TABLE OF CONTENTS
I. Introduction
II. Domain Names
    A. The Problems
    B. NSI's Existing Solution
    C. The Problems With NSI's Solution
    D. A New Approach
    E. The Courts Weigh In On Trademark and Domain Disputes
        1. U.S. Courts
        2. Non-U.S. Courts
           a. Britain
           b. Germany
           c. Netherlands
           d. Australia
III. Other Trademark Issues In Cyberspace
    A. Linking and Framing
    B. Meta Tagging
    C. Procedural Concerns: Jurisdiction
    D. Dilution
    E. Licensing
    F. Trademark Searching and Policing
 
 

Cyberspace raises a variety of thought-provoking trademark and trademark-related issues. While many of the issues and problems that arise may be analyzed and resolved from the vantage point of traditional notions of trademark law, others present thornier questions requiring greater sensitivity to the practical effect of cyberspace on the commercial marketplace.

The cyberspace trademark issue that continues to get the most press is the domain name controversy. Is a domain a trademark? When does use of a domain infringe trademark rights? If someone else registers a company's name or trademark as their domain, what can the company do? Beyond domains lie the vast array of trademark issues that ultimately are likely to be more important than domain disputes. Questions of what constitutes use, and abuse, of trademarks in cyberspace are exploding along with the web. In addition to garden variety trademark enhancement and policing concerns that take new shapes on the Internet, companies must be vigilant in avoiding trademark dilution and think twice before linking to other sites or permitting others to link to the company's site using company logos. Attempting to police trademark rights in cyberspace can be a daunting, but infinitely interesting, task.

A company's presence on the Net starts with its domain name ("domain"). A domain is an important corporate identifier. Beyond being the name under which the company sends and receives e-mail, like any other trademark or trade name it can be a symbol of the company's goodwill and recognition in the marketplace. Given the unstructured nature of the Internet, obtaining an easily ascertained domain name often is a key element of an on-line marketing strategy. Users regularly attempt to guess a company's Internet location by typing in the name of the company followed by the ubiquitous .com top level domain. This common practice of guessing at domain names makes an intuitive domain name a valuable corporate asset.

Generally speaking, domain names are assigned on a first come, first served basis. In the U.S. today, the vast majority of domains are assigned by a single registry, Network Solutions, Inc. ("NSI"), under contract from the National Science Foundation.[1] In assigning a domain, NSI uses a multi-level system, including a Top Level Domain ("TLD") such as ".com", ".net" and ".org", coupled with a Second Level Domain ("SLD") requested by the party seeking the domain assignment (e.g., <ibm.com>). Not surprisingly, the .com TLD, intended for commercial users has experienced exponential growth in the recent past; there are now over three million such domains.[2] As would have been expected from such growth, the .com TLD is at the eye of the storm in domain disputes. Overseas, any number of registration entities (called NICs[3] or registries) assign individual country TLDs using two character ISO country codes, such as ".ca" for Canada or ".fr" for France.[4] Due to the international cachet that has developed in .com names, many overseas business have bypassed country TLDs and have registered .com domains with NSI instead.

In the registration process, NSI (and the other NICs) will not exercise veto power over a requested name, so long as that name is not identical to one already assigned within the TLD.[5] Prior to the commercial explosion of the web, the domain name system engendered little or no controversy. Only with the advent of the web, and the commercial world's awakening to the enormous marketing possibilities it represented, did this system come under scrutiny.

A. The Problems

As the commercial world expanded into cyberspace, three related problems with the domain name system became painfully clear. The first and most obvious problem is the opportunity for others to "pirate" names, typically by obtaining SLD registrations within the .com TLD of a well-known company name or brand. A number of major corporations have had the uncomfortable, and in some cases embarrassing, experience of learning that someone else had already registered their name or mark as a second level domain followed by the now ubiquitous .com TLD. By May 1994, the list of "pirated" names read like a Who's Who of corporate America: McDonald's, Coke, Hertz, Nasdaq, Viacom, MTV and others. By mid-1996, Avon, Levi's, B. Dalton and Readers Digest had joined the list. In 1997, a California college student, Daniel Khoshnood, started a web design firm called The Microsoft Network. Inspired by Steve Jenkins' successful <windows95.com> web site, Khoshnood not only obtained the domain <microsoftnetwork.com>, but also registered dozens of other domain names closely resembling well known trademarks owned by Microsoft and others (e.g. <cinemania97.com> and <creativewriter.com>). In June 1997, Microsoft lawyers convinced Khoshnood's Internet service provider to pull the plug on his web site, but he then planned to relocate the site using the same domain on his own server.[6]

Misspelling popular brands is the second problem. The domain name system creates the opportunity for others to obtain a second level domain that is only a slight variation of someone else's well known, or not so well known, name or mark. Indeed, some "entrepreneurs" even register slight variations of others' marks for the sole purpose of getting hits, thus capitalizing on typing errors made by web surfers. These speculators often sell only advertising rather than products or services, while legitimate companies that happen to have a similar domain will disclose that theirs is not the site the surfer actually was seeking.[7]

The third problem, a variation on a theme, is created by the fact that NSI is not alone in assigning domains: NICs and other registries all over the world may assign identical second level domains, so long as the TLD differs. Again, while Microsoft may be <microsoft.com>, there may also be a completely unaffiliated <microsoft.co.uk> commercial domain in England or a <microsoft.az> in Azerbaijan.

Not surprisingly, the first lawsuits in the domain name area involved situations in which intentional "pirating" was admitted or at least alleged. In the first case, Princeton Review Management Corp. v. Stanley H. Kaplan Educational Center, Ltd., Kaplan did not take kindly to its competitor's use of <kaplan.com> in connection with a web site containing messages disparaging Kaplan's educational testing services and praising those of Princeton Review. Kaplan refused Princeton Review's offer to relinquish the name in exchange for a case of beer, and ultimately convinced an arbiter to order Princeton Review to give up the domain.[8]

Planned Parenthood, the well-known non-profit reproductive health organization, recently was the target of a similar effort by a "competitor" to divert attention on the web. In Planned Parenthood Federation of America. v. Bucci,[9] Planned Parenthood obtained an injunction against an anti-abortion and anti-birth control advocate who set up a web site at <www.plannedparenthood.com> to provide information and promote sales of an anti-abortion book. Planned Parenthood was operating its own web site at <www.ppfa.org> (and its Houston affiliate at <www.plannedparenthood.org>). In finding a likelihood of confusion the court noted that the defendant admitted that he chose the domain name with the intent to divert Internet users who were seeking Planned Parenthood's web site to his own competing site.[10]

Inevitably, the domain name case law moved beyond the context of "pirating" well-known names and into the realm of the more typical trademark dispute between two parties vying for the same name. Comp Examiner Agency, Inc. v. Juris, Inc.,[11] is the first case in which a U.S. court applied a traditional likelihood of confusion analysis in the context of a domain dispute. In that case, Juris, Inc., owner of a federal trademark registration of JURIS for its legal time and billing software products, had been forced to choose the domain <jurisinc.com> after learning its first choice, <juris.com>, had already been assigned to The Comp Examiner Agency ("Comp Examiner"). When Juris, Inc. subsequently accused Comp Examiner of trademark infringement, Comp Examiner, which used the domain for a legal information web site, filed an action seeking cancellation of Juris, Inc.'s JURIS trademark registration on grounds of genericness. Juris, Inc. then counterclaimed for trademark infringement and dilution. The court granted Juris, Inc. a preliminary injunction which not only precluded Comp Examiner from using the domain <juris.com>, but also from using "juris," <juriscom.com> or any confusingly similar variation for "the advertising, operation or maintenance of any Internet site or bulletin board service."[12] The lawsuit settled shortly thereafter. Juris, Inc. now owns both domains, and operates under the domain <juris.com>.[13]

While Comp Examiner Agency essentially involved a "garden variety" claim of likelihood of confusion concerning related services, the limited availability of any particular SLD in the .com domain space has spawned similar litigation involving wholly unrelated goods and services. One such case, though originally scheduled for trial, resulted in a default judgment now on appeal. In Fry's Electronics, Inc. v. Octave Systems, Inc.,[14] an electronics retailer in Palo Alto, California brought suit alleging trademark infringement and federal Racketeer Influenced and Corrupt Organizations Act ("RICO") claims against a Seattle-based vendor of french fry machines, Frenchy Frys, after it learned that Frenchy Frys had registered the domain <frys.com> and Fry's Electronics was left with its second choice as a domain, <fryselectronics.com>.

