How big the domain name risk really is?

[Carl Oppedahl <carl@oppedahl.com>]

At 02:41 PM 01/07/97 -0500, Leo Smith wrote:

>> On Tue 7 Jan 1997, Carl Oppedahl wrote:

>>Recall that one of the system goals (I would suggest, the chief system
>>goal) is for URLs and domain names to be stable.  Everybody seems to be
>>eager to delete the following table in their responses, so for emphasis I
>>will repeat it.

>>Domain name     Date registered         date challenged
>>clue.com        June 1994               early 1996
>>regis.com       April 1993              mid-1996
>>dci.com         August 1993             early 1996
>>disc.com        January 1993            mid-1996
>>juno.com        December 1994           late 1996

>>How would you like to be one of these domain name owners?  How would you
>>like to be minding your own business, not infringing anybody's trademarks,
>>and then be told (two or three years out) that you are going to be put out
>>of business because someone else wishes they could have your domain name?

>To Carl Leo Smith posts:

>Although your point is well taken, and it would be nice to eliminate the
>problem, the issue come down to two questions:

>1) Starting from the base of 100% of ALL URL users, what will the
>percentage of users be, over the next 3 years, who actually experience a
>confrontation with a trademark claimant? 

I estimate the number to be in the tens of thousands.  Keep in mind that
the cases that actually reach court are only the tip of the iceberg, and
that for each case that is in court there are hundreds of others that reach
the stage of a "cease and desist" letter or further.

>Of the percentage of URL users who
>do experience a confrontation with a trademark claimant, what percentage of
>those confrontations will result in the URL user changing the URL, either
>as a matter of settlement or as a matter of court order? 

Depends on what dispute model is followed.  Under the IAHC proposal, I
suspect that only those trademark owners with bona fide claims will get
anywhere, thus reducing greatly the number of "merely covetous" claims.
The percentage of claims leading to a changed URL will increase, but the
number that we are taking a percentage of will decrease dramatically.

>If we use the past
>as a gauge, there are over 800,000 URLs registered under the .com TLD. Of
>the 800,000 URLs registered under .com, less than 200 trademark
>confrontations occurred. 

NSI conducts its domain-name-cutoff hearings in secret and refuses to allow
the Internet community to review the cases.  How do you suppotr your "less
than 200" number?  NSI was recently quoted as saying there had been some
350 handled by NSI.  And there are numerous others that have been in the
courts and were not handled by NSI.  This suggests that the correct number
is more than double your number.

>That makes a ratio of one trademark problem for
>every 4,000 URLs. Do you suggest that 3,999 trademark law-compliant URL
>users should go through a 60 day wait in order to MAYBE avoid the trademark
>confrontation of ONE URL user?

I am not suggesting this.  See my paper at
<http://www.patents.com/nsi/iip.sht> to see what I suggest.  I am merely
trying to point out why the ISHC proposal is not nuts, and in fact serves
the Internet community pretty darn well for a document prepared by a
committee.

But yes, I suggest that even if the ratio is 4000 to one, the waiting
period is not crazy.  Keep in mind that all 3999 of the people whom you
suggest would be needlessly going through a wait, do in fact benefit, as
each of them enjoys ownership of a domain name that is less vulnerable to
reverse domain name hijacking than it would be in the absence of the 60-day
period.

>2) How effective will the remedy be in reducing or eliminating the problem.
>Even if the need for a solution to the problem was sufficiently large to
>warrant a remedy, the remedy itself has to be exactly that...a remedy to
>solve or reduce the problem. Since no statutory provision exists stating
>that a trademark holder looses all rights to the trademark as it applies to
>the Internet URL if the tardemark holder fails to object within 60 days of
>the notice, there will still be court cases. 
>
>Carl suggests that the Courts might tend to hold trademark holders to a
>higher standard of diligence if a 60 day rule were in effect. There are two
>holes in that argument as it applies to the 60 day rule. 
>1) In order for the Court to hold the trademark holder to the higher
>standard, the Court needs to make a finding, and in order for the Court to
>make a finding, there has to be arguments presented by both sides to a
>lawsuit. So in order for Carl's prediction to be true, a suit has to filed
>first before the Court can make a ruling.

It's always that way.  Only after a few court cases will people come to
know how courts will decide cases, thus permitting them to settle their
disputes along the lines of what the court would do.

Might as well refuse ever to change anything (standards for Social Security
disability coverage, speed limits, noise limits for small yappy dogs) on
the grounds that we don't already have a court case making clear what will
happen after the change.  Of course the court case that interprets the
change can't happen until after the change.  

>2) In many instances the URL user may not be as deep pocketed as the
>trademark holder. As a result, when faced with a trademark confrontation,
>the URL user may elect to settle by withdrawing the URL, thus eliminating
>the cost of litigation. In reaching the out of court settlement, however,
>the URL still changes and the "Stability" for that one particular URL is
>nonexistant.

Well, again let me point out that the 60-day period *helps* such
impecunious domain name owners.  The domain name owner who has somehow
survived the 60-day period unscathed has a much lower likelhood of being
sued precisely because the 60-day period had already come and gone.  And as
a result it is less of a vulnerability to have little money.