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Battle for domain names: Early birds catch a lawsuit

Until three years ago, Eric Robison of Louisville, Colorado, had never stopped to contemplate Colonel Mustard, the candlestick, or the study. Without ever thinking of a certain famous board game, Robison's small consulting company, Clue Computing, registered the domain name Clue.



Until three years ago, Eric Robison of Louisville, Colorado, had never stopped to contemplate Colonel Mustard, the candlestick, or the study. Without ever thinking of a certain famous board game, Robison's small consulting company, Clue Computing, registered the domain name Clue.com and built a Web page. Sometime thereafter, Hasbro Inc., the toy conglomerate that manufactures the game, demanded ownership of the URL. Robison refused. Hasbro took him to court, arguing that Clue was an established "famous trademark," and that the company needed the domain name to avoid confusing customers.

Nevertheless, said Robison's attorneys, Clue Computing got to the name first. A federal judge agreed.

"I view this as one of the battles for freedom of control of the Internet," says Robison, who's preparing for Hasbro's appeal. "Companies say, 'We've got all the money, and we can afford to crush anybody who stands up to us.' In their own way, they're pushing tyranny down on a lot of businesses that are quicker to move than they are."

For most of its history, the Web has been unexplored territory. Whoever found a plot of land could pound in a stake and declare it his or her own. But as the potential for profiting in cyberspace increases, the Web is becoming more like an anarchist's used-car lot. Whether it's the fanciest Porsche or the dingiest Nova, you don't need money or even connections to buy one. You just have to reach the driver's seat first.

Though the U.S. Congress recently passed legislation that may change the rules forever, that's pretty much how domain-name registration works. Cases like that of Clue Computing show how the current system can sometimes favor the quicker, smaller guy. But the system can also lead to scratching, clawing, arguing, bartering, and blackmailing. In an economy where a key domain such as Drugs.com sells for more than $800,000, addresses like Monopoly.com and News.com are priceless commodities. Indeed, last November, a Houston entrepreneur sold the name Business.com to the owners of a business incubator for $7.5 million—a record at the time.

Given the stakes, the frenzy surrounding domain names is hardly surprising. A few days after EgyptAir Flight 990 crashed into the Atlantic Ocean last year, attorneys at R. Jack Clapp and Associates scooped up Egyptaircrash.com, Flight990.com, and about 30 other domains. Their rationale? Not "drumming up business," of course, but "helping grieving relatives." The lawyers told the online magazine Salon that they planned to donate the domain names to victims' families. A few months earlier, a quick-drawing Net surfer in Korea, having read about a planned Exxon-Mobil merger, paid the government-contracted firm Network Solutions a $70 registration fee per URL to own Exxon-Mobil.com and ExxonMobil.com. Clue-fighting Hasbro, which also holds the trademark to the 47-year-old board game Candyland, took on the Net-porn company Internet Entertainment Group for ownership of Candyland.com in 1996—and won.

In-the-know tech writers have been on both sides of the cybersquatting issue. Two years ago, immediately after New York Times Magazine columnist James Gleick coined the term micro speak as a label for high-tech Orwellian language patterns, a cybersquatter in Arizona swamped him with sales pitches for Microspeak.com. And, having read about Time columnist Joshua Quittner's early registration of McDonalds.com (which now rests in the hands of the fast-food giant), this writer kicked himself for allowing the German candy company to snag Knoppers.com.

Cybersquatting may be a fun game for the contingent of Netheads who argue that "information wants to be free," but Big Business—which operates under the old-fashioned laws of capitalism—doesn't find it especially amusing. In the anarchist's used-car lot, if companies see cars with their names branded on the sides, they insist on ownership. That's why trademark laws exist in the first place. And it's fairly certain that, before long, we'll have strict rules to govern domain-name registration, too.

"Cybersquatters look at cyberspace as, instead of the World Wide Web, the wild, wild West," says Michael Heltzer, government-relations manager for the International Trademark Association. "They think they can claim it, as in a piece of land. But trademark holders have investedtime and money in their particular marks and have chosen corresponding domain names because the public recognizes them as being legitimate."