The Fry's Electronics court issued the default judgment in response to what the court termed "obstructionist behavior" by codefendant David Peter, proprietor of Frenchy Frys. Peter, who is appearing pro se, is currently appealing the decision to the Ninth Circuit.[15] In the meantime, Fry's Electronics has achieved its goal of obtaining the right to use the <frys.com> domain name without the obvious difficulty of establishing a likelihood of confusion between unrelated goods and services, although the company does not yet appear to be using the domain.[16]

Another inevitable development in domain name litigation occurred in December 1994, when NSI was named as a defendant in KnowledgeNet v. Boone.[17] The first case to challenge NSI's procedures for assigning domain names, KnowledgeNet included a RICO claim against NSI and Boone's Internet service provider for aiding and abetting, via the Internet and the telephone system, Boone's "illegal enterprise" to misappropriate the KNOWLEDGENET trademark using the domain <knowledgenet.com> and licensing the same. NSI ultimately was dismissed as a party, without prejudice, but only after the primary parties reached a settlement in which Boone gave up the domain and reportedly paid a hefty sum to the plaintiff.[18]

B. NSI's Existing Solution

Faced with an ever increasing chorus of complaints from trademark owners regarding the domain assignment system, NSI initially reacted by adopting a policy that an applicant could obtain only one domain. (This policy was rarely, if ever, enforced.) NSI then imposed a fee for obtaining and/or renewing a domain (presently $100 for the first two years; $70 a year thereafter).[19] These changes were intended to put an end to the initially prevalent practice in which a few speculators grabbed multiple domains containing well-known company names or marks for the purpose of selling the domains to the respective companies at premium prices.

Finding itself the target of litigation, and with hopes of avoiding further legal entanglements like KnowledgeNet, NSI adopted its Domain Name Dispute Policy, which has been revised several times since. Under the dispute policy currently in effect, NSI Domain Name Dispute Policy Revision 03, effective February 25, 1998,[20] the owner of a federal trademark registration in the U.S. or a registration in a foreign country may challenge use of an identical second level domain by submitting the registration certificate to NSI, along with proof that the trademark owner has sent the domain holder written notice of the trademark owner's claim that the use and registration of the domain name violates the trademark owner's legal rights. If the "creation date" of the domain postdates the "effective date" of the trademark registration, then NSI gives the domain holder 30 days to prove its ownership of a trademark registration for the same mark in the U.S. or any foreign country.[21]

If the domain holder is able to prove either (1) that the creation of the domain name predates the effective date of the challenger's trademark registration, or (2) that the domain holder has its own trademark registration, then the domain holder will be able to keep the domain (subject to the general obligation of all domain registrants to indemnify NSI and NSF). If, however, the domain holder cannot demonstrate the required prior creation date or produce a trademark registration certificate, then the domain holder must give up the domain, with a 90 day transition period if the domain holders cooperates. The disputed domain then goes into a "hold" status, where it is not available to anyone pending the outcome of the dispute between the parties. Among the many domains that have been placed on hold under the policy are the following (challenger follows in parentheses): <dc.com> (DC Comics), <newton.com> (Apple Computer), and <thegap.com> (The Gap), which NSI subsequently released while the parties continued their negotiations.[22]

While the February 1998 revision to the dispute policy serves mainly to clarify the existing policy, NSI made several significant changes. For example, it appears a trademark owner may no longer base a challenge on the grounds that its first use of the trademark (now registered) predated activation of the domain.[23] Instead, the registration on which the trademark holder relies must have an "effective date" before "creation" of the domain. If "effective date" is interpreted as "filing date" or "registration date," then it will be more difficult for U.S. trademark owners in particular to qualify to mount a challenge, as the effective date of the registration may be years after the trademark owner established trademark rights via use. While such trademark rights appear to be no longer cognizable at all under NSI's dispute policy - with or without a related trademark registration - the rights of other trademark owners who have never used the mark in question but can take advantage of an early effective date in a jurisdiction that does not require use to obtain a trademark registration are recognized.

In the February 1998 revision, NSI also broadened its discretion in domain name disputes by articulating that it may require "suspension, transfer or other modifications to a domain name."[24] Prior to this point, NSI would not, absent a court order or settlement between the disputants, transfer or modify a domain name.

    C. The Problems With NSI's Solution

While perhaps a boon to some large and/or lucky entities who happen to own the right trademark registrations, NSI's chosen solution did little more than create additional uproar over the domain name system. The engineering community objected to the imposition of a user fee in what always has been a free system, and many legitimate businesses are finding that they are suddenly confronted with the loss of a domain in which they have invested significant financial and other resources.

The NSI system is biased, many say unfairly, in favor of those who have obtained trademark registrations because it ignores common law rights and infringement analysis (likelihood of consumer confusion), the underpinnings of trademark jurisprudence in this country.

At the same time, a challenger may find the dispute policy to be of limited value in policing its trademark rights. Would NSI find that the domain <bus1nessweek.com> is "identical" to the registered trademark BUSINESSWEEK?[25] Also, even a successful challenge under the policy does not necessarily immediately entitle the trademark owner to the domain; in the past, NSI would simply place the domain on hold pending a resolution of the dispute.[26]
Initially, NSI's hope of avoiding lawsuits with the dispute policy was not entirely realized. Far from shielding NSI from litigation, the dispute policy-at least earlier versions of it-actually may have spawned it. The lawsuits domain holders have filed against NSI illustrate the spectrum of trademark law concerns implicated by the dispute policy.

In the first case, Roadrunner Computer Systems, Inc. v. Network Solutions, Inc.,[27] Roadrunner Computer (RCS) filed suit against NSI to enjoin NSI from placing the <roadrunner.com> domain on hold, and to require NSI to adopt "fair and evenhanded" dispute policies. NSI counterclaimed for declaratory relief that its policy was not subject to court review.[28]

RCS had obtained the domain <roadrunner.com> in May 1994, and thereafter offered Internet services in connection with the domain. In December 1995, NSI informed RCS of a challenge to RCS's domain by Warner Bros., which holds an August 9, 1995 U.S. trademark registration for ROAD RUNNER for "toys, namely, plush dolls, and Halloween costumes and masks."[29]

Warner Bros. then apparently gave RCS the courtesy of extending the 30 day period for RCS's response several times. RCS used the time to secure a Tunisian trademark registration, a copy of which RCS then submitted to NSI to counter Warner Bros.' U.S. trademark registration. NSI refused to accept the proffered Tunisian trademark registration.[30]

However, before the court could address the substantive issues raised, the case resolved itself. Other than initiating the domain name challenge, Warner Bros. had pursued no claim against RCS; likewise Warner Bros. was not a party to the suit. Presumably seeking a way out of the litigation, in June NSI queried Warner Bros. as to whether it was continuing to suffer "legal harm" as a result of use of the domain. When NSI received what it considered a less than affirmative response, NSI announced that it was terminating the challenge proceedings against the domain, released the hold, and moved the court to dismiss the case as moot. On June 21, 1996, over RCS's objection, the court obliged.[31]

Roadrunner is a concrete example of the failure of NSI's dispute policy to take into account the cornerstone of trademark infringement analysis: likelihood of confusion. Except in the relatively rare dilution context, a trademark owner's rights cover only use of similar marks in connection with those goods or services sufficiently related to the trademark owner's so as to create a potential for consumer confusion as to source, origin, or affiliation. The dispute policy, therefore, awards the holder of a trademark registration certificate a far greater scope of protection against use of the same name than most trademark holders could ever hope to achieve in seeking to prevent use of the same mark, company name or designation other than a domain name.

The second case challenging the dispute policy, Data Concepts Inc. v. Digital Consulting Inc. and Network Solutions Inc.,[32] highlights an even more serious inequity inherent in the dispute policy, that of favoring trademark owners who have registered their marks over those who have not registered, but who nonetheless may have superior trademark rights. Digital Consulting filed a challenge with NSI over Data Concepts' continued use of the <dci.com> domain, on the basis of Digital Consulting's 1987 U.S. trademark registration of DCI for business management software and related services.

