Concurrent Trademark Use: Can the Domain Name System Accommodate?

Rob Kalinsky

April 16, 1999

Cyberspace Law Seminar

There is no problem with this arrangement until it is recognized that current trademark law allows multiple businesses in different lines of work to use an identical trademark as long as it is unlikely that there would be confusion. The web, however, because of its universal structure, allows only one of the businesses to utilize its trademark as its domain name. This means that the other concurrent trademark owners are left choosing less advantageous alternatives.

This paper will consider the traditional trademark law that allows concurrent trademark use and the problems this creates when applied to the Internet. A survey of proposed solutions to this problem will be provided, and each solution will be examined to determine its strengths and weaknesses. Finally, a solution will be presented that would help to alleviate the problem in the most advantageous manner for all parties involved.

The top-level domain name, ".com," loosely describes the purpose of the organization associated with the domain name. The .COM top-level domain was created to designate business or commercial web sites. Other top-level domain names include .NET and .ORG, which are also administered by Network Solutions, Inc. (NSI),[10] and .MIL, .GOV, and .EDU, which are administered by the government. In addition, there are country-specific top-level domain names such as .jp (Japan), .uk (United Kingdom), and .us (United States) which are administered by organizations within each country.

A business will typically register its second-level domain name under the appropriate top-level domain, which is .COM for commercial entities. While the Internet Assigned Numbers Authority (IANA)[11] has overall authority for the top-level domain names, it has assigned authority over to the Internet Network Information Center (InterNIC).[12] The InterNIC, in turn, has contracted with NSI[13] for processing domain name applications. Therefore, a business or other entity interested in registering a second-level domain name would submit an application to NSI.

Normally when a business wishes to create a presence on the web, it will register a second-level domain name that has meaning to its customers. As indicated previously, a natural choice for a business would be to register its trademark as its domain name. A domain name can be thought of as a street address, indicating the location of a web site on the Internet.[14] However, in the context of business web sites, the domain name can come to resemble an identifier of services and goods offered by the business at a web site.[15]

While it is true that a domain name in itself is used simply to make human access to web sites on the Internet easier,[16] use of trademarks as domain names by businesses to promote and sell products and services on the web[17] could and is increasingly recognized as the use of a trademark which is governed by intellectual property law. The domain name in this context becomes more than an address, functioning as an identifier for the goods and services of the business located at that web site.

The use of a business' trademark as its domain name normally creates no problems. However, when examined in light of concurrent trademark use, conflict results when two concurrent users of the same trademark both wish to use the trademark as their domain name. While trademark law allows this concurrent use,[18] it has been indicated that the web's universal nature allows only one business to utilize the specific trademark as its domain name. Several commentators who have examined this problem have drawn an analogy to the problem created by alphanumeric 800 numbers, where several companies may wish to have vanity numbers spelling out the same catchy name.[19]

It is important to distinguish the problem of concurrent trademark use as applied to domain names from other problems associated with domain names on the Internet, such as infringement or cybersquatting. Infringement[20] deals with cases where a second party accuses a first party of wrongfully using the second party's trademark as the first party's domain name. This can most easily be seen in the case of a famous trademark,[21] because any use of a famous trademark by a third party can lead to dilution of the mark. Cybersquatting is similar to infringement, in that the party using the trademark as their domain name is infringing on the rightful use by the trademark owner.[22] However, a cybersquatter is identified as a person who has no real intention of using the domain name for him or herself, but has registered the domain name using the trademark of the business for the purpose of selling it to the business at a profit.

Neither infringement nor cybersquatting issues are not problems that are unique to the domain name system, and both can be handled using existing trademark law.[23] Conversely, concurrent trademark use as applied to the domain name system presents a novel problem which trademark law and domain name policy do not adequately address.

Although the courts have not addressed the specific issue of concurrent trademarks and domain names, several illustrations of the problem have developed in the past several years, and it is anticipated that the problem will continue to grow as the web becomes more popular as a commercial vehicle. One example of this type of problem is the domain name www.frys.com. Originally, David Peter registered the domain name www.frys.com to be used to promote his vending machine business, Frenchy Frys.[24]

Subsequently California giant Fry's Electronics, Inc.,[25] an electronics retailer, sought to stop Peters from using the trademark Frys as Frenchy Fry's domain name. Peters argued that there was no trademark infringement because the two businesses were in sufficiently different lines of business and no likelihood of confusion would result from Frenchy Fry's use of the domain name.[26] The dispute ended in court with a default judgment on other grounds in favor of Fry's Electronics.[27] This is one example where a large business with greater resources is able to exert its power to enjoin a smaller business, which has a legitimate claim to a trademark, from using its trademark as its domain name.

