draft statement on domain name tasting
Robin Gross
robin at IPJUSTICE.ORG
Thu Dec 6 00:00:02 CET 2007
Below is a draft of the constituency statement on domain name
tasting. Please let me know if you have any comments. Thanks!
- Robin
Statement
of the
Non-Commercial Users Constituency (NCUC)
on
Domain Name Tasting
5 December 2007
The Final Outcomes Report[1] of the ad hoc group on domain name
tasting suggests a growing trend of registrants exploiting ICANN’s
Add Grace Period (the “AGP”) to receive a full refund on the cost of
registration by canceling their domain name registrations within five
days. The AGP may have been adopted upon the assumption that all
commercial uses of a domain name would require registration for a
period longer than five days. Certain registrants, however, have
discovered that they can profit from repeated use of extremely short-
term registrations through the use of pay-per-click advertising,
phishing, or pharming. A coordinated response by ICANN may be
appropriate to close this loophole. This response, however, should
not be disproportionate to the problem nor stem from any
misconception of the issue.
Insofar as some registrants are exploiting the AGP to operate without
paying any registrations costs, they are effectively forcing the
registries to subsidize them. This was clearly not the intended use
of the AGP, and action by ICANN may be appropriate to counter this
growing practice. It may, however, be excessive to remove the AGP
entirely. As the ad hoc group reports indicates, the AGP provides a
number of other benefits to both registrants and registrars,
including the correction of typographical errors, the ability to
temporarily reserve a domain for a prospective registrant, mitigation
of consumer fraud, facilitation of the development and improvement of
internal systems, a means to address “buyer's remorse,” and a means
for perspective registrants to evaluate domains before committing to
purchase. To completely eliminate the AGP risks eliminating these
benefits as well.
The preferable approach may be similar that adopted by the Public
Interest Registries (PIR) — the imposition of a modest ‘excess
deletion’ fee. This approach would penalize those registrars with
heavy deletions, thus forcing them to adopt policies that prevent
registrants from exploiting the AGP. Since registrants looking to
avoid paying registration costs will naturally flock to those
registrars least vigilant against this abuse, registrars would have a
substantial incentive to be vigilant against creative disguises of
these practices. Yet unlike directly imposing a fee on all short-
term registrations, this approach gives registrars significant
flexibility to adopt effective practices tailored to their customer
base and business model, and preserves the other advantages of the AGP.
Intellectual Property Issues
The intellectual property issues discussed in the ad-hoc group's
final report warrant special attention. In this context,
“intellectual property” refers almost exclusively to trade and
service marks, which are often referred to collectively as
“trademarks.” The vast majority of the respondents to the RFI
identified themselves as either intellectual property rights owners
(37.93%) or representatives of intellectual property rights owners
(51.23%). Consequently, intellectual property rights feature
prominently in the responses.
The problem which domain tasting presents to trademark holders is not
that the AGP creates a loophole which makes otherwise infringing
activity legal. If a registrant makes use of a trademark in a manner
that constitutes infringement, the holder of that trademark is
protected through international treaty, the laws of various nations,
and through ICANN's own Uniform Dispute Resolution Policy. These
protections still apply even if the period of registration is very
brief. The problem is instead one of enforcement.
This distinction should be kept in mind by the GNSO and by any
subsequent working group established to tackle this issue. Many of
the responses to the RFI listed problems such as “erosion of brand
names,” “erosion of reputation” and “loss of revenues [through]
diversion of traffic” as disadvantages to domain tasting. These are
problems with infringement, not with domain tasting. While it may be
appropriate for ICANN to consider whether its policies unduly
encourage infringement or impede enforcement of intellectual property
rights, it would be a mistake to assume that a revised policy on
domain tasting will stamp out short term infringement or that all
domain tasting necessarily infringes.
Insofar as the AGP allows a registrant to use a domain for a very
short time at no cost it does provide an incentive to a prospective
infringer to operate in a manner that frustrates enforcement of
trademark rights. This incentive can be removed by implementing a
modest restocking fee where no corrective motive can be shown for the
deletion. Because the bulk of deletions come from a handful of
registrars and because registration fees are only likely to deter an
infringer who operates a large number of sites, the approach adopted
by PIR (option “C” on the RFI), is particularly worth further
consideration.
The Sample Zone File Data Study
ICANN should be particularly careful in crafting any test to identify
infringing activity. One proposal in the ad hoc group's report was
to determine the percentage of domain tasting that infringed upon
trademarks by comparing a sample of deletions to a list of trademarks
registered with the United States Patent and Trademark Office (the
“USPTO”). This method was termed the “sample zone file data study.”
This method would result in erroneous and excessive findings of
infringement because it stems from a fundamental misconception of
trademark law. Specifically, it relies upon an erroneous assumption
that any unauthorized use of a registered trademark is unlawful.
