademark owners, whose rights, according to NSI, appear to supersede those of foreign companies. One should question how and why the implementation of a single policy can cause so much dismay. Are the fruits of international telecommunication not greater than the hassle of establishing a policy that is fair and logical? NSI seems to think not.
VII. NSI's Dispute Resolution Policy: How Effective is it?
{41} The failings of NSI's Dispute Resolution Policy ("DRP") are most noticeable when examined in conjunction with the Registration Policy. By the fall of 1996, NSI's DRP was in its fourth edition in thirteen months, [51] a fact that is somewhat indicative of its ineffectiveness up to that point. The current DRP is actually the second version of the fourth edition, and became effective on September 9, 1996. [52] With every edition, certain adaptations have been made to reflect the new problems associated with both the policy and its procedures. Each time, however, it became clearer that the DRP was inadequate from the beginning. [53] The best way to demonstrate the ineffectiveness of the DRP is to offer a brief chronology of the policy as well as examples of the legal disputes which it has poorly served.
{42} NSI's first DRP policy, effective July 23, 1995, established a decision making process which was separate from the regular court system, but which was markedly beneficial toward Trademark holders. Under the policy, a Trademark holder who wanted NSI to deactivate someone's Domain Name (i.e., a "cybersquatter's") only had to write a letter to NSI stating that it held a registered Trademark identical to the Domain Name. At that point, NSI would dispatch a "thirty-day letter" to the Domain Name holder, giving him/her 30 days to cease using the Domain Name, after which, NSI would deactivate it. NSI's intent was to prevent the Trademark holder from suing NSI by resolving any such disputes in advance.
{43} Naturally, this procedure proved to be quite popular with Trademark holders. [54] Instead of instituting legal proceedings and risking countersuits and/or Rule 11 sanctions, a Trademark holder merely had to send NSI a letter, and NSI would (1) assume the risk of a countersuit, and (2) deactivate the Domain Name. What the policy ignored, however, was that Trademark owners were using it to win legal battles they might not have been able to win in court (i.e., they might not have had a bona fide case of Trademark infringement). Luckily for NSI, during the first eight months the policy was in force, not one Domain Name owner fought back in court.
{44} However, by October of 1996 NSI's luck ran out. [55] By the end of 1996, approximately 350 Domain Names had been placed on "hold," and seven of those "hold" decisions resulted in lawsuits against NSI. In each case, the Domain Name holder prevailed, allowing it to keep its Domain Name. Thus, it became clear to Domain Name holders that they only needed to sue NSI to avoid losing their Domain Name.
{45} Under NSI's second and third policies, even more loopholes were encountered. A Domain Name holder was allowed to keep its Domain Name if it could provide evidence of ownership (before the expiration of the 30-day period) of a U.S. or foreign registered Trademark. [56] Therefore, Domain Name holders were left with the sole option of trying to secure a Trademark registration quickly. In several cases, Domain Name holders did just that. [57] NSI's fourth policy eliminated this option, however, by requiring that a Domain Name holder must have obtained the Trademark registration prior to the NSI proceeding.
{46} Under NSI's fourth and current policy, a Domain Name holder's only chance of keeping its Domain Name in such situations(other than suing NSI upon receipt of a 30-day letter) is to somehow obtain a Trademark registration identical to the text of the Domain Name. Thus, one can fairly assume that many Domain Name holders, in preparation of future suits, will try to register their Domain Name with the USPTO. [58] This anticipated and dramatic increase in registrations should not only create havoc for the USPTO, but also for the applicants, for many will have difficulty proving that they actually use the mark in interstate commerce to indicate the origin of goods or services. As a result, Domain Name holders are stuck between the USPTO, which might not grant them Trademark registrations, and NSI, which maintains that nothing but a Trademark registration provides ample defense against a 30-day letter. [59]
{47} Since its inception as a registrar, it has been no secret that NSI is not interested in acting as an adjudicatory body. It has said so itself. [60] Even worse, NSI gave no consideration to foreseeable Trademark issues prior to implementing the "first come, first served" rule, and as a result, has spent the last three years amending its DRP in an effort to fix the problems it created. However, the latest edition of the DRP has met little approval. In fact, one commentator accurately referred to it as a "copout, shielding the company from liability rather than providing clarity to Trademark owners." [61]
{48} As a result, the world is now confronting an international Trademark dilemma, and its epicenter lies in Herndon, Virginia. That is where Internet policy has been created. If peace and order are ever to be restored, the Intellectual Property world must act now. With NSI's lease on the international Domain Name market nearing termination, everyone is searching for the best possible solution to the "policy disaster" - and there is no lack of suggestions.
VIII. Suggestions for a New Domain Name Registry: A Change in Policy
{49} Many of the ideas addressing the Internet's future, as well as NSI's, have come from a conglomerate of organizations that joined together to form a plan to restructure the Domain Name registration system. This group, known as the Internet Ad Hoc Committee ("IAHC"), [62] proposed a plan on February 4, 1997 entitled, "Memorandum of Understanding on the Generic Top Level Domain Name Space of the Internet Domain Name System" ("gTLD-MoU"). In short, the gTLD-MoU is an ambitious plan with global implications, the most profound of which is a shift in control of the Domain Name registration system (and its effect on Trademark rights) from the U.S. government to the private sector. [63] To accomplish this change, the IAHC, in addition to other things, made three proposals. It suggested that 1) a procedure be established to make all Domain Name applications available for public inspection so that Trademark owners can pre-screen for infringement, dilution, and other objectionable activity, 2) an online dispute resolution procedure be established and conducted by Administrative Challenge Panels ("ACPs") under the rules of WIPO's Arbitration and Mediation Center, and 3) a governing body be established based on global community oversight and consensus.
