Based upon a perceived need for change in the DNS, the United States Government, in its June 5, 1998 Statement of Policy on the Management of Internet Names and Addresses (the “White Paper”), [3] called for the privatization of the DNS “in a manner that allows for the development of robust competition and that facilitates global participation in the management of Internet names and addresses.” [4] The need for change in the DNS was seen to arise from 1) dissatisfaction with the absence of competition regarding domain name Registrars [5]; 2) the increasing occurrence of conflicts between trademark and domain name owners, and the fact that the mechanisms for overcoming these were seen as expensive and cumbersome; 3) the call from commercial interests for more formal management of the Internet; 4) increasing desire from non-U.S. interests in participation in the management of various aspects of the Internet; 5) the need for accountability in the decision of whether to add new generic top-level domains (“gTLDs”); and 6) the inappropriateness of U.S. agencies managing and funding commercial enterprises on the Internet. [6]

The White Paper resulted in the formation of ICANN, which now has taken over many of the management functions of the DNS. The ICANN By-laws call for the creation of Supporting Organizations (“SOs”) to develop proposals for the improvement of various aspects of the Internet. The initial three SOs were 1) the Address SO - concerned with the system of Internet Protocol addresses, 2) the Protocol SO - concerned with the technical standards that let computers exchange information, and 3) the Domain Name SO. The SOs serve as advisory bodies and have “the primary responsibility for developing and recommending substantive policies regarding matters falling within their specific responsibilities.” [7] Whereas the first two SOs relate to the more technical functioning of the Internet, the Domain Name SO (“DNSO”) is of particular interest to the intellectual property community.

Within the DNSO, at present [8], are seven Constituency groups that have been ratified by ICANN:

1. ccTLD Registries;
2. commercial and business entities;
3. gTLD Registries;
4. Internet Service Providers (“ISPs”) and connectivity providers;
5. registrars;
6. non-commercial domain name holders; and
7. trademark, other intellectual property and anti-counterfeiting interests.

These Constituency Groups are self-organized and made up of interested individuals and entities. According to the ICANN By-laws "[a]ny group of individuals or entities may petition the Board for recognition as a new or separate Constituency." [9] The Constituency Groups make recommendations to, and select members for the Names Council, which is responsible for consensus building, and communicating DNSO recommendations to the Board of Directors. There are also various advisory committees within ICANN as well as an At-Large Membership with an "open and inclusive" membership.

It was foreseen that problems concerning the functioning of this management structure would arise, and in fact have, and on occasion quite heated, particularly within and between Constituencies; with respect to geographical limitations on the members of the Board of Directors and the Councils [10]; and with respect to voting structures and consensus building within the SOs and Names Council. Given the initial interest shown by a multitude of groups and individuals in becoming a part of Constituencies, it was assumed that consensus would be difficult to achieve. However, ICANN has been able to achieve some consensus and has taken significant actions, although the results of some of these actions may have unintended consequences, particularly with respect to confusion over the introduction of new TLDs.

The White Paper also called upon WIPO to develop a process designed to culminate in recommendations concerning domain name issues to be submitted to ICANN. This process resulted in the April 30, 1999 WIPO Final Report. The recommendations contained in the report relate generally to 1) Best Practices for Registration Authorities; 2) Administrative Procedures Concerning Abusive Domain Name Registrations; 3) Exclusions for Famous and Well-known marks; and 4) New TLDs. [11] While the WIPO recommendations are reasonable with respect to the first three general categories, the paucity of meaningful recommendations concerning the creation of new TLDs, which were basically limited in the Final Report to stating that new TLDs would be beneficial to the DNS once the rest of the proposals were implemented and functioning adequately, was disturbing in its lack of sufficient concern for the protection of intellectual property and the orderly and efficient functioning of the DNS.

A further WIPO domain name Report, WIPO2 RFC-3, Interim Report of the Second WIPO Internet Domain Name Process, April 12, 2001, [12] was published for comment, which deals with the subjects of personal names; International Nonproprietary Names (“INNs”) for pharmaceutical substances; names of international inter-governmental organizations; geographical indications, indications of source and geographical terms; and trade names. Whether significant additional protections will be implemented for these types of intellectual property remains, at present, to be seen.

