An Interactive Guide for The Perplexed To Domain Names

ICANN – ACPA – First Amendment – State Laws-New Gtlds

Introduction

Since the first article about the frustration of trademark owners several breakthroughs and trends have manifested in the cases on the ACPA and ICANN processes, several new theories have been tested and the First Amendment has played a major role. Recall that these processes are bent on resolution of the issues that can arise when a URL or domain name registrant runs into an accusation of “Cybersquatting” on another’s trademark rights. The trends also serve to cause pause to one who thinks that they have the rights. Domain Name owners also have rights to use a Domain Name that suits their legitimate needs, so that the law is attempting to strike a balance, especially for “generic” Domain Names such as “bread.com” where the word bread could not become a trademark in the traditional legal sense.

If I have left out anything that the reader considers important, please email the author. This article was prepared in July, 2001 and changes in this area of law are constant and complex. FOR HELP on the VOCABULARY please use the High Tech Dictionary.

The 2001 and beyond trends that are developing in this arena are not only unpredictable but massive, inconsistent, formative and broad, and include:

ü First Amendment rights to say a company “sucks”

ü Rights in Domain Name registrants to the URLs,

ü Famous persons name Rights of Publicity,

ü What is a Domain Name?

ü New California State laws protecting celebrity names.

ü A major procedural point in the Domain Name field comes in the very careful selection of the Forum.

ü A trend during 2001 is toward placing a greater burden on the Plaintiff to prove his case against a URL and not to rely merely on perceived fame.

ü The coming of new Gtlds, “.biz, .pro, .law, .info, .TV,” and others add yet another dimension to the legal admixture.

From 2000, some issues that seem to remain fairly predictable are:

ü The Registrar non-Liability issue: NSI and most other registrars are usually not liable for Domain Name Cybersquatting.

ü ISPs are generally “out” of liability if they do not monitor or control what is sent via their networks.

ü Trademark law changes remain fairly minimal and consistent with prior practice.

1. First Amendment Trend

a. Defamation - Preliminary Injunction is Tough to Get:

i. Bihari and Bihari Interiors, Inc., V. Gross 2000 WL 1409757 United States District Court, S.D. New York . No. 00 Civ. 1664(SAS). ( Sept. 25, 2000 ) shows how the first Amendment can become involved over arguments about defamation on the Internet. In Bihari the owner service mark "Bihari Interiors," for interior design brought an action for defamation and the infringement of the mark by the owner of a website critical of the Bihari’s services for the defendant.

ii. Blatantly Negative Statements: The site at "bihariinteriors.com" and "bihari.com" was extremely critical of the Biharis. Gross had other “generic name” sites such as “manhattaninteriordesign.com” that contained Metatags that used “bihari” service marks. The Defendants had filed a state court suit against the Biharis for breach of an interior design contract an apparently really hated the job done for their dwelling.

1. The defamation was blatant, such as “this horrible interior decorator…” and, “the first web site designed to protect people from the alleged ill intentions of Marianne Bihari & Bihari Interiors “ and on and on like this

iii. First Amendment: There is an old maxim in constitutional law about defamatory speech and the First Amendment. Though defamation is a tort, it is also protected speech. The Court in Bihari reminded us, “There is a heavy presumption against validity of any preliminary injunction barring allegedly defamatory speech.” [Bihari at N 11.][1]. The Biharis had to demonstrate: “the (1) likelihood of irreparable harm should the injunction be denied; and (2) either (a) likelihood of ultimate success on the ACPA claim, or (b) sufficiently serious questions going to the merits and a balance of hardships tipping decidedly toward the party seeking relief.” That is the trouble with old maxims; they may not make sense under new tests. A court of equity will not, except in special circumstances, issue an injunctive order restraining libel or slander or otherwise restricting free speech.

iv. Trademark Rights: The Biharis alleged their trademark was being used to lure visitors away from their own web site and expensive advertising. However, Generally, personal names used as trademarks are regarded as descriptive terms, protected only if they have acquired distinctive and secondary meaning.

v. Biharis also alleged "initial interest confusion" might cause them damages, based on the idea that potential customers of one website will be diverted and distracted to a competing website. The harm is that the potential customer believes that the competing website is associated with the website the customer was originally searching for and will not resume searching for the original website. This did not work either because the Court stated “Inserting "Bihari Interiors" in the metatags is not akin to a misleading "billboard," which diverts drivers to a competing store…” and there was no proof of diversion.

