Trademark Concerns Follow Domain Name Paper

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January 30, 1998 (12:08 PM EST)

By Andrew Craig,

The U.S. government's plans to privatize the Internet domain naming system would make it difficult for organizations to protect their trademarks on the Internet, according to some trademark holders' initial reactions to the plans.

The Clinton administration's plans are outlined in its long-awaited "green paper," published Friday on the Department of Commerce's Website. The U.S. government acknowledges in the green paper that businesses must be confident their trademarks can be protected, but points out that "management of the Internet must respond to the needs of the Internet community as a whole, and not trademark owners exclusively."

The Clinton administration said in the green paper that it is aiming to provide trademark holders "with the same rights they have in the physical world." Recently, there have been several cases of "cybersquatters" registering domain names that correspond closely to well-known brand names and trademarks, in the hope of selling the names to the trademark and brand owners.

Although the green paper states the importance of protecting trademarks on the Internet, some trademark holders said Friday it does not adequately protect businesses from trademark infringements. The potential addition of five new top-level domains will create "obvious issues" for trademark holders, said John Wood, a consultant at Prince plc, a British computer services company that won a bitter domain name dispute with a larger U.S.-based namesake last year.

The proposed increase in the number of top-level domains -- such as .com -- could also mean that trademark holders will have to correspondingly increase their scrutiny of new names being registered to spot trademark infringements, Wood said. Some trademark holders may feel compelled to spend thousands of dollars registering domain names similar to their trademarks with each of the new registries created under the White House plan, Wood said.

Keith Gymer, a trademark consultant at British Telecom, said the green paper had positive and negative implications for trademark holders. "It has positive aspects, particularly in the proposal to give businesses' and users' interests greater say in the oversight of the new corporation," he said. But the paper does not go far enough in addressing trademark issues, "especially from the perspective of avoiding the potential for confusion and conflicts" with domain name registrations, Gymer argued.

The proposed introduction of five new domain name registries would mean that trademark holders will suffer, said Antony Van Couvering, president of the U.S. subsidiary of London-based domain-name registrar NetNames. "This plan is a nightmare for trademark holders, who must deal with multiple registries, each with their own sets of guidelines and dispute resolution policies," he said, adding "we'd prefer to have a stable, predictable Internet, and this paper points in the opposite direction."

However, the fact that trademark owners would be represented on the board of the new body that controls Internet domain name issues "is a sign that businesses on the Internet have won," said Andy Sernoviz, president of the Association of Interactive Media, a nonprofit group that advises and supports businesses on the Internet. "It's an excellent paper," Sernoviz said. "The days when engineers can set up machines on the Internet to get fees out of trademark holders are done," he said.