March 9, 1999

NAMES AND TRADEMARKS: WHAT NO ONE OWNS BUT ALL WISH TO LAY HANDS ON

by Andy Oram
American Reporter Correspondent

CAMBRIDGE, MASS.—A geeky debate over costs and dispute resolution procedures in Internet domain names has, in the past year, taken on the look of a Frank Capra film. Will Mr. Deeds win his fortune or be committed to the loonie bin? Will Mr. Smith lose his seat in Congress? And will the Internet become a twenty-first century virtual Pottersville?

Recently a software company offered me a free personal domain, something like oram.net (though that one happens to be taken already). It was an attractive prospect: no matter what ISP I used or where I worked, I would be able to maintain the same easy-to-remember email address and URL for my Web site. That’s the kind of future envisioned by the entrepreneurs and public-interest groups. The Domain Name Rights Coalition suggests that the .us domain be used for experimentation and low-cost or free domains for small organizations.

The visionaries went even farther. They hoped to end monopoly control over the registration of domain names, stimulate innovation in every aspect of the technology, and show the world that the Internet community could regulate itself without leaning on governments. Hopes have deflated rapidly.

Entrepreneurs and public-interest advocates have been reading various drafts from the Internet Corporation for Assigned Names and Numbers, the new corporation that met last week to make policy for domain names. We’ve been reviewing recent recommendations by the World Intellectual Property Organization to protect trademarks in domain names. And we’ve been discussing a number of serious critiques of these developments.

The ICANN board met last week in Singapore to lay foundations for its own operation as well as domain name policy. General issues included membership criteria, a call for open board meetings, and ensuring a fair international balance.

In the area of domain names, the board moved forward toward creating a subordinate group called the Domain Name Supporting Organization. Strangely, it also made policy rulings that one would expect to be left open until the DNSO could meet and handle the matters itself.

The intended DNSO reflects a compromise between those wanting a hands-off organization dominated by small and non-commercial users, and those wanting a strongly interventionist organization enforcing the interests of trademark holders and companies in the Internet business (who lost little time in registering a domain name of their own, dnso.org). ICANN claims in a press release to “use the best features of both in the new document.” An examination of the outcome suggests that ICANN adopted the procedures favored by the anti-interventionist interests and the structure recommended by the large commercial interests.

Writing in the March 1 issue of the online journal First Monday, Ted Byfield traces domain name conflicts to the philosophical differences between the “idealized cooperative norms” supposedly characterizing the groups that originally created the Internet, and the intellectual property interests of new commercial players, “dominated by massive corporate efforts to extend proprietary claims indefinitely.”

It must be stressed, however, that lines between the factions cannot be drawn along simple historical or professional lines. Some of the founders of the Internet have helped to form ICANN and forged alliances with the large corporate forces. Conversely, an implacable rancor remains between ICANN supporters and Network Solutions, the company that holds a (soon to end) monopoly on the .com domain and that was hitherto the nemesis of the small-business forces.

Shortly before last week’s meeting began, anti-interventionist interests had coalesced around a proposal called the Paris Draft, and large commercial ones around one called BMW (not to be confused with a famous trademark). Members of both sides met and created “consensus principles” called the CENTR document, though how much was actually sacrificed by the large commercial interests is still being debated.

The CENTR document calls for open meetings—a key plank for the anti-interventionist interests, who went so far as to wear gray ribbons protesting the ICANN board’s choice to meet in private—and a General Assembly that charges no member fees. These procedures were a nod toward the anti-interventionists.

The structure of DNSO, however, ensures heavy representation for narrow interests: organizations maintaining the computers that store domain names (registries), organizations handing out domain names (registrars), businesses, trademark holders (who of course are usually businesses too), Internet Service Providers, and “national Domain Name Policy Organizations.” Never saw a critter resembling that last category before—it looks like the bud of a new bureaucracy.

By their representation in the leadership of the DNSO (the Names Council) the above-named interests would outweigh the interests of ordinary domain-name holders and non-profits. That alarms the participants who want as open an Internet as possible.

This is not to deny that positive movement is taking place. ICANN is seriously pursuing an open membership model (although some opponents grumble that all the important decisions will be locked up before the membership has a chance to meet). And the CENTR document clearly says that this membership will take primacy over the DNSO (because the DNSO will be “an open consensus based expert policy advisory and recommending body…not an ICANN decision making body.”)

ICANN teeters precariously on the edge of legitimacy. While presented to the public as the “new corporation” called for in a White Paper by the U.S. Commerce Department in June 1998, ICANN did not arise from the consensus-building process surrounding the White Paper. It was the brainchild of a single pioneering Internet technical specialist, Jon Postel. The nine initial members were hand-picked by him, deliberately bypassing all the participants in the domain name debate.

When the Commerce Department was faced by this proposal and its critics, they waffled. Ira Magaziner, the well-known architect of White House policy on the Internet, departed just before the proposal arrived, leaving behind a policy hiatus and ultimately a policy cop-out.

On the one hand, ICANN received heavy backing from important representatives of the founding Internet technical community, as well as from some large corporations such as IBM and MCI/WorldCom. Furthermore, it recently won the endorsements of several national governments.

On the other hand, it faced opposition from large numbers of experts who had been debating the domain-name question for over a year, including many Internet Service Providers and companies in the business of registering domain names. The best organized of these diverse (and often deeply divided) forces joined a coalition called the Open Root Server Confederation, one of the main drafters of the Paris Draft.

In November, the Commerce Department signed a Memorandum of Understanding with ICANN allowing it to move ahead, with the vague proviso that it address ORSC issues. Representatives of OSRC and others claim strenuously that these issues have not adequately been addressed. Nevertheless, Commerce Department representative Becky Burr implicitly endorsed ICANN by her presence at last week’s Singapore meeting.

