Are You The Master of Your Domain?

I. Introduction

The hottest commodity in Cyberspace is the domain name. Between 1996 and 1999, the number of domain names registered in the United States exploded from 1 million to more than 6 million. As a result, more than 97% of the words in Webster’s Dictionary have been registered. Given the critical importance that a catchy, memorable domain name has for the success of a website, some people have been able to make significant sums of money by selling domain names. For example, the domain name “business.com” sold for $7.5 million in 1999, and “America.com” is currently on the auction block for a minimum bid of $10 million.

These facts demonstrate a momentous increase in competition for securing the right domain. Noticing this trend, many entrepreneurs have taken advantage of the domain name boom. These entrepreneurs fall into two categories—domain name traders and cybersquatters. Domain name traders typically register generic names, such as business.com or wine.com, that were not at the time of registration or sale trademarks owned by third parties. Domain name traders seek to sell their registered domains to other Internet entrepreneurs seeking to build and identify their Internet businesses.

Cybersquatters, on the other hand, routinely register and hold hostage domain names that are either identical or confusingly similar to trademarks owned by third parties, in an effort to block a trademark owner from using the domain until the owner agrees to pay what is often an exorbitant sum for the domain. The explosion of cybersquatters has spawned a significant amount of trademark infringement litigation.

II. Protection & Enforcement of Trademark Rights Online

It is a truism that the law develops much slower than technology. When widespread commercial use of the Internet began, there existed no laws or policies that specifically addressed Internet legal issues. With the Internet developing at warp speed, and new legal issues seemingly being raised on a weekly basis, lawmakers, regulators, and the courts have struggled with trying to apply laws which are not adapted to the technological marvels of the Internet.

In 1999, two new mechanisms were implemented to provide trademark owners with improved methods for protecting and enforcing their trademark rights in the context of domain name disputes. On October 24, 1999, the Internet Corporation for Assigned Names and Numbers (“ICANN”), a non-profit corporation which administers the domain name system, implemented its Uniform Domain Name Dispute Resolution Policy (“UDRP”). In addition, on November 29, 1999, the Anticybersquatting Consumer Protection Act (“ACPA”), a U.S. federal law, took effect.