vi. “Fair Use:” the central considerations of fair use in trademark[2] are whether the Defendant has used the mark (1) in its descriptive sense, and (2) in good faith, and Gross won on this also. “Fair use is established when the challenged term is a use, otherwise than as a mark, ... of a term or device which is descriptive of and used fairly and in good faith only to describe the goods or services of such party...,” citing 15 U.S.C. § 1115(b)(4). Good faith was proven by Gross’s published disclaimer that the views expressed were opinion. RESULT: no preliminary injunction and no summary judgment. The case is pending.

b. Web Sites That Suck. If your company finds a website that has the URL “yourcompanysucks.com” you might be concerned that it might impair your company’s reputation. Hopefully that impairment is not earned by poor services or goods. For, depending on jurisdiction of the dispute, Your Company, Inc. might have to live with it. The difference can be in the law of the forum. It might include the U.S.A. with litigation under anti dilution[3], trademark and ACPA[4] statutes that one can use to seek to enjoin the SUCKS sites. Trends tend to show that unless there is an unsavory aspect to it, under U.S. law the First Amendment could permit such uses.

i. In Wal-Mart Stores, Inc. v. Walsucks and Walmarket Puerto Rico, Case No. D2000-0477, (July 20, 2000), Walmart sought to stop Walsucks and Walmarket Puerto Rico, with addresses in Canada from defaming its business using, "WALMARTCANADASUCKS.COM", "WAL-MARTCANADASUCKS.COM", “WALMARTUKSUCKS.COM" and "WALMARTPUERTORICOSUCKS.COM".

ii. Registered trademark makes a difference: Walmart registered its marks WAL-MART in the United States and Canada and the mark was known in Canada as early as 1965.

iii. Famous Mark: Wal-Mart stated its WAL-MART mark is famous. The WAL-MART mark is famous in part, because the mark has been in continuous use since at least 1962

iv. The sites were very defamatory of Wal-Mart: The "walmartcanadasucks.com" and "walmartuksucks.com" web pages each state that "This is a freedom of information site set up for dissatisfied Walmart Canada [or UK, respectively] customers." Each site invites visitors to "Spill Your Guts" with a "horror story relating to your dealings with Wal-Mart Canada [or UK , respectively]".

v. Confusing Similarity: Allegations that “The domain names at issue are likely to confuse customers and cause them to believe mistakenly that these domain names are associated with Wal-Mart stores…”

vi. Bad Faith Element: As evidence of bad faith, W-M alleged that, the Defendant registered five ‘Wal-Mart’ domain names within days of receiving notice of the Administrative Panel’s decision in the case of Wal-Mart Stores, Inc. v. Walmarket Canada, Case No. D2000-0150. The timing of these registrations alone is evidence of bad faith.”

vii. No First Amendment: Wal-Mart also used an argument that might not work under the First Amendment, going to the content of the Defendant sites as well as alleging unfair competition “to harass Complainant and interfere with Complainant’s business as shown by the fact that they deliberately selected domain names that disparage Complainant.” [emphasis supplied]

1. Of course the respondent stated the sites were freedom of expression opinion web sites. Wal-Mart countered with the argument that might not work under the First Amendment: “Complainant respectfully disputes Respondents’ suggestion that because the attached websites are ‘freedom of expression’ forums, the domain names at issue are immune to challenge. First, a domain name may be registered and used in bad faith even when the attached website is used to express opinion. See DFO, Inc. v. Williams, Case No. D2000-0181. Second, under both U.S. and Canadian law, speech is not entitled to absolute protection under all circumstances. Speech is only protected against governmental interference. Where the speech does not involve an activity or institution controlled by the government, there may not be any special protection.”

a. Cyber griping: For his part, the Respondent alleged that registering a domain name in the form of “*.sucks.com” provides a forum for critical commentary, is not uncommon, and is "cybergriping” and therefore he was not liable under the First Amendment. The Respondent stated that “Respondent has rights and legitimate interests in respect to the domain names.

viii. The Panel applied the 3 UDRP principals: (i) Respondent’s domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; (ii) Respondent has no rights or legitimate interests in respect of the domain name; and (iii) Respondent’s domain name has been registered and is being used in bad faith.

