But names will never hurt me?

An intense battle has begun
Launched suits against alleged cybersquatters.
Uniform Domain-Name Dispute-Resolution Policy (UDRP)

The battle over the ownership and regulation of domain names is becoming mean and nasty.

Cybersquatting, the practice of registering an Internet domain name with the hopes of profiting due to its association with a trademark owned by someone else, can be punished by fines of up to US$100,000 under a law recently signed by President Clinton.

An intense battle has begun

With domain names selling for millions of dollars, an intense battle over their regulation has begun and the battles are expected to grow more intense. The number of registered domains increased by more than 100 percent from 1997 to 1999.

The Anticybersquatting Consumer Protection Act seeks to stop people from registering Internet names that they will never use but hope to resell at inflated prices. The new law also imposes fines on those who register other people's personal names with the intent of profiting from them. Courts can also order the cancellation of Internet names that were registered in bad faith.

According to Stuart S Malawer, director of the Oxford Trade Program at St Peter's College, Oxford University the statute passed due to lobbying by many "Old Economy firms that failed to register their desired domain names early on and were only able to play catch up by congressional intervention." Critics of the legislation claim the First Amendment right of free speech is being violated.

Businesses who want to expand their operations internationally often reorganize to confront foreign competition. As such, the fight over domain names is becoming international. Companies from Germany, India and Japan are battling over the rights to domain names.

Complaints, fueled by an objection from Japan, are starting to be heard around the world about the influence of the US government in setting the rules concerning domain name disputes.

The US legislation does not help foreign companies that claim rights to domain names held by US firms. The US law also does not protect US firms from lawsuits filed abroad. The law does protect US trademarks, but not foreign trademarks.

As such, foreign firms may find themselves at a huge disadvantage. And, without a global consensus, US firms may find themselves dragged into foreign courts to defend their rights to domain names.

There are 249 different domain designations used in the US and other countries. It is no longer enough to register yourcompanyname.com in the US and not register yourcompanyname.co.uk in the UK.

Other nations are developing their own rules for domain names. Mr Malawer says the United Kingdom and Germany already apply tough remedies that would very likely conflict with US decisions such as a trademark dispute involving an American subsidiary of a foreign firm.

Launched suits against alleged cybersquatters.

Companies like Morgan Stanley Dean Witter and Microsoft as well as organisations such as WWF and the NFL have launched suits against alleged cybersquatters.

In the first big shakeup for 10 years, the private corporation ICANN (Internet Corporation for Assigned Names and Numbers) which has overseen changes in internet naming since 1998 has approved the creation of a slew of new "top-level domains", the suffixes attached to internet addresses. They will be created early next year, with details hammered out before the end of December.

Next year you may have to decide whether a.shop is a real shop, whether .web is a web-only business and whether any of them is different from what went before. The move, likely to create at least six top-level domains, is a reaction to what is perceived as too much jostling for space among companies and individuals trying to stake valuable claims in cyberspace.

There, the shortest - and hence easily-remembered - names have long since been bought up and now command high prices to change hands. The website www.business.com last year was sold for $7.5m, for example. Earlier this year the last three-letter combination for the .com domain was finally bought; domains can, though, be up to 69 letters long.

ICANN will create an as-yet unspecified number of new top-level domains, probably including ".shop" for retailers, ".web" for Web-only companies and perhaps ".news" for information providers.

Uniform Domain-Name Dispute-Resolution Policy (UDRP)

All registrars in the .com, .net, and .org top-level domains follow the Uniform Domain-Name Dispute-Resolution Policy (UDRP). Under the policy, most types of trademark-based domain-name disputes must be resolved by agreement, court action, or arbitration before a registrar will cancel, suspend, or transfer a domain name. Disputes alleged to arise from abusive registrations of domain names - such as cybersquatting - may be addressed by expedited administrative proceedings that the holder of trademark rights initiates by filing a complaint with an approved dispute-resolution service provider.

In essence, the UDRP provides for arbitration of domain-name disputes where the complainant alleges that a domain name is identical or very similar to an existing trademark. Arbitration takes place under the auspices of an approved third party such as the World Intellectual Property Organization (WIPO).

Mr Malawer believes that Congress' approach falls short. "Better would be to strengthen the ICANN rules by providing a permanent panel of arbitrators, explicit protection of foreign trademarks, exclusive and binding arbitration under WIPO, and by limiting passage of unilateral American legislation….."

Writer: Lindsey Wood

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