Let’s turn briefly to a draft proposal from WIPO, the organization responsible for harmonizing world policies on copyright, patents, trademarks, etc. The U.S. government White Paper called in WIPO to recommend policies for handling trademark disputes and related issues. It was a mistake to ask.

Imagine that your local community wants to develop policies for handling open land. If the mayor assembles a committee of real estate developers to make recommendations, the result will naturally involve condos, office parks, and shopping malls. Parks, refuges, and other non-commercial uses are inevitably going to get short shrift. The committee will listen politely to the importance of maintaining undeveloped land; they may even set some aside for the sake of public relations; but they’ll lean heavily toward the uses that lie within their expertise. The same thing is happening in WIPO.

Trademark holders have a natural interest in keeping other people from registering domain names that might confuse users. In recent court cases, organizations critical of Planned Parenthood, Jews for Jesus, and Ringling Brothers were forced to give up the domain names plannedparenthood.com, jewsforjesus.org, and ringlingbrothers.com, respectively. It may be argued that the names—which were used to attract people to Web sites criticizing the organizations—were deceptive and diminished the value of the trademarks. On the other hand, if somebody published a book titled “Planned Parenthood” that was critical of its subject, who could prevent him?

Another beef of trademark holders is speculation in domain names, whereby random individuals register domain names reflecting the names of large companies like neiman-marcus.com. Sometimes the speculators succeed in selling the names for large settlements; in other cases they relinquish them under legal pressure. While I oppose speculation because it hinders communication, it is also rather silly and by no means deserving of the vituperation expressed by advocates of trademark holders.

These trademark holders revile speculation in emotionally weighted words such as cyber-piracy and cyber-squatting. Besides betraying a bourgeois prejudice (squatting is a survival mechanism of desperate indigents), these words create in the public mind the notion that registering a name as a trademark gives the holder a God-given right to control every use of the name, which could not be further from the truth.

It is an axiom of the domain name debate, upheld by WIPO as well as others, that trademark holders shouldn’t get more rights in cyberspace than they have in traditional arenas. But that axiom is violated routinely. A controversial study by policy professor Milton Mueller finds that a large number of legal actions don’t involve either traditional definitions of trademark infringement or speculation in domain names.

Now WIPO is trying to straighten out the mess—but the cure is a harsh regimen with an oddly small chance of succeeding. A widely circulated paper by attorney A. Michael Froomkin points out that the recommended dispute resolution procedure leaves every domain name holder (except those who already sprung for a national trademark) open to challenge, while the policies for resolving disputes depend on legal precedents that are yet to emerge. But I can’t do better than to quote an alarming scenario Froomkin informally wrote up:

“Hand over the domain name, or we will take you through a procedure we understand and you do not…We think it only fair to warn you that if you lose you will pay all arbitral fees and costs…If we win, the decision will go into effect immediately, without even a decent interval for you to find a court to appeal to…And if our courts are slow, and the goodwill, traffic, or other interests associated with your domain are destroyed by our action, you have no claim in tort, absent outright fraud on our part, since you agreed to all this in your registration contract…”

Small businesses, non-profit organizations, and individuals derive no benefit from the WIPO proposal because they usually cannot go through the expense of registering their name as a trademark. Its unintended effect is to hold over small domain holders the constant and eternal threat that somebody, somewhere in the world will challenge their right to a name.

I also worry that attempts may be made to create an artificial scarcity in domain names, scuttling hopes of people like me to have our own someday. One WIPO suggestion, quite benign in itself, says that “domain name registration should be made conditional upon the receipt by the registration authority of the registration fee.” The assumption behind the proposal is that the fee is high enough to discourage speculators from registering hundreds of domains that are open for sale. Given the high value placed by major corporations on particular domain names, it is hard to imagine a fee that is high enough to discourage speculators while still keeping costs down to the ideal minimum for small-scale content providers.

Competition among registrars, under ideal conditions, should lower fees to the small amount required to keep highly reliable root servers and TLD servers running, and perhaps partly to fund ICANN and its Domain Name Supporting Organization. It would be ridiculous to pump up charges for domain names, when all other costs of participation in the Internet (computers, Internet access, skills required for content creation) are becoming more affordable.

On another issue, the Center for Democracy and Technology submitted comments arguing that WIPO and ICANN proposals did not adequately protect the privacy of domain name holders. Of course, some copyright interests complain that domain holders have too much privacy, even though there is a clear path to finding information about them in case of a dispute.

I frankly could never get excited over the frenzy of the trademark holders. My own company, O’Reilly & Associates, faced a domain name problem and handled it with finesse. The name O’Reilly possesses some of the highest recognition in computer publishing, but when we found that the name oreilly.com had been registered by someone else we simply chose another name. We advertised ora.com heavily and gave it such widespread recognition that many of our customers still use it, even though the owner of oreilly.com eventually let that name lapse and we picked it up.

Our customers, admittedly, lie along the more computer-literate strata of the public, but you don’t have to be technically sophisticated to read a URL from an ad.

Dozens of strings that can represent a particular company. So trademark holders can always work around speculators, but innocent small domain-name holders can’t work around harrassment from tenacious trademark holders.

The DNS battle is not the only area where narrow interests are threatening the infrastructure of the Internet. While businesses and governments are gradually getting more clueful, pockets of irrationality remain. For instance, the EU is considering regulations that would render unfeasible the caching of Web pages—one of the most basic computer technologies, and one that is essential on the Web for keeping traffic down—because some companies have complained about people intercepting copyrighted files from caches. When some companies and governments embrace the Internet, they do so in the manner of a boa constrictor.


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