Testimony of Andrew J. Pincus

General Counsel

Department of Commerce

Before the

Subcommittee on Courts and Intellectual Property

House Committee on the Judiciary

July 28, 1999

Thank you for the opportunity to appear here today. I would like to review for you, very briefly, the history of the United State Government's involvement in the domain name system, especially as it relates to the interplay between domain names and intellectual property protection.

Before I begin that review, however, I want to articulate several principles that are an important part of the Administration's policy in this area.

• -It is imperative that intellectual property owners have the tools they need to enforce their rights in cyberspace.

• -We strongly support the development of appropriate mechanisms to deter actors who in bad faith register domain names to mislead consumers and wrongly capitalize on the good will of trademark owners.

• -Intellectual property owners should be active participants in the Internet Corporation for Assigned Names and Numbers (ICANN) process, and the ICANN process should take into account the needs of intellectual property owners in developing policies for the domain name system.

Background

Domain names are the familiar and easy-to-remember names for Internet computers (e.g.,

"www.ecommerce.gov"). They map to unique Internet Protocol (IP) numbers (e.g., 98.37.241.30) that serve as routing addresses on the Internet. The domain name system (DNS) translates Internet names into the IP numbers needed for transmission of information across the network.

Today's Internet is an outgrowth of U.S. Government investments in packet-switching technology and communications networks carried out under agreements with the Defense Advanced Research Projects Agency (DARPA), the National Science Foundation (NSF) and other U.S. research agencies. The Government encouraged bottom-up development of networking technologies through work at NSF, which established the NSFNET as a network for research and education. The NSFNET fostered a wide range of applications, and in 1992 the U.S. Congress gave the NSF statutory authority to commercialize the NSFNET, which formed the basis for today's Internet.

As a legacy, major components of the domain name system are still performed by or subject to agreements with agencies of the U.S. Government.

The domain name space is constructed as a hierarchy. It is divided into top-level domains (TLDs), with each TLD then divided into second-level domains (SLDs), and so on. More than 200 national, or country-code, TLDs (ccTLDs) are administered by their corresponding governments or by private entities with the appropriate national government's acquiescence. A small set of generic top-level domains (gTLDs) does not carry any national identifier, but denote the intended function of that portion of the domain space. For example, .com was established for commercial users, .org for not-for-profit organizations, and .net for network service providers. The registration and propagation of these key gTLDs are still performed by Network Solutions, Inc. (NSI), a Virginia-based company, under a continuation of some of the terms of its five-year cooperative agreement with NSF.

The Need for Change

From its origins as a U.S.-based research vehicle, the Internet has become an international medium for commerce, education and communication. So the traditional means of organizing its technical functions need to evolve as well. The pressures for change has come from many different quarters:

• -There is widespread dissatisfaction about the absence of competition in domain name registration.

• -The mechanisms for resolving conflict between trademark holders and domain name holders are expensive and cumbersome.

• -Without changes, a proliferation of lawsuits could lead to chaos as tribunals around the world apply the antitrust law and intellectual property law of their jurisdictions to the Internet.

• -Many commercial interests, staking their future on the successful growth of the Internet, want a more formal and robust management structure.

• -An increasing percentage of Internet users reside outside of the United States, and those stakeholders want a larger voice in Internet coordination.

• -As Internet names increasingly have commercial value, the decision to add new top-level domains cannot continue to be made on an ad hoc basis by entities or individuals that are not formally accountable to the Internet community.

The U.S. Government's Role in Promoting Change

On July 1, 1997, as part of the Administration's "Framework for Global Electronic

Commerce," President Clinton directed the Secretary of Commerce to privatize management of the domain name system in a manner that increases competition and promotes a contractually based self-regulatory regime to address potential conflicts between domain name usage and trademark laws on a global basis.

Accordingly, on July 2, 1997, the Department of Commerce issued a Request for Comments (RFC) on DNS administration, on behalf of an interagency working group previously formed to explore the appropriate future role of the U.S. Government in the DNS. The RFC solicited public input on issues relating to the overall framework of the DNS system, the creation of new top-level domains, policies for registrars, and trademark issues. During the comment period, over 430 comments were received, amounting to some 1500 pages. That RFC was followed by a January 30, 1998, proposal for comments issued by NTIA, the "Green Paper." Following the closure of the comment period, NTIA issued its Statement of Policy on the Management of Internet Names and Addresses (the White Paper). The White Paper called for the creation of a new, private, not-for-profit corporation responsible for coordinating specific DNS functions for the benefit of the Internet as a whole.

