Submission of the international trademark association in response to the request for comment on the creation of the .EU internet top level domain

1. Please comment on the above outline of the delegation of the .EU TLD to a registration organization: the Registry. Are there alternative models for the Registry organization that should be considered?

The management and implementation of rules governing the .EU registry should be placed in the hands of a not-for-profit entity which derives its authority from the European Commission. INTA believes that the European Commission should retain a measurable degree of oversight, but not directly control the not-for-profit entity.

2. What should be the criteria for the .EU Registry's registration policies? How should the registration policy be developed and implemented? By the Registry organization, by a distinct consultative body or by the European Commission itself?

Criteria for the .EU Registry’s Registration Policies

(a) Information

INTA recommends that the .EU domain name registration agreement contain a requirement that the domain name applicant provide accurate and reliable contact details consisting of:

• the full name of the applicant;
• the applicant’s postal address, including street address, city, state or province, postal code and country;
• the applicant’s e-mail address;
• the applicant’s telephone number;
• the applicant’s facsimile number;
• where the applicant is an organization, association or corporation, the name of an authorized person for contact purposes;
• the primary nameserver (host name and net address).

(b) Pre-Payment

To discourage cybersquatting, pre-payment of the requisite application fee should be made before the domain name is delegated or renewed and, where the fee has not been paid, the domain name application/renewal should be rejected.

(c) Registration Period

It is recommended that all domain name registration be for limited periods.

(d) Dispute Resolution

As described in more detail in our response to Question #3, INTA supports the creation of a dispute resolution procedure that applies to the .EU and requires the applicant to agree in its registration agreement to submit to dispute resolution. This dispute resolution system should be limited to cases of alleged bad-faith, fraud, and cybersquatting.

(e) Protection for Famous and Well-Known Marks

INTA recommends that some type of clearance mechanism be applied for trademarks which would be deemed "famous" or "well-known." This would be beneficial, since famous trademarks are especially inviting to domain name pirates. We believe, however, that determinations on applications for exclusions for famous or well-known trademarks should have no binding effect on national or regional industrial property offices or national courts in their implementation of international norms for the protection of famous and well-known trademarks.

(f) EU Presence Required

INTA recommends that those entities wishing to register a domain name in the .EU be required to demonstrate that they have a recognizable and active presence in a Member State of the European Union. Such a connection could be determined by any number of factors, including citizenship, residency, place of incorporation, place of business, or factors used in EU law for deciding issues of jurisdiction and venue. Such requirements would likely alleviate abuse of the .EU domain, as has occurred with existing ISO 3166 country codes.

(g) Full Disclosure Through WHOIS

Information on domains registered in .EU should be made available through a WHOIS site. Ideally, of course, the information on .EU registrations should be part of a multi-faceted WHOIS site that allows full-featured searching across all registries and registrars.

While INTA recognizes rights of privacy as important, it considers that privacy concerns should not overshadow the need of intellectual property owners to identify the identity of domain name owners through a WHOIS system. Permitting a domain name holder to remain anonymous would place a trademark owner at a significant disadvantage. Limitations on access to information only serve to encourage abuse of intellectual property, frustrate the effective enforcement of legitimate intellectual property rights and, inevitably, increase the cost of doing business on the Internet for the end user. INTA notes that to allow a domain name holder to remain anonymous would not be consistent with the approach adopted in other records that relate to public resources, including the availability of contact information related to trademarks registered with the Office of Harmonization of the Internal Market ("OHIM").

(h) Second-Level Domains in .EU

Commerce, Government, and Education

INTA supports the creation of one or more specific second-level domains such as .co.eu or .gov.eu. Thus far, this has proven to be successful in country code domains such as the .uk. There should, however, be some type of take down procedure in place for cases where a third party is able to demonstrate, for example, that a particular registrant is not a commercial entity and is therefore undeserving of a .co.eu registration.

Beyond the Recognizable Designations

Special-purpose second level domain names beyond the recognizable designations for commerce, government, and education, should not be created under .EU. While it may appear that such special-purpose domain names can be helpful in locating a particular entity, in practice, multi-level domain names are more problematic. First, there is the problem of deciding which category a particular entity falls under. A single company might fall into several different categories, requiring it to register its name for all those different categories, or it might not fall into any one of the enumerated categories at all. Trademark owners in particular have problems with parties registering their trademarks as domain names under the currently existing generic top level domains ("gTLDs"). Adding a secondary level would only exacerbate this problem. In the end, the public is hurt by the confusion caused by so many different entities operating under the same second-level domain name. The trademark owner is hurt by the damage to its valuable trademark rights.