{50} As one might imagine, critics of the plan were quick to state their objections, the greatest being that the plan is an unauthorized attempt by a handful of entities to assume global control of the Internet. [64] This perception, however, seems to ignore the obvious. Exactly what the Internet needs is a handful of entities to assume global control over Internet policy. [65] For example, the IAHC's newly suggested application process for Domain Names would eradicate the "first come, first served" policy used by NSI. This change should effectively minimize the victimization of Trademark owners by "cybersquatters". Also, if a database can be established that allows Trademark owners to screen the Domain Name applications, an adjudicatory process (if necessary) can be initiated before the Domain Name is even issued to the applicant. Forcing the parties into arbitration or mediation at this early stage should minimize the chance of otherwise protracted and costly litigation. In addition, oversight of this adjudicatory process by an impartial, global entity will assure that no party is disadvantaged by the application of rules from a particular country.
{51} However, the gTLD-MoU is still in its infancy. While over 150 entities have signed on as supporters, many important parties have not, including the U.S. government. In early October 1997, the U.S. government thumbed its nose at the plan. Not surprisingly, this effort was headed by Representative Pickering (R-Miss.). [66] The European Commission ("EC"), on the other hand, has complained that the structure of IAHC does not include any specific European representation and that the proposals have been submitted too hastily and without adequate consultation. [67] Another concern is that the plan was not based on any sort of recognized legal framework. The EC has shared this concern with the U.S.-based Domain Name Rights Coalition ("DNRC"), IBM, and UK's Prince PLC. Despite many of its technical and practical flaws, however, such groups also see the plan as the first step in a long journey. As Sally Tate, Managing Director of Prince PLC, said, "We welcome it as a start towards defining a new system." [68]
{52} Suggestions for a new governing body that could administer policy changes are as varied as the problems with the present system. Groups and individuals representing different regions, countries, and Internet and Intellectual Property interests have been shouting to make their opinions heard. Each has its own agenda, and each insists that its policy concerns are worthy of the highest consideration. [69] They are correct. Each and every policy issue surrounding the future of the Internet is relevant and constructive in the effort to reach a global consensus. No party should be silent. At the same time, however, the need to speak immediately is imperative.
{53} The critical issue here is time. As the March 1998 deadline draws ever closer, productive discussion must continue. However, with so little time remaining, there is none to waste. As Sally Tate said, "The current Domain Name system is due to come to an end [in March 1998]. There is at present no universally agreed replacement. Without a Domain Name system, the Internet could effectively come to a halt on April 1, 1998. Most of the commercial world seems blissfully unaware of this problem. It is the big sleeper issue that could derail the Internet." [70]
IX. Conclusion: Creating New Policy by Learning from the Old
{54} This essay has briefly covered the life of the Internet, from its infancy to its present state - which some would argue is near death. It began in the 1960's as an American experiment, but as the late 1980's approached, it took on a whole new appeal - it became a potential moneymaker. The U.S. government knew it and moved quickly, allocating funds through the National Science Foundation to sponsor a government-approved administrative body. This honor was bestowed upon NSI, who has since 1992, acted as the largest Domain Name registrar in the world and the most influential policymaker throughout the Internet community.
{55} The U.S. government has undoubtedly taken the proverbial "bull by the horns". NSI's job has certainly not been easy, nor without failure. This essay has attempted to highlight NSI's two major shortcomings - its Registration Policy and its DRP. Having said this, Sally Tate still reminds us, "We must also realize that the commercial world owes [the U.S. government] a debt of gratitude for nurturing the Internet. It is poised to become the most important commercial medium for the 21st century." [71] This, of course, is true. The U.S. government does deserve credit for forging ahead with this technology. Fifteen years ago, the Internet was nothing more than a dream in a laboratory.
{56} Unfortunately, the global Internet community cannot ignore the problems it now faces. Over the last five years, the Internet has become wholly Americanized, at least with regard to its administration. The administrative bodies that rule the Internet are American, the policies they implement are drafted by Americans, and these policies often favor American companies. This must change, however, for the benefit of the Internet and its users. This essay seeks to show that NSI's Registration Policy and DRP are the two logical places to begin. With the March 1998 deadline in sight, this is also the logical time to implement a change.
{57} As suggested by the IAHC, a new global administrative body is imperative. NSI has never been, nor will it ever be, able to serve the needs of the international community effectively. New policies that take into consideration global interests are long overdue. With this in mind, the IAHC's proposal should serve as the starting point for the future. The intricacies of its proposal can be deliberated further, with input from the various interest groups involved, but its mission should remain the same.
{58} In the forefront of this change, however, there needs to emerge a new global Trademark policy. Administration of the Internet revolves around the assignment of Domain Names, which in turn, revolves around Trademark law. Because the Internet is global, the use of a Domain Name is instantly global. This greatly increases the pressure to fully "internationalize" Trademark law. But how long will it take to accomplish this goal? INTA has suggested that the development of an international body of Trademark law and the process of having the nations of the world accede to that law will take many years. [72] Nevertheless, the time needed to achieve these goals should not deter the Internet community from putting forth its best efforts. The fate of the Internet is in the hands of the IAHC and other such influential groups whose voices can and must speak for Internet users everywhere in an attempt to stop Americans from ruling cyberspace.