Although Data Concepts claimed to have used DCI as a trademark in interstate commerce and internationally in connection with its data management and process control software for business and industry since at least 1982, five years prior to Digital Consulting's trademark use of DCI, Data Concepts did not have a trademark registration to trump Digital Consulting's under the dispute policy. Under NSI's policy, Data Concepts, therefore, was in danger of losing the domain it had used since August 1993. Having no other options under the dispute policy, Data Concepts, the domain holder, filed suit.

After having taken the position that its domain name dispute policy is beyond the reach of the courts in that it essentially is executive branch policy by virtue of the contractual relationship between NSI and the National Science Foundation, NSI later stipulated that it would not interrupt Data Concepts' continued use of <dci.com> absent a court order. The parties then agreed to drop NSI as a party to the suit.[33]

On May 20, 1997, the court granted Digital Consulting's motion to enjoin Data Concepts' use of the "dci.com" domain name.[34] The court did so by adopting the report and recommendation of a magistrate judge who considered both Digital Consulting's motion to enjoin and Data Concepts' motion for summary judgment.[35] Under a traditional likelihood of confusion analysis, the district court concluded that the rights of Digital Consulting in its registered trademark DCI were superior to the rights of Data Concepts.

On appeal, the Sixth Circuit affirmed denial of Data Concepts' motion for summary judgment, but reversed the grant of summary judgment for Digital Consulting and remanded for further proceedings.[36] The Sixth Circuit found that the magistrate judge's likelihood of confusion analysis was inadequate with respect to various factors, including strength of the mark, relatedness of services, similarity of the marks, likely degree of purchaser care, and Data's intent in selecting the mark.[37] Somewhat surprisingly, the Sixth Circuit also held that, as a matter of law, the mark used by Data Concepts prior to their domain name registration was not the legal equivalent of the mark used in connection with dci.com.[38] The Sixth Circuit then compared Digital Consulting's federal trademark registration date of 1987 with Data Concepts' domain name registration date of 1993 to conclude that Data Concepts was not a senior user.[39]

The Sixth Circuit's opinion also addressed a problematic aspect of both NSI's domain dispute policy, and the status of trademark law at this time. In Data Concepts, Judge Merritt wrote "I concur . . . but I believe that there is a serious question regarding whether Data Concepts' use of the dci.com domain name constituted use of a trademark in the first place."[40]

The Data Concepts case draws attention to a serious flaw in NSI's domain dispute policy. Because the policy does not take into account trademark rights that exist on the basis of use alone (common law rights), inequitable situations will arise where the party who actually has superior trademark rights, based on seniority of use, is forced to relinquish the domain to the junior trademark user who had the foresight to register the mark. In this regard, the dispute policy resembles the trademark laws of numerous jurisdictions outside the United States, which award trademark rights to the first to register, not the first to use. These laws impose the burden on the trademark owner to protect its own interest in using the mark by registering it. This is not, however, the law in the United States, where substantive trademark rights have always been based on common law notions of seniority of use. Moreover the logic of protecting the interest of the party who went to the trouble of registering its trademark breaks down when the converse-the first to obtain a domain name-is not also protected. Obviously, to a significant degree, the dispute policy is an effort to protect the interests of the senior user of a name, but in this key respect it falls short of the mark.

Giacalone v. Network Solutions, Inc., the third case involving a challenge to NSI's dispute policy, is the first in which a court enjoined a trademark holder from interfering with use of the domain. [41]The court enjoined defendant TY, Inc. ("TY"), a stuffed toy manufacturer that owns a trademark registration for the word TY superimposed on a heart ("TY and design") for stuffed toys, from interfering with Giacalone's right to use the <ty.com> domain pending final judgment on the complaint. The court further required TY "to take any and all steps necessary to see that Plaintiff's right to use the domain name <ty.com> is undisturbed and not suspended or interfered with in any way, due to the past, present or future efforts of the Defendant TY in contacting third parties and seeking suspension of Plaintiff's right to use the name by alleging trademark infringement claims."[42] The court apparently was unmoved by TY's claim that because Giacalone, a computer consultant, had included on his web site (accessed by using the URL <http://www.ty.com>) comments analogizing his web software to children's toys, trademark infringement or dilution was manifest. TY's appeal was pending when the case settled. [43]

The case raises two important issues relevant to the dispute policy. First, it suggests another aspect to NSI's broad view of what it considers to be an identical mark as is required for purposes of initiating a challenge under the policy. While it may not be surprising that NSI viewed <roadrunner.com> (the domain) and ROAD RUNNER (the trademark) to be identical, it requires a greater stretch to conclude that <ty.com> (the domain) and TY and design (the trademark) are also identical. The fact that NSI ultimately determines whether names are identical on a case-by-case basis casts another element of uncertainty into the mix.[44]

Second, the NSI dispute policy overlooks the very real possibility that many different parties may each legitimately claim equal rights to use a particular mark or name. Giacalone, who chose the domain <ty.com> as a tribute to his son "TY," alleged that at least four U.S. trademark registrations exist for TY for such diverse goods as jewelry, screws, sausage processing machinery, and brushing tools.[45] In responding to the U.S. Trademark Office's initial rejection of the "TY" and design application due to a pre-existing registration of TY TARGET for dolls, TY, Inc. relied on the same principle, arguing that no likelihood of confusion existed because "Ty" was a first name entitled to only a "narrow scope of protection" and because different images were evoked by "TY within a heart, and TY TARGET."[46]

The dispute over the <pike.com> domain further illustrates this inherent inequity in NSI's dispute policy. In Pike v. Network Solutions, Inc.,[47] Peter Pike ("Mr. Pike"), a California realtor, obtained the domains <pike.com>, <pike.net>, and <pikenet.com>, for use in his real estate business. Subsequently, Floyd S. Pike Electrical Contractor, Inc., ("Pike Electrical"), a North Carolina power line repair company, initiated a challenge to Mr. Pike's retention of <pike.com>, submitting to NSI a U.S. trademark registration of PIKE, in stylized letters, for electrical power line installation and repair and related services. Mr. Pike trumped that registration with a Tunesian registration for PIKE, recently issued. NSI responded by allowing Mr. Pike to keep the domain (after he agreed to indemnify NSI).[48] Subsequently, however, NSI modified its dispute policy to preclude a domain holder from relying on a trademark registration that issued after the initial challenge, which had been the case with <pike.com>.[49] Pike Electrical then initiated a new challenge to the domain, and NSI indicated it would cut off the domain in 30 days. Mr. Pike then brought suit, inter alia, against NSI for breach of contract and against Pike Electrical for a declaration of non-infringement. NSI was dismissed without prejudice on February 10, 1997.[50]

Network Solutions, Inc. v. Clue Computing, Inc.[51] another challenge to NSI's policy, involved several firsts: the first domain case filed in state court; the first preliminary injunction issued against NSI (June 25, 1996), precluding NSI from interfering with the <clue.com> domain; and NSI's first attempt to try its interpleader theory in federal court, filing a suit in which it attempted to deposit the domain name with the court and asked that Clue Computing be restrained from pursuing the state court action, that the federal court handle the case, and that NSI be released and discharged from any liability.[52] While procedurally unique, Clue is factually reminiscent of Roadrunner and Hasbro, Inc. v. Internet Entertainment Group, Ltd.,[53]discussed infra. Clue Computing, a computer consulting firm, obtained the domain <clue.com> in August of 1994 and began using it shortly thereafter. On January 26, 1996, Hasbro, Inc. submitted its trademark registration of CLUE for board games, which dates back to the 1950s, to NSI. Lacking a trademark registration, Clue Computing filed suit to prevent the loss of the domain.