In response to the White Paper, private sector participants in a world-wide forum created the Internet Corporation for Assigned Names and Numbers (ICANN). In late November of last year, just eight months ago, the Department of Commerce enterered into a Memorandum of Understanding with ICANN to collaborate on the design, development, and testing of the mechanisms and processes needed to transition DNS management to the private sector.

Trademark Issues

"Whois" Database. The White Paper reflected most commenters' views that Internet users -- including trademark holders -- should have access to searchable databases of registered domain names that provide information necessary to contact a domain name registrant when a conflict arises between a trademark holder and a domain name holder. Specifically, the White Paper suggested that the following information should be available to anyone with access to the Internet:

• up-to-date registration and contact information;
• up-to-date and historical chain of registration information for the domain name;
• a mail address for service of process;
• the date of domain name registration;
• the date that any objection to the registration of the domain name is filed; and
• any other information determined by the new corporation to be reasonably necessary to resolve disputes between domain name registrants and trademark holders expeditiously.

Cybersquatting. Cybersquatting is the abusive registration of domain names by bad faith actors who seek to capitalize on the goodwill earned by trademark owners by hijacking Internet addresses. Domain names of successful businesses may be manipulated by predators who claim rights to use the domain names of well-known brands to exploit the goodwill that businesses have spent considerable years and financial investment creating. The predators who engage in this practice generally do so in order to mislead consumers who think that they are accessing the website of a reputable establishment, or to extort payment from the rightful trademark owner for the right to use their own name in online commerce.

The Department condemns cybersquatting as a deceptive and unfair practice and as an impediment to the potential presented by electronic commerce. We are interested in protecting the public from the acts of people or entities that foster fraud and deny rightful trademark owners the chance to establish an easily accessible online address.

For cyberspace to function as an effective commercial market, businesses must have confidence that their trademarks can be protected. On the other hand, management of the Internet must respond to the needs of the Internet community as a whole, and not trademark owners exclusively. Thus the White Paper recommended a transition that would maintain the rights trademark holders have in the physical world, ensure transparency, guarantee a dispute resolution mechanism with resort to a court system, and possibly add new top-level domains. Of course, all of this must occur during the transition to private sector coordination of domain names and at the same time that competition is being introduced into the provision of registration services.

The White Paper suggested that the new management entity should adopt a number of specific policies designed to reduce domain name speculation involving another party's trademarks and, in general, to reduce conflict between domain name registrants and trademark owners. The recommended policies include:

1) Domain registrants should pay registration fees at the time of registration or renewal and should 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.

2) Domain name registrants should 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. Registries and registrars should be required to abide by decisions of the administrative dispute resolution (ADR) system.

3) Domain name registrants should agree, at the time of registration or renewal, to abide by processes adopted by the new corporation that exclude, either pro-actively or retroactively, certain famous trademarks from being used as domain names (in one or more TLDs) except by the designated trademark holder.

4) Nothing in the domain name registration agreement or in the operation of the new corporation should limit the rights that can be asserted by a domain name registrant or trademark owner under national laws.

The White Paper referred a number of specific issues for further study by the World Intellectual Property Organization (WIPO). The White Paper suggested that mechanisms that allow for on-line dispute resolution could provide an inexpensive and efficient alternative to litigation for resolving disputes between trademark owners and domain name registrants. A swift dispute resolution process could provide for the temporary suspension of a domain name registration if an adversely affected trademark holder objects within a short time, e.g. 30 days, of the initial registration. The White Paper specifically recommended the dispute resolution process as an issue for study by WIPO.

The White Paper discussed the concern of trademark holders that domain name registrants in faraway places might infringe their rights with no convenient jurisdiction available in which the trademark owner could file suit to protect those rights. For example, at the time of registration, registrants could agree that, in the event of a trademark dispute involving the name registered, jurisdiction would lie where the registry is domiciled, where the registry database in maintained, or where the "A" root server is maintained. This issue of jurisdiction was also referred to WIPO for further study.

Trademark holders have also called for the creation of some mechanism for "clearing" trademarks, especially famous marks, across a range of gTLDs. Such mechanisms could reduce trademark conflict associated with the addition of new gTLDs. This issue was also referred to WIPO for further study.

The White Paper did not propose to establish a monolithic trademark dispute resolution process, but it did call for the establishment of minimum dispute resolution and other procedures related to trademark considerations. This issue was also referred to WIPO for study.

The White paper also proposed that a study be undertaken on the effects of adding new gTLDs and related dispute resolution procedures on trademark and intellectual property right holders.

WIPO completed its study of the issues referred to it by the White Paper on April 30, 1999. The process that produced the study included input from trademark and domain name holders and registries. The findings of this study were submitted to the board of ICANN and considered at its meeting in Berlin on May 25-27, 1999 (Berlin meeting).

