The Law of the Net:What's in a CyberName?
The Internet has created a new commercial frontier, and intellectual property owners are in a shoot-out at the WWW corral.by Karl Ruping
In its early stages, the internet was a lawless territory. The first cybersettlers were restrained only by their own frontier code of ethics - that, and the prospect of being "flamed" by their cyber-peers. As veteran surfer Devendra Narayan of the Science University of Tokyo explains, the old rule was simply: "What you do not do in other media, you should not do on the Internet."
This precept was (more-or-less) effective when the Internet was largely a community of scientists and scholars. Today, though, the Internet is attracting an increasingly diverse (and international) group of surfers. And, as in any rapidly expanding community, there are those among the new immigrants who are ignorant of or who openly and knowingly flout established community law. The traditional golden rule of Netiquette has lost whatever little actual force it once had.
Trademark protection
One change in the development of the Wild Wild Web has been the recent growth of its commercial potential. Many companies have recognized the Net's new business prospects, but with all new opportunities come new risks. In particular, the emergence of commercial cyberspace has given rise to issues relating to the use and abuse of trademarks on the Internet.
A trademark is a word, name, or symbol - or any combination thereof - that serves to identify and distinguish the source of one party's product or service from that of another party. Registration systems in the US and Japan provide trademark holders with the right to prevent others from using the same, or confusingly similar, marks.
The registration identifies one or more classes of goods or services associated with the mark. Different parties may have rights to use the same mark. Trademark registrations are distinguished by different markets and use of the marks in such a way that consumers can differentiate between the commercial activities. Infringement of trademark occurs if unauthorized use of the mark, or a very similar mark, in the same or related class of commercial activity is such as to cause market confusion. If, for example, an unsuspecting Net surfer sends off a chunk of cybercash to buy the latest version of the McDonald's Flying Hamburger screensaver, mistakenly believing that the application comes from the same source that gave us the Big Mac, then the McDonald's of Golden Arches fame has a valid case.
In both the US and Japan, if the unauthorized use of a well-known trademark is judged (through a trademark dilution or unfair competition claim) to diminish the value of that mark, then the scope of protection may be extended beyond the registered class of commercial activity. Such claims have been used as effective tools in the US when use on the Internet does not conform to traditional existing doctrine.
Cybertrademarks?
In extending traditional trademark doctrine to new technologies, US and Japanese courts generally do not look at the nature of the medium. The only issue before the court is that of consumer confusion.
The international scope of the Internet, however, makes for an uncomfortable trademark environment. Globally, the same product name may be registered in different countries by different parties. Thus, with regard to an Internet-related claim, the first question is that of jurisdiction.
In addition to this international conflict of national trademark registration, there is basic conflict within the standards of existing national trademark regimes. US rights are based on first use. Japan, on the other hand, follows the more common first-to-file standard. International treaties have failed to harmonize the fractured registration requirements and scope of trademark protection.
Before the Internet, this generally was not a problem; it was rare for a mark to be under two trademark regimes simultaneously. Today, though, a mark in cyberspace is no place, yet every place, at the same time. So what are a trademark holder's rights in cyberspace?
US courts have established that the commercial use of a confusingly similar mark on the Internet, even if the site is not in the US, can still violate a US trademark. Playboy v. Chucklebury concerned an Italian publisher's website that offered a quick peek at its "male sophisticate" magazine, Playman. While Playboy Enterprises had registered the trademark Playboy in the US, there was no conflict in Italy, the location of the publisher and the server. A US court, however, found Playman to be confusingly similar to the US-registered trademark, and ordered the Italian publisher to restrict US Internet access to its website. US trademark holders were delighted to read Playboy v. Chucklebury - until they extended the court's reasoning to other jurisdictions, that is. This nationalistic concept of Internet resources is a double-edged sword: a Tokyo court could just as easily find that a US trademark holder's website infringes a Japanese trademark. And, considering the judgment, how can a website effectively screen all foreign (potentially infringement-creating) access?
Japan has yet to face the cybertrademark issue. Courts here have established that the unauthorized use of a Japanese trademark generated from a software program and appearing on a computer screen is an infringement. The same should be true if the image originates from the Internet, but it is not clear if Japanese courts will attempt to extend domestic trademark rights to a foreign website, as in Playboy v. Chucklebury.