NSI's effort to move the case to federal court and to interplead the domain failed; the court ruled that NSI could not fulfill the interpleader requirement of depositing the domain name with the federal court because the domain was not under NSI's control so long as the state court's injunction was in effect.[54] The federal court then dismissed the claim and denied NSI's motion for reconsideration.[55] Bringing the litigation full circle, a federal court in Massachusetts has denied Clue Computing's motion to dismiss federal trademark infringement action brought by Hasbro against Clue.[56] Hasbro, the court held, had shown sufficient contacts by Clue Computing with Massachusetts (through its Internet site) to enable the court to exercise jurisdiction.[57]

NSI has been named as a defendant in at least seven additional cases.[58] While challenges to NSI and its dispute policy remain on several court dockets, and new challenges to domain names are brought under NSI's dispute policy every day, changes to the Domain Name System are also being implemented. These changes will significantly alter the landscape regarding domain name disputes and the role of the registrars (whether NSI or others) in such disputes.
Despite the above litigation, two recent California cases, Lockheed Martin Corp. v. Network Solutions, Inc.[59]and Academy of Motion Picture Arts and Sciences v. Network Solutions, Inc.[60]may help insulate NSI from liability in future domain name disputes. The Lockheed court found NSI was not a contributory trademark infringer merely by registering the domain. The Academy court reached the same result on infringement, and on the Academy's dilution claim, held that NSI's act of registering an Internet domain name that embodies another party's registered trademark does not constitute a commercial use of the mark, and thus does not constitute conduct prohibited under the Federal Trademark Dilution Act of 1995.

D. A New Approach

The issue of domain names and trademark conflicts now plays out on the world stage. On February 4, 1997, the IAHC, an 11-person International Ad Hoc Committee created by the Internet Society in October 1996 at the request of IANA, issued its plan for the modification and enhancement of the gTLD space.[61] The IAHC had been charged with responsibility for reviewing, modifying as appropriate, and implementing, as warranted, the provisions of the Postel Proposal for enhancement of the Domain Name System, already approved, in concept, by the Internet Society Board of Directors, which plan called for the creation of up to 150 new gTLDs in the first year (1996) alone, with more to follow.[62] Although the IAHC plan has been preempted by the U.S. government, its details remain important as the IAHC will likely have continuing influence in determining domain name policy going forward.

The IAHC plan, designed to be self governing in nature, was formalized in a gTLD Memorandum of Understanding ("gTLD MoU"), signed in Geneva on May 1, 1997.[63] At least 170 companies and organizations worldwide signed the proposal or declared their intent to sign.[64] The private company signatories included several prominent members of the global Internet community, including Internet access providers, Internet backbone service providers, and telecommunications companies, along with governmental and non-governmental organizations.[65]

To increase the available name space and reduce the cachet of the .com gTLD, while at the same time being mindful of increased trademark policing concerns as the domain space expands, the IAHC plan (now typically referred to as the "gTLD-MoU" after the document in which the plan is memorialized) would have added seven new gTLDs, bringing the total generally available to ten (including .com, .org, and .net). IAHC would have added the following:
    .firm, for businesses or firms;
    .store, for businesses selling goods;
    .web, for entities emphasizing activities involving the world wide web;[66]
    .arts, for entities emphasizing cultural and entertainment activities;
    .rec, for entities emphasizing recreational entertainment;
    .info, for sites offering information services; and
    .nom, for sites supported by individuals.[67]
The plan contemplated numerous registrars dispersed worldwide (over 80 had qualified by November 1997), who would have shared the administration of all of the gTLDs. Within the gTLD space, registrar policy would have been uniform as to, among other things, information required of a domain name applicant before a domain would be assigned.

Mindful of the inequities inherent in NSI's dispute policy, the IAHC plan, as initially conceived, recognized the essential role of the courts in resolving trademark disputes.[68] The plan did, however, include elements that would have assisted trademark holders in policing their marks by requiring enhanced information about each registrant. Under the NSI registration policy, a registrant is required to provide only abbreviated contact information and details about the Internet server it will use. By contrast, each applicant for a domain name in the new gTLD space would have submitted a detailed application, including not just accurate and complete contact information, but also an explanation as to the applicant's interest in the SLD it has chosen and its intended use for the domain.[69] In addition, and importantly, the applicant would have been required to agree to submit to the jurisdiction of appropriate courts in the country where the domain registrar is located and to appoint an agent for service of process. This requirement was designed to ensure that the trademark owner would have at least one guaranteed venue (there may or may not be others depending on the circumstances of business activities, use of the domain, and nationality of the parties) in which to pursue infringement litigation if necessary.

Under the IAHC plan, upon submission to the registrar, SLD applications would have been published on a publicly available website.[70] Trademark owners and search firms would therefore have had immediate access to all such information. Such improved information likely would have proven an effective tool both for routine policing and for pursuing infringers.[71]

In addition, the IAHC plan included alternative dispute resolution mechanisms, including on-line mediation and arbitration, as well as a novel "administrative challenge" approach intended to provide an effective enforcement tool, particularly for preemptive purposes.[72] Under this approach, an owner of "demonstrable intellectual property rights" could have directly challenged a registered SLD, either before or after the SLD had been assigned to a domain applicant.[73] For example, upon a challenge by Microsoft, an Administrative Challenge Panel (ACP), composed of experts on trademark law and on the Internet, might have concluded that no one other than Microsoft could obtain "microsoft" as a SLD in a particular gTLD space or, possibly, in any gTLD space, depending on the relevant circumstances and the showing made. What those relevant circumstances would have been and how such a challenge might have been resolved however, remains unclear.

Government intervention, however, has essentially mooted the IAHC plan. The White House has now assigned responsibility for the transition of the administration of the domain name system to a wholly non-governmental entity. On June 5, 1998, the Administration released its Policy Statement on the Control of the Internet Domain Name System.[74]

The document encourages the private sector to create a non-profit, U.S. based company which would take over most existing IANA functions. The new corporation would oversee the creation of a competitive market of registrars, registries, and gTLDs, while the government "ramps down" NSI's current monopoly control over these functions. The Statement suggests that the new corporation should be formed by late 1998, and that the total transition of IANA functions should be completed by October 30, 2000.

Notably, the Policy Statement is short on specifics, beginning instead with a statement of principles to guide the transition.[75] Many difficult questions are left to the newly formed corporation. For instance, the Administration declines to add any new gTLDs (in contrast to its proposal for 5 new gTLDs contained in the earlier draft referred to as the "Green Paper")[76] , and recommends some measures that might be implemented regarding trademark disputes involving domain names. It also suggests that the new corporation be formed by a temporary "interim board" made up of representatives from a mix of global technical, business, and other interests. Accordingly the intense debate over domain name policy will likely continue after a short respite, once the new corporation forms and begins setting its policies in more detail.

E. The Courts Weigh In On Trademark and Domain Disputes

        1. U.S. Courts

Beyond questions of domain name registry policy and Internet governance issues lies the reality that no matter what registry policy or policies ultimately are adopted, disputes invariably will arise and courts will be called upon to resolve those disputes. In the last year, several federal courts reached the merits of some such domain disputes. In most of these NSI was not an active participant.

One of the earliest decisions has so far remained the most extreme. In an unreported case, Actmedia, Inc. v. Active Media Int'l, Inc., an Illinois federal court reached a final judgment that the reservation alone of someone else's famous trademark as a domain name constitutes trademark infringement and dilution.[77] Cases decided since then have suggested limitations on this extreme view.

In a recent Oregon case, for example, a federal district court granted summary judgment against a trademark infringement claim that was based on the use of another company's registered trademark as part of a domain name.[78] Epix, Inc. was the owner of a federal registration for the mark EPIX for "printed circuit boards and computer programs for image acquisition, processing, display and transmission."[79] Interstellar Starship Services registered and used the domain name <epix.com>, and Epix, Inc. charged Interstellar with trademark infringement. However, the court found that Interstellar only used its epix.com web site to publicize the activities of a theater group production called "The Rocky Horror Picture Show." Interestingly, the court concluded that Interstellar's use of <epix.com> could "initially" confuse actual or potential customers of Epix, Inc. because they might go to the Interstellar web site when they were seeking Epix, Inc. But the court held that the differences between the parties' goods and services were such that Epix, Inc.'s customers "could not be seriously confused" by the use of the domain name.[80]

Of course, registration of another's mark as a domain name has been held to infringe trademark rights in a number of cases, but these have commonly involved more than mere registration. Three courts have entered orders against a well-known "cybersquatter" and alleged domain name pirate, Dennis Toeppen, for his registration and "use" of famous marks. The Ninth Circuit recently affirmed one of those decisions in an important opinion on the scope of "dilution" in the Internet domain name content.

On September 3, 1996, Toeppen was first preliminarily enjoined from using the AMERICAN STANDARD trademark and the <americanstandard.com> domain name and was ordered to transfer the domain name to the plaintiff, American Standard, Inc., for the pendency of the action. [81]The case has been dismissed, and American Standard continues to use the domain to promote its air conditioning, automotive, medical systems and plumbing businesses.