Another example of concurrent trademark users vying for the same domain name is the case of the domain name www.pabst.com. In 1996, Mike Pabst, owner of the advertising company Pabst Creative Communications, decided to create a presence on the web at www.pabst.com to promote his business. Several months later Pabst received a letter from Pabst Blue Ribbon beer, claiming that use of the domain was diluting the famous beer's trademark.[28] The much bigger Pabst Blue Ribbon was able to exert pressure to get NSI to put the name put on hold status, thereby freezing the domain name and forcing Pabst Creative Communications to choose a different one.

An overview of proposed solutions to this problem will be examined below. First, the current NSI policy for domain name disputes will be addressed.[29] Next, proposed solutions to the problem will be examined, and the strengths and weaknesses of each explored. Finally, a novel solution will be proposed, attempting to maximize benefits to both trademark owners and end users. These solutions will be examined in a national context and will not address the larger global concerns that are acknowledged. In addition, all analysis will be done under the assumption that both parties have legitimate claims to the use of the trademark as a domain name.

A cursory reading of the current NSI Dispute Policy[30] will illustrate that NSI has taken a passive approach to the problem of trademark use as domain names. NSI notes that it is not equipped to determine if domain name use infringes upon a third party's trademark rights.[31] NSI makes it clear that it will neither act as arbiter nor provide resolution for disputes. Domain names are registered on a first-come, first-served basis, with no formal determination if a registered domain name may infringe on another party's trademark.

A business which believes that another party's domain name infringes on its trademark rights must initiate Section 8 of NSI's Dispute Policy by providing NSI with an original, certified copy of trademark registration. If the trademark is identical to the domain name in question (i.e., the trademark matches the second-level domain name exactly without the "www" or .COM, .ORG, or .NET[32]) NSI will compare the creation date of the trademark to the creation date of the domain name. If the domain name predates the trademark, NSI will take no action.

There are several apparent problems with the current domain name dispute policy as applied to concurrent trademark usage. First, while it may be proper for NSI to distance itself from any determination of trademark rights, its policy only recognizes registered trademarks[33] and provides no recourse for holders of common law[34] trademarks.[35] Second, the policy fails to recognize the existence of concurrent trademarks or how to deal with them. Third, the policy provides no direction for efficient resolution of disputes between trademark owners, leaving the most likely recourse to be costly litigation.

Third, the resolution should create the least amount of confusion to the end user as possible. One aspect of this has been termed "guessability,"[36] which encompasses the idea that the end user should be able to intuitively determine the domain name of a business or other entity on the web without becoming confused about which company is providing the services or goods on a web site. It is a distinct advantage to a business if its domain name is easily guessable by end users seeking to find the business' presence on the web. The most obvious guess for the domain name of a business would probably be its trademark.

One of the obvious courses of actions is to leave the domain name system as it stands. This course of inaction has several flaws that have already been discussed, including the failure to provide resolution for trademark disputes, the failure to recognize common law trademark owner's rights, and the unfair advantages given to the larger trademark owners. Another problem with this proposal is that it would make the domain name for a certain business harder to guess by the end user.[37] This is the case because only one of the concurrent trademark owners could use its trademark as a domain name, and the others would have to use alternatives that would be harder to guess. Although this would probably be the easiest solution in NSI's view, it does nothing to alleviate the inherent problems of concurrent trademark use on the Internet.

The next most obvious solution would be to scrap the domain name system as it now stands and replace it with an alternative system. One proposal in this category calls for the replacement of the domain name system with meaningless top-level domains[38] with the requirement that each domain cannot have meaning in any language.[39] Presumably this would mean that when a business registered with NSI, NSI would generate a gibberish domain name for the business' use.

A second proposal would be to retire the international top-level domain names (e.g., .COM, .ORG, and .NET) and rely solely on country specific top-level domains[40] (e.g., .us for United States). The advantages of this proposal would be to limit disputes to a specific country, which would provide a clearer indication of where a lawsuit could be brought.[41] However, it is not apparent that this would provide any relief for concurrent use of a trademark within a certain country, and it would require that the end user know with which country a certain business is associated in order to be able to guess its domain name. In addition, multinational companies would undoubtedly wish to register domains in at least every country in which they provide goods or services, thereby creating problems for them as well as confusion for the end user.

A third proposal would call for the elimination of the domain name system in favor of using IP address[42] (e.g., 128.255.126.56). Analysis of this proposal would be similar to that for the gibberish domain names. Obviously there is nothing intuitive in an IP address and no possibility of guessability. Also, there is likely to be confusion for the end user who would be required to remember and enter a long string of numbers to obtain a particular business' web site.

