Journal of Law, Information and Science
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BY MARLENE AGMATA-TUCKER[*]
From its arcane beginnings as a tool for Government, the military and academia and with the increasing popularity of the internet not only as a communication tool but as a tool for electronic business and commerce, problems and issues pertaining to allocation and protection of domain names have arisen. Cybersquatting and cyberpiracy are recent additions to the legal lexicon as a new category of wrongful conduct in cyberspace or the information superhighway.[*] * This paper investigates cybersquatting by presenting the legislation on the matter and some of the cases decided on the issue.
The Internet has revolutionised communications worldwide. It has become a widely-used communication tool, a resource of a vast wealth of information, a mechanism for information dissemination, and more recently a tool for electronic commerce which transcends territorial boundaries.
It is no understatement to say that, in the five years since its commercialisation in 1995, the internet lifestyle has been embraced by millions of individuals, businesses and organisations worldwide. While the United States of America still accounts for the large majority of internet users (at least 22 million Americans were using the internet regularly in 1997 and by the following year, more than 60 million[1] and this number continues to grow rapidly), the rest of the world has not been passive. In 1996, around 40 million were connected to the Internet worldwide. By 1997, the number increased considerably to more than 100 million people. Statistics show that traffic on the internet has been doubling every 100 days.[2]
Between 1993 and 1996, the number of internet hosts in Europe increased by about 600 per cent.[3]
Similarly, the growth of internet hosts in Asia and Africa grew by about 840 percent for each region over the same period.[4]
In Australia, over half of Australian households have personal computers and close to 35 per cent have internet connections. Even regional Australia is already embracing the online connectivity, experiencing a 164 per cent increase in online households since February 1998.[5]
With all its benefits and advantages, the internet, has been subjected to new and sometimes highly sophisticated criminal activities. Internet users have either used the "net" to commit offences or commit wrongdoings against those who use it for legitimate purposes.
The internet transcends territorial boundaries. It is multijurisdictional as it allows users located from any place on earth to access any site in the internet located in any place or jurisdiction.[6]
This feature is both a strength and a weakness. Such a multijurisdictional feature makes it easier for internet crimes to spread more rapidly in as many jurisdictions as the perpetrator wishes. Concomitantly, it makes it difficult, if not sometimes completely impossible, to prosecute in a particular jurisdiction.
Although there exists no accurate comprehensive data on internet offences, it is clear from news reports and various studies that they do exist, and in significant proportions.
The number and type of such activities are many and varied, with the perpetrators, in at least some instances, frequently claiming to be unaware of the criminal nature of their activities. In this vein, it is useful to look at some of these activities:
1. Hacking: This is an act whereby a person (called the "hacker") seeks to gain unauthorised access to a computer system. While some do it merely for the technical challenge it poses, others act out of curiosity to see what they can find out about the affairs of others. Those with criminal or malicious intent, use it as a sophisticated form of vandalism, altering or destroying data or the operability of the victim's system as a form of commercial sabotage or espionage.[7]
Hacking includes the spread of computer viruses. Researchers estimate there are some 50,000 computer viruses lurking in cyberspace. Some viruses create several other variants of the original, making them difficult to eliminate. For example, the "I Love You" virus alleged to have been developed by a computer student in the Philippines and which reportedly caused at least US$8 billion in damages early this year had, reportedly, up to 20 variants circulating within days after it first appeared. The infamous "Trojan Horse" type of viruses can infiltrate a host computer where they will sit undetected (and often inactive) for, sometimes, extensive periods until activated. The infected computer then acts on commands initiated by the virus program and may send passwords and other critical information back to the hacker.
2. Phreaking: This covers a range of activities which make use of computers to access corporate computers controlling telecommunications systems. The principal objective of phreakers is to be able to manipulate telecommunications companies system in such a way as to avoid being billed for telecommunications services.[8]
3. Laming: In internet parlance, a "lamer" includes a person who uses the internet for prurient or offensive purposes. Laming can include the display or distribution of pornographic, violent or obscene materials or images, or the incitement of racial hatred through offensive 'posting.'[9]
Australia hosted, in early November 2000, a conference entitled "Cyberhate: Prejudice and Bigotry on the Internet" which addressed issues relating to the proliferation of web sites advocating and encouraging hate against particular groups-- directed most commonly to Jews, homosexuals, the disabled and religious groups. Because of the easy accessibility of the internet to various peoples in various places on earth, the internet could be a convenient tool in fuelling the growth of hate groups.[10]
4. Flaming: This includes sending of menacing, harassing or offensive electronic mail to another internet user, or about an internet user to a newsgroup. In its extreme case, it could be a form of on-line stalking.[11]
5. Spamming: This involves flooding message boards, newsgroups, mailing lists, or one's mailbox with off-topic messages, usually advertisements or promotions or deliberate disruptions. Although it may not necessarily be criminal conduct, it, nonetheless, is a major violation of "netiquette" (an unofficial code of online behaviour recognized by most users) . It violates member agreements in most places and can lead to account cancellation. The term was inspired by an old Monty Python sketch about a repetitive menu with "spam, spam, eggs, and spam."[12]
In October 2000, an Australian County Court handed down a two-year sentence but suspended for 21 months against 24-year-old Steven George Hourmouzis who pleaded guilty for what could be one of the first spamming cases in the world. Evidence showed that Hourmouzis sent more than four million e-mail messages containing false information predicting huge rises in the price of a US company, Rentech. The messages sent to addresses in the United States, Australia and other parts of the world triggered the doubling of the share price of Rentech, on the US Nasdaq stock exchange. It was reported that Hourmouzis made a profit of at least $17,000 from the sale of his Rentech shares. The court was told that Hourmouzis' repeated transmission of unsolicited e-mail messages was known as "spamming."[13]
6. Cyber Terrorism or Mail Bombing: This act is done by instructing a computer to repeatedly send electronic mail (e-mail) to a specified person's e-mail address thus overwhelming the recipient's personal account and potentially shutting down the entire system. Although this act may or may not be illegal, it certainly is disruptive.[14]
This act is akin to spamming but on a larger scale, and with arguably more sinister intent.