Toeppen lost again in federal court a few months later.[82] The plaintiff, Intermatic, Inc., which had used its INTERMATIC trade name and mark in connection with its electronics business since 1941, sued Toeppen, who had registered the domain name <intermatic.com>, for dilution and trademark infringement. On Intermatic's motion for summary judgment, the court ruled against Toeppen, holding that Toeppen's registration and use of the <intermatic.com> domain name constituted dilution of a famous mark. The court held that obtaining a domain name with the intent to "arbitrage" the name represented a commercial use, and that its effect was to dilute the mark within the meaning of the new Federal Trademark Dilution Act.[83] The court further held that questions of fact on the issue of likelihood of confusion prevented it from reaching summary judgment on Intermatic's claim of trademark infringement.

Toeppen suffered his third loss in court against plaintiff Panavision International, the well-known Hollywood camera and lens maker that distributes its motion picture equipment under the familiar PANAVISION and PANAFLEX marks. Following the reasoning of Intermatic, the district court held Toeppen's registration and "use" of the <Panavision.com> and <Panaflex.com> domain names constituted dilution.[84] On appeal, the Ninth Circuit affirmed the summary judgment against Toeppen, interpreting the "commercial use" and "dilution" elements of a federal antidilution claim in the Internet context. First, apparently accepting that registration of a trademark as a domain name without more does not constitute "commercial use," the appeals court held that registration in order to prevent rightful trademark owners from doing business on the Internet under their trademarks unless they paid Toeppen's fee constituted commercial use of the marks.[85] Second, focusing on the Act's definition of dilution at 15 U.S.C. §1127 ("the lessening of the capacity of a famous mark to identify and distinguish goods or services" [emphasis added]), the Ninth Circuit emphasized that it need not rely on traditional notions of dilution such as "blurring" or "tarnishment." Rather, since potential customers commonly try to find a company on the Internet by using its famous mark to locate the company's web site, the court agreed with the Intermatic holding that depriving a trademark owner of the power to use its mark as its domain name "lessens the capacity of [the trademark owner] to identify and distinguish its goods and services by means of the Internet."[86]

Contrary to Actmedia, which held that domain name registration of a famous mark alone represented infringement, another federal court has held more recently that registration of a domain name alone, without use, does not constitute infringement or dilution. In Lockheed Martin Corp. v. Network Solutions, Inc., Lockheed sued NSI alleging trademark infringement and dilution of its registered trademark SKUNK WORKS.[87] Specifically, Lockheed alleged that by awarding registrations of the domain names <skunkworks.com>, <skunkworks.net>, <skunkwrks.com>, and <skunkwerks.com> to multiple parties other than Lockheed, NSI had infringed and caused dilution of Lockheed's mark. NSI moved to dismiss on the grounds that the registrants of each of these domains were indispensable parties to the suit which Lockheed had failed to join. The Central District of California district court denied NSI's motion, finding that these parties were potential joint tortfeasors along with NSI, and as such, these parties were "permissive" rather than indispensable parties to the suit. In reaching its conclusion, however, the court commented that it seemed "unlikely" that NSI's registration of SKUNK WORKS type domain names would, by itself, violate the Lanham Act.[88]
The court later granted NSI's motion for summary judgment on the grounds that NSI has not made a commercial use of domain names as trademarks, and therefore could not satisfy the commercial use element of 15 U.S.C. § 1125(c). [89]The court further concluded NSI was not liable for contributory infringement because the knowledge requirement was not satisfied, i.e., there was no evidence that NSI knew or had reason to know of an infringing use of the domain name by the registrants.

In Planned Parenthood Federation of America Inc. v. Bucci,[90] use of the domain in question, <plannedparenthood.com>, was beyond dispute, but the character of that use was at issue. The defendant, Richard Bucci, an anti-abortion activist and the host of a radio show called Catholic Radio, obtained and used the domain at least in part to attract individuals who believed in abortion to his site. That site, <www.plannedparenthood.com>, carried an opening banner that read "Welcome to the PLANNED PARENTHOOD HOME PAGE" and promoted an anti-abortion text called The Cost of Abortion.[91] Planned Parenthood, which owned incontestable registrations for the mark PLANNED PARENTHOOD, and had used it in connection with its reproductive health services for 50 years, brought suit for trademark infringement and dilution under the Lanham Act.

Bucci first argued that there was no subject matter jurisdiction under the Lanham Act, as his was non-commercial speech.[92] Noting that in a prior hearing in the case the defendant had admitted that his use of the plaintiff's mark was use in commerce as defined by the Act, the court quickly rejected Bucci's attempted retrenchment. The court held that the "in commerce" requirement was satisfied for two reasons. First, Bucci's actions affected Planned Parenthood's ability to offer its health and information services which unquestionably were rendered in commerce. Second, the fact an Internet site must be accessed via interstate telephone lines means that putting up a home page, with unrestricted access, satisfies the in commerce requirement of the Lanham Act.[93] The breadth of these conclusions, particularly the latter, likely will be scaled back in future decisions.[94]

Finding subject matter jurisdiction under the Lanham Act, the court then found the commercial use requirements of 15 U.S.C. § 1114 (infringement of a registered trademark), 15 U.S.C. § 1125(c) (dilution), and 15 U.S.C. § 1125(a)(1)(A) (false designation of origin) were satisfied for three reasons: the defendant was promoting the sale of a book (though he did not benefit monetarily from those sales), the defendant solicited funds for his political activities, and the defendant's actions harmed the plaintiff's ability to distribute its services by preventing some Internet users from reaching the real Planned Parenthood site.[95]
In its discussion the court noted "whether defendant's use of the mark is commercial within the meaning of the Lanham Act is a distinct question from whether defendant's use of the mark is protected by the First Amendment."[96] However, after finding the use to be commercial, and concluding that a likelihood of confusion exists, the court went on to reject Bucci's First Amendment defense on the basis that the use being made was more as a source identifier than as part of the "communicative message," the latter being protected speech, but the former not.[97]

The Second Circuit summarily affirmed the lower court.[98] Beyond the commercial speech issues, the case is of interest for the court's likelihood of confusion analysis as the court essentially eliminates two prongs of the multi-factor Polaroid test as applied to disputes on the Net. The court's conclusion that because both parties have web sites, the parties' goods and services are in close proximity to each other[99] would, taken to its logical conclusion, significantly eliminate this factor of likelihood of confusion analysis whenever adverse parties have web sites on which the marks/names in question appear. Likewise, concluding that the bridging the gap factor need not be considered because both parties have web sites[100], overlooks the substantive aspect of this factor and attributes too much to the "market" of the web. Again, this approach proves too much: one could just as easily conclude that bridging the gap is an unnecessary inquiry between two companies engaged in national distribution of their respective products because they are both in the U.S. market. While the court reached the right result on both of these prongs of the likelihood of confusion test, it did so for the wrong reasons- reasons which may continue to reverberate in Internet case law for some time.

Finally, in another recent domain name decision, Cardservice Int'l, Inc. v. McGee,[101] the court found infringement of the plaintiff's registered CARDSERVICE INTERNATIONAL mark for credit card and debit card processing and related services. The defendant, Webster McGee, had registered the domain <cardservice.com> and set up a web site advertising credit card processing services using the name "EMS - Card Service on the Caprock." McGee claimed that he was not violating the plaintiff's mark because his business name used the words "card" and "service" separated by a space; the space was omitted only from the domain name, and only because spaces are not permitted by Internet protocol. However, the plaintiff submitted evidence showing that McGee intended to use "guerrilla warfare" on the Internet against Cardservice International, that he had also registered <csimall.com> (the "csi" having been derived from the plaintiff's trademark), and that he was using the web sites to direct users to the plaintiff's competitors.[102] The court, characterizing McGee's behavior as "malicious," issued a permanent injunction against him and ordered him to pay the plaintiff's attorneys fees.[103]

2. Non-U.S. Courts

Although domain name disputes, particularly those surrounding the .com TLD, are often perceived as involving U.S. interests only, courts throughout the world are now deciding trademark cases involving domain names

a. Britain
The Prince case[104] appears to be the first domain name dispute to involve parties and courts in two different countries. The case revolves around the <prince.com> domain which Prince PLC, a British computer services company, obtained via NSI in February 1995. Prince PLC also obtained the domain <prince.co.uk>. When Prince Sports Group, Inc., a U.S. manufacturer of tennis rackets and other sporting goods, tried to register the <prince.com> domain, it learned from NSI that the name was already taken. Prince Sports Group registered several other domain names instead, including <princetennis.com> and <princesportsgroup.com>, but the U.S. company also launched an effort to obtain <prince.com> from Prince PLC.

