Business Advice from Bert J. E. van Gils



About Bert J. van Gils

Bernard J.E. van Gils is an international business attorney and a managing director of International Trade & Management Corporation (ITMC).

ITMC's Global Research and Information Division provides reliable research, information and documentation. Being familiar with Washington, DC, ITMC can provide research and documentation support in a more effective and economical manner than in-house staff of most other businesses.

Bert can be reached by phone at 703-352-0962 or by e-mail at tradestar@
juno.com








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Avoid Domain Name Conflicts from the Start

by Bert J.E. van Gils
International Business Attorney




With the advent of the Internet and the World Wide Web, a new world of communication has arrived. Firms of all sizes can now communicate, market and advertise to-- literally-- a world wide market. There are estimates of there being nearly 40 million people who have access to the Internet with multitudes more coming on line each year. With a web page, a firm has the potential to reach all of them.

The Domain Name You Choose
Can Have Long-Term Effects

A domain name is a business' address on the information super highway. It is akin to an exit sign on an interstate, a telephone number, and a store front billboard all rolled into one. In many cases, it is part of a company's image consider, for example, -- McDonald's.com. Imagine the effect upon a firm after leading countless purchasers to its "store front", that one day, consumers going to the domain name address expecting to find the business find only an "empty lot". What are they to think? This is the effect of suddenly being barred from using a domain name and it occurs with shocking ease and frequency. Fortunately, with planning, this is largely preventable. However, as important as a domain name and web page can be to a company's image and marketing strategy, most firms do not take adequate protective measures.

Technology is Outpacing the Legal System

The pit fall with domain names is another example of technology outpacing the legal system's ability to cope with some of its effects. When you obtain and use a domain name, you gain access to potential customers world wide. Therefore, there is increased risk of conflicting with another business using a name which is the same or confusingly similar. In the past, two firms, selling the same product to customers in different geographical areas, has usually not caused a problem. When you advertise with a web page however, there is a greater possibility of transgressing on another firm's territory and its rights acquired under the common law or the legislated fair competition law of the state where it conducts business.

Trade Marks and Service Marks Are Important to Consider

Most of the immediate problems for domain name users however, come from challenges by those with trade marks and service marks which are registered with the federal government or with a foreign nation. Trade marks are words, symbols or logos, colors, or even scents used to indicate or identify a particular source of a product, while service marks indicate or identify the source of services. In the United States, you may successfully apply to register a mark if you have used it in interstate commerce or if you have a bona fide intention to use the mark in interstate commerce.

Relatively swift consequences resulting from the conflict between trade or service marks and domain names can arise from the implementation of the present Domain Name dispute policy of Network Solutions, Inc.("NSI"). Under a contract with the National Science Foundation, NSI of Herndon, Virginia has been responsible for registering domain names as the exclusive administrator of the Internet Network Information Center ("InterNIC") since 1993.

Upon registering a domain name, you represent that to the best of your knowledge, the selected name does not interfere with or infringe upon the rights of any other party. There is no expressed standard, in the policy, regarding what is "the best of an applicant's knowledge" nor any other due diligence requirements. Upon receiving a complaint from a third party with proof that it has notified you of the conflict and holds a service or trade mark registered with the principal registrar of the United States or a foreign nation, NSI will check the activation date of your domain name. If the date your domain name was activated is not prior to the earlier of the date the third party complainant registered its mark or the date of its first actual use of the mark in commerce and if you can not submit proof of your own federal or principal foreign mark registration which is earlier than the date of the notice of complaint you have received from the complainant , you have choices to make, none of which are free of expense.

What to Do

You may voluntarily relinquish the name. Alternatively, if you choose to dispute the complaint you can, by carefully following NSI's instructions, obtain a second domain name and use the original domain name and the alternate name simultaneously for a period of ninety days. After ninety days, the disputed domain name will be placed "on hold" with no party being able to use it pending the outcome of the dispute. This option at least gives you 90 days to "change your store front" and notify as many customers and potential customers as possible. As a practical measure, marketing and other materials with the domain name on it would have to be altered or held in abeyance indefinitely while the domain name is on hold. Additionally, you may choose to be more assertive in defending your right to use the domain name and sue the complainant. Upon receipt of a file-stamped copy of the law suit, NSC will not place the domain name on hold but will deposit the name with the registry of the court and follow the court's instructions. If you fail to act after receiving notice from NSC about the complaint, the domain name will be placed on hold after thirty days.

The NSC Domain name dispute policy gives expanded and swifter remedies to trade or service mark holders than is available through traditional legal recourse. Under the U.S. trade mark regime, more than one party can register the same name if they are not using the name to identify products in the same business classification. If another firm is using the same name as another in a competing business the traditional remedy would be the threat or the instigation of a law suit or an injunctive remedy would have to be sought. Under traditional legal principles, the party seeking the injunction has a heavy burden of proof. In most states, a party must show the
    1. likelihood of success on the merits of the underlying case;

    2. the possibility of irreparable injury;

    3. that it would be more inconvenienced than the other party if the injunction is not granted; and that the remedy afforded by prevailing in a traditional law suit would be inadequate.


By contrast, under the NSC dispute policy, a holder of trade or service mark need not be in the same business in order to lodge a complaint against your use of a domain name. Second, the complainant does not need to invest the time and expense of going to court and prove the elements necessary for injunctive relief. It need only send a complaint letter to you and NSC and you face the possibility of being barred from using your established domain name. No additional feeling of security arrives with the realization that NSC may change its dispute policy upon thirty days notice being posted on its Internet site at ftp://rs.internic.net/policy/internic.domain.policy.

Much Controversy Over
NSC Domain Name Dispute Policy

There is a flurry of controversy and writing about NSC domain name dispute policy. What businesses should realize however, is that preventable measures are readily available. Even without the specter of the NSC dispute policy, you should avoid being vulnerable to an action for infringement. By using the Internet to access customers, precaution should be taken on an international level. Aside from the expense and consequences of litigation, business damages may result such as damage to image and reputation, reprinting materials and scuttling marketing campaigns.

Choose Your Domain Name Carefully

The choice of a domain name should be planned as carefully as every other aspect of the business. The foundation should be carefully constructed. Competent professionals who can conduct name searches on are inexpensive compared to possible consequences of dealing with a complaint of infringement. When appropriate, it may be wise to consider protection and rights acquired by service or trade mark registration. Protections may be much more cost effective and easier than you presently believe.

Copyright © 1997 Bert J.E. van Gils

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