Trademark law does not categorically ban use of a trademark without
the permission of the owner. Instead, it prohibits uses of a
trademark which deceive or confuse the consumer about the origin of a
good or service. Where there is no confusion, there is no
infringement. Thus, trademark law does not prohibit the use of the
same name or symbol by companies in different fields of commerce, or
who are so geographically distant that confusion is unlikely to
occur. Therefore a test for infringement based solely on the
presence of a word that has been registered with any trademark office
would erroneously conclude that many lawful business uses are
infringing.
This is easily illustrated by examining one registered trademark.
The USPTO lists 125 live registered wordmarks which contain the word
“Acme.”[2] Many of these are simply the word “Acme” with little or
no graphical embellishment. Yet hundreds of Corporations, Limited
Partnerships, and Limited Liability Companies with names containing
the word “Acme” have been registered with the California Secretary of
State,[3] to say nothing of General Partnerships or unincorporated
Sole Proprietorships in California or business entities in other
jurisdictions. While a few of these businesses may be infringing
upon the trademarks of others, the vast majority are undoubtedly
operating without any consumer confusion. Moreover, any person is
free to start a business that incorporates the word “Acme” so long as
this causes no confusion as to the origin of their goods or
services. Under the sample zone data file study, however, any domain
incorporating the word “Acme” would be inferred to be infringing
merely because this word has been registered with the USPTO.
More significantly, non-commercial uses of a registered trademark
would also be determined to be infringing under the test proposed.
Under U.S. Law, non-commercial use is particularly unlikely to be
found to infringe because there is little chance of confusion. Thus
a website critical of Jerry Falwell which used a common misspelling
of his domain name (“Fallwell.com” for “Falwell.com”) was ruled to
not infringe upon his trademark because the creator intended “only to
provide a forum to criticize ideas, not to steal customers.”[4]
Since on-line critics of businesses frequently incorporate the name
of the criticized business into their domain names (e.g.
“paypalsucks.com,” “microsoftsucks.org,” etc.) false findings of
infringement are particularly likely under the sample zone file data
study discussed in the report.
To be sure, an argument can be made that non-infringing domains are
less likely to be deleted during the AGP. If that is the case, then
it is less likely that these legal uses of registered trademarks
would significantly skew the sample zone file data study's
conclusions. It would be a mistake, however, to use that argument to
justify the proposed test. This test is intended to determine
whether infringing use predominates in the practice of domain
tasting. To argue that a use of a trademark is probably infringing
because it is deleted during the AGP is to assume the outcome the
test is intended to determine—a logical fallacy known as “begging the
question.”
More importantly, ICANN should be careful not to establish a
precedent that this fundamentally flawed test establishes
infringement. Given the difficulties inherent in enforcing trademark
rights against domain tasters, it is possibly that some sort of
mechanism to screen-out infringing use will be discussed during the
policy development process. The test proposed for the sample zone
file data study would be manifestly inadequate for this purpose in
that it would prevent a great deal of legitimate use.
This last point is particularly significant in light of the fact that
trademark law is still adapting to commerce over the Internet. For
example, while some U.S. Courts have held that a bad faith intent to
make money from a domain containing a famous trademark is sufficient
to establish infringement, others have held that such a use must be
in connection with some form of goods or service.[5] ICANN should
not take it upon itself to decide these issues for the courts and
legislatures of every country. The delicate balance of competing
public policies inherent in intellectual property law should instead
be left to the courts and political processes to work out.
Conclusion
Of the proposed responses to the growing practice of domain name
tasting, the most appropriate may be the imposition of a modest
excess deletion fee. This would force registrars to adopt policies
discouraging domain tasting, but preserve the other benefits of the
AGP and give registrars the flexibility to devise their own
approaches to this issue. As the GNSO takes the next step in dealing
with this problem it must be careful to ensure that the issue remains
properly framed rather than assuming than ICANN is responsible for or
capable of preventing all short-term trademark infringement on the
web. Moreover, while further investigation, discussion, and action
is warranted at this point, the proposed sample zone file data study
should not be undertaken because it relies on a fundamental
misunderstanding of trademark law and sets a dangerous precedent as
to what ICANN will consider to be infringing use.
[1] Final Outcomes Report available at: http://gnso.icann.org/drafts/
gnso-domain-tasting-adhoc-outcomes-report-final.pdf
[2] See http://www.uspto.gov
[3] See http://kepler.sos.ca.gov/list.html
[4] See Lamparello v. Falwell, 420 F.3d 309 (5th Cir. 2005) at 315.
[5] Compare Ford Motor Co. v. Greatdomains.Com, Inc., 177 F.Supp.2d
635 (E.D.Mich. 2001) with Intermatic Inc. v. Toeppen, 947 F.Supp 1227
(N.D.Ill. 1996).
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IP JUSTICE
Robin Gross, Executive Director
1192 Haight Street, San Francisco, CA 94117 USA
p: +1-415-553-6261 f: +1-415-462-6451
w: http://www.ipjustice.org e: robin at ipjustice.org
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