In order to trigger NSI's dispute policy, Prince Sports Group-which has several trademark registrations for PRINCE in both the U.S. and the UK-sent a demand letter to Prince PLC in the UK. The letter threatened litigation if the British company did not assign the <prince.com> domain to Prince Sports Group and agree not to use PRINCE as any part of any new domain name they may select. Prince PLC does not own a trademark registration for its PRINCE service mark in the UK or elsewhere.Prince Sports Group then initiated a domain name dispute with NSI, enclosing a copy of its demand letter to Prince PLC along with copies of its valid preexisting U.S. trademark registrations. Under the provisions of NSI's dispute policy, Prince PLC was given 30 days to either relinquish the <prince.com> domain, produce a valid preexisting trademark registration, file a legal action "in any court of competent jurisdiction in the United States," or do nothing and have its domain put on hold.

With only one day remaining before <prince.com> would be put on hold, Prince PLC opted not to comply with NSI's dispute policy and instead filed a civil action against Prince Sports Group in the High Court in London pursuant to section 21 of the UK Trade Marks Act of 1994.[105] Prince PLC sought declarations from the UK court that its registration of the <prince.com> domain did not infringe Prince Sports Group's trademark rights and that Prince Sports Group's allegation of infringement and threats of legal action were unjustified, and sought to enjoin Prince Sports Group from continuing to threaten legal action based on Prince PLC's use of the <prince.com> domain.[106] Despite the fact that Prince PLC had not satisfied the requirements of NSI's dispute policy, NSI nonetheless did not put the <prince.com> domain on hold but instead deposited it with the UK court for disposition.[107]

While the British case was pending, Prince Sports Group sued both NSI and Prince PLC in U.S. federal court.[108] On July 31, 1997, the UK court ruled that Prince Sports Group's threats were unjustified and issued an injunction preventing the U.S. company from repeating its threats. However, the UK court would not go so far as to declare that Prince PLC's use of the <prince.com> domain name did not infringe Prince Sports Group's registered UK trademarks.[109] The UK court stated that it declined to get involved in the legal battle over domain name ownership because it might be construed as undue interference in the U.S. lawsuit filed by Prince Sports Group.[110] The ruling left Prince PLC in control of the domain and the case subsequently settled with Prince Sports Group dropping its U.S. lawsuit and Prince PLC retaining ownership of the domain. [111]

On the cybersquatting front, in Marks & Spencer PLC v. One in a Million,[112]the High Court of Justice, Chancery Division, recently enjoined the activities of two cyber-dealers and their related companies, who had obtained and were offering for sale or "hire" numerous domain names containing well known marks, such as burgerking.co.uk, motorola.co.uk, britishtelecom.co.uk, spice-girls.net and virgin.org. In this group of cases, the court enjoined the "threat of passing off" (a threat which would become a reality if an offending domain was sold to and used by a stranger to the trademark owner), issuing a warning to cybersquatters:
 

Any person who deliberately registers a domain name on account of its similarity to the name, brand name or trademark of an unconnected commercial organization must expect to find himself on the receiving end of an injunction to restrain the threat of passing off, and the injunction will be in terms which will make the name commercially useless to the dealer.[113]

In addition to the threat of passing off, the court also based its "final injunctions" on grounds of trademark infringement, concluding that the defendants' activities were inherently likely to confuse.[114]

The One in a Million case was preceded by one involving Harrods, the internationally known department store, and the domain <harrods.com>.[115] Although the Chancery Division of the High Court of Justice declined to reach final judgment on the merits, the court enjoined the domain holder, UK Network Services Limited, an Internet service provider, and other defendants from infringing the Harrods name and mark and ordered release of the <harrods.com> domain name. [116]

United Kingdom courts have also created legal precedent involving ".co.uk" domains (".uk" is the ISO country code TLD for the United Kingdom, and ".co" is used to demonstrate commercial entities, similar to the .com TLD in the U.S.). [117]In a case involving the name <pitman.co.uk>, the court ruled that anyone may obtain a domain name that has not already been assigned to another party.[118] The <pitman.co.uk> domain was initially assigned to Pearson Professional Limited ("Pearson") on February 16, 1996, though Pearson did not begin using the domain immediately. On March 31, 1996, another company, PTC, obtained the domain name via an agent and began to use it for e-mail purposes. At Pearson's request, the registry, Nominet UK, returned the domain name to Pearson in accordance with Nominet UK's "first come, first served" rule, cutting off PTC's e-mail. PTC sued. On May 22, 1997, the court reaffirmed the "first come, first served" principle and Pearson's right to the domain name.

b. Germany

Outside the United States, German courts appear to have taken the lead in deciding domain name disputes. In the first and most well-known case, a court in Mannheim held that the assignment of the domain name <heidelberg.de> to a private party (".de" is the ISO country code TLD for Germany) infringed the City of Heidelberg's superior rights.[119] The city of Kerpen appears not to have faired as well in a dispute over <kerpen.de>, where the Köln court ruled that the domain does not represent usage of the name of the city.[120]

Two other cases highlight the fact that, under German law, any activity on the Internet that is visible in Germany brings the actor under the jurisdiction of the German courts. A court in Berlin recently enjoined use by MCN, a Kansas City web design, Internet service, and domain name brokerage firm, of <concertconcept.com>, <concertconcept.de>, <concert-concept.com>, and <concert-concept.de>, as violating the rights of a German company in its trade name and mark.[121] The court specifically noted that it is irrelevant to German jurisdiction whether the defendant's host computer was in the U.S. or whether the domain was registered in the U.S. - the only relevant criteria is that the web site can be read in the district of the court.

A Dusseldorf court reached the same conclusion, albeit in dicta, in a dispute involving the domain <epson.de>. In ordering removal of the defendant's domain registration, the court offered that it makes no difference whether the TLD is .com or .de, so long as the web site with which the domain is used is visible in Germany.[122]

c. Netherlands

The courts in the Netherlands have decided several cases concerning domain name disputes. Perhaps the most interesting involved a group of banks and insurance companies, who together sued IMG Holland N.V., a stock brokerage.[123] The brokerage obtained each plaintiff company's name as an SLD in the .com TLD space-for example <labouchère.com>-and used each of the domains as addresses for a single web site containing information relevant to the plaintiffs' activities.[124] On May 15, 1997, the District Court at Amsterdam granted an injunction against IMG's continued use of the domains, and found IMG's conduct in obtaining the domains to be tortious, concluding that despite the fact that the site itself disclosed that the information it contained originated from IMG, consumers were likely to assume the information came from the plaintiffs, and the plaintiffs were precluded from establishing their own web sites under their own names. In so ruling, the court rejected IMG's argument that the plaintiffs were not harmed because they could obtain the identical SLDs in the .nl ISO country code TLD, concluding that was insufficient consolation for the plaintiffs because .com is the most common TLD for international commerce.

d. Australia

The Australian courts may get an opportunity to hear a dispute regarding the domain name <sydney2000.net>. This domain has been registered by an Australian Internet service provider, Asia Pacific Internet Company ("APIC"). The Sydney Organising Committee for the 2000 Olympic Games (SOCOG) has sent a cease and desist letter, and may soon take APIC to court. Commercial use of the phrase "SYDNEY 2000" is expressly prohibited by Australia's Sydney 2000 Games Indicia and Images Protection Act 1996.[125]

These cases raise national and international issues of trademark law in the context of domain name disputes. As the domain name system continues to evolve and electronic commerce continues to grow, more and more courts throughout the world will be called on to resolve these issues.
 
 

Beyond domain name problems, trademark issues pop up in a variety of forms in cyberspace. Some are "garden variety" trademark infringements; while the medium may have changed, the legal analysis has remained virtually unaltered. At the same time, however, the web's commercial explosion has presented trademark holders and the courts with some difficult new issues. For example, as discussed below, the technological ability to create hypertext links from one web site to others and to imbed hidden code called Meta tags in web pages that, although not viewable on the site, can be recognized by Internet search engines, poses novel questions of trademark and unfair competition law (not to mention copyright). Simultaneously, the lack of geographical limits on the Internet has spawned a host of cases regarding jurisdiction. The Internet has also generated some of the first test cases for the new federal anti-dilution statute.

