Interfacing Trade Marks And Domain Names

Author:	Michael Blakeney BA, LLB, LLM., Hons (Syd), MA, Hons (UNSW)
Subjects:	Internet computer network law and legislation (Other articles) Internet computer network management (Other articles) Trademarks (Other articles)
Issue:	Volume 6, Number 1 (March 1999)
Category:	Refereed Articles

Contents

• The Internet
• Evolution of the Domain Names System
• Administration of the Domain Name System
• Reform Proposals
• Domain Name Allocation
  • (a) Priority
  • (b) Registration Categories
  • (c) Cybersquatting
• Infringing Activities
  • (a) Confusing Use
  • (b) Meta-tagging
  • (c) Word Stuffing, Blacking and Cloaking
  • (d) Spamming
• Dispute Resolution
  
• Notes

The Internet
1. The Internet is a world wide link of computers and computer networks which use a common protocol for communicating with one another. The physical connection between computers on the Internet is typically effected through leased space on existing telephone networks. The information content on the Internet is held in computers, known as "servers" which are owned and operated by information providers, which may be universities, government instrumentalities, or commercial enterprises. Computers which make up the Internet may be "host" or "client' computers. Host computers are connected to neighbouring Internet computers by a dedicated line through which messages are routed according to the Internet communication protocol. Client computers interface with host computers and provide the user with access to request and receive information from the Internet. Host computers are typically provided by commercial "Internet Service Providers (ISPs)". Client computers may be directly connected to host computers through a local area network or may be connected to a host computer by a modem via the telephone network, by cable, or by a wireless connection.

   Evolution of the Domain Names System

2. The Internet grew out of research in the USA by the Department of Defense's Advanced Research Projects Agency (DARPA) in the early1970s, which established the ARPANET communications network. Part of the ARPANET development work was delegated to the University of California at Los Angeles (UCLA) where Dr John Postel, then a graduate student, undertook the task of maintaining the list of names and addresses of host computers on the system and a list of documents called Requests for Comments. This list of addresses was made available to the network community through a sub-contractor, SRI International. Dr Postel continued to maintain the list after he had moved to the Information Sciences Institute at the University of Southern California. Dr Postel also published a list of technical parameters that had been assigned for use by developers of Internet communication protocols.

3. The Internet was managed until the early 1980s by DARPA. From 1987 a consortium of computer corporations, funded by the National Science Foundation (NSF) developed NSFNET, a national high-speed government network based on Internet protocols. This network provided connections to some 4000 research and educational institutions. In 1992 the US Congress gave the NSF statutory authority to allow commercial activity on the NSFNET. The subsequent relationship between NSFNET and commercial Internet Service Providers (ISPs) became the Internet as we know it today.

   Administration of the Domain Name System

4. In 1991-92 the NSF assumed responsibility for coordinating and funding the management of non-military applications of the Internet. It solicited competitive proposals for the provision of infrastructure services. On 31 December 1992, NSF entered into an agreement with Network Solutions, Inc (NSI) by which the latter managed key registration, coordination and maintenance functions of what became the Internet domain name space system (DNS). NSI registered domain names in the generic top level domains, namely <.com>, <.org> and <.net>. This agreement was due to expire on 30 September 1998, but was extended for a two year term.

5. Each host computer on the Internet has a unique IP number, The Internet Number Allocation Authority (IANA), directed, until his death in October 1998, by Dr Postel,[1] allocates blocks of numerical addresses to regional IP registries (ARIN in North America, RIPE in Europe and APNIC in the Asia Pacific Region). Each Internet computer has a unique IP number. IANA allocates blocks of numerical addresses to regional IP registries (eg ARIN in North America, RIPE in Europe and APNIC in the Asia Pacific Region). Internet Service Providers apply to these registries for blocks of IP addresses, which are then assigned to smaller ISPs and to end users.

6. The IP address of computers originally comprised four groups of numbers. For greater ease of use, these numbers were converted to a hierarchical format of letters. The Domain Name Space comprises three levels: (i) computer; (ii) second level domain (SLD); (iii) top level domain (TLD). The TLD is divided into the generic Top Level Domain Name (gTLD) which shows the type of organisation to which an address belongs and for countries other than the USA, a country code is allocated (ccTLD). The principal gTLDs are:"<.com> commercial organisations (also used as a catch-all for most non-specific sites) <.edu> or educational institutions <.gov> government instrumentalities <.int> international organisations <.mil> military organisation <.net> network providers <.org> miscellaneous organisations." The ccTLD, which indicates where the site is registered, appears at the end of the domain name address in a two letter code, eg <.uk> United Kingdom, <.au> Australia, <.at> Austria, <.jp> Japan.