7. Child Pornography: Sophisticated offenders are making use of the web to perpetrate this crime which is no different to such an act perpetrated off the internet, that is to say, conventionally. Because of the internet's nature of being unlimited by territorial boundaries, it makes it easier to sell and/ or acquire children's images in sexually compromising positions or in varying stages of dress or undress.[15]
8. Password Sniffing: This activity involves monitoring and recording the name and password of network users as they log in, jeopardising security at a website. The person who installs the sniffer can then impersonate an authorised user and log in to access restricted documents, such as bank accounts and classified information.[16]
9. Spoofing: This is the act of disguising one computer to electronically look like another computer in order to gain access to a system that would normally be restricted.[17]
10. Credit card fraud: This is a form of cyber theft involving stealing details of credit card and calling card numbers from on-line data bases and is in essence little different to its off-line counterpart.[18]
11. Cyberlaundering : This involves the latest technique in money laundering by means of anonymous electronic cash. Electronic cash (also known as digital cash, digital currency and cybercurrency) has been defined as a series of numbers that have an intrinsic value in some form of currency. Using electronic cash, actual assets are transferred through electronic communications in the form of individually identified representations of bills and coins, similar to serial numbers on hard currency.[19]
12. Cyber Theft or Economic/Industrial Espionage or Software Piracy: All these words involve stealing by downloading a computer program code onto a disk without the permission of the code owner.
13. Cyber Fraud: This offence includes the use of the internet in a variety of activities aimed at depriving unsuspecting participants of assets. This can include promotion of investment scams such as pyramid-selling. Telemarketing has expanded into cybermarketing by using computers to sell and promote products and investments, and this has brought with it the possibility of cyber fraud. The problem with purchasing items over the internet, and this is, of course, similar to the more familiar telephone or mail order sales, is that the buyer does not have the luxury of physically examining the product. A virtual market is created on the net and unscrupulous individuals could easily manipulate the situation to sell bogus or even non-existent products.
One wrongful conduct that has been recently added to legal books as a result of the worldwide spread of the internet is "cybersquatting," also commonly referred to as "cyberpiracy". This part of the paper focuses on that activity through a survey of legislation and decided cases.
The United States put its anticybersquatting legislation in place only in late 1999. And this was prompted by the growing number of cases related to domain name disputes that started to mushroom in American courts. Not every country, however, has enacted an anticybersquatting legislation. Australia, for example, has not and there is some debate as to whether it is, in fact, needed.
In the Philippines, two anticybersquatting bills have recently been introduced before the Senate. The sponsorship of such bills was prompted by an attempt of a person calling himself a "netrepreneur" to sell for as much as US$50,000 registered domain names bearing the names of certain Philippine legislators. One concerned senator responded by sponsoring a bill criminalising the act of cybersquatting or cyberpiracy and proposing heavy penalties for the crime.[20] Another bill was also introduced in the same chamber by yet another senator providing penalties for domain name usurpation and abuse of internet trademarks but short of criminalising the illegal conduct.[21]
The Anticybersquatting Consumer Protection Act (ACPA) of the United States defines cybersquatting as the:
"registration, trafficking in or using of a domain name that is identical or confusingly similar to a trademark, a service mark of another that is famous mark at the time of the registration of the domain name, without regard to the goods or services of the parties, with the bad faith intent to profit from the goodwill of another's mark which:
(a) results in consumer fraud and public confusion as to the true source of sponsorship of goods and services;
(b) impairs electronic commerce, which is important to interstate co)mmerce and the United States economy;
(c) deprives legitimate trademark owners of substantial revenues and consumer goodwill; and
(d) places unreasonable, intolerable, and overwhelming burdens on trademarks owner in protecting their valuable trademarks."
Cybersquatters emerged when some companies, organisations or even individuals, did not realise during the early days of the world wide web the value and importance of registering their trademark as domain name. The stereotypical cybersquatter would register a domain name using the name of a famous person or the trademark or service mark of a commercial or business entity or an organisation with the intent of selling such domain name to the person, commercial or business entity, or organisation bearing the same name or the same trademark or service mark for a hefty profit.
Section 3 of the US Anticybersquatting Act amends section 43 of the US Trademark Act of 1946 (15 United States Code 1125) to the effect that a person shall be liable in a civil action by the owner of a trademark or service mark if that person: (a) has a bad faith intent to profit from that trademark or service mark; and (b) registers, traffics in, or uses a domain name:
• that is identical or confusingly similar to a distinctive trademark or service mark; or
• that is dilutive of a famous mark.
Subsection 3 (1) (C ) of the Act provides that a court may order the forfeiture or cancellation of domain name or the transfer of a domain to the owner of a mark.
Subsection 3(2) (A) allows the filing of an in rem civil action against a domain name if there is violation of any right of the registrant of a mark and the court finds that the owner demonstrated due diligence and was not able to find a specific person who would have been the defendant. The remedies of an in rem action shall be limited to forfeiture or cancellation of the domain name or transfer of the domain name to the owner of the mark.
Section 4 of the Act allows for the remedies of injunctions and damages. Also, the plaintiff may elect to recover, instead of actual damages and profits, an award of statutory damages of not less than US$1,000 and not more than $100,000 per domain name.
In the United States, cybersquatting does not involve 'criminal' sanctions in that the available remedies are exclusively pecuniary in nature.
In order to receive or to make available information on the internet, a domain name is needed. A domain name is likened to an address. It identifies a particular internet site. Messages that are electronically transmitted through the net are directed to e-mail addresses which include the domain names. Domain names appear as words. However, when a domain name is used on the internet, it is translated into numbers known as Internet Protocol (IP) numbers. The translation is carried out by a series of computer software packages known as domain name servers.[22]
The internet is divided into several "top level" domains such as:
• .com for commercial;
• .edu for education;
• .org for organization;
• .net for networks;
• .gov for government entities.
