Policy statement

ICC Statement on trademarks and the Internet
Prepared by the Commission on Intellectual and Industrial Property - Standing Group on Trademarks, 15 May 1997

Domain names
The Internet is becoming an important means of communication and of trading for businesses. For both these activities, the issue of identification is an crucial one: the correspondent must know what the source of the communication is and with whom he is dealing. Users of the Internet must also have the means to easily find the entity or person with whom they wish to deal or on whom they wish to find information.

Currently, the only means to locate, identify and communicate with a correspondent on the Internet is through his e-mail and Website addresses. These "addresses" consist of domain names, which are user-friendly substitutes for codes used to route data. Domain names are not "addresses" in the t raditional sense as they do not necessarily indicate the geographical location of the correspondent, but are principally used as identifiers of persons and entities.

It is therefore important that domain names genuinely indicate the true identity of the domain name holder to reduce the scope for fraud and misrepresentation and for confusion by the public. Entities which wish to be present on the Internet should also be able to have a domain name from which the public can easily identify them.

The domain names system should facilitate and increase confidence in Internet transactions, for users as well as commercial operators.

The ICC suggests that it should have the following characteristics:

1. The system should take into account the interest of all parties concerned and its evolution should benefit from open considered discussions between all such parties.

The ICC therefore welcomes the acknowledgement in the February 1997 report of the International Ad Hoc Committee (IAHC) that "any administration, use or evolution of the Internet Top Level Domain space [... ] should be carried out in an open and public manner" and that "the interests of current and future stakeholders in the Internet name space should be represented". It also welcomes the participation of the World Intellectual Property Organisation (WIPO) in developing a domain name system which takes into account the interests of intellectual property owners.

The integration of intellectual property considerations into domain name policy should not be limited to registered trademark rights but also take into account all other relevant types of intellectual property such as unregistered trademarks, tradenames, company names and other distinctive signs.

2. As the Internet is an intrinsically global system of communication, there must be international coherence between the different systems of allocation of domain names.

This is of immediate importance to ensure consistency in the international system and to facilitate use. Trademark concerns should be taken into account in all national and international domain name registration systems.

3. The system should allow persons or entities with intellectual property rights, trademarks, tradenames or other distinctive signs, to intervene as early as possible to protect their interests.

Early publication should therefore be made of domain name applications to give intellectual property right holders early warning of possible infringement.

Rapid and cost-effective dispute settlement procedures for different parties claiming rights to use a domain name should also be available as early in the process as possible. However, decisions taken under administrative procedures, such as those recommended by the IAHC, should be limited to the question of whether a domain name should be registered, and not pre-empt decisions by courts on the validity and opposability of intellectual property rights. Such administrative decisions should be subject to judicial review, and parties should not be precluded from choosing to resolve their disputes in national courts or through other dispute settlement procedur es, such as arbitration. The ICC, in view of its long experience in the field of dispute settlement, would also be pleased to contribute its views to work on the guidelines for the dispute settlement procedures concerning domain names.

4. The system should be sufficiently flexible to allow different legitimate claimants to the
same mark, name or sign to exploit this as a domain name, while ensuring the means to differentiate between them.

The same mark may be used legitimately by different entities in different countries and for different products or services. Various proposals have been made to establish a system with different levels of domain names corresponding to different categories of activities. However, care should be taken not to multiply the creation of additional levels or categories of domain names in the absence of a coherent international framework. This will only add to the confusion of users and make it more difficult for trademark owners to monitor the use of their marks or signs as domain names. A possible alternative would be to encourage the use of variations of domain names based on the same trademark eg. tmarkcomputer.com and tmarkbank.com.

5. Search systems allowing users to locate sites without relying on domain names should be further developed to reduce reliance on domain names as identifiers.

Practices which distort and confuse searches should be discouraged and site owners should be required to ensure that enough information is provided on the home page of their site to help users identify genuine sites.

Comments on IAHC Report

The International Ad Hoc Committee (IAHC) that was set up to make recommendations for reorganising the current system of domain name allocation issued its final report on 4 February 1997. The ICC commends the report's attempt to address most of the above issues, in particular those concerning intellectual property right holders, and to achieve a balance between different stakeholders in the system.

However, the recommended addition of new generic top level domains may add to the confusion and difficulty of finding entities on the Internet especially as new gTLDs like ".firm" and ".store" overlap heavily with ".com".

While the ICC welcomes the initiative to produce international guidelines to promote coherence between the different systems, measures should be taken to ensure that the guidelines are followed by all national systems, so that the objective is attained. Intellectual property considerations should be taken into account in all national and international systems.

One of the solutions recommended by the IAHC is to establish a separate space for trademarks where applicants could only obtain a domain name after demonstrating proof of intellectual property rights over that name. The IAHC report suggests that this be established at both national and international levels and that the international trademark related domain space could be administered by WIPO. This separate trademark name space is intended to provide users with an assurance that trademarks used as domain names in this space do originate from the trademark holder, and its suggested structure would allow different holders of the same trademark to have equal rights to use this mark as a domain na me.

