Domain Name Disputes

Disputes over domain names on the Internet: As more companies move to put information and products onto the Internet, the clashes over Internet domain names become more common. These clashes are challenging the law and the Internet community to develop new procedures and legal rules that adequately address the equities involved. This page discusses domain names and the resolution of domain name disputes by the Internet community. The issue of trademark infringement on the Internet is discussed in more detail elsewhere in BitLaw. The discussion of domain name disputes is divided into the following topics:

Domain Names--an Introduction

Domain names are simply the addresses of the Internet. E-mail is sent and web pages are found through the use of domain names. As an example, the web address for the Microsoft web site is, while Bill Gates might have an e-mail address such as (both using the "" domain name). Without the domain name, a computer would have no idea where to look for a web page, and e-mail routers would not be able to send e-mail. Of course, domain names are more than just addresses, since they can be selected by the "addressee" and are usually closely associated with a particular service or product.

Domain names are divided into hierarchies. The top-level of the hierarchy appears after the last dot ('.') in a domain name. In "", the top level domain name is .COM. The .COM name is the most common top-level domain name, and is used to indicate that the domain name is owned by a commercial enterprise. Other common top-level domain names include .ORG (for non-profit organizations), .NET (for network and Internet related organizations), .EDU (for four-year colleges and universities), and .GOV (for government entities).

In addition to these generic domain names, each country has been given a unique top-level domain name. For instance, .CA indicates a domain in Canada, and .IE indicates an Irish domain. Although there is a .US top-level domain name, most organizations in the United States outside of state and local governments opt for one of the generic names (i.e., .COM, .ORG, .NET), which are available to entities in any country. For several years there have been proposals to add new generic top-level names, such as .FIRM, .STORE, and .WEB. While each of these proposals has eventually faded away, it is expected that some new top level domain names will be created within the next two years.

The disputes that arise over domain names involve "second level" domain names. The second level name is the name directly to the left of the top-level domain name in an Internet address. For instance, in the address "", the second level domain name is Microsoft.

Two identical second level domain names cannot coexist under the same top level domain. For example, even though both the Delta Faucet Company and Delta Airlines would like the "" domain name, only one Delta company can have Unfortunately for both Delta Faucet Company and Delta Airlines, that Delta company is Delta Financial of Woodbury, New York. Instead of using, Delta Airlines uses, while Delta Faucet Company uses

How assigned

In order to register a second level domain name under a top-level domain, a request must be made to the organization that has the power to assign names for that top-level domain. For instance, The US Domain Registry administers the registration of second level domain names under the .US top-level domain.

Prior to December 1999, a company called Network Solutions Inc. ("NSI") was almost solely responsible for the registration of second level domain names for the most popular top-level domains, including .COM, .NET, and .ORG. Since the vast majority of domain names are under one of these top-level domains (the most common being .COM domain names), Network Solutions had a great deal of control over how domain names were registered, and how disputes would be resolved. To avoid having to be the arbitrator between two parties who both desire the same domain name, NSI decided to simply adopt a first come, first serve arrangement with respect to domain names. Under this scheme, NSI would not question an applicant's right to have a particular domain name. If the domain name was available, the applicant was given the name.

As of December 1999, the ability to register .COM, .NET, and .ORG domain names was spread out among many registrars. These registrars are accredited by The Internet Corporation for Assigned Names and Numbers (or "ICANN"), an non-profit corporation formed specifically to control Internet domain name management and similar functions. NSI continues to assign domain names, but now they are just one of many domain name registrars. Following NSI's precedence, all of these registrars assign names on a first-come, first-serve basis, and do not do any checking before assigning a new domain name.

Domain names disputes

Because of the increasing popularity of the Internet, companies have realized that having a domain name that is the same as their company name or the name of one of their products can be an extremely valuable part of establishing an Internet presence. As explained above, a company wishing to acquire a domain name must file an application with the appropriate agency. Before doing so, a search is done to see if their desired domain name is already taken. A good site for doing such a search is provided by Network Solutions. When a company finds that the domain name corresponding to their corporate name or product trademark is owned by someone else, the company can either choose a different name or fight to get the domain name back from its current owners.

Some well publicized examples of these types of domain names disputes are:

  • Both Hasbro and an adult entertainment provider desired the domain name. Hasbro was too late to register the name itself, but it is never too late to sue (well, almost never). The domain name is now safely in the hands of Hasbro.
  • This domain name was taken by an author from Wired magazine who was writing a story on the value of domain names. In his article, the author requested that people contact him at with suggestions of what to do with the domain name. In exchange for returning the domain name to McDonalds, the author convinced the company to make a charitable contribution.
  • The company Zero Micro Software obtained a registration for (with a zero in place of the second 'o'), but the registration was suspended after Microsoft filed a protest. When the domain name went abandoned for non-payment of fees, the domain name was picked up by someone else: Vision Enterprises of Roanoke, TX
  • The MTV domain name was originally taken by MTV video jockey Adam Curry. Although MTV originally showed little interest in the domain name or the Internet, when Adam Curry left MTV the company wanted to control the domain name. After a federal court action was brought, the dispute settled out of court.
  • An organization entitled "People Eating Tasty Animals" obtained the domain name, much to the disgust of the better know People for the Ethical Treatment of Animals. This domain name was suspended, but as of May 2000 the domain name was still registered in the name of People Eating Tasty Animals.
  • When NSI threatened to suspend the domain name after a protest by Warner Brothers, the New Mexico Internet access provider who was using the domain name filed suit to prevent the suspension. Although the access provider was able to prevent the suspension, a joint venture company involving Time Warner, MediaOne, Microsoft, Compaq, and Advance/Newhouse eventually obtained the domain name.
  • The mainland China news organization Xinhua was allowed to register the domain name, much to the disgust of the government of Taiwan.

