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Among a company’s most valuable assets are its name and trademarks. Today, a trademark’s value and utility are enhanced through use as an Internet domain name — better known as a Web site address — which allows users to locate the company easily on the Internet. Companies often choose to use their own names or the names of their most popular products as domain names. Recognizing the value of trademarks on the Internet, “cybersquatters” intentionally register other’s trademarks as domain names either to extract payments from the owners, or to prevent the owners from using the marks as domain names. To facilitate prompt review and redress possible intentional misuse of trademarks in domain names, the World Intellectual Property Organization, through the Internet Corporation for Assigned Names and Numbers (ICANN), has enacted an international dispute resolution procedure to which all domain name registrants must submit. Through its Uniform Domain Name Dispute Resolution Policy and corresponding rules, ICANN has sought to balance the competing notions of a domain name as merely an Internet “address,” against a domain name as a trademark or service mark. In resolving such ownership issues on an expedient and inexpensive administrative basis (without prejudice to other legal remedies), the ICANN Policy focuses on intentional acts. Specifically, it is designed to remedy the misuse of another’s trademark where it is clear that the selection of a domain name was not merely to serve as an Internet address, but rather intentionally to pirate and ransom another’s mark. For example, an individual with no connection to a particular trademark registers that mark as a domain name in the hopes of either misguiding the public to its Web site, or selling the domain name back to the trademark’s owner for a king’s ransom. Under these facts, the policy and rules offer the trademark owner swift, inexpensive and effective relief through carefully crafted remedies consisting of either cancellation or transfer of the domain name. Similarly, the policy protects parties who have innocently or legitimately chosen a domain name “address,” even though it may be similar to another’s trademark. STREAMLINED PROCEDURE The ICANN procedure is uncomplicated and inexpensive. The initiating party must allege in a complaint that a mark or name in which its has ownership rights has been registered and is being used as a domain name by another in bad faith. The complaint is filed with one of three organizations identified as “providers” under the rules. The registrant of the disputed domain name has 20 days from the proceeding’s commencement to respond to the complaint. Either the complainant or the respondent may choose to elect a three-member or single member panel of arbitrators. The complainant bears the fees except that if the respondent requests a three-member panel, the parties share the fees equally. The providers (or arbitrators) consider neither sworn statements, discovery nor in-person hearings to resolve the dispute. In most cases, the estimated time for full resolution is less than 90 days. Correspondingly, and in stark contrast to a similarly postured lawsuit, the estimated fees for the process range from $750 to $3,000. Where the bad faith of the registrant is unclear, in addition to the traditional required showing that a mark (here, a domain name) is confusingly similar to the owner’s mark, the trademark owner also must establish that the registrant has no legitimate interest in the domain name, and that the registrant registered and is using the domain name in bad faith. The evidence necessary to establish these elements includes the following: (1) the respondent acquired the domain name “primarily for the purpose of selling, renting or otherwise transferring the domain name registration” to the owner for consideration in excess of out of pocket expenses; or (2) the respondent intended to prevent the trademark’s owner from using the mark in a domain name, or to otherwise disrupt the owner’s business; or (3) the respondent intentionally attempted to attract Internet users by creating a likelihood of confusion with the owner’s mark. In a proceeding that does not provide for conventional discovery, these elements may be difficult to establish. ELASTIC PROOFS Conversely, if the respondent establishes a “legitimate interest” in the contested domain name, it may prevail. Unlike a trademark owners’ burden, it may show legitimacy of use through very elastic proofs. For example, the respondent may establish “legitimate use” through showing that it is “commonly known” by the domain name, “even if [it] acquires no trademark or service mark rights” in the name. Although this provision is inherently contradictory (i.e., if the business is “commonly known” under a particular name, that fact alone bestows service mark rights), it allows the respondent a low threshold to establish “legitimacy” of use. Alternatively, the respondent may contend that it does not “intend” to profit commercially from or otherwise tarnish the mark, and that at the time of registration, it had a good-faith intent to use the mark. Consequently, the respondent could defeat a complaint by showing its “innocence,” or by proof that it is “commonly known by” the domain name-defenses affording little if any protection in a traditional trademark lawsuit. The result for a trademark owner who does not clearly establish the wrongful intent of a registrant is a ruling from an administrative body, composed of experts, that another entity is entitled to use its mark in an Internet address. Although the arbitration procedure is non-binding, a decision entitling a third party to use an owner’s mark could be problematic. Moreover, an owner may risk introduction of that ruling in any later court proceeding where an owner’s rights in the mark are at stake. The import of the ruling may be diminished through explanation of ICANN’s “bad faith” standard of proof. Depending on the weight ultimately given to such determinations, however, the impact on judge or jury of an “experts’ decision” permitting another party’s use of a domain name comprising the owner’s mark could be significant. On the other hand, these arguments could be raised for almost all litigation alternatives, such as conciliation, mediation and arbitration, which have found increasing acceptance. Moreover, the fact is that rarely will a formal court proceeding offer a potential remedy as swift as the ICANN dispute resolution procedure, and never at as low a cost. Obviously, such issues have yet to be confronted and resolved by the courts given to the ICANN policy’s recent vintage. Where clear evidence of bad faith is not present, traditional theories of trademark infringement and dilution are available through the courts and may be preferable to the trademark owner. Where an order issues from any court pertaining to the disputed mark, the ICANN policy requires domain name registrars to implement that ruling, including transfer of the domain name from the previous registrant to the trademark owner. COUNTERING RANSOM DEMANDS Whether to utilize the ICANN dispute resolution procedure should be considered carefully. If evidence of intentional misuse exists, such as a registrant’s ransom demand to the trademark owner, the policy offers an expedient and cost-effective avenue of relief. For example, on Jan. 14, in the first case decided under the procedure, the World Wrestling Federation prevailed against a “cyberpirate” who had registered “Worldwrestlingfederation.com” only three days after domain names were increased from 22 to 63 characters. Shortly thereafter, the registrant made an extortionate demand to the WWF for its return. Under these facts, the arbitrator determined that the individual had registered and was using the name “in bad faith” because he had “no rights or legitimate interests” in the domain name. Although not compelled to do so, the arbitration panel relied on federal court decisions holding that “respondent’s attempts to sell the domain name for consideration in excess of his investment of time and money relative to the domain name constitutes ‘use’ of the domain name in bad faith.” The panel noted that through ICANN’s procedure, the WWF had been able to “preserve it relationship with its fans,” while protecting its intellectual property rights “at a minimal cost to all concerned.” The WWF was, thus, able to obtain quick and inexpensive relief in a clear case of cyberpiracy. The ICANN procedure presents a promising alternative to costly litigation in domain name disputes involving intentional misuse and bad faith. It may be particularly effective where the respondent lives overseas and may be potentially beyond the reach of the complainant’s home court system. Today, hundreds of cases are pending before ICANN, and the next six to 12 months will reveal a great deal as to the utility, expense and fairness of the process. Melissa L. Klipp is an associate in the intellectual property group of Drinker Biddle & Shanleyof Florham Park, NJ.

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