A domain name is the simplest way of locating a web site. If a computer user does not know a domain name, s/he can use an internet "search engine." To do this, the user types in a key word or a phrase and the search will locate all of the web sites containing the key word(s). Such key searches can yield hundreds of web sites. To make it easier to find their web sites, individuals, companies, organisations, or institutions prefer to use a domain name that is identified with them. Usually, they use their business names, trademarks or service marks.[23]
In its report entitled The Emerging Digital Economy, the United States Department of Commerce estimated that as at December 1996, about 627,000 internet domain names had been registered. By the end of 1997, the number of domain names more than doubled reaching 1.5 million.[24]
The World Intellectual Property Organisation (WIPO) reports that nearly 7.2 million domain names have been registered worldwide as at April 1999.[25]
Of these, approximately 1.8 million have been registered in the country code top level domain names (ccTLDs). Accordingly, the weekly volume of new registrations is approximately 21,000.[26]
This study will make a survey of the more controversial cases on anticybersquatting that have been decided in the United States and the United Kingdom. Except in the USA and the UK, there are hardly any cases in other jurisdictions on this issue. In the Philippines, a case was brought before the Regional Trial Court of Quezon City but was dismissed, thus the country lost the opportunity to establish judicial precedent on the issue.[27]
Panavision International L.P. v. Dennis Toeppen
[1998] USCA9 991; 141 F.3d 1316 (9th Cir. 1998).
Intermatic Inc. v. Toeppen
947 F. Supp. 1227 (N.D. Ill. 1996).
American Standard Inc. v. Toeppen
1996 US Dist Lexis 14451 (C.D. Ill. 1996).[28]
All three cases bear similar facts and issues. They stem from the act of one Dennis Toeppen, a resident of Champaign, Illinois where he operates an internet service provider known as "Net66." By 1996, Toeppen had registered approximately 240 internet domain names using the names or trademarks of certain entities without seeking their permission because he contends that no permission was or is necessary. Among the domain names he registered were: "panavision.com", "panaflex.com", "intermatic.com" and "americanstandard.com."
In the first case, the plaintiff ("Panavision") is a Delaware limited partnership with its principal place of business in Los Angeles, California. It owns several federally registered trademarks including "Panavision" and "Panaflex" which it uses in connection with its theatrical motion picture and television camera and photographic equipment business.
Panavision, like many businesses, decided to establish its own web site. When it attempted to do so under its name, it discovered that Toeppen had registered domain names using the Panavision trademarks. By registering the "panavision.com" domain name, Toeppen in effect prevented Panavision from registering and using its own trademark, Panavision, as an internet domain name. Toeppen was able to register Panavision's trademark due to NSI's registration policy of first-come-first-served basis.
After Panavision notified Toeppen of its intent to use the "panavision.com" domain name, Toeppen demanded $13,000 to discontinue the use of the domain name and to facilitate the transfer. To add further insult to injury, Toeppen subsequently registered another Panavision's trademark, "panaflex" with NSI.
Panavision filed suit against Toeppen and NSI for: dilution of trademark, trademark infringement, unfair competition, intentional and negligent interference with prospective economic advantage, and breach of contract.
In the second case, Intermatic Inc. is a Delaware corporation, doing business under the same name since 1941. Intermatic has 37 offices throughout the United States and has been in business in Illinois since 1892. Intermatic is a manufacturer and distributor of a wide variety of electrical and electronic products including computerised and programmable timers sold under its trademark, Intermatic.
In the third case, American Standard Inc. is another company bearing a famous brand name "American standard" which refers to a wide range of products from heating and cooling systems to home and office equipment and products including bathroom faucets. The company has presence in and sells its products not only within the USA but overseas. It has been operating in business since 1881.
All three companies, Panavision, Intermatic Inc. and American Standard Inc. separately filed suit against Toeppen to enjoin and restrain him from using the domain names which bear the three companies' trademarks on the grounds of trademark infringement, unfair competition, dilution of trademark, among others.
The main issue in these cases is simply whether the owner of a particular trademark may preclude the use of the trademark as an internet domain name by another entity who had made no prior use of such name or trademark prior to registering it as an internet domain name.
Before going into the heart of the cases, however, the issue of whether the courts have the necessary jurisdiction needed to be decided.
In the Panavision case, Toeppen filed a motion to dismiss for lack of personal jurisdiction alleging that the District Court of California lacks personal jurisdiction because Toeppen resides in Illinois and that Toeppen's alleged actions were all done in Illinois.
In its decision, the 9th Circuit of the US Court of Appeal (CA) affirmed the District Court's decision that:
1. the court does not have general jurisdiction. General jurisdiction exists when a defendant is domiciled in the forum state or his activities there are substantial or continuous and systematic. Toeppen is domiciled in Illinois and his activities in California are not substantial or continuous and systematic;
2. the court has specific jurisdiction over Toeppen, using the 3-part test for specific jurisdiction, namely:
(a) the non-resident defendant must do some act or consummate some transaction with the forum or perform some act by which s/he purposefully avails himself of the privilege of conducting activities in the forum, thereby invoking the benefits and protections of its laws ("purposeful availment");
(b) the claim must be one which arises out of or results from the defendant's forum-related activities ("arises out of" or "results from"); and
(c) the exercise of jurisdiction must be reasonable ("reasonableness").
This meant that all three elements must occur for specific jurisdiction to arise as they did in this case.
Although Toeppen was not "doing business" in California, its act of registering Panavision's trademarks as domain names with the knowledge that the names belong to Panavision and with the intent to interfere with Panavision's business meant that Toeppen expressly aimed his conduct in California. Toeppen therefore fulfilled the "purposeful availment" test.
Panavision's claim arises out of Toeppen's conduct. "But for" Toeppen's act of registering Panavision's trademark's as domain names, Panavision would be able to establish an easily located web site and thus would not have been injured.
The "reasonableness" element requires that the court's exercise of jurisdiction comport with "fair play and substantial justice."[29] In addressing the element of "reasonableness", the court must consider seven factors:
1. the extent of the defendant's purposeful interjection;
2. the burden on the defendant in defending in the forum;
3. extent of conflict with the sovereignty of the defendant's state;
4. the forum state's interest in adjudicating the dispute;
5. the most efficient judicial resolution of the controversy;
6. the importance of the forum to the plaintiff's interest in convenient and effective relief; and
7. the existence of an alternative forum.
The Court found that requiring Toeppen to litigate in California was not unreasonable.
Dilution is defined in US legislation as "the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of (1) competition between the owner of the famous mark and other parties, or (2) likelihood of confusion, mistake or deception."[30]
In Intermatic, the court gave a history of dilution statutes in the United States.