7. A problematic feature of the domain name system is that unlike trade marks, where there are 42 classes of goods or services in respect of which a mark can be registered, there are currently only the 7 gTLDs.

8. The IANA also allocated the right to administer country code TLDs to local Network Information Centres (NICs) or to local corporations. For example the <.co.uk>, <.ltd.uk>, <.plc.uk>, <.net.uk> and <.org.uk> domain names are administered by Nominet UK Limited (Nominet).

9. All TLDs are maintained in a database on a set of 13 file servers. The "A" root server is maintained by NSI. This maintains the root database and guarantees consistency on the Internet. This consistency is secured also by an agreed Internet protocol suite of technical parameters which have been defined by the Internet Engineering Task Force (IETF).

   Reform Proposals

10. With the massive global expansion of the Internet, and the consequent proliferation of domain name disputes, an Internet Ad Hoc Committee (IAHC) was established by a number of interested parties to report on the more efficient administration of the system. Its report of 28 February 1997 proposed a Generic Top Level Domain Memorandum of Understanding (gTLD-MoU). The gTLD-MoU proposed the introduction of seven new gTLDs:" <.firm> for businesses or firms <.store> for retail businesses <.web> for enterprises involved in activities related to the World Wide Web <.arts> for enterprises involved in cultural/entertainment activities <.rec> for enterprises involved in recreation/entertainment activities <.info> for enterprises providing information services <.nom> for those wishing individual or personal nomenclature.[2] The gTLD-MoU proposed a Council of Registrars (CORE), with a Policy Oversight Committee and a Policy Advisory Body, formed from the signatories to the MoU. Registrations were proposed on a first-come, first-served basis, with a database of domain name registrations available on-line and available to the public.

11. In the area of dispute resolution, the gTLD-MoU proposed three categories of administrative challenge: mandatory mediation, binding arbitration and Administrative Challenge Panels (ACPs). Domain name disputes are to be brought before the WIPO Arbitration and Mediation Center.

12. The gTLD-MoU was signed in Geneva on 1 May 1997 and deposited with the Secretary-General of the International Telecommunications Union. Registration procedures and the obligations and responsibilities of registrars are to be governed by a memorandum of understanding to be concluded among the registrar members of CORE (CORE-MoU).[3]

13. The US Department of Commerce established the National Telecommunications and Information Administration (NTIA) to oversee the US government's Internet and telecommunications policies. On 30 January 1998, the NTIA released a Green Paper: A Proposal to Improve the Technical Management of Internet Names and Addresses[4]. The green paper outlined the process by which the US Government will transfer management of the Domain Name System from the IANA to a private non-profit US-based corporation to: 1) set policy for and direct the allocation of IP number blocks; 2) oversee the operation of the Internet root server system; 3) oversee policy for determining the circumstances under which new top level domains would be added to the root system; and 4) coordinate the development of technical protocol parameters.

14. After receiving public comment, on 5 June 1998, the NTIA released its White Paper: Management of Internet Names and Addresses,[5] which suggested that the new corporation, which became known as the Internet Corporation for Assigned Names and Numbers (ICANN), should require applicants for domain names to: (a) pay registration fees at the time of registration or renewal and agree to submit infringing domain names to the authority of a court of law in the jurisdiction in which the registry, registry database, registrar, or the "A" root servers are located; (b) agree at the time of registration or renewal, that in cases involving cyberpiracy or cybersquatting (as opposed to conflicts between legitimate competing rights holders), they would submit to and be bound by alternative dispute resolution systems identified by the new corporation for the purpose of resolving those conflicts; and (c) abide by decisions taken by the new corporation to exclude famous trade marks from being used as domain names (in one or more TLDs) except by the designated trademark holder.[6]

15. These proposals met with significant opposition from the Internet community at a number of public forums and consideration was given to broadening of the membership of the ICANN and to create workable mechanisms to hold the new board accountable.[7]