The ICC agrees with the conclusion of the WIPO Group of Consultants in February that a separate space for trademarks is not the right solution to alleviate problems of conflicts between domain names and trademark rights.

If trademark clearance is limited to domain names in the trademark domain name space, as proposed in the IAHC report, this separate domain space will not alleviate problems of trademark infringement in other domain name spaces such as .com, currently one of the most heavily used, which trademark holders would have to continue to police. However, if trademark clearance is required for other domain name spaces, a separate trademark name space would be unnecessary and would only create duplication.

The creation of a new domain name space for trademarks with rigourous registration procedures almost equivalent to those of trademark registries is therefore unjustified. It would be preferable to reinforce controls on existing domain name registries to reduce the possibilities of infringement and allow more rapid and cheaper procedures to challenge unauthorised registrations of trademarks, tradenames and other distinctive signs as domain names.

Comments on WIPO memorandum
The ICC supports any work that can be done by WIPO to harmonize the approach to issues arising out of the use of trademarks on the Internet at the international level and welcomes its initiative to convene a Consultative Meeting on these issues in May 1997.

The ICC offers the following comments on the issues proposed for discussion in the WIPO memorandum of 26 March 1997.

Trademark databases
Although it will not be able to include unregistered trademarks and other distinctive signs, a world-wide database of registered marks would still be useful in allowing domain names to be cross-checked against at least most registered trademarks. Such a database could conceivably also be useful for other purposes unrelated to domain names.

Trademark directories
As stated above, the ICC agrees that the institution of a universal directory or other search systems would help alleviate pressure on the domain name system. However, this directory should not be limited to trademarks but should allow searches to be made according to all relevant identifying criteria e.g. company names, tradenames, types of activity or product etc.

Pre-screening of domain name applications
Pre-screening of domain name applications would be useful in alerting intellectual property right holders, domain name applicants and registries to possible conflicts.

Intellectual property rights in domain names
The ICC questions the necessity for creating new intellectual property rights in domain names. Domain names should rather be considered as a new type of use for existing forms of intellectual property, such as trademarks, tradenames and other distinctive signs, and subject to their ordinary rules. If no strong arguments are put forward to justify the introduction of sui generis rights for domain names, it would be preferable to examine whether rules concerning existing intellectual property rights have to be modified to take into account use as a domain names, rather than creating a new category of intellectual property rights.

Other issues
Although trademark problems caused by cross-border trade and communication are not new, these are greatly exacerbated by the use of trademarks on the Internet. The existing territorial system of trademark registrations roughly corresponds to geographical markets and political territories. The Internet, however, creates a new form of commerce which cuts across borders. There is no system of allocation of trademarks or of other distinctive signs which corresponds to this borderless commerce.

The use of trademarks on the Internet will also lead to conflict between trademark rights allocated by different jurisdictions and to risks of unintentional infringement as trademark owners will be unable to control where their trademarks are being displayed.

The ICC therefore suggests that WIPO does not restrict the scope of its work to domain names but also examines the issues raised below in the wider perspective of use in general of trademarks and other distinctive signs on the Internet:

l Should the registered and unregistered trademark systems be adapted to take into account the specific problems arising from the use of trademarks on the Internet and, more generally, the internationalisation of use of trademarks, and how? (e.g. by encouraging further harmonisation of trademark law and regional trademark systems, such as the European Community trademark, to enable trademark holders to have international coverage at lower cost or by establishing an international system for registration of trademarks for Internet use).

The WIPO memorandum suggests that "supra-national administrative" procedures, instead of international treaties could be used to develop effective international rules concerning the protection of intellectual property in the context of the Internet. The business community welcomes any new approaches which could lead to quicker international solutions allowing intellectual property owners to exploit and protect their intellectual property internationally more easily and cost-effectively. However, these solutions should take into account the fact that intellectual property rights must ultimately be enforceable in national courts on a recognised legal basis, either legislative or contractual. Any administrative procedures proposed should not pre-empt decisions by judicial authorities on the validity of intellectual property rights.

l What constitutes use and infringement on the Internet? International guidelines would encourage a harmonised approach to these issues in different countries. The ICC suggests that mere registration of a trademark as a domain name without the authorisation of the owner could be sufficient to constitute infringement. However, a system such as the proposed international trademark database, will have to be established to allow verification of existing rights at an international level.

l Will an infringement be considered to take place in the country of transmission or the country of reception of the transmission? This will have practical consequences for rightholders, as seen in the debate on copyright, as the trademark owner's cause of action will be determined by the level of protection he has for that mark in the relevant country. In order to protect their marks effectively, rightholders need as much flexibility as possible with respect to the choice of jurisdiction.

l Enforcement procedures in the international context (e.g. the enforcement of injunctions in foreign jurisdictions) will also need to be considered.

The ICC emphasises the importance of future work on Internet policy that affects business being carried out in collaboration with business representatives, and would be pleased to participate in future discussions.

Document n 450/843