The Federal Trademark Dilution Act of 1995 provides that : "the owner of a famous mark shall be entitled to the principles of equity and upon such terms as the court deems reasonable, to an injunction against another person's commercial use in commerce of a mark or trade name, if such use begins after the mark has become famous and causes dilution of the distinctive quality of the mark…"[31]
In considering whether the trademark dilution claims would prosper, the plaintiff(s) had to show that:
1. the mark in dispute is famous;
2. the defendant is making a commercial use of the mark in commerce;
3. the defendant's use began after the mark became famous; and
4. the defendant's use of the mark dilutes the quality of the mark by diminishing the capacity of the mark to identify and distinguish goods and services.[32]
In the first case, Toeppen did not challenge the determination that Panavision's trademark was famous and that his alleged use began after the mark became famous. He challenged, however, the court's determination that he made "commercial use" of the mark and that this use caused "dilution" in the quality of the mark.
• "Commercial use"/"in commerce"
Toeppen argued that his registration of Panavision's trademark simply as a domain name does not constitute commercial use. In his defence, he cited judicial authority that a "registration of a trademark as a domain name, without more, is not a commercial use of the trademark and therefore is not within the prohibitions of the Act"[33] and that "the mere registration of a domain name does not constitute a commercial use."[34] He also argued that NSI's acceptance of a domain name for registration is not commercial use within the meaning of the Trademark Dilution Act.[35]
The California Court of Appeals (CA) held that Toeppen's business is to register trademarks as domain names and then sell them to the rightful trademark owners. He acts as a spoiler by preventing Panavision and others from doing business on the internet under their trademarked names unless they pay his fee. This, in itself, according to the CA is a commercial use, which was his attempt to sell the trademarks themselves.
In the earlier Intermatic case, the Court did not accept the proposition that the defendant's conduct constitutes "commercial use" by virtue of his registration of the domain names under the internet designation ".com" (which is an abbreviation for commercial). The Court said that the use of the first level domain designation ".com" does not in and of itself constitute a commercial use. It held instead that it was Toeppen's desire to resell the domain names which makes it sufficient to meet the "commercial use" requirement of the statute. Also, the Court found that Toeppen's use of the internet constitutes commerce. Toeppen's use of the internet therefore satisfies the "in commerce" requirement of Section 43 (c) of the Federal Trademark Dilution Act of 1995, otherwise known as the Lanham Act.
• "Dilution claims"
The CA affirmed the lower court's finding that Toeppen's conduct diminished the capacity of the Panavision's marks to identify and distinguish Panavision's goods and services on the internet.
The CA rejected Toeppen's argument that a domain name is nothing more than an address. The CA held that a significant purpose of a domain name is to identify the entity that owns a web site. (In its footnote, the CA quoted a legal article that explains the dual purpose of a domain name, namely: (1) it marks the location of the site within cyberspace, much like a postal address in the real world and (2) it also indicates to users some information as to the content of the site and in instances of well-known trade names or trademarks, may provide information as to the origin of the contents of the site.)[36]
The CA further stated that a domain name mirroring a corporate name may be a valuable corporate asset, as it facilitates communication with a customer base.[37] Using a company's name or trademark as a domain name is also the easiest way to locate that company's web site. In an important observation on the habits of internet users which underscores the value of the (brand name) .com address, the court noted that a customer who is unsure about a company's domain name will often guess that the domain name is also the company's name.[38]
The CA said that potential customers of Panavision will be discouraged if they cannot find its web page by typing in "panavision.com" but instead are forced to wade through hundreds of web sites. This, in itself, dilutes the value of Panavision's trademark. Also, Toeppen's use of "panavision.com" puts Panavision's name and reputation at Toeppen's mercy.
In Intermatic, the Court cited the 7th Circuit's decision in Polaroid Corp. v. Polaroid Inc :[39]
"The gravamen of a dilution complaint is that the continuous use of a mark similar to plaintiff's works an inexorably adverse effect upon the distinctiveness of the plaintiff's mark, and that, if he is powerless to prevent such use, his mark will lose its distinctiveness entirely…dilution is an infection which, if allowed, to spread, will inevitably destroy the advertising value of the mark."
The Court concluded that if Toeppen were allowed to use "intermatic.com", Intermatic's name and reputation would be at Toeppen's mercy and could be associated with an unimaginable amount of messages on Toeppen's web page. There is a serious but side issue emerging from the dilution debate, and this concerns the point at which a brand name enters the region of generic description and therefore not capable of exclusive registration and protection. The US courts are, at the time of writing, dealing with a number of actions involving such trade names.
In Intermatic, it was held by the Court that for trademark infringement and unfair competition to be proven, the plaintiff need only prove the following:
1. the plaintiffs own prior rights to the marks in dispute; and
2. Toeppen's use of the "intermatic.com" is likely to cause consumer confusion, deception or mistake.
As there was no dispute to the first requirement that the plaintiff Intermatic Inc. owns prior rights to the mark in dispute, it was on the second requirement that Toeppen based his defence.
The Court discussed the seven factors that should be weighed to determine if there is likelihood of confusion. These seven factors are:
1. degree of similarity between the marks in appearance and suggestion;
2. similarity of products or services for which the name is used;
3. the area and manner of concurrent use;
4. the degree of care likely to be exercised by consumers;
5. the strength of the complainant's mark;
6. actual confusion;
7. an intent on the part of the alleged infringer to palm off his products as those of another.
The Court said that the test is not whether the public would confuse the marks but whether the viewer of an accused mark would be likely to associate the product or service with which it is connected with the source of products or services with which an earlier mark is connected.[40]
In all three cases, Toeppen was enjoined and restrained from using the domain names he registered with NSI which bear the plaintiffs' names and federally registered marks.
Jews for Jesus v. Steven Brodsky 993 F.Supp. 282 (D. N.J. 1998) affirmed by 159 F.3d 1351 (3d Cir. 1998).