16. In its White Paper, the US Department of Commerce indicated that it would seek international support to call upon WIPO to initiate a "balanced and transparent process" to: 1) develop recommendations for a uniform approach to resolving trade mark/domain name disputes involving cyberpiracy; 2) recommend a process for protecting famous trade marks in the generic top level domains; and 3) evaluate the effects, based on independent studies, of adding new gTLDs and dispute resolution procedures on trade mark and intellectual property holders. These proposals were placed before the first meeting of a new WIPO standing committee on trademarks, industrial designs on 13-17 July 1998. Comments were to be accepted, including by e-mail[8], until November 6, 1998 after which a list of issues is to be drawn up, with a view to publishing a final set of recommendations by March 1999.[9]

17. An Interim Report on The Management of Internet Names and Addresses: Intellectual Property Issues was published by WIPO on 23 December 1998.[10] The Interim Report made recommendations concerning: (i) best practices to minimize conflicts arising out of domain name registrations; (ii) the need for a uniform dispute resolution procedure; (iii) protection for famous and well-known marks; and the impact of adding new top level domains. Regional consultations by an International Panel of Experts were announced by WIPO for the first two months of 1999.[11]

    Domain Name Allocation

    (a) Priority

18. The allocation of domain names on a 'first come, first served' basis has caused some trade mark proprietors to be excluded from the use of their trade marks as their domain names. For example, the word DELTA is registered as a trade mark in the United States in respect of both Delta Air Lines and deltaComm, an Internet Service Provider. However, the domain name is owned by the ISP, despite the fact that Delta Air Lines is the larger and better known company.[12] However, the various allocation authorities have developed disputes policies under which the proprietors of established trade marks may challenge prior domain name registrants.

    (b) Registration Categories

19. The priority which first applicants for domain names obtain, is exacerbated by the fewness of gTLDs, compared with the 42 classes of goods and services available for applicants for trade marks. A particular problem is the fact that there is only one gTLD available to companies, namely <.com>. In Prince Plc v Prince Sports Group Inc,[13] Prince Plc, a UK computer company, registered the domain names and . The Prince Sports Group Inc, a US maker of tennis products and the company with which the public would more commonly associate the word 'Prince', was unable to register the domain name. The Prince Sports Group demanded that the domain name should be handed over to it, as it asserted that Prince Plc's use of the domain name infringed the Group's trade marks.

20. Prince Plc commenced proceedings against Prince Sports Group in the UK for unjustified threats to bring trade mark proceedings and sought, inter alia, a declaration that its use of the domain name in relation to information technology did not infringe the Group's trade marks for sporting goods. At the time of sending its letter, Prince Sports had not obtained any UK trade marks upon which to base a claim of infringement. Accordingly, Neuberger J held that the US company had made 'unjustifiable threats' in breach of the Trade Marks Act 1994 (UK).[14]

21. Unlike trade mark registrations which have to satisfy the various criteria of registrability, such as distinctiveness, intention to use, domain names have not needed to satisfy equivalent tests. A fundamental principle of trade mark law is that registration ought not be granted for marks which might legitimately be used by persons acting in good faith in a particular trade. This principle, is applied in the general requirement that a mark be distinctive and non confusing and also in the refusal to protect marks which refer to the character or quality of products, or to geographic locations, or surnames. Similarly, trade mark protection is withheld from marks which have become generic. These principles are not applied in domain name registration, but in a recent case, the owner of the trade mark 'CDS' was held to be unable to assert its trade mark rights against the owner of the domain name because the term 'cds' was the generic term used by the public for 'compact discs'.[15] In other words, it may be possible that some trade mark principles may creep into domain name registration practice, through judicial intervention.

