browse comments: WIPO RFC-2

WIPO RFC-2
New Zealand Internet Registry Limited (process@wipo2.wipo.int)
Wed, 18 Nov 1998 10:12:58 -0500

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Original document:
http://www.domainz.net.nz/newsstand/wipo2.html
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Response to WIPO RFC-2 Purpose

The Domainz formal submission in response to the WIPO RFC-2 document.

Background
Trade Mark Protection in New Zealand
Comment on WIPO RFC-2
Dispute Prevention
Dispute Resolution
Process for the protection of famous and well
known marks
Addition of new generic top level domains
Conclusion

Background

The New Zealand Internet Registry Limited, trading as Domainz,
welcomes the opportunity to comment on WIPO RFC-2.
Domainz is a company formed by the Internet Society of New
Zealand Inc. It has been given the task of managing the DNS
registery for the ".nz" country code top level domain within the
Internet domain name system. Responsibility for that domain
has been allocated by IANA to the Internet Society of New
Zealand Inc (ISOCNZ), which continues to exercise the policy
making role and to monitor the performance of Domainz in the
management and administration of the registry.

Domainz is required, by its contract of appointment, to:

a.
provide a cost-effective service in administrating
the DNS (in respect of the .nz space);
b.
provide a robust operational infrastructure;
c.
co-operate with others in promoting,
administering, and using the Internet.

The specific policies and procedures of ISOCNZ and Domainz
relevant to trade mark claims and related intellectual property
issues include:

a.
there are a limited number of second level
domains within .nz TLD, with no present intention
of increasing that number. Some of those second
level domains are closed and/or moderated, but
most (including .co, .org, .gen) are open to all
applicants;
b.
every applicant agrees to payment of application
fees and annual licence fees at the time of
applying for a name;
c.
every applicant also agrees to comply with the
conditions upon which names are registered;
d.
every applicant undertakes that the registration
for use of the name which is appliedfor will not
infringe the rights of anyone else, and agrees to
indemnify Domainz against any costs arising out
of claims of infringement;
e.
names are allocated on a "first come first served"
basis, in order of receiving applications;
f.
name applicants, and others, are clearly informed
that any disputes about the rights to hold or use
a name are matters to be resolved between the
claimant and the name holder or user.

There have been some instances in New Zealand of name
holders registering names or letter strings which correspond
with known trade marks or trading names then offering those
domain names to existing name users. In some cases names
have changed hands by agreement, in other cases there has
been no agreement and the names remain on the register or
have been cancelled. In a small number of cases claims have
been resolved after litigation has begun, but none have gone
beyond preliminary or interlocutory hearings.

ISOCNZ and Domainz consider that the determination of
intellectual property rights and enforcing claims to those rights
are matters which involve issues of law and inquiries into facts
which Domainz has neither the resources nor the competence to
determine with authority. They believe that an applicant or
user of a domain name must take the responsibility for that
choice of name, in the same way as if they published a name in
any other manner, as with a company name, publication in a
newsletter or poster or selecting a telephone "word number".

The holders of trade marks and trading names in New Zealand
have well established rules and mechanisms to protect their
rights and to enforce remedies against infringers. As in most
other jurisdictions, there are borderline cases which may be
keenly fought, resulting in litigation. The existing litigation
system is equipped to deal with those matters authoritatively.
ISOCNZ and Domainz believe that their own competencies do
not cover those matters and they do not have the necessary
authority to determine them, nor to enforce any determination,
unless the parties involved agree to be bound.

Trade mark protection in New Zealand

New Zealand has legal mechanisms for the protection of trade
marks and trading names similar to those in other common law
countries. In our case, those include:

a.
protection under the Trade Marks Act 1953 for a
registered trade mark in respect of specified
goods and services;
b.
protection under the common law rules
against"passing off" for a trade mark (whether
registered or not) and any distinctive feature of a
method of trading;
c.
a remedy under the Fair Trading Act 1986 against
conduct, in trade, that is misleading or deceptive
or is likely to mislead or deceive.

A mark or sign, capable of distinguishing goods and services,
may be registered in relation to specified goods or services.
Registration gives the proprietor exclusive right to the use of
the trade mark in relation to those goods and services. The
proprietor or registered user will have remedies for infringement
against the unauthorised use in trade of:

a.
an identical sign on the same products;
b.
an identical sign on similar products where
deception or confusion is likely; or
c.
a similar sign on identical or similar products if
deception or confusion is likely.

New Zealand is party to the Nice Agreement on "International
Classification of Goods and Services for the Purposes of the
Registration of Marks". Experience in New Zealand, and as far
as we know overseas, does not seem to include any claims by
the holders of registered marks that a domain name holder, by
registration or use of the domain name, has infringed the rights
of a registered owner under the Trade Marks Act in respect of
the relevant classes of goods or services.

