[Congressional Record Volume 145, Number 109 (Thursday, July 29, 1999)]
[Senate]
[Pages S9749-S9755]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. HATCH (for himself, Mr. Leahy, Mr. Abraham, Mr. 
        Torricelli, Mr. DeWine, Mr. Kohl, and Mr. Schumer):
  S. 1461. A bill to amend the Trademark Act of 1946 (15 U.S.C. 1051 et 
seq.) to protect consumers and promote electronic commerce by 
prohibiting the bad-faith registration, trafficking or use of Internet 
domain names that are identical to, confusingly similar to, or dilutive 
of distinctive trademarks or service marks; to the Committee on the 
Judiciary.


               Domain Name Piracy Prevention Act of 1999

  Mr. HATCH. Mr. President, I am pleased to rise today, along with my 
colleague, the Ranking Member on the Judiciary Committee, Senator 
Leahy, to introduce legislation that will address a growing problem for 
consumers and American businesses online. At issue is the deliberate, 
bad-faith, and abusive registration of Internet domain names in 
violation of the rights of trademark owners. for the Net-savy, this 
burgeoning form of cyber-abuse is known as ``cybersquatting.'' for the 
average consumer, it is basically fraud, deception, and the bad-faith 
trading on the goodwill of others. Whatever you call it, it is an issue 
that has a great impact on American consumers and the brand names they 
rely on as indications of source, quality, and authenticity.
  As anyone who has walked down the aisle in the grocery store knows, 
trademarks serve as the primary indicators of source, quality, and 
authenticity in the minds of consumers. How else do you explain the 
price disparity between various brands of toothpaste, laundry 
detergent, or even canned beans. These brand names are valuable in that 
they convey to the consumer reliable information regarding the source 
and quality of goods and services, thereby facilitating commerce and 
spurring confidence in the marketplace. Unauthorized uses of others' 
marks undercuts the market by eroding consumer confidence and the 
communicative value of the brand names we all rely on. For that very 
reason, Congress has enacted a number of statutes addressing the 
problems of trademark infringement, false advertising and unfair 
competition, trademark dilution, and trademark counterfeiting. Doing so 
has helped protect American businesses and, more importantly perhaps, 
American consumers.
  As we are seeing with increased frequency, the problems of brand-name 
abuse and consumer confusion are particularly acute in the online 
environment. The fact is that a consumer in a ``brick and mortar'' 
world has the luxury of a variety of additional indicators of source 
and quality aside from a brand name. For example, when one walks in to 
the local consumer electronics retailer, he is fairly certain with whom 
he is dealing, and he can often tell by looking at the products and 
even the storefront itself whether or not he is dealing with a 
reputable establishment. These protections are largely absent in the 
electronic world, where anyone with Internet access and minimal 
computer knowledge can set up a storefront online.
  In many cases what consumers see when they log on to a site is their 
only indication of source and authenticity, and legitimate and 
illegitimate sites may be indistinguishable in cyberspace. In fact, a 
well-known trademark in a domain name may be the primary source 
indicator for the online consumer. So it a bad actor is using that 
name, rather than the trademark owner, an online consumer is at serious 
risk of being defrauded, or at the very least confused. The result, as 
with other forms of trademark violations, is the erosion of consumer 
confidence in brand name identifiers and in electronic commerce 
generally.
  Last week the Judiciary Committee heard testimony of a number of 
examples of consumer confusion on the Internet stemming from abusive 
domain name registrations. For example, Anne Chasser, President of the 
International Trademark Association, testified that a cybersquatter had 
registered the domain names ``attphonecard.com'' and 
``attcallingcard.com'' and used those names to establish sites 
purporting to sell calling cards and soliciting personally identifying 
information, including credit card numbers. Chris Young, President of 
Cyveillance, Inc.--a company founded specifically to assist trademark 
owners police their marks online--testified that a cybersquatter had 
registered the name ``dellspares.com'' and was purporting to sell Dell 
products online, when in fact Dell does not authorize online resellers 
to market its products. We heard similar testimony of an offshore 
cybersquatter selling web-hosting services under the name 
``bellatlantics.com''. And Greg Phillips, a Salt Lake City trademark 
practitioner that represents Porsche in protecting their famous 
trademark against what is now more than 300 instances of 
cybersquatting, testified of several examples where bad actors have 
registered Porsche marks to sell counterfeit goods and non-genuine 
Porsche parts.