ix. The panel applied U.S. law and the famous factors from the Ninth Circuit in AMF Inc. v. Sleekcraft Boats, 599 F.2d 341 (9th Cir. 1979). The Sleekcraft factors are directed to whether there is a "likelihood of confusion": (1) strength of the mark; (2) proximity of the goods; (3) similarity of the marks; (4) evidence of actual confusion; (5) marketing channels used; (6) type of goods and the degree of care likely to be exercised by the purchaser; (7) defendant's intent in selecting the mark; and (8) likelihood of expansion of the product lines.

x. Conclusion: Transfer Domain Names:

1. The “sucks” misspelled Domain Names were determined to be confusingly similar to Complainant’s mark. Respondent acted for commercial gain, i.e., to extract consulting fees from Complainant by threatening to disrupt its business.

2. The activity constitutes bad faith within the meaning of paragraph 4(b)(iv) of the Policy. All the names were transferred to Wal-Mart.

xi. First Amendment disclaimer from UDRP Panel: This is very interesting from an international forum: “The Panel stresses that this decision does not address legitimate freedom of expression sites established by parties critical of trademark holders…. [and the panel] anticipates that others… may choose to characterize this decision as seeking to stifle freedom of expression on the Internet by ordering the transfer of "sucks" formative names. Certain trademark holders might choose to characterize this decision as supporting action against "-sucks" formative domain names in other contexts. The Panel intends this decision to serve neither of these aims. This decision is directed to a blatant case of abuse of the domain name registration process -- no more, no less.”

2. Celebrity Names.Com

a. Springsteen - No Trademark Registration: Bruce Springsteen did not fare well at the ICANN hearing in Bruce Springsteen -v- Jeff Burgar and Bruce Springsteen Club Case No. D2000-1532. If the trademark is so famous as to carry with it the image or sound of the performer, in the entertainment industry it may be said to have gained secondary meaning. Bruce asserted inter alia that the use of the name creates a misleading impression of association which is not based in fact. The fact that the Defendant owned some 1,500 URLs was asserted as evidence of “Bad Faith.” Springsteen never registered his name as a trademark, however and this was a factor in the case. He failed to produce enough evidence of use for the panel, however and relied on fame. The panelists included Gordon D. Harris and Michael Froomkin, who had been known for his criticism of the often one-sided holdings against Domain Name registrants of famous persons names.

i. Respondent pointed out that (1) Springsteen's representatives have given no evidence of any common law rights, (2) the rock star’s name had already been registered in a domain name, namely "brucespringsteen.net" in 1998 and alleged that his use does not besmirch or denigrate the name of Bruce Springsteen but to have hits on his celebrity club site www.celebrity1000.com.

ii. Bad Faith – Based on Available Domain Names Left: As to the Bad faith issue, Respondent stated that “… there has been no evidence submitted that he intended to stop Bruce Springsteen from registering the domain name "brucespringsteen.com" himself. The domain name "brucespringsteen.net" had been registered by Mr. Springsteen's record company for some years and that, presumably, that should have sufficed.”

iii. The WIPO Arbitration and Mediation Center Panel composed found that the 3-part test lacked part 2 and found the Respondent has rights or legitimate interests in respect of the domain name, based on his registration of the Domain Name under the fictitious name, “Bruce Springsteen Club” and links to the Respondent’s "celebrity1000.com" advertising site.

iv. They admitted that celebrity names can acquire a secondary meaning giving rise to rights equating to unregistered trade marks, “notwithstanding the non-registrability of the name itself. It should be noted that no evidence has been given of the name "Bruce Springsteen" having acquired a secondary meaning.

v. Panel’s Strict Interpretation of UDRP: The UDRP required in paragraph 4(b)(ii) that a cybersquatting Domain Name registration, to be “bad faith” (among other factors) should have the effect of preventing the owner of a trade mark or service mark from reflecting the mark "in a corresponding domain name". This part of the decision has subsequently been criticized. It appears too technically demanding at first glance but does serve to demonstrate that arbitration can be subject to the personal whims or viewpoints of the panelists, as is the general nature of arbitration.

vi. ADR Used Precedent: They interestingly cited “precedent” and rejected it, “Further, in the Julia Roberts case, there is a suggestion that the registration of the domain name <juliaroberts.com> "necessarily prevented the Complainant from using the disputed domain name". As indicated above, that is not sufficient to meet the criteria required under the UDRP for the relevant circumstance in paragraph 4(b).”