The WIPO Report

In response to the request of the United States and other governments around the world, the World Intellectual Property Organization conducted the study called for in the White Paper. The WIPO Final Report of the WIPO Internet Domain Name Process (Report), issued in April of this year, made a number of recommendations related to the trademark issues identified in the White Paper. Those recommendations start with a series of "best practices" for registration authorities. The adoption of improved standard practices will very likely reduce the problems that exist between trademark owners and domain name registrants.

In particular, the collection and availability of accurate and reliable contact information for the domain name holder is essential if the system is to provide protection for trademarks. Contact details provide the principal means by which intellectual property owners can start the process to enforce their rights.

The Report recommended that where the contact details were inaccurate or unreliable so that the trademark owner could not contact the domain name holder, then the trademark holder should have the right to serve notice on the responsible registrar. If the registrar then verifies that the domain name holder cannot be contacted, the registrar should be able to cancel the domain name.

In addition, the Report listed the contact details that should be provided by the domain name applicants, e.g. name, postal address, e-mail address, voice telephone number, and fax number. The Report also recommended that such information be made readily available to the public.

As to the issue of an administrative dispute resolution procedure, the Report recommended to ICANN that 1) all new domain name holders be made subject to the dispute resolution process, 2) the scope of any administrative procedure be limited to cases of bad faith and abusive registration, 3) the determinations made in the process would be limited to orders to cancel or transfer the domain name and allocate the costs of the procedure, 4) decisions could be appealed to national courts, and 5) the administrative procedure be done online, as cheaply and quickly as would be consistent with safeguarding all of the rights involved.

As to the possible exclusion from the domain space for famous or well-known trademarks, the WIPO Report recommended that a mechanism should be introduced whereby the owner of a well-known or famous mark could obtain an exclusion in some or all gTLDs for the mark if the mark is famous or well-known on a widespread geographical basis and across different classes of goods or services.

Finally, the WIPO Report recommended that any new gTLDs be introduced in a slow and controlled manner, after introduction of new practices and in a manner that will allow the experience with the new gTLDs to be monitored and evaluated. ICANN referred the recommendations in the Report concerning new gTLDs to the Domain Name Supporting Organization (DNSO) for recommendations on the topic to be submitted to the ICANN Board as the earliest practicable time after the August 24-26 Board meeting.

ICANN Activities

On February 8, 1999, ICANN posted for public comment a set of guidelines to be followed in accrediting new registrars to provide registration services in the generic top level domains (gTLDs) of .com, .net, and .org. Although these so-called Accreditation Guidelines preceded the release of the final WIPO report in late April, ICANN anticipated and incorporated a number of its recommendations. Thus, by the time the Report was issued, ICANN had, for the most part, adopted the WIPO recommendations concerning best practices for registrars. ICANN has put into place some procedures to protect the privacy of domain name holders where requested.

ICANN embraced WIPO's call for an administrative dispute resolution procedure for cases of abusive registrations in violations of another party's intellectual property rights. The ICANN Board in May asked the DNSO to begin the work necessary to implement these recommendations, and to report back at the next ICANN meeting in late August. In the meanwhile, ICANN accredited registrars have been working to develop a voluntary, uniform dispute resolution policy that will incorporate the WIPO recommendations on cybersquatting.

At its Berlin meeting in May, ICANN also referred the recommendations in the WIPO Report concerning exclusions for famous or well-known marks to the DNSO for further study and development.

Conclusion

In the few short months that ICANN has been in existence, it has addressed a number of issues of significant concern to intellectual property owners. Of particular importance -- to both the trademark community and the copyright community -- is the obligation of all ICANN accredited registrars to collect and make publicly available reliable and up-to-date contact information for domain name registrants. This is backed up by a required provision in the registration contract between registrars and registrants that provides for termination of the registration in the event that the registrant fails to respond to an inquiry about the accuracy of any contact information. In addition, ICANN has taken the simple, but potentially very powerful, step of requiring pre-payment for domain names. If properly implemented, this policy should substantially reduce problems with cybersquatting.

ICANN's Domain Name Supporting Organization is working to develop procedures to implement the WIPO- recommended administrative dispute resolution procedure for cybersquatting. The DNSO is also expected to study further the recommendations related to famous marks as part of its work on possible new generic top-level domains.

As new competitors begin to provide domain name registration services, we have every expectation that ICANN and the competing registrars will continue to be sensitive and responsive to the need of trademark holders to protect their intellectual property. The voluntary undertaking by ICANN accredited registrars to develop a uniform dispute resolution policy is a good indication of the ways in which the Internet community can come together to address important issues such as the protection of intellectual property rights in the domain name system.

Thank you, Mr. Chairman. I would be happy to answer any questions the Committee may have.