Planned Parenthood Federation of America v. Richard Bucci 97 Civ. 0629 (KNW), 1997 WL 133313 (S.D.N.Y. March 26, 1997) affirmed by 152 F.3d 920 (2d Cir. 1998) cert. denied 119 S. Ct. 90 (1998).[41]
These two cases are similar in facts and issues, but differ from those previously discussed in that the motive of the defendant was not mere profit, but to instead provide a mechanism to pursue ideological or religious aims.
In the first case, the plaintiff owns the federally registered service mark "Jews f<<StarOfDavid>>r Jesus" and the common law service mark "Jews for Jesus." It is a non-profit international outreach ministry that was founded in 1973. The defendant, Brodsky, is a lawyer and professional internet site developer who is a vocal opponent of the teachings of the plaintiff organisation. He registered the domain names www.jewsforjesus.org. and www.jews-for-jesus.com
. The defendant Brodsky admitted that his internet site was a "bogus Jews for Jesus" site and that his intent was to "intercept potential converts" to the beliefs of the plaintiff's organisation. The plaintiff brought the case to enjoin the defendant from the use of the jewsforjesus domain name alleging, amongst other things, dilution of a registered mark, unfair competition, false designation, and service mark infringement.
In the second case, the plaintiff organisation is a non-profit, reproductive health organisation, founded in 1922, aimed at educating the public on issues such as sexual and reproductive health, contraception and family planning, pregnancy, sexually transmitted diseases, and abortion. The organisation owns the service mark "Planned Parenthood". The defendant, Bucci, host of "Catholic Radio", actively opposes the views and teachings of the plaintiff. He posted the web site "plannedparenthood.com" to enable him to reach people who would be sympathetic to the pro-abortion position. In his affidavit, the defendant admitted that his motive in posting the web site is "to reach primarily, Catholics that are disobedient to the natural law." He said that he wanted his "anti-abortion message to reach as many people as possible, and particularly the people who do not think that abortion has an inimical effect on society." Furthermore, the web site advertises an anti-abortion book entitled "The Cost of Abortion". The plaintiff organisation brought the court action to enjoin the defendant, Richard Bucci, from using his registered domain name, www.plannedparenthood.com
for similar causes of action as Jews for Jesus.
In Jews for Jesus, it was held that the plaintiff organisation has common law rights to the phrase "Jews for Jesus" even if the plaintiff's federally registered mark contains "o" that is stylised as a "<<StarOfDavid>>".
Utilising the body of service/trade mark common law decisions, it was held that in order to constitute infringement, exact similarities are not required between the allegedly confusing marks. Rather, it is sufficient that enough of the mark is confusingly similar or has been used to deceive the public. Marks are confusingly similar if ordinary consumers are likely to conclude that they share a "common source, affiliation, connection or sponsorship."[42]
Considering the domain name used by the defendant is nearly identical to the plaintiff's mark, it is likely that internet users will conclude that the plaintiff's mark and the defendant's domain name share a common source, affiliation, connection or sponsorship. As such, the phrase "jewsforjesus" used by the defendant as domain name appears to be confusingly similar to the plaintiff's mark.
The defendant also contended that his conduct was exempted from the dilution law because it is a non-commercial speech as it is allegedly meant to call attention to issues of public importance. He cited jurisprudence which held that "the mere registration of a domain name, without more, is not commercial use of a trademark."[43]
In rejecting defendant's arguments, the Court held that the defendant had done more than merely register a domain name. He had created a bogus Jews for Jesus site intended to intercept, through the use of deceit and trickery, the audience sought by the plaintiff organisation. Also, the defendant's internet site used the mark and the name of the plaintiff organisation as its address conveying the impression to internet users that the plaintiff organisation is the sponsor of the defendant's internet site.
Furthermore, the defendant's conduct constituted commercial use of the mark and the name of the plaintiff organisation because it was designed to harm the plaintiff organisation commercially by disparaging it and preventing the plaintiff organisation from exploiting the mark and name of the plaintiff.
Similarly, in Planned Parenthood, defendant Bucci argues that his use of plaintiff's mark is not covered by the prohibition in the Lanham Act because it is a non-commercial speech.
Section 1114 of the Lanham Act forbids a party to "use in commerce any reproduction, counterfeit, copy, or colourable imitation of a registered mark in connection with the sale, offering for sale, distribution or advertising of any goods or services on or in connection with such use is likely to cause confusion, or to cause mistake, or to deceive."
The Court held that the activity involved in this action meets the "in commerce" standard for two reasons: first, the defendant's actions affect the plaintiff's ability to offer its services in 48 states and over the internet (Even assuming, arguendo, that defendant's activities are not interstate commerce for Lanham Act purposes, the effect of those activities on plaintiff's interstate commerce activities would place defendant within the reach of the Lanham Act.); second, internet users constitute a national, even international, audience, who must use interstate telephone lines to access defendant's web site on the internet. The nature of the internet indicates that establishing a typical home page on the internet, for access to all users, would satisfy the Lanham Act's "in commerce" requirement.
The Court further held that defendant's use of plaintiff's mark is "in connection with the distribution of services" because it is likely to prevent some internet users from reaching plaintiff's own internet web site. Prospective users of plaintiff's services who mistakenly access defendant's web site may fail to continue to search for plaintiff's own home page, due to anger, frustration, or the belief that plaintiff's home page does not exist. Therefore, it held that the defendant's action in appropriating plaintiff's mark had a connection to the plaintiff's distribution of its services, and applied section 1114 which forbade such an action.
For the same reasons, the Court held that the defendant's use of planned parenthood in its domain name was a commercial use of plaintiff's famous service mark which would cause dilution thus violating section 1125(c) of the Act. The principal and important difference between these two cases and the preceding cases is the fact that the courts had to consider, in addition to the commercial aspect, the ulterior ideological motive of the defendants. In doing so, the courts had to consider US First Amendment (freedom of speech) issues, and held that in the conditions prevailing in these cases, these are subservient to the freedom to use the internet for genuine commercial and non-profit activity.
The defendant's conduct was not protected by the First Amendment[44] because the mark was used to identify defendant's site and not as part of a communicative message about the plaintiff or its organisation. By using the plaintiff's mark as a domain name and home page address and by welcoming users with the message "Welcome to the Planned Parenthood Home Page", defendant identifies the web site as being the product, or forum of the plaintiff. Such act was held by the court to be an infringement of plaintiff's mark which was not protected by the First Amendment.