1. NOTE: It is unusual for arbitrators to cite precedent or use stare Decisis type of reasoning. It is likely that cross citation will continue for this is all on the cutting edge of the law and without precedent arbitrators might find themselves flailing in the dark.

b. Criticism for the Springsteen Decision.

i. Performers Have Rights to Names: In the Celine Dion case, Celine Dion and Sony Music Entertainment ( Canada ) Inc. v. Jeff Burgar operating or carrying on business as Celine Dion Club, Case No. D2000-1838, the panelist William R. Cornish stated, “It has been accepted in …UDRP decisions that authors and performers may have trademark rights in the names by which they have become well-known.”

1. He went on, “The majority of the Panel in Case D2000-1532, Springsteen v. Burgar has cast doubt on this view, but their dictum is in no way necessary to their Decision and I have not accepted it in deciding Case D2000-1628, Julie Brown v. Julie Brown Club.”

2. The arbitrator suggested the ruling was wrong because a famous personality can establish common law rights to their name, even if it is not a registered trademark, “…Authors and performers can establish trade mark rights either by showing that they have registered their names as marks for certain goods or services, or because, through deployment of the names as source indicators in commerce, they have unregistered or "common law" rights to protection against misleading use.”

3. Interestingly this panel asserted a well known fact as legal theory that, “it is particularly likely that an address which is the proper spelling of an artist's name in the .com gTLD will be treated by some as pointing to an official site.”

c. Rights of Publicity should be able to assert claims akin to California Civil Code’s Sec. 3344 worldwide against cybersquatters who use those names commercially without authorization. The law will evolve rapidly but at the turn of the new millennium in e-business, I-business and global communication, the world is not yet in its honeymoon on the long marriage of e-commerce the law and the needs of entertainers and famous personalities.

d. Madonna Ciccone, p/k/a Madonna v. Dan Parisi and "Madonna.com"Case No. D2000-0847. This case points out that even a celebrity must pro actively register her trademark to prevail in the world of Domain Name disputes.

i. Madonna is the owner of U.S. Trademark Registrations for the mark MADONNA for entertainment services and related goods (Reg. No. 1,473,554 and 1,463,601). She has used and is still using her name and mark MADONNA professionally for entertainment services since 1979. Note that this is a major difference from the Springsteen case where Bruce did not have the registrations in place.

1. Other big differences from Bruce are that Madonna’s Respondent registered MADONNA as a trademark in Tunisia [5], and that the Respondent operated his sit as an "adult entertainment site that featured sexually explicit photographs.” He was thoughtfully however to insert a notice stating, "Madonna.com is not affiliated.” Despite the disclaimer, the respondent was held to have in bad faith used Madonna’s famous name. Of course, this was a different WIPO panel.

2. They found, “Although the word "Madonna" has an ordinary dictionary meaning not associated with Complainant”

a. Nothing in the record supports a conclusion that Respondent adopted and used the term "Madonna" in good faith based on its ordinary dictionary meaning.

b. The name was selected and used by Respondent with the intent to attract for commercial gain Internet users to Respondent’s web site by trading on the fame of Complainant’s mark. The panel concluded this intentionally trades on the fame of another can not constitute a "bona fide" offering of goods or services.

e. California Personalities Get a Boost Business & Professions Code Section17525 Under the California ’s Anti Cyber Piracy Act, personalities are generally more protected than they seem to be under ICANN arbitration and the law is again consistent with the federal equivalent.

i. California ’s new anti piracy act helps living and deceased personalities. In part to remedy the shortfalls of inconsistencies in cases like Bruce Springsteen, In August 2000 the California legislature provided much clearer protection to personalities, the glut of which California is famous for.

ii. This is termed “UNFAIR BUSINESS PRACTICES--CYBER PIRACY” and almost mirrors the federal ACPA. The new law states, “(a) It is unlawful for a person, with a bad faith intent to register, traffic in, or use a domain name, that is identical or confusingly similar to the personal name of another living person or deceased personality, without regard to the goods or services of the parties.” This is consistent with other Business & Professions code sections on the subject of dilution and trademark protection. It is in the Business & Professions Code because it deals with unfair competition among businesses and provides broader coverage than the Federal laws on the subject prior to 1997 when anti-dilution and trademark law were amended to broaden their scope. See 15 U.S.C. 1125(c).

iii. Does Not Apply to Copyrights. As in the ACPA there is an escape hatch: “(b) This section shall not apply if the name registered as a domain name is connected to a work of authorship, including, but not limited to, fictional or nonfictional entertainment, and dramatic, literary, audiovisual, or musical works.”