A. Linking and Framing

One of the most significant technical features that distinguishes the Internet from all other communications media is the ability to dynamically connect multiple documents and elements. These dynamic connections most often appear in the form of "links" or "frames." It is important to understand the nature of links and frames to understand the context in which they can pose trademark concerns.

Linking comes in two forms. When a net user clicks on an icon or highlighted text segment programmed as a hypertext reference link, the link instantly transports the user to another location. The link may lead simply to a particular point within the same web site, but, just as often, the link allows the user to leap from one site to a completely different, unrelated site provided by a different source, across the country or across the world. This latter form of linking, called "linking out," is what most people mean when they speak of linking. If the user checks the Uniform Resource Locator (URL) address on the browser being used, the address will change from the page where the user started to that of the linked page. In contrast to hypertext reference links, image links bring an image contained in a separate file onto the page being viewed. The separate file may be an image file stored on the same server as the link or an image file stored on a separate, unrelated site, which is known as "linking in." For example, a travel agency advertising trips to Hawaii might link in photographs from hotel, airline, and resort sites to promote bookings. The end result is a web page that appears to be a seamless integration of content and images all provided by the same source.

Framing is another type of dynamic connection that is similar to image linking, but that permits more sophisticated "capture" of content. A framing site brings entire web pages from another site into a window on the original site. Using framing technology a web developer can allow users to scroll through multiple sites simultaneously. For example, our travel agent might have a page that shows an airline's page in a left hand column window. In the right hand window, the content of the web sites of various destination resorts would display in cycles, that is, a new page, and new resort, would appear every five minutes. Across the bottom of the screen the travel agency might have a ledge, that is, a portion of the screen that does not change so long as the user is at the travel agency's site. The ledge might contain the agency's logos, links for navigating within the agency's site, and advertisements from sponsors.

With both image links and framing, the URL does not change, which may give the impression that the site on which the link is located is an authorized provider of the linked or framed content. To prevent access to image files, web site owners can limit access to the files so that only requests to link from authorized pages are allowed. To prevent a site from being framed, developers add an instruction to the page's source code so that when the user clicks the link to the page a new window is opened so that the page appears in its own window without the linked page's frame around it.

The ability to direct users from one site to another using hypertext reference links underpins Internet commerce. Although under some circumstances a party linking to or framing another's site may seek permission, doing so is not the norm. Content providers have been less receptive to framing and image links than they have to hypertext reference links, for which permission to link historically has been regarded as unnecessary.

The first major case to challenge framing on intellectual property theories has settled. In Washington Post Co. v. TotalNews,[126] TotalNEWS provided a web site that featured a list of "name-brand" news services, identified by their trademarks, in a narrow column to the left, an advertising banner across the bottom right of the screen, and a content window in the upper right of the screen. When a user clicked on a news service, that news service's content appeared within the content window on the TotalNEWS web site. However, when the news service's content first loaded, its advertisements were obscured by the advertising banner on the TotalNEWS web site. Some of the framed sites, such as CNN Interactive, responded by setting their pages to refresh when loaded so that the pages appeared in their own window without the TotalNEWS frame.

Although substantially a copyright case, the TotalNews plaintiffs (The Washington Post, Time, CNN, The Los Angeles Times, Dow Jones and Co., and Reuters) also alleged trademark infringement, false designation of origin, and unfair competition. On June 5, 1997, the parties settled with TotalNEWS agreeing to cease framing the plaintiffs' web sites in exchange for permission to link to the plaintiffs' web sites using hypertext reference links consisting only of highlighted plain text.[127] Each plaintiff is entitled to revoke permission to link to its site; however, if the defendant refuses to remove the link the plaintiff must convince a court that the link is an impermissible violation of rights under some theory of intellectual property.

A more recent case involving framing, based substantially on copyright claims, has not settled, and has already generated two opinions.[128] Defendant Applied Anagramics is the owner of the "1-800-DENTIST" trademark, and exclusively licensed it to plaintiff Futuredontics. Evidently still desiring some credit or benefit relating to the mark, Anagramics created a web site that displayed the mark by framing Futuredontics' site. Futuredontics has sued for copyright infringement, alleging that defendants had created an unauthorized derivative work within the meaning of the Copyright Act, and alleging a false advertising claim under § 43(a) of the Lanham Act, arising out of certain representations made by Applied Anagramics.

The district court's two opinions seemingly point in different directions and illuminate little. On the one hand, the court denied plaintiff's motion for preliminary injunction on the ground plaintiff had not shown a likelihood of success on merits; on the other hand, the court denied defendant's motion to dismiss on the ground that defendants had failed to show that plaintiff would not be entitled to relief under any set of facts that could be proved.

Although the Futuredontics case does not illustrate this point, the TotalNews case demonstrates an important distinction between framing and linking in the context of advertising, the lifeblood of the web. With framing, the framing site's revenue generating advertisements are substantially more visible to the consumer than those of the framed site. Unlike the TotalNEWS style framing model, the hypertext reference linking model, permitted under the terms of the settlement, does not obscure the advertisements of the linked page. Where sites are linked, rather than framed, the link can enhance the revenues of both sites, providing additional consumers through links. Such economic benefits of linking, as well as the fair use nature of many such links, have caused linking to become ubiquitous on the net.
However, not everyone accepts the theory that hypertext reference links are beneficial, or at least harmless. On April 28, 1997, Ticketmaster filed a complaint against Microsoft in federal district court in Los Angeles alleging that Microsoft's unauthorized links to interior pages of Ticketmaster's site constitute "electronic piracy," and accusing Microsoft of "feathering its own nest at Ticketmaster's expense."[129]

In the complaint, Ticketmaster indirectly alleges that Microsoft's Seattle Sidewalk city guide at <www.seattle.sidewalk.com>, a feature of the Microsoft Network, wrongfully linked users in search of tickets to Seattle-area sports and entertainment events directly to the page of the Ticketmaster site where such tickets could be ordered. The complaint states several counts, including trademark infringement, dilution, and federal and state unfair competition claims, all of which are primarily premised on a theory of web site dilution - likely the first of its kind. Pursuing an argument that would allow it to direct the flow of traffic into and within its web site, Ticketmaster essentially equates a web site with a trademark, claiming that is has an obligation to control "the manner in which others utilize and profit from its proprietary services, or face the prospect of a feeding frenzy diluting its content."[130] After filing the suit, a Ticketmaster representative commented to the press that Ticketmaster's concern was not Microsoft's links to the Ticketmaster home page (<www.ticketmaster.com>), but Microsoft's direct links to specific parts of the Ticketmaster site that allowed a ticket customer to bypass the home page. Not surprisingly, the Ticketmaster home page contains advertising (in addition to other content) that was bypassed by a link, such as Microsoft's, to an internal page within the site. Significantly, shortly before the suit was filed Ticketmaster and Microsoft ended efforts to negotiate a partnership in which they would jointly provide a city events guide and ticketing service; Ticketmaster announced that it would offer its service in collaboration with City Search, another guide service.[131] Not surprisingly, Microsoft answered, denying the claims and asserting affirmative defenses such as fair use,[132] non-commercial use, estoppel, assumption of risk and First Amendment protection.

Ultimately, if a court were to find Microsoft liable for the mere act of linking, the decision would have profound repercussions for all Internet users. It is likely that, if a court ultimately finds any liability at all, the decision will be quite narrow and limited to the particular facts of the case. But even if the case should settle, the issue will continue to resurface in the context of linking that results in diverting advertising revenues.[133] For example, one meta-search engine provides the results of other search engines, such as Excite or Infoseek, and attribute the content to the source engine, but without the logos, features, or advertising of the source engine. In place of other search engines' advertising, the meta-search engine may sell advertising on its site.[134] If meta-search engines like this become popular and reduce the number of direct searches on the source engines, thus reducing advertising revenues, the source engines may sue on theories similar to those in Ticketmaster.

