Sunday, November 20, 2011

The Wayward ACPA: Act I: The Land Grab

In 1994, WIRED magazine published Billions Registered by Joshua Quittner. The Internet, with roots going back more than 30 years, had at that time only recently emerged as a public phenomenon. The World Wide Web had been unleashed only three years prior. And most corporate executives would have laughed hysterically at the foretelling of the coming destruction of their business plans. 

For the ubber-geek, the Internet was cool, and corporate executives were clueless.  Internet culture was collaboration and consensus; corporate culture was the antithesis: greed and competition. The two cultures collided over domain names.

Quittner decided to see what would happen if he called up corporate culture and asked them about their Internet strategies. He wrote an article telling the tale of calling up McDonalds and Burger King. Neither company had a web presence at that time and both mcdonalds.com and burger_king.com were unregistered domain names. Neither company knew what he was talking about.  Neither company considered it a priority to return his calls. 

Quittner reported that at that time only one-third of Fortune 500 companies had registered domain names associated with their trademarks.  Fourteen percent of companies who had not themselves registered their trademarks as domain names, had those domain names registered by some stranger. Fifty percent of Fortune 500 companies had domain names associated with their trademarks unregistered and available to the first taker. With McDonalds and Burger King generally unresponsive, Quittner decided to go ahead and register mcdonalds.com.  He then concluded the WIRED article with the following:
So here's the deal: Let's get interactive. What should I do with mcdonalds.com? You tell me. I could auction it off. I could hold on to it as a trophy, a la Curry and mtv.com. I could set up a Mosaic home page, explaining the difference between McDonald's and Josh "Ronald" Quittner.
Quittner knew a storm was brewing on the horizon that would see a clash between corporate trademark holders and domain name owners. Within a few years, the Internet community was embroiled in the sound and fury of "the Domain Name Wars," an era of sound and fury that ultimately lead to the creation of ICANN. In the midst of the cacophony over domain names, Internet governance, intellectual property, and the First Amendment, there was rough consensus on one issue: cybersquatters bad! The Department of Commerce's 1998 White Paperon Internet governance identified cybersquatting as problematic. The Federal courts articulated perpetual disdain for cybersquatters – while struggling with curious new factual patterns that did not fit neatly under old law. And the 106th Congress, an otherwise gridlocked Congress, found sufficient consensus in 1999 to pass the AntiCybersquatting Consumer Protection Act (ACPA). 

In passing the ACPA, Congress was responding to a particular problem: nefarious individuals who registered warehouses of domain names in order to extort ransom from Trademe Mark Owners (TMOs), or to unjustly benefit from familiar trademarks with confusing domain names that attracted and divert web traffic to fraudulent, criminal, or pornographic websites. But how would a Court distinguish between a nefarious fellow in a long trench coat, and a patriotic citizen engaged in First Amendment dialog over the quality of service in their community (a gripe site), or perhaps an enterprising entrepreneur who registers a creative domain name having the firm belief that the entrepreneur's flash of creativity did not conflict with previous trademarks?  In order to separate the wheat from the nefarious chaff, Congress identified nine bad faith factors for consideration (they're more like "guidelines"). 

In time, TMOs made good use of the ACPA, and Wild-West land-grab that was the 1990s came to a close.  Eventually, a few nefarious TMOs came to use the ACPA against Domain Name Owners (DNOs) that they, well, just didn’t like.  Unlike the early land-grabs, there was no multiple-domain names registered, no extortion, no falsified registrations, no redirections to pornographic sites – there was just a dispute between a TMO and a DNO. And, with the discretion given to them by Congress, some courts found violations in cases which "did not fit the profile of a cybersquatter." 

This is a story of trademarks, domain names, the ACPA, and the adjective "nefarious" which, in any given chapter, could be aptly applied to a different character in the story. The moral of this story is that the AntiCybersquatting Consumer Protection Act, as enacted by Congress, applied the adjective "nefarious" to "cybersquatters."  In cases where courts struggle to find "nefarious" activity on the part of the DNO, they should thwart the nefarious efforts of the TMO to use the ACPA in cases for which it was not designed.

Next Installment:  A Sour Story
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