Recent decisions regarding the ownership of domain names have
caused confusion and are undermining investment in hundreds of
European Web sites. Julian Morris reports
In many respects, registering a domain name is like buying a
rolling lease on a house. Domain owners are assured that they will
be entitled to reap whatever benefits result from investments in
their Web site. Such legal certainty stimulates investment and
results in higher rates of economic growth.
But domain ownership, as with a lease, is not absolute. Breach a
condition of a lease and you could find yourself on the street;
breach a condition of your registration and you could find yourself
in the ether. In 1995, Network Solutions Inc - the body responsible
for registering dotcom domains - altered the registration
agreement, allowing domains to be removed from registrants who
infringe the rights of others.
Courts subsequently heard cases in which domain owners had
diluted the trademark of famous brands by displaying pornography or
linking to Web sites run by competitors. In such cases, courts
typically order the transfer of the name from the registrant
"cybersquatter" to the trademark owner.
But taking a case to court can be a lengthy and expensive
process, with negative effects for both parties. In the US, where
courts rarely award costs against the losing party, cybersquatters
hope to be paid off with a sum smaller than the costs of bringing
the suit. In the UK, where costs are usually awarded against the
losing party, small Internet startups might be scared by the
possibly high costs of losing and choose instead to give up their
domains even if they have a reasonable chance of winning.
In order to expedite procedures and reduce costs, the Internet's
governing body ICANN - the Internet Corporation for Assigned Names
and Numbers - introduced the Uniform Domain Name Dispute Resolution
Policy (UDRP), to be meted out by approved arbitrators. Since the
policy came into force in January this year, the four
ICANN-approved arbitrators have heard hundreds of cases. Most of
these appear to have followed the UDRP to the letter and to have
been decided in a perfectly reasonable manner. But a recent
decision concerning Barcelona.com has called this assumption into
question.
Under the UDRP, domain owners must submit to domain name dispute
resolution if the complainant asserts that: their domain name is
identical or confusingly similar to a trademark or service mark in
which the complainant has rights; and they have no rights or
legitimate interests in the domain name; and their domain name is
being used in bad faith. If the complainant is able to prove these
assertions before the arbitrator, the domain must be transferred,
although the decision may be appealed to a national court.
Barcelona.com was registered by Concepcio Riera in 1996 and
subsequently transferred to Barclona.com Inc., a US-based company
owned by Ms Riera and her husband Joan Nogueras. In May 2000,
Barcelona City Council filed a complaint with WIPO claiming
ownership of the domain. The claim was based upon the presumption
that the owners of barcelona.com have violated trademarks
registered in Spain by Barcelona City Council. On its face, the
city council's claim seems weak. The filing clearly says that the
two trademarks held by the city council are "Barcelona
Excelentisimo Ayuntamiento de Barcelona" and "Barcelona-BCN",
neither of which is identical to "Barcelona" or
"Barcelona.com".
In any case, the current owner of the domain, Barcelona.com Inc,
has a common law trademark in the name, so the second part of the
dispute criteria is not met-suggesting that WIPO should never have
accepted the case. Moreover, there is no evidence that the owners
of Barcelona.com have ever engaged in bad faith towards Barcelona
City Council - such as trying to extort money for the domain - so
the third part of the dispute procedure is not fulfilled either.
Nevertheless, not only did WIPO accept the case, it ruled in favour
of the city council.
The reasoning given for the decision by the arbitrator Marino
Porzio is disturbing. He argues that since Barcelona City Council
owns more than a thousand trademarks in the name Barcelona, it
somehow has more rights to the name.
Senor Porzio further claims that it is an act of bad faith to
take advantage of the fact that people searching for information
about the city of Barcelona will look for domains containing the
string "barcelona".
By that merit, all privately owned dotcom domains containing a
place name and pointing to Web sites providing information about
those places are doing so in bad faith.
Yet, dotcom addresses are not meant for governments, they are
meant for private companies. Governments can use their own country
domains, as Barcelona City Council has done with its Web site
bcn.es since 1995. Senor Porzio's reasoning is, quite simply,
upside down.
WIPO recently released a policy document arguing that geographic
domain names relating to distinctive goods such as Bordeaux wine,
Cheddar cheese, etc. should belong to the region. The reasoning is
as specious as that given by Mario Porzio in the barcelona.com
decision. Its effect, if adopted by ICANN, would be devastating on
those who have invested heavily in developing geographic domain
names such as champagne.com, which owned by a company in New York
and currently points to a Web site for Moet & Chandon.
Barcelona.com Inc has filed an appeal to the U.S. Courts, where
it has a greater chance of success in defending its property. But
as long as WIPO continues its reign of confusion, Web businesses
will be in constant fear of having their domains taken by force.
This is not a recipe for ensuring continued investment in
cyberspace.
Julian Morris is director of the Environment and Technology
programme at the Institute of Economic Affairs in London.
Does this mean that if I take out a thousand trademarks
containing the name Morris, I should be able to extract the domain
name morris.com from its current owners?
Of course it could be argued that Barcelona - BCN might be
considered confusingly similar to Barcelona, but so would
practically any trademark containing "Barcelona" and any other
hyphenated word - of which there are many.
This is not only ridiculous, it is absurd and counterproductive.
It would mean, in effect, that the only legitimate owners of such
domains would be government authorities.
Interestingly, a similar case decided recently by another ICANN
approved arbitrator, eResolution, ruled that the governmental
district of Huangshan in China did not have the right to seize the
domain huangshan.com from NA Global Link Ltd of Hong Kong, a
private enterprise that registered it first. Moreover, whereas
eResolution has transferred the domain in only 47 per cent of
cases, WIPO has transferred the domain in 84 per cent. How many of
these WIPO decisions have been based on reasoning as dubious as
that meted out by Senor Porzio?