ICANN Targets Domain Squatting

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September 03, 1999 (6:37 AM EDT)

By Ellis Booker,

Draft rules from the organization responsible for Internet domain names may reduce the amount of domain "cyber squatting" and take away some of the legal worries that now revolve around the process of registering a .com, .net, or .org name.

At its recent meeting in Santiago, Chile,the Internet Corporation for Assigned Names and Numbers (ICANN) voted to approve rules that call for a common dispute resolution process.

The dispute resolution model -- backed by America Online and register.com, and voluntarily adopted by 20 domain name registrars -- calls for ICANN-endorsed mediation bodies to settle disputes, with the loser paying fees. The mediation process would be spelled out in the standard language of domain name registration contracts.

ICANN also hammered out rules to discourage domain name squatting. The group recommended three guidelines for "determining whether a domain name was registered in bad faith:"

Whether the domain name holder is making a legitimate noncommercial or fair use of the mark, without intent to divert consumers for commercial gain or to tarnish the mark;
Whether the domain name holder (including individuals, businesses, and other organizations) is commonly known by the domain name, even if the holder has acquired no trademark or service mark rights; and
Whether, in seeking payment for transfer of the domain name, the domain name holder has limited its request for payment to its out-of-pocket costs.

But lawyers familiar with domain name disputes wondered about the effective impact of the proposed rules.

"I think companies are struggling more with the interplay between trademark law and the domain system," said Barry Weiss, a partner with Cooley Godward.

Companies often pay off domain name squatters, rather than go to court to make their case, Weiss said.