    (c) Cybersquatting

22. A number of domain name disputes have arisen in the context of what has been called "Cybersquatting", where individuals obtain domain name registrations which are likely to be sought by well known enterprises, with a view to selling them to those enterprises.[16] For example, in Harrods Limited v Network Services Limited,[17] the well known department store had been approached for payment to relinquish the domain name by its unauthorised registrant. Harrods commenced proceedings for infringement, passing off and conspiracy, applying for summary judgement when no defence was filed. The defendants were not represented at the hearing. The trial judge accepted that passing off and trade marks principles were applicable to domain names and ordered the defendants to relinquish the domain name and to desist from passing off. The leading case on the subject of cybersquatting as trade mark infringement and on the related subject of the status of well known marks in the Internet domain names regime is the Court of Appeal decision in Marks & Spencer and Others v One in a Million.[18] The appellants had registered a number of domain names which incorporated the famous trade marks of the respective plaintiffs: Marks & Spencer Plc, Sainsbury Plc, Virgin Enterprises Ltd, British Telecommunications Plc, Telecom Securicor Cellular Radio Ltd and Ladbrokes Plc, with a view to selling those domain names to the respondents. The trial Judge, Mr Jonathan Sumption QC, sitting as Deputy Judge of the UK High Court, held that the mere registration of another's name as a domain name was not in itself actionable as passing off, stating that "The mere creation of an 'instrument of deception' without either using it for deception or putting it into the hands of someone else to do so, is not passing off. There is no such tort as going equipped for passing off. It follows that the mere registration of a deceptive company name or a deceptive Internet domain name is not passing off."[19] However, his Honour ruled that the practice of the appellants in registering well known marks as domain names for the purpose of blocking their use by the proprietors of those marks, except upon the payment of money, was both passing off and an infringing use of a trade mark in the course of trade within the meaning of s.10 (3) of the Trade Marks Act 1994 (UK).[20]

23. The judgement of Lord Justice Aldous, with whom Lord Justices Stuart-Smith and Swinton Thomas agreed, considered in some detail the application of passing off principles to the practice of cybersquatting. The conclusion which Lord Justice Aldous reached from an examination of the cases was that there could be discerned

    ...a jurisdiction to grant injunctive relief where a defendant is equipped with or is intending to equip another with an instrument of fraud. Whether any name is an instrument of fraud will depend upon all the circumstances. A name which will, by reason of its similarity to the name of another, inherently lead to passing off is such an instrument...The court should consider the similarity of the names, the intention of the defendant, the type of the trade and all the surrounding circumstances.[21]

    Also, where a defendant has an intention to appropriate the goodwill of another, Aldous LJ could see no reason why the court should not infer that it will happen, even if there was a possibility that such an appropriation would not take place.

24. The basic facts of the case were not in dispute. The Court of Appeal accepted that the business of the appellants was dealing in Internet domain names. The appellants obtained the registration of prestigious names as domain names without the consent of the owners of the goodwill in those names with a view to selling those names to the owners of the goodwill. For example, the respondents offered to sell the domain name to British Telecommunications Plc for £4,700 plus VAT and the domain name to Burger king for £25,000 plus VAT. Thus the Court of Appeal found that the purpose of the appellants' blocking registrations of these domain names was for the purpose of extracting money from the owners of the goodwill in those names. "Its ability to do so was in the main dependent upon the threat, expressed or implied, that the appellants would exploit the goodwill by either trading under the name or equipping another with the name so he could do so."[22]

25. The Court of Appeal rejected the appellants' submission that mere registration did not amount to passing off. It ruled that the "placing of the register of a distinctive name...makes a representation to persons who consult the register that that the registrant is connected or associated with the name registered and thus the owner of the goodwill in the name".[23] In the case of the appellants' domain names incorporating the name Marks & Spencer, the Court found that registration of the domain name would cause damage by eroding Marks & Spencer's exclusive goodwill in its name and that the domain names were instruments of fraud. Thus the trial judge was justified in granting injunctive relief to prevent them from being used for a fraudulent purpose and to prevent them from being transferred to others.

26. The appellants sought exoneration for their domain names which were not inherently distinctive, for example those which were surnames, such as "Sainsbury" and "Ladbroke", or which might be the initials of persons, such as "BT", or which were the names of a range of companies such as "Virgin". However, Aldous LJ was not prepared to accept this distinction as they "were well-known 'household names' denoting in ordinary usage the respective respondent".[24] Concluding that: "The appellant registered them without any distinguishing word because of the goodwill in those names. It was the value of that goodwill, not the fact that they could perhaps be used in some way by a third party without deception which caused them to register the names. The motive of the appellants was to use that goodwill and threaten to sell it to another who might use it for passing off to obtain money from the respondents. The value of the names lay in the threat that they would be used in a fraudulent way. The registrations were made with the purpose of appropriating the respondents' property, their goodwill, and with an intention of threatening dishonest use of them by another. The registrations were instruments of fraud and injunctive relief was appropriate just as much as it was in those cases where persons registered company names for a similar purpose.[25]" In light of their success on the passing off claim, the respondents did not press their trade mark infringement action. Counsel for the appellants had submitted that for there to be a trade mark infringement under s.10(3) of the Trade Marks Act, 1994, there had to be use of the trade mark: (a) as a trade mark; (b) for the purpose of denoting origin of goods; and (c) which was confusing. Aldous LJ indicated that he was not sure that s.10(3) required the use to be a trade mark use and that it had to be confusing. On the supposition that this was correct, he held these matters to be satisfied as the appellants had sought to sell domain names which were confusingly similar to registered trade marks; the purpose for which the domain names had been registered was to indicate origin and they were to be used in relation to the services provided by the registrant who traded in domain names.[26]