3. What is a Domain Name?

a. Quiz: What is it that: is really an address, may become a Trademark, may incorporate a trademark, it might be “intellectual property,” some may long enough to copyright, it seems to be a contractual right to a service and may not be garnishable nor may it be converted? Answer: A Domain Name.

b. Lest we forget, a Domain Name is actually an alphabetical assigned term that, when typed into an internet browser, will open files on a server that is actually at the address, a number such as: 123.456.789.23.

c. “Just” a Domain Name Does Not a Trademark Make; and A Trademark for one Class does Not Cover all Others. In Brookfield Communications, Inc., vs. West Coast Entertainment Corporation, U.S.C Ninth Circuit. (April 22, 1999.) 174 F.3d 1036, 50 U.S.P.Q.2d 1545 another “ Hollywood ” case allowed for the opportunity to clear up the law, holding that the mere registration of a domain name “Moviebuff.com” does not provide any trademark priority as against a prior trademark user. This case also solidifies that an action for infringement may be based on use of meta text (invisible use of a text or phrase that cannot be seen by users but search engines can find them). Thus the elements were laid bare to see and Congress saw the confusion in the cases on one hand and that it was time for clearer definition in this international legal arena.

d. ACPA : Capable of being an In Rem “Property” 15 U.S.C. Section 1125 (d) (2) (A) provides that “the owner of a mark may file an in Rem civil action against a domain name in the judicial district in which the domain name registrar, domain name registry, or other domain name authority that registered or assigned the domain name is located…”

e. What Rights does a Domain Name Registrant Have?

i. Under various Registration Agreements there are common elements.

ii. The registrar is providing the service of connecting an alphanumeric word or phrase to a certain DNS address. DNS addresses are harder for the public to remember and is meaningless. The service maintains that connection for the duration of the Agreement.

iii. When it expires, and the Domain Name registrant does not renew, the name may 1) be warehoused by NSI 2) become available for purchase by others or 3) lie dormant until discovered and then grabbed up.

f. Rights by agreement are sometimes sold, transferred and assigned, licensed and otherwise dealt with.

i. Intellectual property generally is often licensed, cross-licensed and distributed, assigned by law, sale and transferred by operation of law such as the good will that goes with an assigned trademark. Logically, since NSI and many other registers allow the transfer of Domain Names within their register systems they appear to function as other intellectual property.

1. The NSI Service Agreement states,

a. “domain name registrations that have passed the registration agreement's anniversary date, must be in a paid status to transfer, delete, modify, or otherwise to request Network Solutions to affect the domain name record or to provide domain name services.” And

b. “you may not transfer your domain name registration to another domain name registrar during the first sixty (60) days from the effective date of your initial domain name registration with us…” and

c. “you agree that we may suspend, cancel or transfer your domain name registration services in order to: (i) correct mistakes made by us or the registry in registering your chosen domain name, or (ii) to resolve a dispute.” And

d. “TRANSFER AND ASSIGNMENT. You may transfer your domain name registration to a third party of your choice, subject to the procedures and conditions found at: http://www. networksolutions.com/en_US/makechanges/rnca/agreement.html…”

g. Virginia courts say Domain Name is not garnishable. In a recent case of Network Solutions Inc vs. Umbro International Va. S. Court 4/21/00 No 991168, suggests that the URL “is or permits a service” and thus it is not garnishable under Virginia ’s garnishment laws as a service rather than tangible goods or real property. Thus it is not amenable to an In Rem action under the state garnishment law. Yet Section 1125 (d) allows courts to order the Domain Name register to turn over a URL to a trademark owner. This may remain a conflict for some time.

i. Note that the current (July, 2001) NSI Service Agreement states, “Your rights under this Agreement are not assignable and any attempt by your creditors to obtain an interest in your rights under this Agreement, whether by attachment, levy, garnishment or otherwise, renders this Agreement voidable at our option.”

