UK: The Future of the Domain Name System - Up For Grabs?

Last Updated: 28 August 1998
The recent One in a Million Court of Appeal decision in the United Kingdom is another success for trade mark owners. The judgement left no one in any doubt that the English Courts will not tolerate blatant cybersquatting ie the registration of a famous trade mark or trading name as a domain name by a third party with no rights to use the name. As matters now stand, such activities will be regarded as passing off or trade mark infringement even if the name has not been used to trade in goods or services.

However, the One in a Million case was a blatant case where the names taken were very famous in the United Kingdom and the defendants were also based here. Matters become very much more complicated when the Defendants are based abroad, perhaps in a jurisdiction where the UK trade mark owner has no rights. We then begin to face the reality of an international Internet operating against a background of separate national laws and conflicting trade mark rights across different territories. Individual domain name Registries also may have their own dispute resolution procedures. This level of complication has led many to say that matters should be left to national laws and courts to sort out, since the Internet is just another medium through which business is conducted. It is acknowledged, however, that this is expensive and messy. Against such a background those with money and determination are likely to win out. The question is: can a better system be worked out to operate internationally?

The US White Paper on the Management of Internet Names and Addresses has now been published and leaves many of the important decisions regarding the future of the domain name system ("DNS") to the not-for-profit US corporation which it proposes should take over responsibility for the DNS by October 1998. Trade mark owners and Internet users alike have the opportunity, however, to lobby as to the constitution of the new corporation which will ultimately decide whether there should be new generic top level domains (e.g. .firm or .shop to add to existing ones such as .com), who will administer new and existing top level domains and how trade marks should be protected in the context of use as domain names. There have been a series of meetings internationally to discuss important issues, but unsurprisingly the issues of trade mark protection and new top level domains are proving very contentious.

Since the new corporation will reflect a broad range of interests and a large section of the Internet community appear to be demanding an end to NSI's monopoly in administering the .com domain, the opening up of the .com domain to competition is one likely result.

The issues relating to trade marks and the new top level domains seem less clear cut. The White Paper condemns the practice of cybersquatting ie registering someone else's name or mark as a domain name with the object of holding them to ransom. There is no doubt that many consumers when using the Internet will as a first step type in the name of the company they are looking for plus ".com" eg "kodak.com" and expect to reach a site associated with the famous entity they seek. Businesses are actively promoting domain names in advertising as easy ways for consumers to identify and contact them. Famous entities may well be damaged if they do not own the main .com address consisting of their name. One example of this damage would be misdirected e mail.

The White Paper suggested that WIPO should initiate a process of discussion amongst the Internet community including trade mark owners with a view to developing recommendations for a uniform system to prevent cyberpiracy of famous marks (although this will not be designed to apply where the intellectual property rights in issue are more evenly balanced and national courts are a more appropriate forum). Interestingly, the system of International On Line arbitration already developed by WIPO in conjunction with previous proposals would seem to fit the bill. However, WIPO are starting from scratch as they are concerned to be seen to involve everyone, not just trade mark owners. Those wishing to participate in the WIPO discussion process can register on the WIPO site at Click Contact Link

WIPO have also been asked to assess the effect of potential new top level domains on trade mark rights.

WIPO's recommendations will be put to the new corporation who will make the final decisions, making the constitution of its Board an important issue.

The main problem with the existing DNS is that because each domain name is unique, there is no capacity for two entities who normally trade with the same name in different fields or territories to use exactly the same domain name (top level and sub domain). In the trade mark world this is overcome by a series of national systems which allow registration in different classes of goods and services, allowing companies with the same trade mark to exist side by side. The real world also allows those with unregistered rights to trade and build up protectable goodwill in a name provided there is no infringement of other's rights. The existing DNS with its emphasis on the internationally recognised top level domain ".com" cannot accommodate these legitimate demands to use the same name. Legitimate and illegitimate users alike are subject to a "First come First served" system. Some people are seeking to get over the problem by "sharing" the domain name by having links to sites of others with the same name, so the consumer gets to choose beween eg Polo the mint or Polo the car, but this depends on cooperation which all too often cannot be secured.

As a result of this, many are arguing that there should be more top level domains of a descriptive nature which will allow a system to develop, akin to the trade mark system whereby trade mark owners can only protect a name in their own field of activity and perhaps only in their own territory/ies, using the existing top level country codes such as ".uk". On this argument ".com" addresses would be for businesses engaged in international commerce. However, arguably such a descriptive system should be subject to some control of the allocation of Internet domain names. At the very least requiring disclosure of true name and contact details and prepayment for registrations, but perhaps also involving some examination of whether the domain name is likely to cause confusion. Without some Registry checks, trade mark owners will always be opposed to more top level domains which will be seen as more opportunity for cybersquatting. The problem is particularly troublesome if the trade mark is so distinctive (eg Kodak) that a perceived connection with the trade mark owner is likely, whatever the newcomer's business.

Registries are keen not to screen applications for domain names save to ensure that exactly the same domain name is not allocated twice. It may well be an onerous burden which would put up the costs of registering a name as the costs are passed on to the consumer. However, it is clear that there is a demand for more top level domains and Registries are keen to provide them. In this environment, undoubtedly more top level domains are on their way. As unpalatable as it is to Registries, more checks, prepayment and screening may be the only way to keep trade mark owners and Internet users happy. Unless and until some Registry checking becomes the norm, we are likely to see further decisions like One in a Million where the trade mark owners are given the benefit of the doubt. Ironically, in this scenario, the demand for more Registry checking may come from users of the Internet rather than trade mark owners who want to be clear to use a non infringing domain name.

It may be that too much water has passed under the bridge and it is too late or too costly to introduce proper checking and screening into Registries. After all, these days, people do not expect to wait to have access to domain names. Accordingly, there would certainly seem to be an argument for an international on-line system designed to deal quickly and as inexpensively as possible with blatant instances of cybersquatting of famous names to have effect internationally. Noone is suggesting that it should apply to those with an arguable right to use of the name, when matters will fall to be decided by national courts. The difficulty, however, is to devise an international system which can achieve a fair result in all jurisdictions and can work alongside national court systems. The danger is that any international system for famous marks may be arguably too heavily biased towards trade mark owners in line with recent UK decisions. However, this is the price that the Internet Community may have to pay if there is no control over the allocation of Internet domain names sufficient to protect legitimate business interests.

Dawn Osborne is a senior solicitor at Willoughby & Partners. Willoughby & Partners, in association with Rouse & Co International, have an active interest group devoted to legal issues relating to the Internet.
The content of this article is to provide only a general information on the subject. Legal advice should be sought for any specific circumstances.

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