Five Cases in the High Court of Justice, Chancery Division
Marks and Spencer PLC v. One in a Million and others, CH 1997 M.5403.
Ladbrokes PLC v. One in a Million and others, CH 1997 L.5404.
J. Sainsbury PLC v. One in a Million and others, CH 1997 J.5402.
Virgin Enterprises Ltd v. One in a Million and others, CH 1997 V.5401.
British Telecommunications PLC v. One in a Million and others, CH 1997 B.5421.[45]
In the United Kingdom, internet use commenced around 1985 when the Internet Assigned Numbers Authority (IANA) in the United States authorised an academic organisation in the UK, known as the United Kingdom Education and Research Networking Association (UKERNA) to administer the domain name system for the United Kingdom under the u.k. top level domain.[46]
Initially, the internet was used principally by academics and UKERNA gave domain names to universities and to other academic bodies. From about 1992, the internet began to be used commercially and the volume of business transacted on the internet began to increase dramatically. Arrangements became necessary to deal with the allocation of domain names to companies and individuals desirous of using the internet. In September 1995, the U.K. Naming Committee was formed as an off-shoot of UKERNA to administer the U.K. domain name. The Naming Committee consisted of UK internet service providers, and on 1 August 1996, Nominet UK took over from the UK Naming Committee the responsibility of allocating UK domain names.[47]
The defendants, One in a Million, Global Media Communications and Junic are dealers in internet domain names. They register names with organisations such as NSI and Nominet and sell them to potential users, very much the same way as company registration agents. These dealers specialise in registering internet domain names comprising the names or trademarks of well-known commercial or other enterprises without the consent of those enterprises.
The Court noted that for a dealer in internet domain names, there are, in principle, only four uses to which the names can be put, namely:
1. that it may be sold to the enterprise whose name or trademark has been used, which may be prepared to pay high price to avoid the inconvenience of there being a domain name bearing its own name or trademark, which is not under its control;
2. that it may be sold to a third party unconnected with the name, so that s/he may try to sell it to the company whose name is being used or else use it for purposes of deception;
3. that it may be sold to someone with a distinct interest of his/her own in the name with a view to using it;
4. that it may be retained by the dealer unsold and unused, in which case it serves only to block the use of that name as a registered domain name by others, including those whose name or trademark it comprises.
In the above cases, plaintiffs commenced action to enjoin the defendants from using and having the continued registration of the names and marks which pertain to the plaintiffs, respectively. The plaintiffs base their action on the following causes of action: tort of passing off and infringement of trade marks.
The Court said that the essence of the tort of passing off is a misrepresentation to the public (whether or not intentional) liable to lead them to believe that the goods and services offered by the representor are those of the plaintiff. The tort is also committed by those who put or authorise someone to put an instrument of deception into the hands of others. However, in a series of UK cases, the courts have consistently held 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. It follows then that the mere registration of deceptive company name or a deceptive internet domain name does not in itself constitute passing off.
In these cases, the Court held that there is only one possible reason why anyone who is not part of any of the plaintiff organisations (such as Marks and Spencer PLC) should wish to use such domain names, and that is to pass himself off as part of that group or his products off as theirs.
The defendants argued that there are uses to which they can put the domain name which would not involve passing off by them or any one else, namely: (1) the sale of the domain name to the plaintiff; and (2) its simple retention with a view to blocking the use of the same name by the concerned plaintiff organisation.
Although the Court accepted that neither of the above two acts would constitute passing off, a salient point is that the names are only saleable to the concerned plaintiff organisations and blocking their use by the plaintiff organisations will only be a useful negotiating tactic for the registrant.
In conclusion, the Court found that any person who deliberately registers a domain name on account of its similarity to the name, brand name or trademark of an unconnected commercial organisation must expect to find himself on the receiving end of an injunction to restrain the threat of passing off, and the injunction will be in terms which will make the name commercially useless to the dealer.
Section 10(3) of the Trade Marks Act 1994 provides:
" A person infringes a registered trademark if he uses in the course of trade a sign which is identical or similar to the trade mark, and is used in relation to goods or services which are not similar to those for which the trade mark is registered, where the trade mark has a reputation in the United Kingdom and the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or the repute of the trade mark."
The defendants argued that: (1) their use has not been "in the course of trade" and (2) it is an implicit requirement of section 10(3) that there should have been a likelihood of confusion on the part of the public and there has been none.
The English Court followed established precedent and held that "use in the course of trade" means "use by way of business" and is not restricted to "use as a trade mark".[48] The Court said that the use of a trade mark in the course of the business of a professional dealer for the purpose of making domain names more valuable and extracting money from the trade mark owner is a use in the course of trade.
As applied by the Court, the test as to whether there is likelihood of confusion depends not on the way the sign has been used but on whether a comparison between the sign and the trade mark shows an inherent propensity to confuse. The Court held that there is no doubt that this is the effect of the use by the defendants of the domain names which bear the names and trade marks of the plaintiffs, and was applicable therefore in all the instant cases.
In all five cases, the court granted final injunctions quia timet.
The interface between domain names as addresses on the internet and intellectual property (specifically trademarks and other recognised rights of identity) prompted the World Intellectual Property Organisation (WIPO) to address the issue of cybersquatting as it impinges on intellectual property rights.
There are differences in the domain name system (DNS) and the Intellectual Property Right (IPR) system. For one, the registration of a domain name gives rise to global presence as a registered domain name is accessible anywhere in the world. On the other hand, intellectual property rights are territorially-based and can be enforced only within the territory concerned.[49] Tension occurs between the two systems when cybersquatters take advantage of the first-come-first-served policy for registering domain names and register the trademarks and/ or famous marks in the hope of selling the domain names to the owners of those marks or simply to take unfair advantage of the reputation attached to those marks.[50] Because of the global and multijurisdictional nature of DNS, persons who claim IPR infringement may have to sue in various jurisdictions thus incurring great costs. While a plaintiff may succeed in the jurisdiction where his/her IPR is registered, he/she may not succeed in other jurisdictions.