Commercial and Non-Commercial

Finally, with regard to the issue of differentiation between commercial and noncommercial second-level domains, INTA is somewhat skeptical that such a distinction would resolve a number of the trademark problems existing under the current domain name system ("DNS"). INTA is concerned, for example, that adopting a less stringent standard for contact information for so-called "noncommercial" TLDs may encourage abusive practices in such gTLDs. Given that trademarks may be diluted by uses that are claimed to be "noncommercial," INTA believes that uses masquerading as "noncommercial" have the potential to be just as abusive as "commercial uses." More importantly, INTA is wary that end users of the Internet might not appreciate such a distinction and that consumer confusion would abound. Furthermore, based on

the nefarious activities which trademark owners are already facing in the existing gTLDs, INTA is mindful that a system relying on such a distinction may lend itself to abuse.

Development and Implementation of Registry Policy

Registry policy for .EU should be developed in an open, fair, and effective manner and in consultation with Internet user groups. In particular, if the Internet is to serve the needs of international commerce, including business and consumer interests in maintaining brand equity and investment and consumers' interests in relying on such brand equity to identify the product, service or company of the consumers' choice, the mainstream business and trademark community must have an effective voice in the creation of the .EU.

3. Would it be appropriate to apply the WIPO disputes and trademark policies as reflected in their May 1999 Report to the .EU domain or are there alternative solutions to these issues within the European Union?

Yes. INTA believes that the most prudent course of action is to apply the policy recommendations on resolving disputes found in Chapter 3 of the May 1999 final Report of the World Intellectual Property Organization ("WIPO"). Given the level of the openness and thoroughness with which WIPO conducted the consultative process that lead to its final recommendations, INTA feels that these recommendations are an excellent starting point for developing a dispute resolution mechanism for registries and registrars within the proposed .EU top level domain. Specifically, INTA believes that any dispute resolution mechanism developed for the .EU TLD should contain the following features:

• The dispute resolution mechanism should not deny the parties access to the courts. That is, any dispute resolution procedure should not prevent either party from filing the appropriate claim in a national court prior to the initiation of the administrative procedure or after the administrative panel has issued a decision.
• Domain name holders within the .EU TLD must agree through the registration agreement to submit to the jurisdiction in (1) the domicile of the domain name holder and (2) the domicile of the registrar.
• The contractual relationships between the .EU governing body and the registries, the registries and registrars as well as the registrars and the domain name holders should contain provisions which require all parties involved in the contractual chain to abide by or enforce, as the case may be, the decisions rendered by the dispute resolution mechanism.
• The domain name registration agreement in the .EU TLD require domain name holders to submit to the administrative procedure.
• At least initially, the dispute resolution mechanism must be limited to cases of alleged bad faith, fraud and cypersquatting.
• The remedies available under the dispute resolution mechanism should be:
1. the suspension of the domain name registration;
2. the cancellation of the domain name registration; and
3. the transfer of the domain name registration to the complainant.
• The dispute resolution mechanism should allow the consolidation of disputes in situations where there is one infringer who has misappropriated the same or different intellectual property rights of the same party through domain name registrations.
• There should be no time limitation for bringing a claim under the dispute resolution mechanism.
• The dispute resolution mechanism should provide for interim measures such as the suspension of a domain name registration to be granted within ten days of the initiation of the dispute procedure.
• The dispute resolution mechanism should by default require only one decision-maker. However, the rules of procedure should allow the selection of a three person panel at either party’s election.
• The rules of procedure should allow for party participation in the selection of a three person panel.
• All decisions under the dispute resolution mechanism should be posted on a publicly available web site.

In addition to the WIPO recommendations, INTA believes that any dispute resolution mechanism must contain features to enhance the express purpose of WIPO’s recommendations (i.e., providing a quick and efficient mechanism for resolving disputes between trademark owners and domain name holders). In this regard, INTA believes that the rules of procedure for any dispute mechanism developed for use within the .EU TLD must provide a workable list of non-exclusive factors to be used by decision-makers in determining whether a domain holder has registered a domain name "bad faith." In this regard, INTA recommends that the dispute resolution mechanism adopted in the .EU TLD incorporate the following non-cumulative factors as a guide to decision-makers:

• Whether the domain name holder has any trademark or other intellectual property rights in the disputed domain name.
• Whether the domain name holder ever made any lawful use of the domain name in connection with the legitimate offering of goods or services prior to the registration of the domain name.
• The domain name holder’s intent to divert consumers from the on-line location of the mark owner to another on-line location that could be harmful to the goodwill represented by the trademark or service mark.
• The domain name holder’s offer to transfer, sell or otherwise assign the domain name to the trademark owner or any third party for financial gain.
• The domain name holder’s provision of false or misleading contact information when applying to register the domain name or the domain name holder’s intentional failure to maintain accurate contact information.
• The domain name holder’s registration or acquisition of multiple domain names which are identical or confusingly similar to trademarks or service marks of others.
• The domain name holder’s history of offering to transfer, sell or otherwise assign domain names identical or confusingly similar to the trademarks or service marks of others to third parties.
• The domain name holder’s history of providing false or misleading contact information when applying to register the domain name or the domain name holder’s history of using aliases in the registration of domain names which are identical or confusingly similar to the marks of others.

