The Domain Name Game

By Jason Shpik
Posted Tuesday, June 15, 2004

The Widgets Corporation decides to start a Web site and naturally wants to name it Widgets.Com. But much to the consternation of its management, it discovers there already is a Widgets.com. Someone else has registered the "domain name" and Widgets is stuck.
It happens every day as the battle for the best domain names grows. But what in fact is a domain name and what are the issues surrounding their use?
Domain names are simply the addresses of the Internet. Without the domain name, a computer would have no idea where to look for a Web page, and e-mail routers would not be able to send e-mail.
Domain names are divided into hierarchies. The top-level of the hierarchy appears after the last dot in the domain name. In "microsoft.com", the top level domain name is .com. The .com name is the most common top-level domain name, and is used to indicate that the domain name is owned by a commercial enterprise.
The disputes that arise over domain names involve "second level" domain names directly to the left of the top-level domain name. For instance, in the address "(www.microsoft.com)," the second-level domain name is "Microsoft."
Two identical second-level domain names cannot coexist under the same top-level domain. For example, even though both the Delta Faucet Company and Delta Airlines would like the "delta.com" domain name, only one Delta company can have delta.com. Unfortunately for both Delta Faucet Company and Delta Airlines, that Delta company is Delta Financial of Woodbury, New York. Instead of using delta.com, Delta Airlines uses deltaairlines.com, while Delta Faucet Company uses deltafaucet.com.
In order to register a second-level domain name under a top-level domain, a request must be made to the organization that has the power to assign names for that top-level domain. Prior to December 1999, a company called Network Solutions Inc. ("NSI") was almost solely responsible for the registration of second level domain names for the most popular top-level domains, including .com, .net and .org.
As of December 1999, the ability to register.com, .net and .org domain names was spread out among many registrars. These registrars are accredited by The Internet Corporation for Assigned Names and Numbers (or "ICANN"), a non-profit corporation formed specifically to control Internet domain name management and similar functions.
NSI continues to assign domain names, but now they are just one of many domain name registrars. All of these registrars assign names on a first-come, first-served basis, and do not do any checking before assigning a new domain name.
Because of the increasing popularity of the Internet, companies have realized that having a domain name that is the same as their company name or the name of one of their products can be an extremely valuable part of establishing an Internet presence.
When a company finds that the domain name corresponding to their corporate name or product trademark is owned by someone else, the company can either choose a different name or fight to get the domain name back from its current owners.
When a dispute over a domain name occurs, the parties can always turn to the courts. While courts and judges have the authority to award control and ownership over domain names, the judicial process is notoriously slow. Consequently, many parties have avoided the courts and turned to the domain name dispute policies of the domain name registrars.
In response to intense lobbying from trademark owners and famous individuals, Congress passed the Anticyber-squatting Consumer Protection Act in November of 1999. This act made it easier for individuals and companies to take over domain names that are confusingly similar to their names or valid trademarks. To do so, however, they must establish that the domain name holder acted in bad faith.
One portion of this Act related to famous individuals. This portion allows individuals to file a civil action against anyone who registers their name as a second level domain name for the purpose of selling the domain name for a profit.
The more general portion of the statute protects companies against persons who, in bad faith, register a domain name that is the same or confusingly similar to an existing trademark.

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