ii. It has been suggested that because of this issue a Domain Name is not “property” of any kind and therefore not “intellectual property” either. This seems logical since the Domain Name can only be used if it is registered with one of the ICANN certified registrars worldwide and linked to a DNS address.

iii. Therefore, this line of reasoning goes, the Domain Name is merely a contractual service provided by the registrar. The service is what “connects” a user’s browser to a certain Server because of the registrar equating the DNS with the Domain Name so the user types in a familiar Domain Name. It is the Domain Name that is advertised and touted as the address of a website that does something, sells goods, applies for credit, researches anything, even a free Webster’s dictionary. Witness, “Amazon.com” that has become a trademark for the online store. These Domain Names then become source indicators.

h. Generic Domain Names May Never be Registrable trademarks:

i. The Patent & Trademark Office takes the position[6] that a Domain Name is an address and not a trademark.

ii. Yet, over time, some non generic Domain Names may become source indicators, represent good will and thus take on features of a trademark and thus become intellectual property in character. Generic Domain Names that have become popular like “law.com” and “clogs.com” are not usually capable of being trademarks because they are both generic and usually descriptive. Yet many modern well known “brands” have been created such as the successful “eBay”, “Yahoo”, and others. These Domain Names then may gain and have their status as mere contractual services be claimable by the registrant Domain Name owner and become trademarks that can be enforced under the law of unfair competition.

i. Domain Name is not Capable of Being Converted like Property.

i. In Kremen v. Cohen, 99 F.Supp.2d 1168 (N.D.Cal. May 30, 2000 ) the Domain Name “sex.com” was fraudulently stolen and legally retrieved as if it were intellectual property. The court stated, “The elements of conversion are as follows: (1) the plaintiff has ownership or right to possession of the property at the time of the conversion; (2) the defendant's conversion is by a wrongful act or disposition of property rights; and (3) damages.”

ii. The Facts included that Kremen registered the Domain Name with NSI. Later Cohen signed and submitted a made up agreement to transfer the Domain Name to him and used the name of a former Kremen employee to accomplish the transfer.

iii. Originally the U.S.D.C. Ware, J., dismissed NSI from the claims and in NSI’s Motion for Summary Judgment held that the (1) the registrar did not have contractual commitment not to assign the name since there was no beneficial consideration for one (it was registered in 1994 and gratis); (2) registrant was not a third party beneficiary of contract between the United States and NSI, that established the registration system; (3) a domain name was not property capable of being converted under California conversion law[7] (due the fact that it does not include “intangible property”)[8] ; there was no bailment relationship between and no fiduciary duty owed to the registrant and the failure to allege any relevant material misrepresentation by the registrar precluded negligent misrepresentation claim.

iv. The Court in dismissing NSI as a party agreed with the Umbro decision, “…Historically, the tort of conversion was confined to tangible property. However, California law does recognize ‘conversion of intangibles represented by documents, such as bonds, notes, bills of exchange, stock certificates, and warehouse receipts.’…. Intangible property such as "goodwill of business, trade secrets, a newspaper route, or a laundry list of customers" are not subject to conversion[9]. The Ninth Circuit noted that …"[a]lthough the common law rule has been relaxed somewhat, and the tort may now reach the misappropriation of intangible rights customarily merged in or identified with some document, it has not yet been extended further."

v. In Kremen’s suit for fraud and conversion against Cohen under ACPA, however things went better:

1. The Court found fraud and that since 1995 Cohen’s use of sex.com was causing irreparable harm. On Appeal in Nov, 2000 [10] the Court granted summary judgment and ordered injunctions because of the likelihood of success on the merits. Here the Court stated specifically:

2. It is likely Kremen would obtain a constructive trust among other claims against Cohen, and Cohen had no rights to the sex.com domain name,

3. that Defendant Cohen had fraudulently transferred his and his company’s assets to prevent money recovery and

4. Ordered NSI (pursuant to its agreement to abide by the Court's authority …) to change the sex.com domain name registration record specifically. You would want to include these among your Prayers in a complaint: all fields in an NSI “Who Is” listing (registrant, administration contact, etc.) are Gary Kremen, listing his address….” etc. This clever language gets around the property issue by requiring changing the data for the Domain Name listing, rather than ordering the “transfer of” the Domain Name.