In recognition of the potential infringement on intellectual property rights resulting from the easy and relatively inexpensive registration of domain names, WIPO commenced a continuing consultation with its 171 member states to discuss and address the protection, proper dissemination and use of intellectual property in the context of internet technology.
In October 2000, at least 80 members of WIPO reached agreement on a proposal that would establish guidelines for the protection of trademarks and other distinctive marks on the internet.[51]
The proposed solution involves the issuance of a "notification of infringement" for anyone in a WIPO member state who infringes a mark in the country of another WIPO member state. Once the notification is received, the infringer may avoid liability if the infringer takes steps to avoid a "commercial effect" in the member country in which the notice is served.[52]
In determining whether a mark has "commercial effect", factors will be considered such as, but not necessarily limited to,:
• whether it is being used for other goods and services in the jurisdiction;
• whether prices are indicated in that country's currency;
• whether customers are actually being served in that country;
• the relationship of the web site to the country concerned.[53]
In 1999, the United States Department of Commerce amended its agreement with NSI to introduce industry competition in domain name registration and even facilitate international participation in its management. The revised agreement allows the Internet Corporation for Assigned Names and Numbers (ICANN) to accredit private registrars of global top-level domain names. These accredited registrars, however, are required to utilise one shared central registry operated and maintained by NSI.[54]
In order to provide a faster and cheaper mechanism for domain name dispute resolution, ICANN adopted the Uniform Dispute Resolution Policy (UDRP) which provides for an administrative procedure on domain name disputes.[55]
UDRP, however, applies only to global top-level domain names (gTLDs) such as .com, .net, and .org. Those with country code top-level domain names (ccTLDs) such as .au, .uk, .ph etcetera are not administered by ICANN and the UDRP does not apply to them unless these countries have specifically adopted it.[56]
Australia has not adopted the UDRP. A plaintiff in a domain name dispute, therefore, would have to rely on the traditional laws relating to trademark infringement,[57] the provisions of the Trade Practices Act 1974 (Commonwealth) or the fair trading legislation of a state or territory concerned.
Section 52 of the Trade Practices Act provides that " a corporation[58] shall not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive."[59]
Section 52 is a comprehensive provision of wide impact.[60] In the absence of a specific law relating to cybersquatting, section 52 may be used by an aggrieved party against another whose conduct of registration of a particular domain name has the effect of misleading or deceiving or is likely to mislead or deceive the public.
However, cybersquatting or cyberpiracy in Australia does not appear to be much of a problem. This may be due to the fact that Australian policy requires that the domain name applied for should be close to the registered name of the organisation seeking to register such domain name.
The involvement of the public bureaucracy in the granting of domain names has meant that Australia has effectively mixed private registration with public regulation. While trademark registration is a federal regulatory matter (meaning that simple referral to the appropriate records reveals any prior entitlement to use), business name registration is a state and territory matter with little or no coordination between them, meaning that there exists the very real possibility of future litigation in this area.
This is unlike the United States where the policy has historically been on a first-come-first-served which then enables enterprising opportunists to "jump the gun" in registering the business name of some well-known company with the intent of selling it back to the company that made the name famous.
This is not as serious a matter as may appear at first glance. Given the maturing nature of business confrontation with the internet and the e-business world, it is reasonable to assume that all appropriate .com registrations relating to existing business names have by now been made, and that proper process requires new business creators to make all appropriate registrations from the outset.
Additionally, the establishment by the World Trade Organization (WTO) of an arbitration system with the power to order the transfer of registration, has had the effect of enabling quick and cost-effective resolution of cybersquatting matters.
That is not to say that cybersquatting is now obsolete. What these developments have done is to push the price being asked by perpetrators to just below the cost of achieving the same result through the courts (but at a much lower cost).
Persons who specialise in domain name selling still maintain that they are not criminals (and in the absence of appropriate Australian legislation, this is true in Australia) but merely "netrepreneurs" who take advantage of the opportunities that the world wide web has to offer. Whether they are entrepreneurs or unscrupulous opportunists, the United States, the biggest user of the world wide web, has now regulated this activity and, no doubt, countries that deal with the world wide web would find it prudent, if not expedient, to enact a legislation to address this specific problem.
[*] Marlene Agmata-Tucker is a Legal Practitioner in the Australian Capital Territory and a lifetime member of the Integrated Bar of the Philippines. She works with the ACT's Department of Justice and Community Safety as Legal Policy Officer and is a member of the E-Business Law Group, National Centre of Corporate Law and Policy Research, University of Canberra. The views expressed in this article are entirely those of the author and not to be attributed to the ACT Government or the UC.
[*]* Typosquatting is a variation of cybersquatting. It involves the registration of domain names with slight variations of well-known web sites (e.g., yyahoo.com, wwwaol.com, yahwoo.com). When surfers mistype web addresses, they are directed to these slightly varied web sites which are then able to earn thousands of dollars as a result of unintended typographical errors of internet users. These web sites are paid by the number of clicks they are able to re-direct to other portals. Advertisements posted on their web sites pay as well for the number of clicks which they generate.
[1] Bill Gates, Business @ the Speed of Thought, Penguin Books, 1999, p.130.
[2] The Emerging Digital Economy,
http://www.ecommerce.gov/daintro.htm (Last visited on 22 Aug 2000).
[3] Final Report of the WIPO Domain Name Process, "The Management of Internet Names and Addresses: Intellectual Property Issues," paragraph 2(i) at http://wipo2.wipo.int/process1/report/finalreport.html
[4] Ibid.
[5] E-Commerce Across Australia (Forward),
http://www.noie.gov.au/projects
[6] Final Report of the WIPO Domain Name Process, "The Management of Internet Names and Addresses: Intellectual Property Issues," at http://wipo2.wipo.int/process1/report/finalreport.html, paragraph (2)(v).
[7] Greg Nicholson's Web Site, http://www.dov.net.au/`gni/nichcrm.htm (Last visited on 18 Sept 2000).
[8] Ibid.
[9] Ibid.
[10] "Internet may be fuelling hate groups", The Canberra Times (Australia) 4 November 2000, p.9.
[11] Greg Nicholson's Web Site, http://www.dov.net.au/`gni/nichcrm.htm (Last visited on 18 Sept 2000).
