House Subcommittee Scrutinizes Possible Domain Name Expansion

WASHINGTON, May 5, 2011 – The House Judiciary Subcommittee on Intellectual Property, Competition and the Internet held a hearing Wednesday to investigate the possible effects of expanding Internet domain names beyond the traditional suffixes like .com and .net to potentially anything a registrant could type.

The subcommittee probed plans by the Internet Corporation for Assigned Names and Numbers (ICANN) to expand the generic top level domains (gTLDs) beyond the set menu of familiar suffixes like .org and .gov.  The proposed new regime could comprise either an expanded menu of choices or an open door for registrants to create a suffix of their choosing, such as .google or .microsoft.

ICANN, which formed in 1998, is a non-profit corporation that manages the domain name system for Internet website addresses.  Each website “lives” at an address designated by a string of numbers – called an IP address – which operates like a telephone number.  ICANN indexes those numbers and pairs them up with domain names, which allows users to find a website by typing in an easy-to-remember name rather than a difficult-to-remember string of seemingly random numbers.

As ICANN presumes – and a number of subcommittee members acknowledged – the go-ahead on generic top level domains would likely spur investment by offering many new entrants sought-after domain names, albeit with different suffixes. The move would also lay the groundwork for allowing the creation of domain names in non-Latin characters, such as Arabic or Japanese.

On the other hand, subcommittee members worried, the creation of unlimited gTLDs could also create a host of problems.

“New gTLDs will likely spur investment and revenue,” said subcommittee chair, Rep. Bob Goodlatte (R-VA) during his prepared statement, “but [they] may cause consumer confusion and open doors to fraud.”

Later on in the hearing, Goodlatte questioned whether there were financial motivations in the form of raises or bonuses for anyone at ICANN to push the proposed expansion. ICANN senior vice president, Kurt Pritz, said he did not know the answer to that question.

Goodlatte also indicated that if ICANN introduced gTLDs, he would like to see a significant portion of the proceeds from the sale of new domains invested protections for trademark and intellectual property owners.

In addition to the consumer issues ICANN’s proposal presents, trademark holders also face potential skyrocketing costs associated with ensuring the integrity of their marks.

When questioned, Mei-Lan Stark, a member of the Board of Directors of the International Trademark Association acknowledge the value of making the Internet more accessible to those using non-Latin alphabets, but noted the difficulty and cost already associated with defending marks on the Internet due to multiple gTLDs.

To illustrate, Stark relayed the problems a Fox affiliate had when its domain name was copied with a different suffix and used by an overseas registrant to host a pornography site.

To head off problems, in a practice known as “defensive registration,” many registrants will scoop up domain names with additional suffixes like .net or .co in addition to the .com.   When trademark disputes do arise, however, ICANN’s Uniform Domain-Name Dispute-Resolution Policy (UDRP) requires that the parties settle the matter by agreement, arbitration or court action before the organization will cancel, suspend or transfer a domain name.

In many cases, where an alleged infringer resides outside the U.S., a long-term resolution may be all but impossible, according to Philip Foret, a partner and intellectual property attorney at Dilworth Paxson LLP in Philadelphia. The World Wide Web, he says, is the “Wild West” of trademark law.

“The problem with overseas infringers is that they can avail themselves to loopholes,” says Foret.  “You can send them a cease and desist letter, but then they take the site down and retain the address so you have to continue to monitor these sites.”

Adding a theoretically infinite number of gTLDs to the mix could very well lead to what Foret calls a cybersquatting “land rush” on domains similar to the mid-1990’s and consequent exponential increase in already high legal costs for trademark policing.  Moreover, with respect to the ability to absorb those costs, all companies are not equal.

“It’s really the smaller and medium sized companies with low or no legal budgets that would be most affected when having to police trademark rights,” says Foret. “They may have to spend a lot of company resources protecting their brands.”