DO YOU OWN YOUR NAME IN CYBERSPACE?
   
   Last edited 27-Dec-1995
   
   Doing Business on the Internet
   
   Many articles have been written recently about the Internet and the
   potential it provides for business. Yet the Internet presents a unique
   "digital" marketplace which is very different from the "real world."
   The Internet is a "network of networks." Although the number of actual
   users is a subject of intense debate, most experts believe that twenty
   to thirty million people worldwide have access to the Internet. It is
   not like America Online, Prodigy or CompuServe. These services are
   "closed" and to access their features you need to "join" them. The
   Internet is open to all and has no central authority which governs it.
   Computer networks from universities, companies, and government
   agencies join the "Internet" by agreeing to adopt certain transfer
   protocols, pay certain fees and to carry the messages of the other
   networks.
   
   The first challenge for your company in doing business on the Internet
   is being able to identify itself. Unlike a "location" in the real
   world, you cannot hang out a sign on the Internet. In this electronic
   environment you are identified by your "domain" name ("gcwf.com" is
   the Gray Cary Ware & Freidenrich domain name, the law firm of the
   author). The fact that you have incorporated under a name or even that
   you have filed a trademark application does not automatically permit
   you to use that name on the Internet. Most domain names in the United
   States are "registered" by a non-profit agency called InterNIC.
   InterNIC is run by Network Solutions, Inc. (NSI), a company in Herndon
   Virginia. Early in the summer of 1994, the Washington Post reported
   that over 17,000 ".com" names (the "com" suffix indicates commercial
   entities; other frequently seen suffixes include "org" for
   organization and "edu" for educational institutions) have already been
   registered. More recently, the estimate of registered ".com" names has
   increased to over 60,000. The registrations in 1994 included
   "coke.com" and "nasdaq.com," although these domain names were not
   "registered," respectively, by Coca-Cola, Inc. and NASDAQ (the parties
   that have rights to these trademarks in the "real world").
   
   Your full address will also include a personal identifier. The full
   email address of the author is "mradcliffe@gcwf.com." The domain name
   is a critical asset for your company because it is how your customers
   and potential customers will identify and contact you.
   
   Subject to the new domain name policy (described below), domain names
   are registered on a "first come, first served" basis so long as you
   have an Internet Protocol address. Generally, businesses have their
   Internet access providers (such as Netcom Online Services Company or
   Pipeline, Inc.) register their domain name. If you want to contact
   InterNIC directly to register the domain name, you can contact
   InterNIC at 703-742-4777 (fax: 703-742-4811) or email at
   hostmaster@rs.internic.net (remember you must have an Internet
   Protocol address). In early March of 1995, the backlog was four weeks
   and they had 4,800 applications pending. InterNIC has promised to
   reduce the delays based on funding from its recent imposition of a
   fee. You can also search InterNIC files by FTP to rs.internic.net and
   type "whosis" at the prompt. NSI does not perform a search to
   determine if the other parties are using a domain name as a trademark
   or a tradename.
   
   The potential for problems is clear. For example, Princeton Review, a
   well-known provider of training for standardized tests, registered two
   domain names: "review.com" and "kaplan.com." Kaplan Education Centers
   is the name of their most important competitor. When Kaplan Education
   Centers went to register kaplan.com as an Internet address it found
   that it was blocked by Princeton's registration. An arbitrator gave
   the domain name back to Kaplan Education Centers.
   
   Music Television has also found itself in a dispute over the use of
   the "MTV" domain name by one of its vjs. MTV is now claiming that they
   own rights to the MTV domain name. In a more dramatic example, a
   reporter for Wired magazine, Joshua Quittner, registered
   "mcdonalds.com." Initially, McDonalds Corporation did not respond to
   his inquiries. However, they eventually complained to InterNIC about
   granting the domain name to Quittner. Subsequently, Quittner and
   McDonalds settled the dispute and Quittner assigned the domain name
   back to McDonalds.
   
   Moreover, the legal status of domain names is uncertain: are they like
   trademarks, a source of origin or identity and, thus, capable of being
   protected by trademark law and owned, or are they more like street
   addresses and, thus, generally not capable of being protected by
   trademark law or owned? Although several lawsuits have been filed and
   settled, no court has decided this issue. Last year, Quittner found
   that only 33% of the Fortune 500 companies had registered their names
   with InterNIC. However, another 14% of the names of Fortune 500
   companies were registered by unrelated third parties as domain names.
   