As is evident in Ticketmaster, linking highlights another complication which may be unique to the net: the ability of friend or foe to divert traffic from a trademark owner's web site, likely the intended site, to the proponent or opponent's site. The vast majority of search engines available on the web today report search results based on raw number of hits--the number of times the searched-for term appears on the web page. A detractor may deliberately overwhelm the trademark owner's presence on the web, or a supporter may unwittingly do so, thereby diverting traffic away from the trademark owner's site.

A more sinister development involves the wholesale appropriation of the content of sites that receive a high numbers of hits. The appropriator downloads the content of a site that receives a substantial number of hits, for example <disney.com>, and then converts all text and images to white on white so that it becomes hidden. This hidden content is then made part of the appropriator's site, which, for example, may be a competing site selling videotapes of children's movies. When an Internet user searches for content that appears on the appropriated site, for example "Hercules," the search engine will return both the Disney site and the competing site, because both sites contain the same content, even though the user cannot see the appropriated site's content on the competing site. While such appropriation is a copyright violation, it may also qualify as unfair competition or trademark dilution.

A related problem involves use of corporate logos by disgruntled former employees. In several instances, unhappy former employees have set up web pages, complete with doctored versions of their target's marks, to rail against the injustices allegedly visited upon them by their former employer. The same may be true of consumers displeased with "lemon" purchases, and virtually anyone else with an ax to grind. While each of these avenues of complaint has been available through more traditional forms of media in the past, the opportunity to reach a broader audience, cheaply, and to flaunt corporate logos and marks in the process, is increased dramatically on the net.

Attempted enforcement of trademark rights against persons who use marks or content to divert traffic from a trademark owner's site, whether the troublesome use is by friend or foe, requires careful consideration of First Amendment concerns as well as of trademark principles of fair use. The public relations nightmare that could result from a misstep in this area should be balanced against both the perceived need to police trademark rights and the proposed policing method.

In Patmont Motor Werks, Inc. v. Gateway Marine, Inc.,[135] the court was unwilling to extend trademark protection in a domain name dispute that focused on the path of the URL (as opposed to the use of someone else's registered mark). The path is that part of the web site address that immediately follows the forward slash after the domain name (e.g., "volfive/abel.html" in <www.mttlr.org/vofive/abel.html>). Reasoning that the path merely shows how the web site's data is organized within the host computer, and does not serve the same source identifying function as the domain name, the court held it does not merit the same protection. The court noted, "[plaintiff] has cited no case in which the use of a trademark within the path of the URL formed the basis of a trademark violation."[136]

B. Meta Tagging

While some appropriators steal content simply to ensure that their site appears in search engine results, even if the searcher was not searching for their product or service, other means to accomplish the same result exist. Meta tagging is a technique whereby a word (e.g. "sex") is inserted in the keywords field of the site in order to increase the chances of a search engine returning the site, although the site may have nothing to do with the inserted word. In another version of this technique, a pornographic site duplicates, in their keywords field, the keywords of frequently searched sites so that the pornographic site will be returned by search engine looking for the frequently searched site.

In what appears to be the first case of this type, the law firm of Oppedahl & Larson, owner of the domain name <patents.com>, filed a trademark infringement action against three companies and the corresponding ISPs after discovering that the companies inserted the words "Oppedahl" and "Larson" in the keywords field of their web pages in order to draw traffic to their sites. When the law firm ran a search on "Oppedahl" and "Larson," the defendants' web sites were returned but the sites did not appear to contain either term. Only a review of the source page revealed the hidden text.[137]
It is anticipated that all the defendants will defend their actions on fair use and First Amendment grounds. However, to the extent such actions cause confusion, or are used to intentionally mis-direct potential customers to a competitor's site, such actions may be found to constitute trademark infringement or unfair competition.[138]

A slight variation on this theme is Playboy Enterprises, Inc. v. Calvin Designer Label,[139] the first case in which a court enjoined a party from using misleading terms in hidden text or metatags on a web site. In this case, the defendants' web sites <playboyxxx.com> and <playmatelive.com> featured adult material and nude photographs, advertised defendants' "Playmate Live Magazine" and displayed the message "Get it all here @ Playboy."[140] The defendant's sites also contained the terms PLAYBOY, PLAYBOY MAGAZINE and PLAYMATE, repeated several hundred times. The terms were in black type on a black background, so they were not visible to individuals viewing the site but the words did cause the sites to be returned by search engine queries for "Playboy" or "Playmate." In fact, given the number of times the terms appeared, the sites were typically the first or second sites to be returned, before the plaintiff's <playboy.com>.

When the defendants failed to respond to requests that they cease using the marks, Playboy Enterprises (PEI) sued for, inter alia, trademark infringement, dilution, and unfair competition and moved for injunctive relief to preclude defendants from continuing to use the marks in this fashion. The defendants failed to respond to the motion and a preliminary injunction was issued on September 8, 1997 which precluded the defendants from continuing to use the <playboyxxx.com> and <playmatelive.com> domains or PEI's registered PLAYBOY and PLAYMATE trademarks in hidden text or metatags on the defendants' web site.[141] Interestingly, the preliminary injunction not only precluded defendants from continuing to use the marks and domain names, it ordered defendants to immediately request that NSI cancel its domain name registrations. Anticipating NSI's likely response, the court ordered that, in the event NSI were to deposit the domain names with the court for disposition, "the domain names are hereby canceled."[142]

In another case involving PEI, a federal district court ruled in favor of a defendant, Terri Welles, who had included trademarked terms on both the title and metatags of her website.[143] Welles, who appeared in Playboy magazine as a Playmate of the Month, and then Playmate of the Year, established a website, <http://www.terriwelles.com>, which included the heading "Terri Welles-Playmate of the Year 1981." Among other uses of PEI's trademarks, the site also contained the terms "Playboy" and "Playmate" within the keywords section of its metatags.[144]

The court held the use of the trademarked terms in metatags on Ms. Welles' site did not constitute trademark infringement, since it qualified for the "fair use" defense.[145] Although the court briefly mentioned that metatags are not visible to websurfers, it did not then proceed to carve out the website's metatag as a specialized tool of trademark infringement. Instead, it compared metatags to the "subject index of a card catalog," and held that there may be "legitimate editorial uses" of trademarked terms in metatags which make it easier for websurfers to know the content of a website.[146] "[The] defendant may properly use the term Playboy in an editorial fashion . . . Therefore, the court finds that defendant has not infringed on defendant's trademarks by using them in her website meta tags."[147]

Ultimately, for infringement purposes, the court treated the "invisible" metatags much like the "visible" webpage itself. Since Ms. Welles was indeed a Playboy Playmate, her use of those terms to describe herself, whether visibly on her webpage or through metatags, was a fair use.

C. Procedural Concerns: Jurisdiction

The instantaneous international nature of the web adds an element of uncertainty to trademark use. For example, a client may put up a page containing marks cleared for use in the U.S., perhaps even marks that have long been in use in the U.S. market, and receive a cease and desist demand from a company with trademark rights in Germany. Recently, a German state trial court in Berlin enjoined the use of the domain names "concertconcept.com," "concertconcept.de," "concert-concept.com," and "concert-concept.de" under German trademark law.[148] The court found jurisdiction over the defendant, a United States corporation doing business in Kansas and Germany, on the grounds that the domain names were accessible at the plaintiff's location in Germany. As for the claims concerning the .com sites, which are registered in the U.S., the court stated that the country within which the name had been registered was irrelevant in determining jurisdiction.

This exercise of jurisdiction over a domain name dispute on the basis of accessibility of a foreign registered site within the forum country goes beyond the most expansive extraterritorial exercise of jurisdiction occurring to date within the U.S. In Playboy Enterprises, Inc. v. Chuckleberry Publishing, Inc.,[149] the district court found that it had jurisdiction over the operators of the Italian web site "playmen.it." The service allowed users to download information from the Italian PLAYMEN magazine and specifically courted U.S. users. Although this extra-territorial exercise of jurisdiction appears expansive, the court determined it had jurisdiction based on retention of jurisdiction over the defendant for the purposes of enforcing a permanent injunction issued in 1981. The court ruled that the operators must either completely shut down the site or prevent U.S. users from accessing the Italian site.

In numerous cases involving trademarks or other content on the Internet, the first issue the court confronts is jurisdiction. Most problematic is applying traditional principles of jurisdiction, which speak in terms of a party's establishment of minimum contacts with a sta