The tort of passing off occurs when a trader trades in a way
that causes customers to believe that one person's goods or
services are those of another. To succeed, a plaintiff has to
prove:

a.
that it has a goodwill or reputation;
b.
that there is a misrepresentation by the
defendant; and
c.
that there is damage or likelihood of damage to
the plaintiff.

In this case, there is no need for the plaintiff to have a formally
registered or recognised mark. The Court system furnishes a
set of rules and a procedure for determining the facts and
applying the relevant law.

The prohibitions against misleading and deceptive conduct
under the Fair Trading Act 1986 provide a remedy in similar
cases - where a person, in trade, engages in "conduct that is
misleading or deceptive or is likely to mislead or deceive".
Clearly, merely using a string of letters which corresponds to a
trade mark, particularly in cases of common words or names,
will not necessarily result in confusion and in that case will not
be an infringement.

Comment on WIPO RFC-2

In RFC-2, WIPO seeks comment particularly with respect to:

a.
dispute prevention;
b.
dispute resolution;
c.
process for the protection of claims and well
known marks in the gTLDs; and
d.
effects on intellectual property rights of new
gTLDs.

Comments follow under the headings for each of those issues.

Dispute Prevention

Domainz aims to establish an infrastructure and a registry which
will facilitate compliance with the law (in respect to trade mark
infringements as well as other aspects) without jeopardising
the quality of servcie or the robustness of the infrastrcture.
Every applicant for a domain name must take responsibility for
that name and must continue to meet conditions upon which
registration is granted. These conditions include:

a.
an undertaking that the name does not infringe
the rights of others, with the corollary that any
claims of infringement must be met by the name
holder and not the registry. The name holder
agrees to indemnify the registry for any costs
incurred by the registry because of infringement
claims;
b.
all contact details must be maintained up to date
and responsive, so that claims can be addressed
to the legitimate name holder. Unresponsive
registrations may be cancelled;
c.
an annual licence fee, and any other charges
incurred by the registry must be paid, this means
that speculative registrations or "warehousing"
will only occur where the applicant sees a real
potential for economic benefit;
d.
the contract between the applicant and registry
is under New Zealand law.

Domainz does not require that applicants or name holders
submit to disput resolution procedures or other conditions in
respect of claims by "third parties" (i.e., purported holders of
registered or unregistered trade marks or other claimants).
Even if if chose to impose conditions, by contract, upon name
holders, it has no legal power to require that third parties must
comply with the same procedures. Domainz leaves the parties
to determine the manner of resolving any disputes.

Details of Domainz name hlders are published and available for
serach when the name is registered. We take no responsbility
for screening applications or undertaking trade mark searches.
We believe that those functions are the responsiblity of the
applicant and any claimant of trademark rights. If Domainz
tried to undertake those functions the arrangements would
seriously inhibit the delivery of a high level of service and
robust infrastructure, and would fall outside the competency of
the domain name registry.

Dispute Resolution

Claims of trade mark infringement, passing off or other
infringement by domain name holders may be resolved, if the
parties wish, by any of the formal or informal dispute resolution
procedures which may be devised by human ingenuity.
However, where the parties to the dispute do not voluntarily
agree to some specific agreement, the national and
international legal system provides a framework of laws and
institutions (including the Courts) to determine the respective
rights and remedies of the parties.

In our experience, the most difficult domain name disputes
arise between parties who are not previusly in any contractual
or other relationship with each other. In many cases, they
involve claimants whose "trade mark rights" have not been
formalised, in fact or in law, in respect of the matter where the
infringement is claimed. In these cases, unless informal
resolution can be negotiated, only formal legal rules and
institutions can determine and enforce the legal rights and
remedies of the respective parties.

We recognise that it may be desirable, for parties who wish
disputes to be resolved expeditiously, that they should be able
to select an alternative dispute resolution procedure and
forum. If there is sufficient demand, WIPO could provide that
facility for those parties which wish to use it. It is not
necessary for the registries to be a party of or in any way bound
by those arrangements. If the parties comply with the outcome
of the dispute resolution process, that any changes to the
registration details can be provided to the registry and
processed in accordance with the usual procedures for voluntary
changes. Each registry is perfectly capable of acting upon the
instructions of the parties, if there are changes to be made to
the name holder or other details.

If one or other party fails to abide by the result of the dispute
resolution process, then either the dispute resolution procedure
or some other legal mechanism (such as domestic or
international law) must provide for a method of enforcement. It
is not within the competence of the registry, nor conducive to a
cost-effective service, for the registry to become an
enforcement agency.

In short, a registry and registrar should have no involvement in
the resolution of domain name disputes, except tothe extent
that it may choose to do so informally. The registry should
ensure that details on the register are up to date, thereby
providing a point of contact for anyone to issue proceedings.