27. Finally, counsel for the appellants submitted that it had not been established that the contemplated use would take unfair advantage of, or was detrimental to the distinctive character or reputation of the respondents' trade marks. This was rejected by the Court which observed that "the domain names were registered to take advantage of the distinctive character and reputation of the marks. That is unfair and detrimental".[27]

28. In the USA, the practice of cybersquatting has been dealt with under the various state and Federal anti-dilution statutes. However, the state of the US law on this practice, in most jurisdictions, appears to resemble that in the UK prior to the Court of Appeal's decision in the One in a Million Case, in requiring something more than mere registration of another's trade mark as a domain name before finding trade mark infringement. A recent example of this position is Panavision International LP v Toeppen[28]. Panavision was the owner of the trade marks Panavision and Panaflex in the USA in respect of movie camera equipment. In December 1995 it had attempted to establish a web site on the Internet with the domain name . It transpired that this domain name had already been registered by Mr Dennis Toeppen. In reply to a letter which he received from Panavision, informing him of the latter's trade mark rights, Mr Toeppen offered to exchange the domain name for a payment of $13,000. Mr Toeppen also offered on receipt of this payment not to register any other Internet address alleged by Panavision to be its property. Panavision refused this demand, whereupon Mr Toeppen registered the 'Panaflex' mark as a domain name. The Californian District Court ruled that Mr Toeppen's actions violated the Federal Trademark Dilution Act of 1995 and the Californian Anti-dilution statute.[29] As he was located in Illinois, Toeppen objected to the Californian District Court exercising jurisdiction and submitted that as the registration of domain names was not a commercial use, the court had erred in finding trade mark dilution. On the issue of jurisdiction, the Ninth Circuit ruled that the District court had properly exercised its jurisdiction as Toeppen knew that his conduct would have the effect of injuring Panavision in California, which was its principal place of business and the centre of the movie industry. The court found that the attempt to sell the domain names was the requisite commercial activity which constituted dilution. Toeppen's conduct was considered to satisfy the requirement of detriment to the trade mark proprietor by diminishing "the capacity of the Panavision marks to identify and distinguish Panavision's goods and services on the Internet".[30]

29. Where a domain name which is the trade mark of another company is used in relation to similar goods in respect of which the trade mark is registered, then trading using the registered mark will be an infringement. Problems arise where the domain name is used in relation to unlike goods or services.

    Infringing Activities

    (a) Confusing Use

30. There is an extensive corpus of US case law concerning trade mark infringement through domain name use. In the main these decisions follow the course of typical trade mark infringement cases. Confusing use is more likely to be found in those situations where the plaintiff and defendants are engaged in similar activities, whereas the courts have not as easily been prepared to find confusion where those activities are dissimilar. Thus, the vendor of computer software to law firms under the trade mark "JURIS", successfully enjoined the use of the domain name by a subsequent vendor of computer software and related services to legal, insurance and forensic businesses.[31] Similarly, the proprietor and first user of the service mark "CARDSERVICE" which provided credit and debit card processing services was able to prevent the use of the domain name by a defendant seeking to carry on the same business.[32] The court noted in this case that the effect of the domain name registration by the defendant barred access of the plaintiff to the Internet under this domain name with the result that consumers would be diverted from the plaintiff to the defendant.

31. As in trade mark law, the greater the repute of the plaintiff's marks, the more likely will confusing use be found in dissimilar areas of enterprise. Thus in Planned Parent Federation of America, Inc v Bucci[33] the repute of the plaintiff's "PLANNED PARENTHOOD" trade mark under which it offered reproductive health care and birth control services, was the basis of the court's enjoining the use of the defendant's domain name under which he promoted anti-abortion advocacy.

32. This decision was applied in Jews for Jesus v Brodsky[34] which concerned the plaintiff proprietor of the registered trade mark 'JEWS FYR JESUS' who conducted an international religious organization and who operated a Web site . The defendant, a critic of the plaintiff, established a Web site at the domain name with a hyperlink to another site critical of the plaintiff. The court found both confusion and dilution and that the defendant's bogus Web site was designed to divert "potential converts" from the plaintiff.