   On July 28, 1995, NSI, the Domain Name Registrar, announced a domain
   name policy due to the increasing number of legal disputes involving
   domain names and trademarks. The policy was amended effective November
   23, 1995. First and foremost, the policy confirms the basic "first
   come, first served" rule with respect to the registration of domain
   names. No one needs to own a servicemark or trademark to register a
   domain name. No domain name registrant will be challenged unless and
   until a third party complains to NSI and supplies appropriate evidence
   of ownership of a trademark that is identical to the challenged domain
   name.
   
   Recognizing, however, that disputes will occur, NSI's policy has the
   following procedures:
   
     (1) Domain names are assigned on a "first come, first served" basis.
     The policy will apply only in situations where servicemark or
     trademark infringement is alleged, and backed up by proof of
     ownership of a servicemark or trademark registered with the federal
     government or a foreign government by the complaining party where
     the first use of the trademark or the effcetive date of registration
     is earlier that the first use of the domain name. Challenges to
     domain names based on other legal grounds need to be settled in
     court.
     
     (2) In cases where the complainant can prove that it owns a "valid
     and subsisting" registered servicemark or trademark in any country
     where the first us eof the trademark or the effective date of
     registration is earlier than the first use of the domain name and
     the domain name registrant does not have such proof, the domain name
     registrant will be allowed a reasonable period of time to transition
     to a new name before the disputed domain name is placed on "hold".
     The disputed domain name will not be used by anyone until the proper
     legal authority directs reassignment of the name, which may be to
     either party in the dispute. This section of the policy is meant to
     discourage "pirates" who register the trademarks or servicemarks of
     other parties.
     
     (3) If both the domain name registrant and the complainant possess a
     registered servicemark or trademark to the same name, then NSI will
     allow the domain name holder to continue using the disputed domain
     name, so long as the domain name registrant protects NSI from the
     costs and possible liability of a lawsuit.
     
   NSI does not arbitrate or adjudicate disputes involving possible
   violations of U.S. or foreign law. Those matters appropriately belong
   in the courts, which have yet to rule on the specific issues presented
   by conflicts between domain names and trademarks. NSI has sought to
   preserve the open and accessible nature of the Internet, while
   respecting the prominent role played by servicemarks and trademarks.
   
   NSI states that it intends to refine the policy over time and welcomes
   all constructive comments and suggestions. The policy can be found at
   ftp://rs.internic.net/policy/internic/domain-4.txt. Comments may be
   sent to the domain-policy@internic.net list. To subscribe, send e-mail
   to domain-policy-request @internic-net with "subscribe domain-policy"
   in the message body.
   
   InterNIC announced on September 13, 1995 that NSF would not continue
   to fund domain registration and that InterNIC would start charging
   fees for registration. InterNIC is imposing a $100 fee for registering
   domain names. The initial registration lasts for two years. In
   addition, all new registrants and current owners of domain names must
   pay $50 per year to maintain the registration of a domain name.
   Special rules apply for educational and governmental institutions
   which have "edu" or "gov" domains. The full text of the policy can be
   found at ftp://rs.internic.net/policy/internic/domain-3.txt.
   
   The most important first step that your company can take to do
   business on the Internet is to register its company name (and perhaps
   some of its important trademarks) as domain names.
   
   
   
   Mark F. Radcliffe is a partner in the Palo Alto office of Gray Cary
   Ware & Freidenrich, the eighth largest law firm in California. He
   represents high technology companies in their financing and licensing
   transactions. He is a graduate of Harvard Law School and is the
   co-author of the Multimedia Law Handbook, a book describing legal
   issues in multimedia for non-lawyers. It can be ordered by calling
   800.523.3721.
   
   
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   This article is a publication of Gray Cary Ware & Freidenrich and
   should not be construed as legal advice or legal opinion on any
   specific facts or circumstances. The contents are intended for general
   information purposes only, and you are urged to consult your own
   lawyer concerning your own situation and any specific legal questions
   you may have.
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