It is now generally accepted by the intellectual property community that second-level domain names can serve the same function as trademarks, [13] particularly “[w]hen the domain name includes elements that would be recognized by the public as indicating the source of goods or services of a particular business.” [14] Additionally, a domain name can function to enhance or diminish the reputation of a business, celebrity, musical group, organization or politician, and, when obtained by another, has the potential to cause serious harm to the intellectual property rights of these entities and/or individuals. As the Internet becomes increasingly important as an information provider and as a mechanism to sell goods and services, domain names are becoming nearly, if not completely, interchangeable with trademarks in their ability to create goodwill among consumers, and their resultant capacity to sell goods – and a web presence, whether by a business or public figure, is becoming increasingly important to enhance reputation. Nonetheless, there appears to be a reluctance, at least on the part of the WIPO panel of experts, to regulate the Internet in a manner similar to that of intellectual property in the real world, as for example trademarks, which system has been in place and has arguably been effective for hundreds of years.

This is despite the fact that the WIPO panel of experts has recognized that there is a “considerable disjunction between on the one hand, the cost of obtaining a domain name registration, which is relatively cheap, and, on the other hand, the economic value of the damage that can be done as a result of such registration and the cost to the intellectual property owner of remedying the situation through litigation, which may be slow and very expensive in some countries.” [15]

Although the WIPO Final Report stated that “A constant consideration has therefore been to ensure that the recommendations of the WIPO process are practical and do not interfere with the functionality of the Internet by imposing unreasonable constraints on the high-volume and automated operations of domain name registration authorities,” [16] it is nonetheless disappointing that stronger proposals at this beginning and crucial stage were not recommended with respect to TLDs, to lead the way for ICANN to seriously approach a system that is only becoming more chaotic.

It is the belief of this author that a significant increase in problems associated with the orderly functioning of the DNS will be seen due to the “multi-jurisdictional” nature of the Internet, the rapid increase in domain name registrations, [17] and the inability for persons or companies with the same names to coexist on the Internet. There is an urgent need for more stringent regulation of the DNS at this early stage of the Internet, [18] if this still can be considered an early stage in the growth of the Internet, which will allow for the “fair use” of domain names, while not lessening the protection of intellectual property and personality interests, and the free flow of information, both on the Internet and in the real world. If specific actions are not taken now, particularly with respect to the introduction of new TLDs and their policies of use, registration and dispute resolution, current intellectual property protections will be lessened, leading to a chaotic system in which an intellectual property owner can have no reasonable expectations as to the scope of their intellectual property rights, and the Internet user will be unable to locate what they are looking for without confusion. In fact, with the introduction of new domain names discussed herein, the ship may have already sailed, leaking and without adequate lifeboats.

One of the first actions taken by ICANN was the introduction of competition among Registrars in providing registration services for the .COM, .ORG and .NET gTLDs. Previously, Network Solutions, Inc. (“NSI”), under contract with the United States Government, had been the only Registrar authorized to provide these services. ICANN has now accredited approximately 100 new Registrars to provide competing registration services, and many are currently active and profitable.

The introduction of competing Registrars, however, created uncertainty concerning an intellectual property right holder’s ability to protect his intellectual property rights against the registration of an identical or confusingly similar domain name by another. Therefore, as a condition of being accredited by ICANN to provide domain name registration services, all Registrars must contractually agree to be bound by ICANN's Uniform Dispute Resolution Policy, outlined below.

Other problems have arisen, however. For example, although required by ICANN to provide WHOIS services, which list the contact details of those who register domain names, it has been difficult in some instances to ascertain this information due to technical deficiencies in the WHOIS services of particular Registrars.

Furthermore, with the glut of competing regsitrars, it is often difficult for a trademark owner to ascertain with which Register a potential cybersquatter has registered a domain name.