[12] Glossary of Internet Terms,
http://www0.delphi.com/navnet/glossary/s.html
[13] Stathi Paxinos, "Internet share swindler jailed", The Age (Australia) 31 October 2000, p. 5; "Three-month prison term for share 'spamming'", The Canberra Times, 31 Oct 2000, p.2.
[14] Jones Telecommunications and Multimedia Encyclopedia, Crime on the Internet, http://www.digitalcentury.com/encyclo/update/crime.html (Last visited on 18 Sept 2000).
[15] Ibid.
[16] Ibid.
[17] Ibid.
[18] Ibid.
[19] Mark Bortner, Cyberlaundering: Anonymous Digital Cash and Money Laundering, http://www/law.miami.edu/~froomkin/seminar/papers/bortner.htm
[20] Philippine Senate Bill 2083 sponsored by Senator Tito Sotto III entitled " An Act to prevent fraudulent acquisition of a domain name." This Bill proposes an imprisonment of prision correcional (6 months and 1 day to 6 years) up to the minimum period of prision mayor (6 years and 1 day to 12 years) or a fine of no less than 2 million pesos (approximately US$40,000) but not more than 50 million pesos (approximately US$1 million).
[21] Philippine Senate Bill 2110 introduced by Senator Juan Flavier entitled "An Act prohibiting the usurpation and abuse of internet trademarks and providing penalties therefore."
[22] Pitman Training Ltd. v. Nominet UK, Ch 1997 F1984, High Court Chancery Division (U.K.).
[23] Panavision International L.P. v. Dennis Toeppen, [1998] USCA9 991; 141 F.3d 1316 (Ninth Circuit 1998)
[24] The Emerging Digital Economy,
http://www.ecommerce.gov/daintro.htm
[25] Final Report of the WIPO Internet Domain Name Process, http://wipo2.wipo.int/process1/report/finalreport.html, paragraph 9 citing Statistics from Netnames Ltd. (http//:www.netnames.com)
[26] Ibid.
[27] PLDT v. Gerry Kaimo and PLDTI, Regional Trial Court, Quezon City, Philippines.
[28] All three cases can be accessed electronically at http://www.marketdomain.com/law.htm (Last visited on 23 August 2000).
[29] Panavision v. Toeppen, citing Burger King, 471 US at 476, 105 S.Ct. at 2184.
[30] The Lanham Act, 15 United States Code Section 1127 provides definition for Trademark Dilution Act, 15 USC S.1125(c).
[32] Ibid
[33] Panavision,, 9th Cir, USCA, citing Panavision v. Toeppen, 945 F.Supp. 1296, 1303 (C.D. Cal 1996).
[34] Panavision, 9th Cir USCA citing Academy of Motion Picture Arts and Science v. Network Solutions Inc., 989 F.Supp 1276, 1997 WL 810472 (C.D. Cal. Dec 22, 1997).
[35] Panavision, 9th Cir USCA citing Lockheed Martin Corp. v. Network Solutions Inc, 985 F. Supp 949 (C.D. Cal 1997).
[36] Found in footnote 8, Panavision 9th Cir USCA citing Peter Brown, "New Issues in Internet Litigation, 17th Annual Institute on Computer Law: The Evolving Law of the Internet-Commerce, Free Speech, Security, Obscenity and Entertainment", 471 Prac. L. Inst 151 (1997).
[37] Panavision citing MTV Networks Inc. v. Curry, 867 F. Supp 202 (S.D.N.Y.1994).
[38] Panavision citing Cardservice Int'l v. McGee, 950 F.Supp 737 at 741.
[39] [1963] USCA7 203; 319 F.2d 830, 836 (7th Cir 1963).
[40] Intermatic citing Nike Inc. v. "Just Did It" Enterprises[1993] USCA7 1181; , 6 F.3d 1225, 1228-9 (7th Cir 1993).
[41] These 2 cases can be electronically accessed at http://www.marketdomain.com/law.htm
[42] Jews for Jesus citing Fisons, 30 F.3d at 477.
[43] as stated in Academy of Motion Pictures Arts and Sciences, 989 F.Supp. 1276, 1278; Juno, 979 F.Supp. at 691; Panavision, 945 F. Supp at 1303.
[44] "Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances." US Constitution Amendment 1.
[45] All five cases are in one judgement:
http://wood.ccta.gov.uk/courtser/judgements.nsf (Last visited on 15 October 2000).
[46] Pitman Training Ltd. and Anr. v. Nominet UK and Anr., Ch 1997 F 1984 HC Chancery (22 May 1997).
[47] Ibid.
[48] Citing British Sugar Plc v. James Robertson & Sons Ltd [1996] RPC 281, 290-2.
[49] Final Report of the WIPO Internet Domain Name Process, paragraph 22.
[50] Ibid., paragraph 23.
[51] Prof. Eugene Clark, "Intellectual property deal drafted," The Canberra Times (Australia), 6 November 2000, p. 18.
[52] Ibid.
[53] Ibid.
[54] http://www.icann.org/registrars/accreditation-overview.htm
[55] http://www.icann.org/udrp/udrp-rules-24oct9.htm
[56] Christine Ecob and Catriona Harris, "Fighting off the pirates' dotcom", Australian Financial Review, 26 October 2000, p.42.
[57] Ibid.
[58] By virtue of section 6 of the Act, activities of individuals are subsumed by section 52. (Russell V. Miller, Miller's Annotated Trade Practices Act, 19th Edition, LBC Information Services, 1998, p.274).
[59] A similar provision appears in the legislation of New South Wales (sec 42, Fair Trading Act 1987), Queensland (sec 38, Fair Trading Act 1989), South Australia (sec 56, Fair Trading Act 1987), Western Australia (sec 10, Fair Trading Act 1987), Tasmania (sec 14, Fair Trading Act 1990), Northern Territory (sec 14, Consumer Affairs and Fair Trading Act 1990), Australian Capital Territory (sec 12, Fair Trading Act 1992) and Victoria has a slightly different wording under its sec 13 of the Consumer Affairs Act 1972.
[60] Miller's Annotated Trade Practices Act, page 275, quoting Fox J in Brown v. Jam Factory Ltd (1981) 53 FLR 340 at 348.
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