In summary, INTA sincerely feels that the recommendations found in Chapter 3 of the WIPO Final Report will provide a strong foundation for an effective dispute resolution mechanism for the proposed .EU ccTLD. That being said, INTA also feels that in order to establish an effective dispute resolution mechanism in the .EU ccTLD, the dispute mechanism must contain a non-exclusive set of factors that can provide guidance to decision-maker when determining if a domain name has been registered in bad faith.

Might there be a specific role for the Office of Harmonization of the Internal Market in Alicante in this context?

Given that OHIM is relatively young and still continuing to address the myriad of issues associated with developing and refining a new trademark registration system for use within the European Union, INTA believes that, at this time, it should not be tasked with resolving trademark and domain name disputes. Moreover, the planned expansion of the European Union will give rise to additional challenges for OHIM. Given the extreme importance of OHIM’s mission, INTA feels OHIM must continue to focus its energies on creating a valuable and effective trademark registration system within the internal market.

4. To what extent might a more constraining instrument in the European Union or in WIPO reinforce protection of names and marks in the DNS, in addition to alternative dispute resolution? In that case, which categories of names should be protected and how should they be determined?

While it is true that the U.S. is the first nation to adopt an anti-cybersquatting law, cybersquatting is by no means an American problem. Many European companies and other entities doing business in Europe - a number of whom own trademarks registered with a European trademark office - are faced with substantial costs in combating cybersquatting in Europe, and to these trademark owners, a more constraining instrument to reinforce protection of names and trademarks would be most welcome.

“Cybersquatting” is generally referred to this activity as the registration and trafficking of Internet domain names with the bad-faith intent to benefit from another's trademark. In particular, famous and well-known marks have been prime targets of cybersquatters, who, unless they are stopped, will likely become the "pirates" of the new millennium. WIPO, in addition to identifying cybersquatting as a global problem, recognized in its interim report on the domain name process that, indeed,

"[f]amous and well-known marks have been the special target of a variety of predatory and parasitical practices on the Internet." Cybersquatters target famous or well-known marks for a variety of reasons, including:

1. to extract payment from the rightful owner of the trademark, who are likely to have greater financial resources;

2. to offer the domain name for sale to third parties on a Web site;

3. to use such names for pornographic sites or otherwise capitalize on customer confusion; and

4. to engage in consumer fraud, including counterfeiting activities.

In Europe, the problem of cybersquatting is particularly prevalent in, but not limited to, the open or relatively open ccTLDs, including Austria, Denmark, Germany, The Netherlands and the U.K. It is our understanding that cybersquatting, despite the problems it presents to trademark owners and consumers, is not yet specifically dealt with in any European national statute. European courts have typically utilized traditional concepts in trademark law, marketing practices laws, or even “common legal principles” to provide trademark owners with remedies for harm caused by piracy on the Internet.

For many European trademark owners, the lack of clear anti-cybersquatting mechanisms have left them without adequate and effective judicial remedies. Despite the fact that cybersquatters are trafficking in domain names, trademark owners in many cases cannot sue without proof of use or an offer to sell. Consequently, trademark owners are forced to engage in continuing monitoring situation - waiting to see if the cybersquatter begins use of their domain name, offers it for sale to the public or fails to renew the registration with the registration authority.

Cybersquatting is a malicious act that is damaging to the interests of European trademark owners and the European consumers who purchase goods and services via the Internet. Moreover, trademark piracy in cyberspace results in consumer fraud and confusion and is detrimental to brand equity during this critical transition to the Internal Market that is now heavily influenced by electronic commerce.

Further legislative action to reinforce protection of trademarks in cyberspace is thus sorely needed. European judges, attorneys, and perhaps, most importantly cybersquatters, must be put on notice that activities that include the pilfering of trademarks in cyberspace will not be tolerated, despite the "first-come, first-serve" principle that regulates domain name registration procedures that exist in many ccTLDs. Due to the fast pace of developments concerning the Internet, what is needed is a legislative instrument which can be quickly established and which can be effective as soon as possible. In this regard, an EU-Regulation concerning cybersquatting, which would have direct effect in all Member States, would be preferable to an EU-Directive or WIPO Treaty on the subject, which might take several years to implement. INTA, in conjunction with other stakeholders, will gladly assist in the preparation of an EU-Regulation concerning cybersquatting or other legislative instruments in this regard.

As regards the names which should be protected, the focus should not be on the category of the trademark, but rather on the intent of the cybersquatter. Any bad faith acquisition, based on the non-exclusive criteria outlined above in our response to Question 3, should be prohibited. Experience has shown that such a mechanism is particularly applicable in the introduction of new trademarks, e.g. in connection with a merger.

6. Are there any other considerations that should be taken into account about the relationships between the proposed .EU Registry and the national ccTLD Registries in the Member States.

INTA is in favor of the harmonization of regulations governing all TLD registries, whether they be generic, country code, or the .EU. The lack of harmonization that currently exists has proven to be a significant problem for consumers, businesses, and non-commercial domain name owners alike.