33. A more robust approach to the application of trade marks principles to the acquisition of domain names in the UK is suggested in Avnet Inc v Isoact Ltd.[35] The plaintiff was a distributor of electronic components and computer software. It maintained a web site and published trade catalogues. It conducted its business by reference to its "Avnet" trade mark and had obtained a registration for this mark in the UK in class 35. This class covers "advertising and promotional services". The defendant conducted an entirely different business as "Aviators Network", an ISP with a particular focus on aviation matters. The defendants used the domain name "avnet.co.uk". The plaintiffs, alleging an infringement of its class 35 trade mark, sought an order that the defendant assign to it the defendant's domain name.

34. The trial judge refused to make the order sought by the plaintiff as he did not consider the defendant to be engaged in any activity which infringed the plaintiff's trade mark. He ruled that although persons might use the defendant's web site for advertising purposes, this was not the essence of what the defendant did, but was incidental to its provision of a forum for the discussion of aviation matters.

35. The trial judge had expressed doubts as to whether any Internet users on accessing the defendants aviation web site, would have been confused into thinking that there was some association with an electronics components distributor.[36] Contrasting domain names with trade marks, he noted that the former operated on words alone and not words connected with goods and services. Consequently, users of the Internet know that when a word is searched "even if a searcher is looking for the word in one context, he will, or may find web pages or data in a wholly different context".[37]

    (b) Meta-tagging

36. Meta-tags are a component of HyperText Markup Language (HTML), which is the programming language of the World Wide Web. Meta-tags are used to provide keyword information to describe the contents of Web pages. A search engine, such as AltaVista, or Lycos typically scans the keywords in a Web site's meta-tag to rate that site's relevancy to a search. These meta-tags are not visible to viewers of a Web site as they are embedded in the Web-site code. It has been possible to manipulate the frequency with which a Web-site scores hits in a search engine's inquiry.

37. In Playboy Enterprises v Calvin Designer Label[38], a US case, the plaintiff owned the registered trade marks Playboy and Playmate. The defendant used these marks as part of the domain names and which it embedded in the meta-tags of its Web site. The court enjoined the defendant from using these trade marks "in buried codes or metatags on their home page". And from "disseminating, using, or distributing any Web site pages, advertising, or Internet code words or titles" whose appearance resembling those of the plaintiff so as to create a likelihood of confusion, mistake or deception.

38. The same trade marks embedded as meta-tags were the subject of litigation in Playboy Enterprises Inc v AsiaFocus International Inc[39] and Playboy Enterprises Inc v Welles.[40] In the former case the defendant used the plaintiffs trade marks as meta-tags in its Web sites which featured pictures of nude women. Additionally, the defendant incorporated these marks in its domain names and playmates-asian.com>. This Web site was offered as a facility for advertisers promoting the sale of playing cards, calendars and similar merchandise. The court took into account the willfulness of the defendant's conduct in awarding the plaintiff $3 million plus costs. The plaintiff failed in the latter case, which concerned the use of the plaintiff's trade marks in the meta-tags of a Web site established by Ms Terri Welles, 1981 "Playmate of the Year". The court found this use to be properly descriptive or an editorial use of the trade marks.

39. In Oppendahl & Larson v. Advanced Concepts[41] a Colorado law firm which had established a Web site noted for its information on cyberlaw matters, objected to the use of its meta-tags by a web page design company. The plaintiff law firm obtained orders enjoining the defendant from using its common law trade marks as meta-tags in Web pages constructed by the defendant.

40. The abusive embedding of meta-tags has led to search engines being constructed either to ignore meta-tags altogether in weighting relevance, or in minimising their significance, compared with headers and other significant portions of a web page.

    (c) Word Stuffing, Blacking and Cloaking

41. These practices involve the embedding of another's trade mark(s) in a Web site so that they are not visible to a reader, but can be acquired by a search engine. Thus, for example, a retailer of medium level fashion brands can embed multiple examples of well-known, high fashion brands in a web site in the same colour as the background of the retailer's Web site (eg white on white, or black on black). Similarly, a direct trade rival of the owner of a well-known brand can use the same technique to embed the well-known mark in the trade rival's Web site.