The issue of domain names
Even more uncertain is trademark infringement by a domain name. A domain name is the "address" of a computer connected to the Internet, such as www.computingjapan.com.
Upper level domains (such as "co.jp") indicate the class of user and the country of registration. The lower level domain is chosen by the user and registered with the local Internet management organization on a "first come, first served" basis. Network Solutions Inc. (NSI), for example, manages the registration of domain names in the US under the authority of InterNIC. In Japan, it is JPNIC.
As Joshua Quittner, the original registrant of mcdonalds .com and a writer for Wired magazine, explains: "Domain names are kind of postal addresses, vanity license plates, and billboards, all rolled into one digital enchilada." Domain names may seem strange candidates for trademark protection, but whether a domain name may infringe a trademark has already caused courts a bit of cyber-indigestion.
Domain name registration and trademark registration are two totally different systems. Neither NSI nor JPNIC performs a trademark search when processing domain name applications. And, even if they did, the same trademark may be registered across different classes of commercial activity. The trademark "Fuji," for example, can be owned by both a film manufacturer and a bank. But there can be only one fuji.co.jp, wherein lies the seeds of contention.
Due to the uncertainty of the law and infancy of the Internet, most early domain name conflicts were settled out of court. Princeton Review, a standardized test review service, registered the domain name kaplan.com, much to the dismay of its arch-rival, Stanley Kaplan Co. The two agreed to arbitrate the matter, and Kaplan was awarded the registration. Some major US companies, such as McDonald's and Kentucky Fried Chicken, were caught offline with their Internet pants down, as other parties registered their trademarks as domain names.
We'll see you in court!
US case history regarding domain name registration actually begins with dirty pictures. Frena operated a BBS from which subscribers could access an electronic library of "adult" material. Photographs from Playboy magazine were available there under the file descriptors "playboy" and "playmate." In addition to the obvious copyright violation of the photographs, the court found that the file descriptors were an infringement of Playboy's registered trademarks.
Subsequent cases have extended Playboy v. Frena to domain names. An MTV video jockey (VJ, if you're hip) registered mtv.com as his own domain name a couple of years back. The court, in MTV v. Curry, established that a domain name may violate a trademark (although the parties settled out-of-court before a final ruling).
In Intermatic v. Toeppen, meanwhile, a cybersquatter with over 200 registrations offered to sell the matching intermatic.com domain name to the Intermatic trademark holder. The court held that Toeppen's intent to transfer the registration was commercial use and constituted trademark dilution. Intermatic now holds the domain name.
Most early cases considered only identical marks. In Akkaqui v. Toys "R" Us, though, the defendant was selling "marital aids" under the name Adults "R" Us and through the adultsrus.com domain name. Under a claim of dilution, the court found that the domain name conflicted with the well-known trademark in the children's toy industry.
As might have been expected, aggressive litigants began dragging the registration organization NSI into court, too. As a result, US applicants now must warrant that they know of no existing trademark conflict, and indemnify NSI against any future claims of trademark infringement. Further, new guidelines freeze a domain name during the course of a trademark dispute.
There is general dissatisfaction, though, with both the US court decisions and the NSI guidelines. Users fear that these decisions will inhibit the growth of the Internet. Could an innocent hyperlink on your homepage violate someone's trademark? Can you get in trouble if you use the e-mail address burger@king.com? Trademark holders are also worried. As the Internet develops, consumers may identify a product with its domain name, and a recognizable Internet address may eventually be more important than shelf space.
There has been a rush to register commercial domain names in the US. Kraft, for example, has over 130 registrations matching as many products. Proctor & Gamble has followed suit, registering 32 generic domain names, such as - no kidding - toiletpaper.com and badbreath.com. (So far, though, no one seems much interested in the Japanese counterparts.) The reverse phenomenon has also emerged: registering domain names as trademarks. MTV, having learned its lesson, now enjoys the mtv.com trademark.
Land of the rising Net
JPNIC manages the registration of Japanese domain names, and the rules are somewhat stricter here. Individuals are limited to geographical domain suffixes that indicate the applicant's physical location (such as aichi.jp for someone living in Aichi prefecture, or nagoya.jp for someone in the city of Nagoya).
