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Policy statement
Principles
for an electronic commerce-friendly domain name system
ICC Domain Names Taskforce, 28
July 1998
The International Chamber
of Commerce (ICC) is the world business organization. It is the only representative
body that speaks with authority on behalf of enterprises from all sectors in
every part of the world. Founded in 1919, it represents today thousands of member
companies and associations, both large and small, from over 130 countries. The
ICC's purpose is to promote international trade, investment and the market economy.
It is actively involved in formulating private sector rules and guidelines for
electronic commerce, and operates the foremost international arbitration service
for dealing with commercial disputes.
The ICC has a respected
history of developing global, self-regulatory policies, guidelines and practices
and a solid track-record of successfully introducing and promoting self-regulatory
schemes. The ICC has been actively involved in developing global initiatives
to facilitate electronic commerce and has set up a special broad-based Electronic
Commerce Project (ECP) to define appropriate rules, in which over 500 companies
world-wide are participating. Recent ECP and associated initiatives have included:
GUIDEC, privacy model contracts and guidelines, Revised Online Advertising Guidelines,
framework of rules for dematerialized trade, model electronic sales contract,
E-terms1. The ICC Court of Arbitration has extensive experience in
developing and implementing alternative dispute resolution procedures and is
currently studying its application in the field of electronic commerce.
The Internet
The phenomenal growth of
the Internet as an electronic information medium is well documented. It is clear
that this growth is increasingly being driven by mainstream businesses establishing
an on-line presence and by ordinary consumers who want to take advantage of
the increasing range of services and sources of information available. Datamonitor,
the commercial research business, has recently estimated that in Europe alone,
on-line retail sales will grow from just over $100m a year in 1997 to over $4.5
billion in 2002. Price Waterhouse has also suggested that worldwide e-trade
over the Internet could reach over $400 billion in the same year2.
In this environment, it is business which will provide the investment necessary
to develop the underlying global information infrastructure and the global information
services for the future. It is also busine
sses who are likely to be the principal
users of domain names as they seek to create an Internet identity and on-line
brand recognition.
Domain Name
Administration
The future of Internet domain
name administration has been the subject of considerable debate over the last
two years. The ICC previously issued a "Statement on trademarks and the
Internet"3, in which it made a number of suggestions for features
required for the domain name system to meet business needs. The ICC has also
been represented at the various WIPO hearings on proposed changes to the domain
name system and draft dispute resolution policies.
The US Administration, which
has historically been indirectly responsible for overseeing DNS administration,
has undertaken extensive consultation and issued requests for comment, including
a "Green Paper", entitled "Technical Management of Internet Names
and Addresses"4 on proposals for changes to DNS administration.
The need for changes to the current system has been driven by: a) dissatisfaction
about the absence of competition in domain name registration; b) concern over
conflicts between trademark holders and domain name holders; c) demands for
a more formal and robust management structure; and d) demand for greater international
participation in Internet administration to reflect the increasing proportion
of internet stakeholders residing outside of the US.
The US administration has
now concluded its consultations with the publication of a so-called "White
Paper" entitled "Management of Internet Names and Addresses"
(Docket No: 9802120368146-02 dated 5 June, 1998) -which sets out its own final
recommendations5. The White Paper calls for the creation of a new
private-sector, not-for-profit corporation to assume the responsibilities of
the existing IANA as a self-regulatory, governing body to set policies for administration
of the domain name system.
ICC Response
The ICC welcomes the publication
of the White Paper and supports the Policy Statement that the domain name system
should be administered by a not-for-profit corporation (now frequently referred
to as "the new IANA") formed by private-sector Internet stakeholders.
The ICC endorses the principles of stability, competition, private-sector coordination
and international user representation. However, the White Paper leaves open
the key issues of who should have responsibility for the creation of the proposed
new corporation and how members of its Interim Board are to be selected. The
Interim Board will have responsibility for taking fundamental policy decisions
on contentious issues of domain name administration which will have profound
consequences for business use of the internet. The ICC believes that it is essential
for business interests to be appropriately and sufficiently represented at every
stage - in the incorporation process, on the Interim Board and on the subsequently
elected Board.
The administration of the
domain name system (DNS) is itself an essential element in the broader context
of Internet governance as a whole. The ICC's focus is obviously not limited
to consideration of the DNS issues in isolation. As a truly international and
cross-sectoral business organization representing commercial parties with an
interest in the Internet, including business users generally, carriers and service
providers as well as major trade
mark owners, the ICC offers a much wider commercial
perspective and is well-qualified to represent the business constituency at
every stage on all issues of governance.
To facilitate comprehensive
stakeholder input into the process of formation of the new IANA, the ICC itself
has supported and is represented in the ad hoc group of professional, trade
and educational associations called the International Forum on the White Paper
(IFWP) - which has organised regional meetings in the US, Europe and the Far
East specifically to provide stakeholders with an opportunity to discuss the
key issues involved in transition of the DNS administration into the private
sector.
In order for the Internet
to become an effective and successful medium for electronic commerce, the domain
name system must facilitate and increase business and consumer confidence in
Internet transactions. It therefore has to be structured and administered to
meet consumer and business needs.