5. The end result of this is that a Domain Name may serve as a trademark, as a mere contractual right to link to a server, and it may be transferable and owned as if property but not garnishable as property. NSI continues to contend that a Domain Name is not “property” and not “tied to a contract for property” and thus cannot be converted.

j. Statutory Money Damages - The Joe’s Cartoon Circumstances Under ACPA

i. Joe’s Cartoons: In Joseph C. Shields - The Joe Cartoon Company Vs. John Zuccarini (April 24, 2001 U.S.C.A. 3^rd CIR. No. 00-2236) is a case that began prior to enactment of ACPA and reported in a prior article by this author, Joe’s Cartoons won not only the trial but also established some of the first guidelines regarding statutory damages.

ii. FACTS: Here the Defendant is infamous as an admitted registrant of many thousands of Domain Names that are misspelled to attract poor typists. Whether called “typosquatting” or “piracy” the result of the case is that one cannot take a famous name and make use of the public’s typing habits for personal gain by misspelling a trademark.

1. MORE NEW TERMS: Another term used in this case is “mouse trapping” where one designs a web site to not only attract users but also does not allow them to exit without wading through multiple other windows displaying ads the site owner wants you to see and buy from. The site gets paid for every “hit”.

2. “Wholesaling” is the act of registering many Domain Names with the intent to sell them to the related trademark owners and use them for personal gain.

iii. Zuccarini makes between $800,000 and $1 million per year on typos and close spellings of famous names, trademarks and other’s Domain Names to get hits.

iv. As soon as Zuccarini was served with first a Cease & Desist letter and then the action in 1997, he changed the “content” of his Joe’s type-a-like sites to claim a First Amendment “right” to protest Joe’s Cartoons of “Frog Blender” and “Micro-Gerbil” depicting animals in rather funny but sick humor. The Court did not go for the defense, saying that the “political protest” came too little too late.

v. Effectiveness of ACPA 15 U.S.C. Sec 1125(d):

1. Zuccarini argued unsuccessfully that this precluded an Action because the Act says it only applies to Domain Names registered or used after the effective date of the Act. Zuccarini kept using the names after the Nov. 29, 1999 effective date and this kept the Action valid.

vi. As reported last year, the Court held that:

1. Joe Cartoon was “distinctive” (famous a trademark or recognizable).

2. Instant Fame: The 15 year old Joe’s Cartoons became popular on t-shirts and other merchandise. Joe’s site gets over 700,000 “hits” per month, has been awarded Macromedia’s “Shock Site Of The Day” and is advertised in national magazines with a circulation of over 1.3 million.

3. The Domain Names derived by Zuccarini are "identical or confusingly similar" to the distinctive trademark or Internet domain name of another person or company,” under the Act.

4. And “typosquatting” is not a legitimate use. Zuccarini’s argument that his use was “fair use” since he merely capitalizes on typos was of no merit.

5. There was intent to profit from using the errors of others. The Act was designed to rectify just such confusing mistakes.

a. Note that the Court found the Act’s legislative history to include an incident of a child who typed “dosney.com” and wound up at an Adult web site.

b. There was no “fair use” Safe Harbor of 1125(d)(1)(B)(i) These detailed factors are another good reason why the ACPA might be best for complex, domestic and difficult cases that provoke more thought generally than do the three factors of the ICANN UDRP.

c. The Court also found under the facts likelihood of confusion between Defendant’s Domain Names and the trademarks.

vii. Statutory Damages:

a. Zuccarini had the “book” thrown at him; the pocket book that is. It was rather difficult for Joe’s Cartoons to prove his losses by the many hits that went to Zuccarini, including proof of actual confusion.

b. The Court upheld the U.S.D.C. awards of (1) $10,000 damages per Domain Name ($50,000) and as this was deemed an “exceptional case” under Section 1117, an award of the $34,000 attorney fees went to Joe’s Cartoons.