If the registry ensures that parties can be put into
communication with each other, then the legal machinery can
provide the remedies. On the basis of past experience, that
can extend to awards of damages or to orders that a name
holder must take all necessary steps to relinquish a name in
favour of a claimant.

Process for the protection of famous and well known marks

We do not believe that there is any need to provide special
protection for "famous and well known marks" by explicit
mechanisms in the DNS. Those marks, in each case, are
registered in respect of specific goods and services and have
existing legal protection. Apart from registration, the concept
of a "famous and well known mark" is subjective. It applies
under the Paris convention to a mark which is 'considered by a
competent authority in the country of registration or use' (i.e.,
where the claimed infringement occurs) 'to be well known in
that country as being already the mark of a person entitled to
the benefits of this convention and used for identical or similar
goods'. The proper 'competent authority' is not the DNS
registry. The registry cannot act to 'protect' these marks,
unless the issue has been determined by a ruling of the
competent authority, without the registry being exposed to
claims for wrongfully interfering with the rights of one or other
of the parties.

It would be contrary to the "first come first served" principle for
Domainz to attempt to make judgements which might fall in
this category. Unless there is a supervening "register" of those
marks and a level of protection for them (which still leaves open
the quesitons of conflicting similar or identical word strings in
different categories) there is no way of the registry discharging
an obligation of this type with any certainty.

Addition of new generic top level domains

Domainz is primarily concerned with the .nz top level domain.
Both ISOCNZ and Domainz wish to have the freedom to set
policies, to manage that domain cost-effectively and to deliver
a high level of service performance to registrants and users
within that domain.

Any rules which are imposed in respect of gTLDs should not
purport to limit the flexibility of ccTLD domain managers to
obtain their objectives, consistently with the integrity of the
Internet by whatever legitimate methods they choose.

The problems resulting from the interface between Internet
domain names and intellectual property rights in New Zealand
have been quite limited. The arrangements described above
have meant that only cases of genuine dispute or extreme
obstinacy have not been resolved informally. Those remaining
cases are such that the only satisfactory method of resolution is
by a formal legal procedure.

We are aware, and we expect others will be aware, of the
research undertaken by Professor Milton Mueller of the Syracuse
University School of Information Studies and reported in July
1988 entitled Trademarks and Domain Names: Property Rights
and Institutional Evolution in Cyberspace - Milton Mueller,
Associate Professor and Director, Graduate Program in
Telecommunications and Network Management, Syracuse
University School of Information Studies.

http://www.istweb.syr.edu/~mueller/study.html.

Professor Mueller's conclusions appear to support our experience
that the existing legal framework is better suited to resolving
claims of trademark infringement in accordance with the law
than involving DNS registries in ad hoc administrative
procedures which do not necessarily have any sound legal
foundation.

Similarly, ISOCNZ and Domainz have no direct interest in the
possibility of adding additional new global TLDs. From a purely
intellectual property perspective, there might be merit in adding
a further 42 generic TLDs, so that trade marks could be
registered as domain names in respect of the classes to which
the marks relate. Of course, this is an incomplete solution
because trademarks are more than merely word strings. In
addition, there are objections to this proposal from the
perspective of the DNS management and governance more
generally. We consider that intellectual property matters in this
context should be secondary to the integrity and performance of
the Internet itself.

Conclusion

The Internet is only one of many media of communication,
which can give rise to claims of infringement of Intellectual
Property rights (nationally or internationally). Others include
television, radio, print media and telephone 'word numbers'.
Universal arrangements for protecting Intellectual Property
rights, as with other legal rights, need to be independent of the
media involved.

It is quite feasible for registries to ensure that name holders
are accountable for their choice of names and their decisions
about the uses to which they will be put. As in the .nz ccTLD,
name holders can be required to provide and maintain
indentifying and contact details, which must be responsive.
Name holders must meet the charges of the registry for
registering and maintaining the name, plus any charges incurred
as a result of infringement claims. The registry publishes its
policies of non-involvement and requires an indemnity from
every name holder. Registration may be cancelled if these
conditions are not met.

This transparency and accountability means that inadvertent or
deliberate infringers can be brought within the legal system,
which has the competence and authority to resolve any dispute
over legal rights and to enforce any remedies.

WIPO might usefully establish an alternative dispute resolution
framework for dealing with Intellectual Property conflicts. This
framework could be complementary to the Internet and could
use the technology of the Internet as a means of
communication. However, it should not be a requirement
imposed upon every name holder or registry. In particular, it
should not be imposed upon the managers of ccTLDs, which
have other methods of ensuring that Trademark holders have
the means of protecting their legal rights.

Last revision: Weds, 11 Nov 1998. All pages on this site (c) Domainz, all rights reserved.

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