August 26, 1999 2:05 PM PDT

Domain name dispute policy approved

SANTIAGO, Chile--The nonprofit organization that oversees the Net's core technical functions adopted a policy today to settle squabbles over ownership of Internet domain names.

As expected, the Clinton administration-backed Internet Corporation for Assigned Names and Numbers (ICANN) approved a policy requiring that domain-name registrants submit to third-party arbitration if they are accused of registering a name in "bad faith," such as garnering a name for the sole purpose of trying to resell it to an offline trademark holder.

Currently, Network Solutions (NSI), the dominant registrar of domain names, places names on hold when two parties cannot settle a dispute over a name. Critics said the practice favors big businesses and others who can't afford to file costly lawsuits seeking ownership.

Calling the new plan "quicker, easier, and cheaper," Esther Dyson, chair of the ICANN interim board, said, "The major benefit of the dispute resolution policy is that people who register domain names--businesses or individuals--will have a much clearer idea of what their rights are."

The decision affects fights over Internet addresses that end in ".com," ".net," and ".org," which are the real estate upon which businesses and personal Web sites are built. Domain names are crucial to the success of Web sites because they are the means by which Net users find information, services, and products.

Fights over domain names have been an ongoing problem as individuals and businesses have pushed for the name they want. For example, while there can be any number of stores selling lawnmowers in the physical world, there can be only one "www.lawnmower.com" on the Web.

Companies have relied on their trademarks and the notoriety of their brands to give them a leg up when disputes have arisen over Net names. Lawmakers and organizations have tried to promote rules that would curb the practice of "cybersquatting," in which speculators register scores of domain names with the hope that they can resell them to top bidders.

Fighting for names
To the chagrin of many trademark owners, domains such as ".com" historically have been given out on a first-come, first-served basis, triggering challenges to the use of numerous names. Although most squabbles are between companies, the dispute policy also affects individuals who use Net names to express views. For example, the Church of Scientology has waged battles against publishers of sites such as "scientology-kills.net," a domain name the church said violated its trademarks.

ICANN's new policy doesn't address the most controversial issue surrounding domain name disputes: a World Intellectual Property Organization (WIPO) proposal to give special rights to "famous" trademark holders.

But the policy does aim to curb lawsuits and to give average registrants a more balanced forum for negotiating the rights to a name. The cost of the process will likely be split among the parties, although it is unclear whether there will be a price cap. An ICANN advisory group suggested keeping the cost under $900.

ICANN was recognized by the U.S. government to manage the Net address system and to foster competition to NSI. The more than 60 registries accredited by ICANN will have to implement the policy.

NSI's backing of the new policy is important because it is the market leader, with more than 5 million Net name registrants. NSI signed off on the proposal, which is a combination of drafts by WIPO, America Online, and Register.com, two of the companies positioned to compete with NSI now that it has been forced to open up its market to new players.

"Any measure that ensures all registrars will be following a sound and universal domain dispute resolution policy is good news for this market, especially when the role of the registrars in resolving disputes is minimized to the greatest extent possible," said Shonna Keogan, a spokeswoman for Register.com.

ICANN interim president Mike Roberts will appoint a drafting group made up of intellectual property owners, individuals, domain name registrars, businesses, and noncommercial entities to work out some critical details in the dispute resolution policy over the next 45 days.

Dealing with "cybersquatting"
Topping the list is how to define "cybersquatting."

Another issue that has to be resolved is how to prevent powerful companies from intimidating domain name holders into forfeiting their registrations, a scenario observers call "reverse domain-name hijacking."

Moreover, the definition of "bad faith" is still being mulled. For example, the resolution adopted by ICANN notes that use of a domain name could be protected if the registrant is "making legitimate noncommercial or fair use of [a] mark, without the intent to misleadingly divert consumers for commercial gain."

Such a situation arose earlier this year when comic book publisher Archie Comics fought the parents of a toddler over the "Veronica.org" domain, claiming the site infringed on its trademark for its Veronica character. The company later dropped the issue when the fight gained national attention.

Those who anticipated a bigger clash over the dispute policy are hoping the drafting group will smooth out definitions and keep things equally balanced between private registrants and corporations.

"There is a spirit of cooperation at this meeting that I didn't expect," said Kathryn Kleiman, of the Association for Computing Machinery's Internet Governance Committee. "If it goes forward this way, and strong people are chosen for the drafting team, something good will come out."

Giving Net users a voice
In addition to the dispute policy, the ICANN board pushed forward proposals to broaden its delegation.

The board recognized a noncommercial domain name holders constituency, which will affect policy and help vote in new board members. ICANN also adopted a plan to create an at-large membership made up of at least 5,000 Net users who will vote on ICANN's policies.

In addition, ICANN decided to add a layer between itself and the membership in the form of a council comprised of up to 18 people. ICANN said it made the controversial move to limit the possibility of at-large members suing the California-based nonprofit company over its actions.

But some argue that the council will further remove individuals from ICANN's process.

"ICANN's management is disenfranchising the stakeholders in the Net," said Theresa Amato, of Ralph Nader's Citizen Advisory Center. "It's a blatant maneuver to prevent at-large members from being able to hold ICANN accountable."

Under the resolution, by next July residents will elect five local council members, with the remaining seats elected globally by all ICANN at-large members. Based on the at-large membership input, council members will elect ICANN board members to replace the interim board currently in place.

In November, seven constituencies--including noncommercial domain name holders, technical standards bodies, and Net name registries--will vote in nine new board members.

With the replacement of the initial board not set to take place until sometime next year, the board also voted today to extend its term until September 30, 2000.

 

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