Territoriality Challenges in Protecting Trademark Interests in the System of Generic Top-Level Domains (gTLDs)

I. INTRODUCTION II. THE INCOMPATIBILITY III. THE CONFLICTING INTERESTS IV. THE NEW GTLD SYSTEM AND ITS LEGAL RAMIFICATIONS V. EARLY DEVELOPMENTS SINCE THE CLOSING OF GTLD APPLICATIONS VI. CONCLUSION I. INTRODUCTION Being human-friendly addresses on the Internet, domain names, such as amazon.com and cbc.ca, operate as globally unique gateways that enable consumers of products, services, and information to reach online contents. Trademarks, on the other hand, are territorial in nature and arise primarily from the need to prevent consumer confusion. The interface between the two systems in an Internet economy is such that domain names act similarly to word-marks in the trademark system, thereby functioning as quasi-trademarks. In an Internet economy, there is an entrenched association between trademarks and domain names despite the inherent legal and technical incompatibility between the two, a result of which gives rise to exploitative business practices in the midst of an ever-present risk of violation of exclusive rights. As domain names continue to be an integral part of any firm's trademark strategy, there have been increasing efforts on an international level to make the administration of the domain name system (DNS) compatible with the way trademark rights are enforced. This article examines such trends, particularly in light of Internet Corporation for Assigned Names and Numbers' (ICANN's) introduction of generic top-level domains (gTLDs), and their ramifications from an intellectual property law standpoint. Legal avenues for domain name dispute resolution have long favoured trademark interests in the current domain name system. The provisions and safeguards in ICANN's new gTLD programme, however, introduce new dimensions of complexity in terms of dispute resolution, which transcend the extent of territorially enforced trademarks. Some of the early developments since the closing of the gTLD registration applications show the increasing misalignment between the governance of identifying marks on the Internet and the reach of national trademark laws. The paradoxical nature of endeavours to align the governance of globally unique domain names with that of territorial trademark interests inevitably harms domain names' conformity to the traditional trademark system. II. THE INCOMPATIBILITY In terms of valuation of assets, trademarks are "as significant in economic terms as patents and copyright; and their impact across industry is thought to be far wider." (1) In fact, the result of having trademarks is argued to be purely economic, one that "seeks to protect consumers from deceitful and anti- competitive practices." (2) Moreover, while the protection of trademarks in itself may not create an incentive for continuous improvement in quality, trademarks are key to maintaining the quality associated with goods and services offered. (3) Internet domain names, on the other hand, are a largely privately administered system, born out of technical needs to facilitate a global addressing scheme for the operation of the Internet. (4) In order to draw an intuitive comparison, Phillips and Simon classify trademarks and domain names as "distinguishing" signs and "disguising" signs, respectively. (5) While closely interwound on the surface and in practice, the domain name system differs significantly from trademarks in the following legal and technical aspects: International legal harmonisation: Unlike trademarks, there is no international convention or treaty to govern domain names upon which ratifying member states are obliged to harmonise administration. Principle of territoriality: Country-code top-level domains (ccTLDs) such as .it, .nz, and .kr correspond to individual countries and territories. ccTLDs are managed territorially by authorities according to local policies and legal circumstances of the country or territory involved. (6) Still, the country-code portion cannot be omitted and must always follow the string to the left of the dot when written down or pronounced. …