Domain name policy absurd when it comes to trademarks

July 25, 2002

Last week an Ontario court issued a landmark judgment involving the domain name Canadian.biz. Effectively, it overruled a domain name dispute resolution decision that had called for the transfer of the domain from the original registrant to Molson Breweries. The court's decision does much more than just reverse a plainly wrong initial outcome -- it provides one of the clearest examples of the absurdity of a domain name policy that grants trademark holders (such as, in this case, Molson) rights that extend far beyond those traditionally associated with trademark law. Following years of debate, the Internet Corporation for Assigned Names and Numbers decided in the fall of 2000 to establish seven new generic top-level domains, including dot-biz and dot-info. When it became clear that most of those new domains were to be allocated in either a random or first-come, first-served basis, trademark interests expressed concern that the new domains would provide fertile ground for a fresh round of cybersquatting. Their fear was that speculators would snap up domain names matching their trademarks and then demand sizable payments in return for transferring the domain names.

To alleviate those concerns, several approaches were adopted. For dot-biz domains, the Start-Up Trademark Opposition Policy, or STOP, was instituted. It allowed trademark holders to register an intellectual property claim in a particular trademark before Neulevel, the dot-biz registrar, began allowing registrations. The premise was simple: By registering an IP claim, trademark holders were entitled to later seek the transfer of the domain name if it was registered in bad faith.

Douglas Black, a University of Toronto graduate, registered Canadian.biz with plans to use the domain for an on-line business. Molson Breweries holds a controversial trademark in the word Canadian in association with beer and when Mr. Black refused to surrender the domain name, the brewery launched a STOP action, having previously registered an IP claim.

The STOP decision, which reads much like the dispute resolution cases involving dot-com domains, was decided by Robert Merhige, a retired U.S. judge who began practising law in Virginia in 1942. He determined that Molson indeed had a trademark in the word Canadian and that Mr. Black has no such rights in the name. He did not find Mr. Black's contention that he intended to create a business site persuasive, ruling that this was a case of bad faith and the domain name should be transferred to Molson.

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