A third category of proposals would modify the domain name system as it now stands. The Internet International Ad Hoc Committee's (IAHC)[43] proposal, in addition to adding new top-level domains as discussed in the next section, would require all applications for domain names be made publicly available on the web to allow trademark owners to monitor for infringement. In addition, the proposal would call for each domain name applicant to agree to participate in on-line arbitration as part of the registration process in the event of a dispute.[44] While this proposal would help to protect trademark owners and allow for more efficient dispute resolution, it does not specifically address the problems associated with concurrent trademark use and domain names.

A second proposal in this category would call for the addition of information to each domain name. Some propose the addition of trademark classification codes that represent different fields of goods or services.[45] This would result in such domain names as www.acme.9.com (class 9 is for computers). Others would add categories to the domain name from a list of controlled vocabulary,[46] and still others would add a personal string to domain names to distinguish personal web sites from business sites.[47] InterNIC also proposes requiring each domain name to contain a one-word description of the applicant's business, such as www.acme-grocery.com and www.acme-hardware.com.[48]

A third proposal entailing modification of the system would be to require each domain name to include geographic data.[49] This would result in a domain name such as www.acme.iowa-city.ia.us, which is a system currently used for most educational domain names. While this would help to distinguish domains, it would have the obvious problem of defining where a business is truly located, and it also does not solve the problem which arises when two concurrent trademark users are located in the same geographic area. Also, it reduces guessability by the end user, requiring knowledge of the location of a business, and it seems to frustrate the Internet's inherent non-geographic nature.

The final category of proposals is really a subset of the previous section calling for modification of the domain name system, but it is worthy of separate analysis. Many commentators have proposed an increase in the number of international top-level domain names to alleviate the current congestion in the .COM, .NET, and .ORG domains. Some would create several new domains,[50] and one even proposes to allow a business to use any name it chooses for a top-level domain, unconstrained.[51] All of these proposals contain the same basic problem in that as the number of top-level domain names increase, the harder and more confusing it becomes for the end user. In addition, the solution does not really address the problems associated with concurrent trademark use. Once again, it is likely that large businesses would register their trademark as a domain name in several different top-level domains.

The substantive difference between these proposals calling for more top-level domains lies in who would regulate and register the new top-level domains. One proposal calls for the Federal Communications Commission (FCC)[52] to step in and take over registration of top-level domains.[53] Others call for alternative sources to register the new international top-level domains. Two such organizations that already exist and register alternative top-level domain names are the ALTERNIC[54] and eDNS[55]. While these new top-level domains do relieve congestion, they still do not adequately meet the needs of concurrent trademark users. They may actually create burdens for trademark owners concerned with policing domain names to assure that none infringes on the trademark owner's rights.[56] Also, the possibility for end user guessability is again compromised as more and more similar top-level domains are created.

This paper's proposed solution to the problem is similar to one given in an INTA bulletin, calling for a directory that would contain information about each domain name owner and provide links to the owner's separate web site.[57] This proposal differs from the INTA proposal in that it does not call for a master directory, but it does provide links to each trademark owner's web site. The proposal is tailored to maximize benefits for both trademark owners and end users.

The image would probably be a company logo or other picture that would help identify the owner of the trademark. The text could be used in any way that the business wished, but it is anticipated that the text would be used to describe the business. Finally, the hypertext link would provide access to the trademark owner's actual, unregulated web site at a different domain name address. A sample linking page for owners of the ACME trademark is seen in Figure 2. An html version of the sample linking page can be seen by clicking here.

[1] James W. Morando and Christian H. Nadan, Can Trademark Law Regulate the Race to Claim Internet Domain Names?, 13 NO. 2 Computer Law. 10, 11 (1996).

[2] See Federal Trademark Act, 15 U.S.C. § 1052(d) (1998).

[3] Federal Trademark Act, 15 U.S.C. § 1114(1)(a) (1998).

[4] Federal Trademark Act, 15 U.S.C. § 1125(c) (1998).

[5] David B. Nash, Comment, Orderly Expansion of the International Top-Level Domains: Concurrent Trademark Users Need a Way Out of the Internet Trademark Quagmire, 15 J. Marshall J. Computer & Info. L. 521, 531 n. 93 (1997).

[6] The domain name www.acme.com is used throughout the paper as an example. The domain is actually owned by ACME Laboratories. See Jef Poskanzer, ACME Laboratories, (visited Mar. 23, 1999) <http://www.acme.com>.