Of course, cybersquatting—a concept that allowed a Miami private investigator to register SenatorOrrinHatch.com and offer it to the Utah Republican for $45,000—is well on its way to being outlawed. But the practice has already led to some of the most bizarre disputes in Net history: Five years ago, to see if he could get away with it, ISP owner Michael Doughney registered PETA.org and erected a People Eating Tasty Animals page. The advocacy group People for the Ethical Treatment of Animals was not amused; after PETA complained, Doughney took down the site. Network Solutions has barred both Doughney and PETA from using the domain name.

To trademark-owning companies, such incidents are more than annoying—they can cost millions. The Motion Picture Association of America, regularly stung whenever Net opportunists register all possible variations of movie titles before the actual films are released, was one of the groups lobbying Congress for legislation. Perhaps inspired by Sen. Hatch's URL troubles, Congress in 1999 passed anti-cybersquatting legislation cracking down on those who register domain names in "bad faith." In such cases, trademark holders could seek up to $100,000 in damages.

"Not only do you have people infringing on legitimate trademarks and service marks, and essentially blackmailing people from commerce on the Internet," says Rep. James Rogan, the California Republican who sponsored the House bill, "but you have massive potential for fraud."

There are, of course, those who oppose the anti-cybersquatting measures, and these critics ask one important question: Why is U.S. legislation even necessary?

In 1998, the Clinton administration selected the Internet Corporation for Assigned Names and Numbers (ICANN) to create its own domain-name policy. (Though Clinton signed the Republican-sponsored anti-cybersquatting bills as part of a budget compromise, he has publicly expressed opposition.) Instead of relying on U.S. courts to resolve disputes, as the congressional legislation does, ICANN's policy called for the establishment of international arbitration panels. And instead of tailoring domain-name rules according to established U.S. trademark laws, ICANN proposed a universal set of voluntary guidelines for Internet users and trademark holders everywhere.

With Congress passing U.S.-only anti-cybersquatting laws, says Barbara Simons, president of the Association for Computing Machinery, "it's not far-fetched to imagine other countries passing similar legislation. Then you could have a real problem, because the Net doesn't adhere to geographical boundaries. This could really create problems for people who want to do business on the Net. It could be pandemonium."

California's Rogan sees the situation differently. Citing statistics showing that most Web sites are registered to American citizens, he says the time-tested U.S. court system is much more effective than new international panels. "I don't think it should be up to a coalition of countries that do not respect our statutes," he says. "American trademark law is just that; it's not international law. I don't want to surrender our rights to an international body."

Only cybersquatters, along with the most committed freedom-of-everything activists, continue to support such blatant "land" grabs as the one involving senatororrinhatch.com. But plenty of gray areas remain. Consider, for instance, the man who registered Veronica.org for his daughter—and immediately heard from lawyers representing Archie Comics, which created the famous cartoon brunette Veronica Lodge and owns the domain Veronica.com.

So what happens when more than one party legitimately claims rights to the same domain name? In Canada, notes ICANN CEO Mike Roberts, Delta Faucets, Delta Air Lines, and Delta Hotels are all jockeying for the Delta.ca URL. He suggests that the companies simply become more creative, registering, say, the more specific Deltafaucets.ca.

But Kenneth B. Wilson, one of the chief lawyers for Hasbro, argues that in such cases the company with the best-known trademark deserves to use the name. "What if I ran a company called Kodak Car Wash, and I'd run Kodak Car Wash for a couple of years, and took the domain name Kodak.com for my car wash? Doesn't that dilute the famous trademark?" he asks. "People who come to the kodak.com site are not going to be able to look for the camera site. Some people will search further, but others will just give up. They'll assume Kodak isn't Internet-savvy."

That's exactly the logic that Clue Computing's Robison has spent more than $100,000 in legal fees to dispute. Clue Computing, he says, has just as much right to clue.com as its more famous opponent.

Still, he did win the fight. So maybe the current system