Balancing the rights of trademark holders and registered web-domain owners is a complicated process. Understandably, trademark holders wish to protect their intellectual property rights and prevent cyber-squatters from acquiring valuable domain names for an illegitimate purpose. Conversely, domain owners argue that corporations should not be granted the automatic right to acquire any domain that can ultimately be associated with their business, regardless of how remote the association may be.

At a recent conference in New York, the Internet Corporation for Assigned Names and Numbers (ICANN) discussed the possibility of creating a centralized database (specifically referred to as an IP clearinghouse) of trademark owners. This approach would directly benefit corporations by making it an increasingly arduous process for prospective domain owners to acquire domain names that even remotely resemble the trademark of an established business. However, many corporations argue that the purpose of a centralized database is not to act as an absolute barrier to individuals who wish to register domains that contain trademarks. The idea is that a database of this sort would have the ability to preemptively highlight potential problems.

ICANN has recently come under more intense corporate pressure to adopt the IP clearinghouse approach since it has publicly declared its intention to grossly increase the number of internet domains (i.e. “.ca”) to be made available to the public. As new domain suffixes are created and introduced by ICANN, corporations/trademark holders worry that they will have no choice but to pay the exorbitantly high fees associated with registering various domain names in a defensive manner. By establishing a central database, an attempt to register a variant of someone else’s mark as one’s own domain would be automatically blocked unless that person/corporation could prove that they offered a product or service that was legitimately connected to the chosen domain.

Trademark holders and domain owners both agreed that the current practice of using arbitration hearings to settle these types of disputes is fundamentally flawed. This process is often unnecessarily costly, time-consuming and used in an inappropriate manner.

Domain owners claim that the trademark dispute process could easily be abused by large corporations to facilitate their acquisition of highly desirable web addresses that are in no way related to their business. An example of this would be Hearst’s unsuccessful attempt to challenge the website of a completely unrelated entity (www.esqwire.com) as an infringement of its trademark for Esquire magazine.

Balancing the interests of these two major constituents is no easy task. Therefore, ICANN must think strategically about how each party can best be accommodated prior to the implementation of a new system that has the potential to asymmetrically harm one of them beyond repair.

I can certainly understand why a corporate trademark holder would not want to make it easy for anyone else to piggyback off the hard-earned success that they have attained and communicated through their registered trademarks. However, I do believe that the protection and exclusivity granted to trademark holders must be subject to a limit. The line should be drawn where it is plainly obvious that a corporate trademark holder is using the protection and exclusivity that they have acquired for the purpose of hording and unduly restricting entry into various markets by potential competitors and non-competitors alike.

Posted in Domain Names, Internet, Trademarks