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?