by
K.K.CAMPBELL
Internet columnist
The Toronto Star
May 6 1999

While Shakespeare might have mounted a legal defense around the argument that "a Web site, by any other domain name, would still smell as sweet," the United Nations has decided to take a different approach.

There are two dominating Internet issues at the moment: privacy and domain name ownership.

Not surprisingly, there are also several international initiatives dealing with these matters.

The UN agency dealing with the domain name problem is known as the World Intellectual Property Organization (WIPO -- www.wipo.org). It's currently drawing up global "rules of play" for who own what.

Legal battles over domain names are constantly erupting, WIPO says, because there are "two autonomous systems that live in ignorance of each other" -- namely, the system of registering domain names (the InterNIC) and the intellectual property system, which has existed long before the Net rose up from the digital muck.

One of the biggest domain name sub-issues is "cybersquatters." These are folks who register domains with the names of famous people (rogerclemens.com) and corporate entities (mcdonalds.com).

They "camp out" on these unused properties (intellectual properties) and either convert them to their own use -- by pointing the domain name at something else, like a porn site, thus tricking people to visit -- or warehouse the domain name in anticipation of the day someone will wants it back -- for which the cybersquatter demands big bucks, though just less than the prospective buyer's cost of trying to get the name back through litigation.

And lots of people try it. Recently, the InterNIC purged some 18,000 domain names it says were probably filed by cybersquatters.

Some cybersquatters are smart. Some cybersquatters are dumb. The person who registers television.com is smart. The person who registers nbc.com is not. No one owns "television," but courts will rule, everytime, that "NBC" is a mark of trade and, unless it's taken by a company called NBC, the registrant will probably be forced to relinquish it.

Usually after a lot of legal posturing. And wasted money.

Example: In March, a New Jersey court ordered a Princeton man to stop using citigroup.com -- kill the Web site and return any email messages delivered there. It's stage one in reclaiming the domain.

The Princeton chap claims he had no ulterior motive, he wanted to use it for his own business interests. Apparently, though, he registered it the very day the big merger of Citicorp and Travelers Group was announced (April 6 1998). He says that was mere coincidence. However, he also grabbed citigroupbank.com, citicorptravelers.com and citi-travelers.com. That's a coincidence worthy of Agents Scully and Mulder.

Citicorp says it didn't pre-register any domain names because it was trying to keep the negotiations secret. Domain name registrations are public record -- so the savvy would have been tipped-off.

So, WIPO aims to stop to this sort of chaos.

This chaos exists because of the way domain names are organized. There are only three "first level domains" -- .com, .net and .org -- that can be used for people and businesses. That means there are only three possibilities for each trademarkable name. This artificial scarcity causes business to fight over the limited pickings like starving dogs over on an old soup bone.

And there are a lot of hungry dogs out there -- WIPO estimates domain name registrations have increased from about 100,000 as 1995 dawned to maybe 4.8 million as 1998 closed.

Critics of WIPO's plans exist -- including internal dissension. Michael Froomkin, a law professor at the University of Miami, is part of WIPO's "Panel of Experts, Internet Domain Name Process." He says the plan is biased in favor of trademark holders -- usually rich corporations.

He says that bias is a threat to "fundamental free-speech interests including parody, and criticism of corporations." It could also spell legal intimidation because WIPO would institute an "expensive loser-pays arbitration process with uncertain rules that will intimidate persons who have registered into surrendering valid registrations." (Check out his site for more -- www.law.miami.edu/~froomkin/.)

But the WIPO says it only wants to narrow the definition of cybersquatter to those who demonstrate repeated, and clearly bad faith, registrations.

It, thus, wants to avoid silly things like when Archie Comics lawyers tried to bully a father into relinquishing veronica.org -- a domain name for his two-year-old daughter. (The lawyers claimed Veronica was a trademark of the corporation.

Well, while the United Nations committees its way through that mess out, business still has to deal with the daily realities of the problem.

One recent case was resolved with interesting results.

A Vancouver-based company called Colorworks Reproduction and Design owns colorworks.com. A Pennsylvania-based company called Desktop Technologies Inc. owns the American trademark on the term Colorworks. So, the U.S. company sued the Canadian company over the domain name.

This was unique because it crossed national borders. As far as I know, it's a first.

Desktop filed the case in a Pennsylvania district court. The B.C. company was forced to hire American legal counsel -- because if it didn't defend, InterNIC rules would have taken its domain name away by default.

The basis of its suit was that the Net reaches that state, so, Colorworks was infringing on its trademark there. It said, doesn't matter if Colorworks in B.C.

Colorworks said, Does so matter.

The U.S. District Court judge thought about it and said, Yeah, does so matter. Case dismissed.

The judge did elaborate a bit more than that: "Simply registering someone else's trademark as a domain name," he wrote, "is not sufficient to subject a party domiciled in one state to jurisdiction in another. There must be something more to demonstrate that the defendant directed his activities towards the forum state [Pennsylvania]."

That could have big implications for off-shore Net industries -- like gambling, banks, etc. We'll see if that one stands up the test in other cases.