[7] IP numbers are assigned by the IANA. See Internet Assigned Numbers Authority, IANA Home Page, (last modified Mar. 10, 1999) <http://www.iana.org>.

[8] Matisse Enzer, Glossary of Internet Terms, (last modified Mar. 7, 1999) <http://www.matisse.net/files/glossary.html>. Other protocols used on the Internet include the File Transfer Protocol (FTP) and the Network News Transport Protocol (NNTP).

[9] See Network Solutions, Frequently Asked Questions Registration-related terms, (last modified Nov. 01, 1998) <http://www.internic.net/faq/glossary.html>.

[10] Network Solutions, Domain Name Registration by Network Solutions, (visited Mar. 10, 1999) <http://www.networksolutions.org>.

[11] See Internet Assigned Numbers Authority, IANA Home Page, (last modified Mar. 10, 1999) <http://www.iana.org>.

[12] See Network Solutions, Welcome to the InterNIC, (visited Mar. 10, 1999) <http://www.internic.net>.

[13] See Network Solutions, Domain Name Registration by Network Solutions, (visited Mar. 10, 1999) <http://www.networksolutions.org>.

[14] David J. Loundy, Domain Name Symposium: A Primer on Trademark Law and Internet Addresses, 15 J. Marshall J. Computer & Info. L. 465, 470 (1997).

[15] Id.

[16] Id. at 466.

[17] James W. Morando and Christian H. Nadan, Can Trademark Law Regulate the Race to Claim Internet Domain Names?, 13 NO. 2 Computer Law. 10, 11 (1996).

[18] See Federal Trademark Act, 15 U.S.C. § 1052(d) (1998)

[19] In these cases, the telephone companies normally provide the numbers on a first-come, first-served basis, meaning that the first business to register the vanity number is the winner and the second business has to live with a less advantageous alternative. James W. Morando and Christian H. Nadan, Can Trademark Law Regulate the Race to Claim Internet Domain Names?, 13 NO. 2 Computer Law. 10, 12 (1996) ("Like NSI, telephone companies assign numbers on first-come, first-served basis, making the courts sort out the trademark issues.").

[20] See e.g. Hasbro, Inc. v. Internet Entertainment Group, Ltd., No. C96-130WD, 1996 U.S. Dist LEXIS 11626 (W.D. Wash. Feb. 9, 1996); Comp Examiner Agency v. Juris, Inc., no. 96-0213WMB, 1996 WL 376600 (C.D. Cal 1996).

[21] Federal Trademark Act, 15 U.S.C. § 1125(c) (1998).

[22] See e.g. Panavision Int'l L.P. v. Toeppen, 938 F. Supp 616 (C.D. Cal. 1996); Intermatic, Inc. v. Toeppen, 947 F. Supp 1227 (N.D. Ill. 1996).

[23] Federal Trademark Act, 15 U.S.C. § 1114 (1998).

[24] David Peter, Frenchy Fries™ homepage v5.01 (last modified Feb. 17, 1998) <http://home1.gte.net/dpeter1>.

[25] Fry's Electronics, Inc. also operates the other registered domains of www.fryselectronics.com and www.fry-s.com.

[26] Richard Zaitlen and David Victor, The New Internet Domain Name Guidelines: Still Winner-Take-All, 13 NO. 5 Computer Law. 12, 16 (1996).

[27] Fry's Electronics v. Octave Systems, Inc. et al., First Amend. Complaint, Case No. C95-2525-CAL (N.D. Cal., Jul. 13, 1995).

[28] Call it trouble.com, USA Today, News Section, Pg. 10A (January 15, 1997).

[29] See Network Solutions, Network Solutions' Domain Name Policy (last modified Feb. 25, 1998) <http://rs.internic.net/domain-info/internic-domain-6.html>.

[30] Network Solutions, Network Solutions' Domain Name Policy (last modified Feb. 25, 1998) <http://rs.internic.net/domain-info/internic-domain-6.html>.

[31] Richard Zaitlen and David Victor, The New Internet Domain Name Guidelines: Still Winner-Take-All, 13 NO. 5 Computer Law. 12, 15 n.27 (1996) (quoting NSI Domain Dispute Resolution Policy Statement of July 7, 1995).

[32] Network Solutions, Frequently Asked Questions Network Solutions' Domain Name Dispute Policy (Rev. 03) (last modified Sept. 23, 1998) <http://rs.internic.net/faq/dispute.html>.

[33] Network Solutions, Network Solutions' Domain Name Policy §§ 8-9 (last modified Feb. 25, 1998) <http://rs.internic.net/domain-info/internic-domain-6.html>.

