As the advertising, sales, and communications advantages of the Internet continue to grow, on-line services will become an ever more important component of successful business organizations. Unfortunately, by the time many companies choose to make the leap and begin to use this technology, they may find that the "address" they wish to use has already been acquired by someone else.
The Internet address is called a "domain name." This is your location in cyberspace to which e-mail and other messages can be sent by customers (or potential customers) and colleagues. The marketing advantages of having a domain name which is the same as, or at least relates to, your or your company's name are obvious. (For example, you can contact any attorney at Woods, Rogers & Hazlegrove via Internet e-mail at an address which includes his or her last name [or its first eight letters] followed by "@woodsrogers. com.")
There is a catch, however. Only one entity can use each domain name. And these domain names, or addresses in cyberspace, are being assigned at a rate of over 1,300 per month. More and more frequently companies are finding that a name they would like to use is unavailable. A potentially more troublesome problem is also occurring, as small businesses discover that the name they have already chosen to use is in fact the name or trademark of another company. The other company may be across the country, entirely unknown to the user of the domain name, but its claim of trademark rights in the domain name may well result in legal action to prohibit any use of its name or trademark, even as an Internet address for a business in another part of the country.
Three examples demonstrate the potential for problems in this area. McDonalds Corporation applied too late to use the address "mcdonalds. com," which had already been assigned to an individual. MTV recently engaged in litigation with one of its former employees who had begun an Internet service at "mtv.com" while employed as a video disc jockey by MTV, then continued to operate the Internet service at that address after leaving the company. And the Princeton Review testing service frustrated its major competitor, Stanley Kaplan, by reserving the domain name "kaplan.com" (although after arbitration the name was given to Kaplan).
These situations present an issue of increasing importance: What is the legal framework governing the assignment and use of addresses in cyberspace? The answer is that the law in this area is still developing and therefore uncertain. Knowledge of how the system currently works thus becomes critical to helping companies avoid pitfalls as they begin to consider use of the Internet in their businesses.
Internet domain names are assigned on a first come, first served basis by the "Internet Network Information Center" (InterNIC). (InterNIC may be reached at (703) 742-4777 or on the Internet at hostmaster@internic.net.) Because of the exponential growth of demand for these addresses, registration of domain names is currently limited to one per company. Further, InterNIC does not allow a company to "reserve" a domain name for possible future use. However, private companies have sprung up which will reserve a name for you, establish it on their system and maintain the name until your company creates its own Internet service.
Companies should also take steps to ensure that others are not using their company names or trademarks as Internet domain addresses. Network Solutions Inc. (NSI) of Herndon, Virginia, administers the domain name system for InterNIC. NSI will not knowingly assign your company's name to another party, but it does not perform a trademark search before assigning a domain name. Rather, the party requesting the domain name is asked to certify that the use of the registered domain name will not interfere with or infringe upon the rights of third parties in any jurisdiction with respect to trademark, service mark, tradename, company name, or any other intellectual property right.
In order to limit potential problems, companies should first avoid using any domain names that could cause confusion with well-known companies or trademarks. The next step is to run a trademark search of domain names under consideration before choosing an address. An in-depth search can be performed by a trademark attorney, while a more cursory search can be performed on-line. InterNIC does not get involved in disputes between parties over the rights to particular addresses but will suspend the use of an address upon a showing of possible infringement. Resolution of disputes over the right to use particular Internet domain name addresses is left to the parties and the courts.
In this area, where the legal rules are still developing, caution and planning are of paramount importance. Particularly for small companies, the cost of litigating over the use of a domain name or an alleged trademark infringement is prohibitive. Avoiding potential conflicts when choosing an Internet address is much more cost effective and will allow the business to begin to build name recognition and goodwill in an Internet domain name, with a reduced risk that it will have to switch to a different name in the future because of a dispute with another claimant.