Legal Remedies

When a dispute over a domain name occurs, such as those described above, the parties can always turn to the courts. While courts and judges have the authority to award control and ownership over domain names (just as they have authority to award control and ownership over any other property), the judicial process is notoriously slow. Consequently, many parties have avoided the courts and turned to the domain name dispute policies of the domain name registrars (see the following section for more information on these policies).

Companies that do bring a court action must present legal arguments on why a domain name registered to someone else should be cancelled or transferred to an organization who wasn't fast enough to register the name first. Historically, these arguments were based on trademark law or dilution law (which are discussed in more detail on the BitLaw section on trademarks on the Internet). It was sometimes difficult to present a strong case under the traditional principals of trademark law, especially when the party seeking to obtain a domain name either could not prove a likelihood of confusion (which is required under trademark law) or was a famous individual who never technically established trademark rights in their name.

In response to intense lobbying from trademark owners and famous individuals, Congress passed the Anticybersquatting Consumer Protection Act in November of 1999. This act made it easier for individuals and companies to take over domain names that are confusingly similar to their names or valid trademarks. To do so, however, they must establish that the domain name holder acted in bad faith.

One portion of this Act related to famous individuals. This portion allows individuals to file a civil action against anyone who registers their name as a second level domain name for the purpose of selling the domain name for a profit.

The more general portion of the statute protects companies against persons who, in bad faith, register a domain name that is the same or confusingly similar to an existing trademark. The statute the lists the following factors as elements that a court can consider to determine whether the domain name was registered in bad faith.

  • Does the domain name holder have trademark rights in the domain name?
  • Is the domain name the legal name of the domain name holder, or some other name that is otherwise commonly used to identify that person?
  • Has the domain name holder made use (prior to the dispute) of the domain name in connection with a bona fide sale of goods or services?
  • Is the domain name holder using the mark in a bona fide noncommercial or fair use way at a web site accessible at the domain name?
  • Is the domain name holder attempting to divert consumers from the trademark owner's web site in a confusing way, either for commercial gain or in an attempt to tarnish or disparage the trademark mark?
  • Has the domain name holder offered to sell the domain name to the trademark owner (or anyone else) for financial gain without having any intent to use the mark with the sale of goods or services?
  • Has the domain name holder behaved in a pattern of registering and selling domain names without intending to use them in connection with the sale of goods or services?
  • Did the domain name holder provide false information when applying for the registration of the domain name (or do so in connection with other domain names)?
  • Has the domain name holder registered domain names of other parties trademarks?; and
  • How distinctive and famous is the trademark owner's trademark?

Domain Name Dispute Policies

The best alternative to pursuing a domain name dispute through the courts is to take advantage of the domain name dispute policies that have been developed by the organizations that assign domain names. Disputes prior to December of 1999 were handled under the domain name dispute policy created by NSI.

Under this much maligned policy, NSI created a procedure under which a third-party can challenge the right of a domain name owner to use a particular domain name. If the challenge were successful, the domain name would be suspended. This policy only protected parties that had a nationally registered trademark identical to another party's second level domain name (i.e., Microsoft in ""). An owner of an unregistered trademark could not initiate an action under this policy, nor could an owner of a trademark that was confusingly similar (but not identical). If the date that the trademark was first registered predated the domain name registration, the domain name owner had to supply their own trademark registration for the second-level domain name. If the domain name owner could not provide such a trademark registration, NSI would suspend all use of the domain name. This is true even if the challenging party could not properly prove a claim of trademark infringement (see the BitLaw discussions on trademark infringement in general and trademark infringement on the Internet for more information).

This policy has now been replaced with a Uniform Domain Name Dispute Resolution Policy created by ICANN and used by all accredited registrars. Under this new policy, a trademark owner can initiate a relatively inexpensive administrative procedure to challenge the existing domain name. In order to prevail, the trademark owner must show:

  1. that the trademark owner owns a trademark (either registered or unregistered) that is the same or confusingly similar to the registered second level domain name;
  2. that the party that registered the domain name has no legitimate right or interest in the domain name; and
  3. that the domain name was registered and used in bad faith.

If the trademark owner successfully proves all three points in the administrative proceeding, then the domain name can either be cancelled or transferred to the prevailing trademark owner. If the trademark owner fails to prove one of these points, the administrative panel will not cancel nor transfer the domain name.

Among the ways that a domain name owner can prove a legitimate right or interest in a domain name is by showing:

  • use or preparations to use the domain name in connection with a bona fide offering of goods or services prior to any notice of the dispute;
  • that the domain name owner has been commonly known by the second level domain name; or
  • that the domain name owner is making legitimate noncommercial or fair use of the domain name, without intent of (i) commercial gain, (ii) misleadingly diverting consumers, or (iii) tarnishing the trademark at issue

A trademark owner can show that a domain name was registered and used in bad faith in a variety of ways, including by showing that the domain name owner:

  • registered the name primarily for the purpose of selling or transferring the domain name to the trademark owner or a competitor of the trademark owner for a price greater than out of pocket costs;
  • engaged in a pattern of registering trademarks of others to prevent the use of the domain name by the trademark owner;
  • registered the domain name primarily to disrupt the business of a competitor; or
  • is attempting to attract users to a web site for commercial gain by creating a likelihood of confusion with the trademark owner's trademark.