42. An interesting issue is whether this practice can be described as trade mark infringement, given that the embedded mark is not visible. This issue was canvassed in part in the US case, Playboy Enterprises, Inc v Calvin Designer Label[42]. That case also involved meta-tagging and the incorporation of the plaintiff's trade marks in its visible domain names. The court had little difficulty in finding trade mark infringement, dilution and unfair competition.

43. As in the case of meta-tagging, search engines are being modified to discount word stuffing, blacking and cloaking.

    (d) Spamming

44. "Spam" is unsolicited junk e-mail which is sent in multiple postings to Internet users as a form of direct mail, promoting sales of goods and services. Trade mark concerns are raised when spam mail is sent under return addresses comprising the domain names and trade marks of innocent third party traders. In Hotmail Corp v Van$ Money Pie Inc[43] the defendants sent spam e-mail messages advertising pornographic material, utilising the plaintiff's domain name as a return address. The plaintiff was a provider of e-mail addresses under an agreement which forbade the sending of spam mail. The court enforced this contract to enjoin the defendant from the use of the plaintiff's trade mark and domain name.

    Liability of Domain Name Allocation Authorities

45. In addition to trade mark infringement actions against registrants of domain names, litigants, particularly in the USA, have sought to join the domain name allocation authorities as being a contributory infringer. Where NSI has attempted to place a disputed domain name on hold, until the dispute can be resolved by court action, it has been sued for breach of contract. Finally, where the allocation authority has refused to grant a disputed domain name, it has run the risk of liability under antitrust law for preventing market entry, or under the Lanham Act for unfair competition.[44]

46. In an endeavour to deal with some of these problems, NSI promulgated a Domain Dispute Resolution Policy Statement on 28 July 1995, which has been modified on a number of occasions, most recently on 25 February 1998. Under this policy NSI requires undertakings from each domain name applicant that its use or registration of the domain name does not infringe any intellectual property right of a third party and that NSI will be indemnified for any claims of trade mark infringement arising out of the applicant's use or registration of the domain name. The NSI dispute resolution policy had been criticised both by representatives of trade mark owners[45] and domain name registrants[46]. On the trade mark owners' side, concern was expressed that domain name registration proceeds without a trade mark search and that the NSI requires a protested domain name to be identical to a registered trade mark before it is put on hold. Domain name registrants complain that domain names are put on hold by NSI merely upon the receipt of a complaint and regardless of whether the registrant has superior trade mark rights. Dissatisfaction with NSI's dispute resolution policy precipitated the current movement for reform of the administration of the Internet, described above.

    Dispute Resolution

47. Under the gTLD-MoU, the Arbitration and Mediation Center of the World Intellectual Property Organization (WIPO) was nominated to assist in the resolution of domain name disputes. It is proposed that under the agreement which constitutes the application for a domain name, the domain name holder agrees to participate in the mediation of any third party claim of infringement (usually by a trade mark owner).[47] Where the mediation is not completed within thirty days, the third party challenger has the option to request that the mediation be converted to a binding arbitration. However, at the time of registration the option is given to the applicant for a domain name to opt out of the arbitral process. Both mediation and arbitration are made available on-line by WIPO.

48. The IAHC also proposed the establishment of' Administrative Domain Name Challenge Panels (ACPs) to provide an on-line ADR option, before one to three experts in the field, which would decide whether a challenged second-level domain should be excluded from the gTLD in which it was registered. Under this procedure, the domain name holder is protected in that the domain name cannot be suspended prior to the conclusion of the challenge proceedings, unless the challenge is filed within thirty days of registration and two years use of a domain name creates a presumption of validity in favour of the registrant. The CORE-MoU provides that no decision of an ACP shall prevent the exercise of jurisdiction by a national or regional court.

49. In relation to well-known names, the gTLD-MoU provides in its statement of principles to be applied in the resolution of disputes that

    ...(f) a policy shall be implemented that a secondlevel domain name in any of the COREgTLDs which is identical or closely similar to an alphanumeric string that, for the purposes of this policy, is deemed to be internationally known, and for which demonstrable intellectual property rights exist, may be held or used only by, or with the authorization of, the owner of such demonstrable intellectual property rights.

50. Questions raised concerning the suitability of WIPO to administer a system for the resolution of domain name disputes provoked an 'Open Letter' from WIPO to the Internet Community explaining that the dispute resolution procedures were adopted following broad consultations with a wide range of Internet stakeholders.[48]