draft statement on domain name tasting
Robin Gross
robin at IPJUSTICE.ORG
Fri Dec 7 04:39:15 CET 2007
Danny,
Thanks for your helpful comments. I've revised the statement so as
to not advocate for any particular approach at this stage (including
the PIR approach), so the PDP can do the work of making the
appropriate recommendations.
Best,
Robin
Here's a slightly revised of the statement:
Statement
of the
Non-Commercial Users Constituency (NCUC)
on
Domain Name Tasting
6 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 or
otherwise. 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 remains to be seen, however, if the AGP should
be removed in its entirely. The ad hoc group report indicates that
the AGP may provide benefits to both registrants and registrars, and
so completely eliminating the AGP risks eliminating these benefits as
well. However, any reported benefits of the AGP are disputed and
further elaboration is needed before recommending specific action.
One possible approach may be similar to that adopted by the Public
Interest Registries (PIR) — the imposition of a modest ‘excess
deletion’ fee. This approach could 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. 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, and is limited in terms of its geographical
reach. 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, it may be
possible to start a new business incorporating the word “Acme”
without infringing upon any of those trademarks registered. 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
Further investigation within the GNSO is needed and action may be
required to curb abusive domain name tasting. 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).
==========================================
On Dec 5, 2007, at 4:17 PM, Danny Younger wrote:
> Robin,
>
> Thank you for the work that you have done on this
> topic. Having served as a representative on the
> domain tasting ad-hoc working group, allow me to make
> the following observations:
>
> (1) You cite the five purportedly legitimate uses of
> the Add Grace Period as stipulated by the registrars
> in the ad hoc report; lets review them as I find none
> of their justifications to have sufficient merit:
>
> AGP Use 1: Correction of typographical errors made by
> registrant -- with all the redundancies built into the
> registration process (including all the upsell pages)
> the AGP is no longer needed to dealt with this remote
> possibility.
>
> AGP Use 2: Cart “hold” to provide access to domain
> names -- the concept of reserving a domain at the
> registry once it gets "looked up" by a user (that
> hasn't paid for the registration) is an abomination.
> As stated in the White Paper: "The failure to make a
> domain name applicant pay for its use of a domain name
> has encouraged cyberpirates and is a practice that
> should end as soon as possible."
>
> AGP Use 3: Fraud remedies -- arrangements regarding
> the settlement of fraud claims can be built into the
> Credits section in the Service Level Agreement within
> the relevant registry-registrar agreements; it need
> not be part of the AGP.
>
> AGP Use 4: Monitoring, testing and development of
> systems -- This argument seeks to make the "cost of
> doing business" a registry subsidy. The argument is
> weak and can readily be rejected.
>
> AGP Use 5: Addressing Registrant ‘Buyer’s Remorse’ --
> a fine example of BS.
>
> The best way of dealing with the current spate of
> domain tasting is to eliminate the Add Grace Period;
> this option is preferable to all others.
>
> Even the PIR approach is amenable to gaming as
> registrars can adjust their business and pricing
> models to compensate for the extra miniscule charges
> that are being imposed -- five cents is not a
> sufficient barrier, and even a twenty cent
> registrar-level transaction fee may not be sufficient
> to stem the tide as registrants have been willing to
> pay registrars .2 Euro (see the NASK domain tasting
> program launched 3 September) for the privilege of
> tasting a domain -- here in the States, programs such
> as Traffic Club already charge 25 cents for tasting --
> what we don't want to do is to create another new
> opportunity for registrars to game the system and
> thereby allow domain tasting to continue.
>
> If you take a close look at the .org Monthly registry
> reports, you will see that capitoldomains deleted
> 1,026,628 domains in .org during the month of May --
> they certainly weren't deterred by the PIR fee
> assessment. Accordingly, I disagree with your
> conclusion that "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." Simply put, it won't work.
>
> The only safe course of action is to advocate for the
> complete elimination of the AGP -- the "modest
> restocking fee" approach can and will be gamed.
>
> (2) By the way, with regard to your reference to
> phishing/pharming, I should point out that the APWG
> study found no correlation between phishing and domain
> tasting -- see
> http://www.antiphishing.org/reports/
> DNSPWG_ReportDomainTastingandPhishing.pdf
>
>
> The APWG does note that "tasting affects anti-phishing
> efforts. Members of the anti-phishing community have
> had to increase their infrastructure to account for
> the larger number of potential phish sites that are
> being registered by tasters, and this impedes
> anti-phishing efforts and increases the cost of
> detecting and mitigating the fraudulent behavior."
>
> regards,
> Danny
>
>
>
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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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