The prestigious "co.jp" remains the primary area of trademark use and abuse in Japan. Only commercial entities can use a "co.jp" domain. Foreign companies qualify if they are incorporated overseas and are registered to do business in Japan, but with the lack of JPNIC information in English and a Japanese-only registration system, nonnative speakers can face difficulties in obtaining a domain name.
Brad Bartz of Internet Access Center is no stranger to JPNIC regulations. Regarding the complex application requirements, changing policies, and unusually long processing time for foreign registrants, Bartz laments: "It appears that JPNIC has a policy of frustrating foreign registrants in particular, and Japanese surfers in general."
JPNIC has not yet implemented trademark dispute guidelines similar to those of NSI. Indeed, this issue was not considered a concern - at least, not until an enterprising applicant obtained the domain name jpnic.co.jp. Now, concedes Naomasa Maruyama, Secretary-General of JPNIC, "Yes, we have to consider the possible conflict between domain names and trademark. But we are waiting for the courts to establish policy."
The wait may not be long. Officials at Japan's Patent and Trademark Office unofficially recognize the possibility of registering domain names as trademarks, if the standard requirements of commercial use and distinctiveness are satisfied. Unlike in the US, however, there are no guidelines and no such trademarks in Japan... yet. As the Internet becomes a viable marketplace for Japanese suppliers and consumers, though, competition and conflict are bound to result. JPNIC has begun investigating several suspected violations of its regulations, although with domain name applications doubling every six months, enforcement has not been a priority.
Unlike the litigious West, there have been no trademark/domain name cases in Japan. Academics and practitioners disagree as to whether trademark protection will be extended - or, indeed, should be extended - to domain names. A further complication in the analysis is that a Japanese trademark may be distinguished by the use of kanji, katakana, hiragana, and romaji. (It is only the latter roman text that qualifies as a domain name.) To dissuade domain name "prospecting," JPNIC regulations prohibit the sale or transfer of a domain name, and limit each individual or organization to one registration. This has proved frustrating to large companies with several trademarks across different product lines. Even telecommunications giant NTT, for example, may hold only one domain name as it is a single organization (at least, for now).
This one-per-customer policy has not deterred some enterprising cybersquatters from warehousing valuable "co.jp" domain names. IAC's Bartz, for example, has amassed an impressive collection of Japanese registrations. With a Delaware incorporation and Japanese presence, he has several foreign companies that each own a bank account and an impressive "co.jp" domain name. And the non-transferability of a registration presents no problem. "If you want [to buy] the most attractive cyberspace in town," says Bartz, "I have a Delaware company just for you!"
Finders keepers
The Japanese Internet community is expanding rapidly. Industry is just now realizing the commercial potential of, and the legal risks associated with, the new global cyberfrontier. It seems likely that a Japanese court will find the unauthorized use of a registered trademark on a website to be infringement. The jury is still out, however, on domain names.
If you have a company, the best advice at this point may be to grab your cyberspace name while it lasts. In the Japanese domain, possession is what counts in the eyes of the law.
Over the next several months, Computing Japan will present a series of articles by Professor Ruping on computer law and technology. If you have questions, comments, or suggestions, contact the editors at editors@cjmag.co.jp (fax 03-3499-2199), or the author directly at ruping@tuj.ac.jp.
| Sites of interest |
| InterNIC |
| http://rs.internic.net/ |
| JPNIC |
| http://gopher.nic.ad.jp/index-j.html |
| US Patent & Trademark Office |
| http://www.uspto.gov/ |
| Japan Patent & Trademark Office |
| http://www.jpo-miti.go.jp/ |
| Georgetown Law Center |
| http://www.law.georgetown.edu/lc/internic/domain1.html |
| Cornell Law School, Legal Information Institute |
| http://www.law.cornell.edu/lii.table.html |
| Information Law Alert |
| http://infolawalert.com |
| Lectric Law Library |
| http://www.lectlaw.com/ |
| Recognized domain name suffixes | ||
| JPNIC | InterNIC (.us by default) | |
| commercial enterprise | .co.jp | .com |
| academic institution | .ac.jp | .edu |
| government agency | .go.jp | .gov |
| non-profit organization | .or.jp | .org |
| Internet administrator | .ad.jp | -- |
| network service provider | .ne.jp | .net |
| international organizations | -- | .int |
| military organizations | -- | .mil |
| geographical | * | -- |
| * One for each prefecture plus three metro- politan areas (Tokyo, Osaka, and Nagoya). | ||
