Bad Faith in Cyberspace: Grounding Domain Name Theory in Trademark, Property, and Restitution

TABLE OF CONTENTS I. INTRODUCTION II. THREE THEORIES OF DOMAIN NAME REGULATION A. Extrapolating Theory from Practice B. A Tripartite Theoretical Model: Property Theory, Restitution, and Trademark Policy III. EXISTING REGULATORY INCONSISTENCIES A. General Inconsistencies B. Specific Inconsistencies and Possible Solutions 1. Personal Names 2. Culturally and Geographically Significant Words and Phrases 3. Generic Terms 4. Typosquatting IV. THE ROLE OF THE REGISTRAR V. CONCLUSIONS I. INTRODUCTION Think back, if you can, to the early days of the new frontier--not the Western frontier, but the virtual frontier. Like the Western frontier, the early Internet was largely barren space awaiting cultivation. Virtual prospectors never knew if they would strike it rich or die trying. However, some clever prospectors managed to secure some thing that their real-world counterparts never imagined possible--a guarantee of striking gold if they moved quickly. Enter the cybersquatter. In the early- to mid-1990s, a handful of tech-savvy virtual prospectors realized the value of trademarks in the online domain space long before many mark holders did. These prospectors registered multiple domain names corresponding with trademarks very inexpensively. (1) They offered to sell them back to the trademark holders for a handsome profit. (2) Today, this practice is old news and infrequent in practice. Quick to react to the cybersquatting threat, judges held early cybersquatters liable for trademark infringement and dilution. (3) The United States Congress soon followed with the Anti-Cybersquatting Consumer Protection Act (4) ("ACPA"), while the Internet Corporation for Assigned Names and Numbers (5) ("ICANN") adopted the Uniform Domain Name Dispute Resolution Policy (6) ("UDRP"). These measures more than met the challenges posed by cybersquatting. However, the application of these rules left a confused pastiche of domain name policy in its wake. Since the rules were narrowly targeted to protect trademarks against cybersquatting, they did not provide a coherent theoretical basis for domain name regulation that might apply more generally. Part of the reason for the narrowness in focus relates to the question of who, if anyone, has constitutional power to make general policy for the domain space. While ICANN administers the technical side of the domain name system, its bylaws limit its policy-making role to "policy development reasonably and appropriately related to [its] technical functions." (7) Domestic legislatures and courts can only reach disputes within their jurisdictional competence. In the absence of a central policy-making body, each entity dealing with domain name conflicts can only address a small piece of a much larger puzzle. This results in a domain name market that is regulated inconsistently, often leading to wasteful uses of potentially valuable online assets. The domain space becomes clogged with registrations of multiple domain names by speculators who, more often than not, will park websites under the names and fail to use them for any particularly useful purpose, in the hope that someday they may sell the names for a profit. (8) In the meantime, they may derive revenue from click-through advertising. (9) Domain name speculators now typically rely on registrations of personal names, geographical and cultural indicators, and generic words and phrases in the domain space. (10) Thus, the practice of domain name speculating has moved away from trademark policy, while the regulatory system has not. This creates an inconsistency between the robust regulation of trademarks in the domain space and the lack of regulation over any other conduct. There is a glaring need to develop a coherent theory of domain name regulation. Domain name conflicts are not likely to subside any time soon. (11) Additionally, the development of a more robust domain name theory may facilitate policy developments in the emerging area of search engine law. …