PTC FORUM: Online Journal of the Patent, Trademark and Copyright Research Foundation

USA / TRADE MARKS / DOMAIN NAMES

Commercial Law collides with Cyberspace

Xuan-Yhao N Nguyen

Washington & Lee Law Review, Vol 59 No 1, Winter2002

Three themes run through this article: the question of treating domain names, like trade marks, as a form of property; the assessment of their value; and, more specifically, the methods of securing interest in domain names. The author describes the process of perfection in relation to trade marks, draws the necessary distinctions between trade marks and domain names and seeks to apply the process of perfection to domain names. He makes the point that many domain names owe their value to their generic or descriptive, rather than to their distinctive or original, quality. Business.com, loans.com and jewelry.com have all attracted substantial value, but would not be protected under trade mark law. Yet there are analogies; and the high values placed on certain trade marks are apt to be reflected in the values placed, either through formal estimates or through market experience, on domain names. The author cites some of these estimates (Coca-Cola, Marlboro and Nike, for example) and describes the legal processes for having trade marks treated as security interests, bearing in mind the ambiguities of the Lanham Act, the conflict with the Uniform Commercial Code and the doubts expressed by the Court in the Roman Cleanser case. He then goes on to consider the valuation of domain names, many of which owe their attraction to their simplicity: thus, one of the principal tests is whether the domain name has fewer than five characters. The test is one of four: Characters, Commerce, .com and Comparables. A domain name satisfying each of these tests can have a substantial value: wine.com, for example, sold for $3.5m. Nevertheless, it is questionable whether domain names, however valuable, can be treated as property: they result from contractual grants; and, although the author is cautious about comparing them to "vanity" telephone listings, he recognizes the problems of treating them on all fours with other intellectual property rights, particularly in the light of the Umbro case, which he discusses at some length. He suggests ways in which the security interest in domain names may be perfected, but concludes that only "an electronic, national filing scheme for perfection of security interests in domain names will provide notice to all third parties, reduce transaction costs and increase efficiency". [20086]