The ICC accordingly supports
those recommendations in the White Paper which are directed to that end. More
specifically, the international business community believes the following principles
should particularly apply:
Principles for an
electronic commerce-friendly domain name system
1. The domain name system
must have operational stability, integrity and security and be supported by
a predictable legal environment (i.e. there must be confidence about how different
stakeholder interests are secured.)
2. Business interests
from the various regions of the world should have a sufficient voice in any
entity administering the domain name system - and specifically at all stages
in the incorporation and operation of the "new corporation" proposed
in the White Paper-commensurate with the reality that it is business which
will increasingly be the primary source of future investment in the Internet
and which will comprise the most significant market for domain names6.
3. New gTLDs should be
created where necessary to improve the functionality and utility of the DNS
for businesses and consumers as a whole, rather than just to increase business
opportunities for new registries themselves; new gTLDs should be adequately
scalable to meet future demands; must facilitate fair competition and limit
the potential for conflicts; must not jeopardize system stability; and should
be phased in to allow time to review the benefits/effects of their introduction.
4. Brand names and trading
styles must be protected, in particular, to reduce the scope for fraud and
misrepresentation and the risk of confusion of the public. Consumers must
have confidence in electronic transactions through a secure infrastructure
and the ability to rely on established brand identities, trade marks, trade
names and corporate reputations as guideposts of trust and reliability. Developing
this level of consumer trust in transactions will spur electronic commerce
and enable new markets to be opened with competition from new entrants by
developing a critical mass of e-consumers. The importance of brand recognition
for consumers and commercial operators must therefore be taken into account
in the structure and operation of the domain name system7. Specifically:
- policies for the addit
ion
and operation of any new gTLDs must recognize business and consumer concerns
regarding trade marks and trade names;
- within the constraints
of technology, the domain name system should enable entities wanting a presence
on the Internet to have a domain name by which the public can easily identify
them;
- there should be sufficient
flexibility to allow different legitimate claimants to the same trade mark,
trade name or sign to exploit this as a domain name, while ensuring adequate
means to differentiate between them ;
- registration policies
should prohibit cybersquatting, warehousing, piracy and any such misappropriation
of trade marks or trade names in domain names;
- "famous", trade
marks should be accorded
- the system should allow
persons or entitles with intellectual property rights, trade marks, trade
name or other distinctive signs, to intervene as early as possible to protect
their interests; and
- appropriate jurisdictional
options for trademark owners must be preserved; in particular, jurisdictional
choices should not be restricted to the advantage or disadvantage of the businesses
of one country relative to those of any other country.
5. As the Internet is
an intrinsically global system of communication, there must be globally representative
participation in the formulation of policy concerning the DNS, as well as
in technical, operational and administrative functions, so that no one country
has de facto control over those functions.
6. There must be international
coherence between the different systems of allocation of domain names in different
registries (for both generic top level domains (gTLDs) and country code-top
level domains (ccTLDs)). Consistent procedures must be implemented by all
registries and registrars, including baseline requirements for trade mark
dispute resolution procedures and requirements for accurate and complete information
in domain name applications8.
7. An internationally
coherent and effective legal framework should be established to address problems
arising out of the use of trade marks, trade names and other distinctive signs
on the Internet, and potential conflicts with domain names. More specifically,
the following issues should be addressed at an international level in a forum
such as WIP09:
- jurisdictional conflicts
between the territorial nature of trademark law and the international scope
of the Internet;
- the protection of famous
marks on the Internet;
- the effects of new gTLDs
on trademark holders;
- the international prevention
of cybersquatting, warehousing and hoarding of trademarks as domain names;
and in the longer term, appropriate further international harmonization of
trademark laws.
8. Effective and timely
dispute resolution mechanisms are essential. Dispute resolution policies for
all registries should be consist
ent and there should be a choice of fora for
dispute settlement. The ICC Court of Arbitration could provide an alternative
dispute resolution forum.
9. The White Paper recommendation
that more effective use be made of the US country code domain should be extended
to country code domains (ccTLDs) generally. Differences in allocation rules;
failure to structure the domains to reflect the realities of the business
environment and to facilitate general business use; anti-competitive and abusive
monopoly practices; and other inefficiencies, which are exhibited to a greater
or lesser degree by many country code administrations, mean that the ccTLDs
are not being utilised as efficiently or effectively as they could. Internationally
consistent, market-oriented organisation and operation of ccTLDs could reduce
the pressure on gTLDs and reduce the potential for undesirable conflicts over
domain names.
10. Initiatives
to develop search systems allowing users to locate sites without relying primarily
on domain names could help relieve pressure on the domain name system and
reduce the potential for conflicts with trademarks and should therefore be
encouraged.
The ICC looks forward to
providing further input from the international business community on the future
development of the domain name system.
1 Further details of these
initiatives are available at http://www.iccwbo.org
2 Information from the Financial Times Guide - net.gain, June 1998
3 ICC Document 4501843 dated 15 May 1997
4 http://www.ntia.doc.gov/ntiahome/domainname/022098fedreg.htm
5 http://www.ntia.doc.gov/ntiahome/domainname/6-5-98dns.htm
6 see the White Paper proposals for Structure of the new corporation.
7 see the White Paper Revised Policy Statement on Trademark Issues.
8 see the White Paper Revised Policy Statement on Trademark Issues.
9 See the White Paper proposals for THE TRANSITION
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