4. Registrars Not Generally Liable for Domain Name Piracy.

a. What about the register who provides a Domain Name and then is sued, it being alleged that they infringed or aided and abetted another to infringe or was vicariously or contributory liable for infringement? Also, what if a trademark owner contacts a Domain Name registrar that a name infringes on a trademark[11] and the registrar removes, transfers or stops the Domain Name; some registrars have been sued for making the transfer or stopping the name. California says they are not liable, “(c) A domain name registrar, a domain name registry, or any other domain name registration authority that takes any action described in subdivision (a) that affects a domain name shall not be liable to any person for that action, regardless of whether the domain name is finally determined to infringe or dilute a trademark or service mark.”

b. QUIZ: What might happen if a registrar was in active cooperation with and knew of complaints about trademark violations but either maintains or registers a Domain Name with this knowledge?

c. Lockheed Martin V NSI, 65 USLW 2744, 43 U.S.P.Q.2d 1056, the court upheld the district Court in Lockheed Martin Corp. v. Network Solutions, Inc. 194 F.3d 980 C.A.9 (Cal.),1999, and held, “Where domain names are used to infringe Lockheed’s federally registered "SKUNK WORKS" service mark, the infringement does not result from NSI's publication of the domain name list, but from the registrant's use of the name on a web site or other Internet form of communication in connection with goods or services.... NSI's involvement with the use of domain names does not extend beyond registration.”

i. ISP Liability Issues: When might an ISP be liable for an intellectual property infringement? Not generally for copyright infringement due to posting of anonymous information or even defamation online. ISPs are also apparently immune from “famous” trademark dilution and infringement.

ii. Lockheed attempted to get the ACPA into the Act but, the Court stated, “There is no summary judgment evidence that plaintiff [NSI] is a person who has had a "bad faith intent to profit from" specific marks, 15 U.S.C. 1125(d)(1)(A)(i), that are registered with it or contained in its registry. That the court's interpretation of "intent to profit from that mark" is correct is supported by § 1125(d)(1)(B)(i), which lists factors the court may consider in determining whether a person has a bad faith intent. Although the list is not exclusive, none of the conditions and conduct listed would be applicable to a person functioning solely as a registrar or registry of domain names.”

d. In the recent case of Gucci America, Inc., v. Hall & Associates, … Mindspring Enterprises, Inc. No. 00 Civ 549 RMB (S.D. New York . March 14, 2001), GUCCI the famous trademark for various articles of jewelry, fashion accessories, wearing apparel and related services notified Mindspring (an ISP) that its subscriber, Hall was using Mindspring's services to aid in acts of trademark infringement and unfair competition, including the advertising of jewelry on Hall’s “goldhaus” website which infringed the Gucci Trademark. Gucci alleged that, despite the warnings, Mindspring continued to permit Hall to use Mindspring's ISP services to infringe Plaintiff's trademark rights, “with actual knowledge of, or in reckless disregard of, Plaintiff's rights and Hall's infringement.”

i. Mindspring's Motion for Summary Judgment was premised upon two grounds: (i) that the Communications Decency Act of 1996, 47 U.S.C. § 230 ("Section 230"), "immunizes Mindspring from liability for information posted [on the goldhaus website] by [Hall]," and (ii) that “Gucci’s theory of trademark infringement is barred by the First Amendment,"

ii. However the Court held, “The Communications Decency Act (CDA) did not immunize Mindspring from a claim that its hosting of a trademark-infringing web site, despite notice from the mark owner, was itself infringement of that owner's mark. It also held the CDA did not limit existing intellectual property laws, under which a manufacturer or distributor who continues to supply its product to one “whom it knows or has reason to know is engaging in trademark infringement may itself be held be liable for infringement. Telecommunications Act of 1996, § 509(c)(1), (e)(2), 47 U.S.C.A. § 230(c)(1), (e)(2).”

iii. 1st Amendment Defense Has No Merit. The Court stated that Gucci’s trademark claims against Mindspring are not "barred" by the First Amendment because they challenge an allegedly infringing commercial speech used to identify the source of a product. They held, "[T]rademark infringement law does not curtail or prohibit the exercise of the First Amendment right to free speech.... Defendant's use of another entity's mark is entitled to First Amendment protection when his use of that mark is part of a communicative message, [but] not when it is used to identify the source of a product[12].". In other words, yes, commercial speech is protected but no, not when it is used in the context of unfair competition to cause confusion as to the source of Gucci products. No Summary Judgment; stay tuned.

5. Choice of Forum and Law

a. Be it U.S.D.C. and ACPA or an ADR method, the factors that make that choice must include: