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PASSIVE WAREHOUSING UNDER ICANN's UNIFORM DISPUTE RESOLUTION POLICY: a UTILITARIAN PERSPECTIVE

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PASSIVE WAREHOUSING UNDER ICANN's UNIFORM DISPUTE RESOLUTION POLICY: a UTILITARIAN PERSPECTIVE PASSIVE WAREHOUSING UNDER ICANN's UNIFORM DISPUTE RESOLUTION POLICY: A UTILITARIAN PERSPECTIVE Bernadette Dino I. INTRODUCTION From a utilitarian 6 point of view, passive ware- housing is an inefficient use of Internet resources This paper takes the position that under and disruptive of Internet activity. Even though 1 ICANN's Uniform Domain Name Dispute Reso- no positive action is involved, it has harmful ef- 2 lution Policy ("UDRP" or "Policy"), passive ware- fects on legitimate trademark owners. Such waste- housing should be considered "bad faith registra- ful and destructive behavior should not be toler- tion and use" and the burden of proof should be ated, especially in the finite world of the domain shifted to the Respondent to show current or fu- name system, and a "use it or lose it" approach ture legitimate use of the disputed domain name. should be adopted. Utilitarianism has been de- Passive warehousing is a type of cybersquatting fined as "a doctrine that the useful is the good 3 activity. Cybersquatting, in general, involves a and that the determining consideration of right cybersquatter registering a domain name identi- conduct should be the usefulness of its conse- cal or confusingly similar to a well-known trade- quences." 7 "The principle of utility holds that mark in the hopes of selling it to the trademark right actions are those that maximize utility for 4 owner for a huge profit. However, unlike the all."8 Social utility has been one of the fundamen- cybersquatter, the passive warehouser registers a tal principles of property law in determining own- domain name that resembles a trademark but ership rights9 , and it could be applied to domain never makes any offers to sell the domain name name disputes as well. or makes use of the domain name by constructing ICANN's (Internet Corporation for Assigned 5 an active web site. This non-use or "passive hold- Names and Numbers)1° Uniform Dispute Resolu- ing" (or "pseudo-cybersquatting") has been re- tion Policy' 1 was developed to address only "cases ferred to as passive warehousing. I See ICANN.org, at http://www.icann.org (last visited Walker]. Sept. 26, 2001) [hereinafter ICANN]. 5 White, supra note 3, at 230; see also Robert D. Gilbert, 2 ICANN, UNIFORM DOMAIN NAME DISPUTE RESOLUTION Cyber Squatters Beware: There Are Two New Ways to Get You, N.Y. POLICY, at http://www.icann.org/udrp/udrp-policy- L.J., T5 (2000). 24oct99.htm (last visited Sept. 26, 2001) [hereinafter UDRP]. 6 RANDOM HOUSE ROGET'S THESAURUS 650 (2d ed. 1996) 3 John G. White, ICANN's Uniform Domain Name Dispute (defining "utilitarian": adj. useful, practical, serviceable, func- Resolution Policy in Action, 16 BERKELEY TECH. L.J. 229, 230 tional, efficient, workable, effective, convenient, handy, usa- (2001) [hereinafter White] (stating that other cybersquatting ble, beneficial). activity involves "cyberpiracy" by luring Internet traffic from 7 WEBSTER'S NINTH NEW COLLEGIATE the trademark owner's site by incorporating a variation of the DICTIONARY 1300 (1986) [hereinafter WEBSTER'S]; see also STEPHEN R. MUNZER, trademark term and "typo-squatting" by luring Internet traf- A THEORY OF PROPERTY 193 (1990) [hereinafter MUNZER]. fic by misspellings or missing characters). 8 MUNZER, supra note 7, at 193 (stating that "utilitarian- 4 Robert A. Badgley, Internet Domain Names and ICANN Ar- bitration: The Emerging "Law" of Domain Name Custody Disputes, ism is the position that the principle of utility is the sole ulti- 5 TEX. REv. LAw & POL. 343, 345 (2001) [hereinafter mate standard of right and wrong."). Badgley]; see also Luke A. Walker, ICANNs Uniform Domain 9 ROGER CUNNINGHAM, ET AL., THE LAW OF PROPERTY 2 Name Dispute Resolution Policy, 15 BERKELEY TECH. L.J. 289, (2d ed. 1993) (defining "social utility" theory - "that the law 290-91 (2000) (stating that "cybersquatting" is "defined as should promote the maximum fulfillment of human needs 'the abusive registration of domain names by bad faith ac- and aspirations . .. "). tors ... in order to mislead consumers ... or to extort pay- 10 See, e.g.,ICANN, supra note 1. ment from the rightful trademark owners."') [hereinafter I1 UDRP, supra note 2. COMMLAW CONSPECTUS [Vol. 10 involving 'abusive registrations' made with bad- some background information regarding the do- .faith intent to profit commercially from others' main name system ("DNS") and registration, how trademarks." 12 One of the elements the Com- ICANN came about, and the UDRP and proce- plainant is required to prove is bad faith registra- dures involved in bringing a complaint. The sec- tion and use of the domain name. 13 There was ond part will discuss the development of the some question whether passive warehousing satis- UDRP, the "inaction doctrine" and its application, fied both bad faith registration and bad faith use as well as other decisions that have found bad since it involves non-use and is not associated with faith registration and use outside this doctrine. Fi- any kind of positive action (i.e., no offers to sell or nally, an examination of how adopting the "Tel- no active web site). The Second Staff Report men- stra" doctrine has affected the Policy as a whole tions, "without use the streamlined dispute-resolu- from a "utilitarian perspective" is followed by a tion procedure is not available. '14 However, since discussion of how shifting the burden of proof to the implementation of the Policy, panelists have the Respondent with regard to proving bad faith found both bad faith registration and use in pas- registration and use will improve the efficiency sive warehousing as shown in the Telstra Corpora- and effectiveness of the Policy. tions Limited v. Nuclear Marshmallows15 decision. The Telstra decision, having acquired some "prec- edential" value, is now widely accepted and well- II. BACKGROUND established as the "inaction doctrine." 1 A. Domain Name System and Registration The factors considered in the "inaction doc- trine" vary from case to case because it is fact sen- "Domain names are the unique identifiers that sitive, and a "totality of the circumstances" test is people depend on to route e-mail, find web essentially applied.17 Naturally, the more factors pages, and connect to other Internet resources." ' present, the stronger the argument for finding The DNS allows Internet addresses to be found by bad faith registration and use. Likewise, the fewer easy-to-remember names instead of numbers. 19 factors present, the weaker the argument. Never- For example, a user can find the web site for theless, the panels still find bad faith registration Congress by typing www.congress.gov instead of and use in either case. This lack of symmetry in the "Internet protocol" ("IP") address applying the "inaction doctrine" is disturbing, and 140.147.248.209.20 The DNS has two levels: a top- since panelists are not bound by other panelist de- level domain ("TLD") and a second-level domain cisions, non-uniformity in the application of the ("SLD").21 There are TLDs that are available ei- "inaction doctrine" and the Policy itself results. ther commercially (.com, .net and .org) or non- The first part of this paper will briefly discuss commercially available (.gov, .mil and .edu). 22 12 ICANN, ICANN: SECOND STAFF REPORT ON IMPLEMEN- PARFUMS ET BEAUTE & CIE V. SL, BLANCEL WEB 6, para 6, at TATION DOCUMENTS para 4.1(c), at http://www.icann.org/ http://www.arbiter.wipo.int/domains/decisions/html/ udrp/udrp-second-staff-report-24oct99.htm (last visited Sept. 2001/d2001-0028.html (last visited Nov. 11, 2001) ("In per- 26, 2001) thereinafter SECOND STAFF REPORT]. forming the Telstra analysis a Panel must 'give close atten- 13 UDRP, supra note 2, at para 4(a) (iii). tion to all the circumstances of the Respondent's beha- 14 SECOND STAFF REPORT, supra note 12, at para 4.5(a). viour'."). 15 WIPO ARBITRATION AND MEDIATION CENTER, TELSTRA 18 A. Michael Froomkin, Wrong Turn In Cyberspace: Using CORPORATION LIMITED V. NUCLEAR MARSHMALLOWS para 7.9, ICANN to Route Around the APA and the Constitution, 50 DUKE at http://arbiter.wipo.int/domains/decisions/html/2000/ L.J. 17, 20 (2000) [hereinafter Froomkin]. d2000-0003.html (last visited Sept. 26, 2001) ("The concept 19 ICANN, Background, at http://www.icann.org/gen- of a domain name 'being used in bad faith' is not limited to eral/background.htm (last modified Nov. 20, 2001) [herein- positive action; inaction is within the concept."). after ICANN BACKGROUND]. 20 16 WIPO ARBITRATION AND MEDIATION CENTER, Id.; see also Froomkin, supra note 18, at 37-38; see also FREESERVE.COM PLC v. PRIMARY SOURCE ONLINE 7, para 6, at Walker, supra note 4, at 291-292. 21 lan L. Stewart, The Best Laid Plans: How http://www.arbiter.wipo.int/domains/decisions/html/ UnrestrainedAr- 2001/d2001-0185.html (last visited Nov. 11, 2001) ("Telstra is bitration Decisions Have Corrupted the Uniform Domain Name Dis- perhaps the most cited case of all UDRP decisions to be pute Resolution Policy, 53 FED. COMM. L.J. 509, 511 (2001) handed down to date, it and its rationale have been followed [hereinafter Stewart]. 22 Id.; see also Christopher S. Lee, by numerous subsequent panel decisions."); see also Badgley, The Development of Arbi- supra note 4, at 343, 384; see also White, supra note 3, at 240- tration in the Resolution of Internet Domain Name Disputes, 7 41. RICtI. J.L. & TECH. 2, 5 (2000) [hereinafter Lee]. 17 WIPO ARBITRATION AND MEDIATION CENTER, LANCOME 20021 Passive Warehousing There are also country code top-level domains main name registration. 34 Upon the expiration of ("ccTLDs") such as .ca representing Canada and the agreement, a two-year extension was granted .jp representing Japan.23 SLDs are the words and in exchange for a Shared Registry System to allow phrases that appear before the TLDs in addresses competing companies to register domain names that are descriptive or reflect the ownership or in the top-level domains.
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