Internet: What's in a Domain Name? Self Regulation Comes to the Internet

April 1, 1999 Advisory

On July 1, 1997, President Clinton instructed the Secretary of Commerce to prepare to privatize the operation of the Internet. This hand-over (which is currently in progress) will be a major change in the behind-the-scenes operation of the Internet and could substantially alter the rights of its users and providers. Since its development by the U.S. military in the 1960's, the Internet has been operated under the supervision of the Departments of Defense and Commerce. As the Internet gained popularity through the 80's and 90's, these departments hoped that it would be self-regulating and took a laissez-faire approach to its operation. As such, they granted domain names on a first-come, first-serve basis (thus ignoring the potential for trademark infringement) and imposed very little standard on the structure of the names. They also established no rights to privacy (due in large part to the heightened scrutiny with which government action is analyzed when it affects freedom of speech). The proposed private domain name system, however, could effect change in each of these areas.

The new domain name system (DNS) is being designed and will be operated by the Internet Corporation for Assigned Numbers and Names (ICANN)o'a non-profit company incorporated in California. ICANN is composed of nineteen directors, nine of whom come from the international community. This structure is designed to regulate in a manner that recognizes the internationally ubiquitous nature of the Internet. So far, the structure seems to be workingoICANN recently established a consensus-seeking advisory organization to help develop policy recommendations. The organization is open to nearly all interested parties and is composed of, among other entities, members of WIPO (the World Intellectual Property Organization). ICANN and WIPO recently issued a proposal and a list of recommendations, respectively, for the new DNS.

Under ICANN's proposal, the job of issuing new domain names would be franchised to authorized "registrars." Registrars would perform this role in accordance with standards and using contracts designed by ICANN. Developed before WIPO's recommendations were known, ICANN's proposed contracts and standards already address many of WIPO's concerns: domain name holder responsible for data accuracy and trademark infringement, paper and electronic record of agreement maintained, holder agrees to certain jurisdictions in event of dispute, domain name not activated until payment is received, domain name active for limited term that must be reissued, what data would be required for issuance of a domain name, and that the data is open to the public.

Perhaps of more interest, however, is where the proposal and recommendations differ. ICANN's contract between registrar and holder requires that the holder submit to the jurisdiction of the registrar and/or the server to resolve trademark disputes. WIPO would have this jurisdiction include a mandatory, on-line administrative dispute resolution forum as the starting point of any dispute. Additionally, WIPO would establish a mechanism whereby exclusions could be obtained for certain famous and well-known marks. ICANN's proposal contains no such system. Finally, ICANN's contract between registrar and domain name holder would grant rights of ownership in certain information (including holder's name, postal and email addresses, and phone number) to the registrar. WIPO would restrict use of this data to resolving disputes and communications related to the transaction.

The trademark and privacy rights involved in the changes to the domain name system are of tremendous importance as commerce moves to the Internet. While it appears that ICANN's DNS falls short of some of WIPO's desires, it bears repeating that ICANN has not yet integrated the recommendations. ICANN's first attempt at a DNS consistent with world-consensus produced a system that met nearly all WIPO's concerns. As it now considers and hopefully integrates WIPO's recommendations, the new DNS should enable companies to protect their investments in their trademarks and other proprietary information.