[34] See Federal Trademark Act, 15 U.S.C. § 1125 (1998).

[35] Catherine Simmons-Gill, Copyright Protection on the Internet: Statement of the International Trademark Association Before the Subcomm. On Courts and Intellectual Property of the House Comm. On the Judiciary on H.R. 2441 104th Cong., 1996 WL 50058 (1996).

[36] See D. Collier-Brown, On Experimental Top Level Domains Rev 0 (Sep. 1996) <http://java.science.yorku.ca/~davecb/tld/experiment.html>.

[37] D. Collier-Brown, On Experimental Top Level Domains Rev 0 (Sep. 1996) <http://java.science.yorku.ca/~davecb/tld/experiment.html>.

[38] D. Collier-Brown, On Experimental Top Level Domains Rev 0 (Sep. 1996) <http://java.science.yorku.ca/~davecb/tld/experiment.html>.

[39] Catherine Simmons-Gill, Copyright Protection on the Internet: Statement of the International Trademark Association Before the Subcomm. On Courts and Intellectual Property of the House Comm. On the Judiciary on H.R. 2441 104th Cong., 1996 WL 50058 (1996).

[40] D. Collier-Brown, On Experimental Top Level Domains Rev 0 (Sep. 1996) <http://java.science.yorku.ca/~davecb/tld/experiment.html>.

[41] D. Collier-Brown, On Experimental Top Level Domains Rev 0 (Sep. 1996) <http://java.science.yorku.ca/~davecb/tld/experiment.html>.

[42] David B. Nash, Comment, Orderly Expansion of the International Top-Level Domains: Concurrent Trademark Users Need a Way Out of the Internet Trademark Quagmire, 15 J. Marshall J. Computer & Info.L. 521, 538 n.176 (1997).

[43] See Internet International Ad Hoc Committee, IAHC Home (last modified May 26, 1997) <http://www.iahc.org>.

[44] International Trademark Association, V. Domain Name System Models: Current and Proposed (last modified Nov. 20, 1997) <http://plaza.interport.net/inta/wpii.htm>.

[45] James W. Morando and Christian H. Nadan, Can Trademark Law Regulate the Race to Claim Internet Domain Names?, 13 NO. 2 Computer Law. 10, 12 n.48 (1996).

[46] D. Collier-Brown, On Experimental Top Level Domains Rev 0 (Sep. 1996) <http://java.science.yorku.ca/~davecb/tld/experiment.html>.

[47] E.g. Ms. Sharp's personal web page at www.sharp.personal.com could be distinguished from Sharp Electronic's business page at www.sharp.com. See James W. Morando and Christian H. Nadan, Can Trademark Law Regulate the Race to Claim Internet Domain Names?, 13 NO. 2 Computer Law. 10, 12 (1996).

[48] James W. Morando and Christian H. Nadan, Can Trademark Law Regulate the Race to Claim Internet Domain Names?, 13 NO. 2 Computer Law. 10, 12 (1996).

[49] Id.

[50] See e.g. International Trademark Association, V. Domain Name System Models: Current and Proposed (last modified Nov. 20, 1997) <http://plaza.interport.net/inta/wpii.htm> (proposing to add .FIRM, .SHOP, .WEB, .ARTS, .REC, .INFO, and .NOM as new top-level domains). (See also the Postel Plan, proposing to create up to 150 new international top-level domains).

[51] D. Collier-Brown, On Experimental Top Level Domains Rev 0 (Sep. 1996) <http://java.science.yorku.ca/~davecb/tld/experiment.html>.

[52] Federal Communications Commission, Federal Communications Commission (FCC) Home Page (last modified Apr. 2, 1999) <http://www.fcc.gov>.

[53] David B. Nash, Comment, Orderly Expansion of the International Top-Level Domains: Concurrent Trademark Users Need a Way Out of the Internet Trademark Quagmire, 15 J. Marshall J. Computer & Info.L. 521, 543 (1997).

[54] See AlterNIC, AlterNIC.NET Network Information Center (visited Feb. 28, 1999) <http://www.alternic.com>.

[55] See New Domains, Welcome to New Domains (visited Feb. 28, 1999) <http://www.newdomains.net/default.htm>.

[56] International Trademark Association, V. Domain Name System Models: Current and Proposed (last modified Nov. 20, 1997) <http://plaza.interport.net/inta/wpvcd.htm>.

[57] James W. Morando and Christian H. Nadan, Can Trademark Law Regulate the Race to Claim Internet Domain Names?, 13 NO. 2 Computer Law. 10, 12 n.48 (1996) (citing the INTA Bulletin, December 28, 1995 at 10).