[[Page S9750]]

  Consider also the child who in a ``hunt-and-peck'' manner mistakenly 
typed in the domain for ``dosney.com'', looking for the rich and 
family-friendly content of Disney's home page, only to wind up staring 
at a page of hard-core pornography because someone snatched up the 
``dosney'' domain in anticipation that just such a mistake would be 
made. In a similar case, a 12-year-old California boy was denied 
privileges at his school when he entered ``zelda.com'' in a web browser 
at his school library, looking for a site he expected to be affiliated 
with the computer game of the same name, but ended up at a pornography 
site.
  In addition to these types of direct harm to consumers, 
cybersquatting harms American businesses and the goodwill value 
associated with their names. In part this is a result of the fact that 
in each case of consumer confusion there is a case of brand-name 
misappropriation and an erosion of goodwill. But, even absent consumer 
confusion, there are many many cases of cybersquatters who appropriate 
brand names with the sole intent of extorting money from the lawful 
mark owner, of precluding evenhanded competition, or even very simply 
of harming the goodwill of the mark.
  For example, a couple of years ago a small Canadian company with a 
single shareholder and a couple of dozen domain names demanded that 
Umbro International, Inc., which markets and distributes soccer 
equipment, pay $50,000 to its sole shareholder, $50,000 to a charity, 
and provide a lifetime supply of soccer equipment in order for it to 
relinquish the ``umbro.com'' name. Warner Bros. was reportedly asked to 
pay $350,000 for the rights to the names ``warner-records.com'', 
``warner-bros-records.com'', ``warner-pictures.com'', ``warner-bros-
pictures'', and ``warnerpictures.com''. And Intel Corporation was 
forced to deal with a cybersquatter who registered the ``pentium3.com'' 
domain and used it to post pornographic images of celebrities.
  It is time for Congress to take a closer look at these abuses and to 
respond with appropriate legislation. In the 104th Congress, Senator 
Leahy and I sponsored the ``Federal Trademark Dilution Act,'' which has 
proved useful in assisting the owners of famous trademarks to police 
online uses of their marks that dilute their distinctive quality. 
Unfortunately, the economics of litigation have resulted in a situation 
where it is often more cost-effective to simply ``pay off'' a 
cybersquatter rather than pursue costly litigation with little hope of 
anything more than an injunction against the offender. And 
cybersquatters are becoming more sophisticated and more creative in 
evading what good case law has developed under the dilution statute.

  The bill I am introducing today with the Senator from Vermont is 
designed to address these problems head on by clarifying the rights of 
trademark owners online with respect to cybersquatting, by providing 
clear deterrence to prevent such bad faith and abusive conduct, and by 
providing adequate remedies for trademark owners in those cases where 
it does occur. While the bill shares the goals of, and has some 
similarity to, legislation introduced earlier by Senator Abraham, it 
differs in a number of substantial respects.
  First, like Senator Abraham's legislation, our bill allows trademark 
owners to recover statutory damages in cybersquatting cases, both to 
deter wrongful conduct and to provide adequate remedies for trademark 
owners who seek to enforce their rights in court. Our bill goes beyond 
simply stating the remedy, however, and sets forth a substantive cause 
of action, based in trademark law, to define the wrongful conduct 
sought to be deterred and to fill in the gaps and uncertainties of 
current trademark law with respect to cybersquatting.
  Under our bill, the abusive conduct that is made actionable is 
appropriately limited to bad faith registrations of others' marks by 
persons who seek to profit unfairly from the goodwill associated 
therewith. In addition, the bill balances the property interests of 
trademark owners with the interests of Internet users who would make 
fair use of others' marks or otherwise engage in protected speech 
online. Our bill also limits the definition of domain name identifier 
to exclude such things as screen names, file names, and other 
identifiers not assigned by a domain name registrar or registry. it 
also omits criminal penalties found in Senator Abraham's earlier 
legislation.
  Second, our bill provides for in rem jurisdiction, which allows a 
mark owner to seek the forfeiture, cancellation, or transfer of an 
infringing domain name by filing an in rem action against the name 
itself, where the mark owner has satisfied the court that it has 
exercised due diligence in trying to locate the owner of the domain 
name but is unable to do so. A significant problem faced by trademark 
owners in the fight against cybersquatting is the fact that many 
cybersquatters register domain names under aliases or otherwise provide 
false information in their registration applications in order to avoid 
identification and service of process by the mark owner. Our bill will 
alleviate this difficulty, while protecting the notions of fair play 
and substantial justice, by enabling a mark owner to seek an injunction 
against the infringing property in those cases where, after due 
diligence, a mark owner is unable to proceed against the domain name 
registrant because the registrant has provided false contact 
information and is otherwise not to be found.
  Additionally, some have suggested that dissidents and others who are 
online incognito for legitimate reasons might give false information to 
protect themselves and have suggested the need to preserve a degree of 
anonymity on the Internet particularly for this reason. Allowing 
a trademark owner to proceed against the domain names themselves, 
provided they are, in fact, infringing or diluting under the Trademark 
Act, decreases the need for trademark owners to join the hunt to chase 
down and root out these dissidents or others seeking anonymity on the 
Net. The approach in our bill is a good compromise, which provides 
meaningful protection to trademark owners while balancing the interests 
of privacy and anonymity on the Internet.

  Third, like the Abraham bill, our bill encourages domain name 
registrars and registries to work with trademark owners to prevent 
cybersquatting by providing a limited exemption from liability for 
domain name registrars and registries that suspend, cancel, or transfer 
domain names pursuant to a court order or in the implementation of a 
reasonable policy prohibiting the registration of infringing domain 
names. Our bill goes further, however, in order to protect the rights 
of domain name registrants against overreaching trademark owners. Under 
our bill, a trademark owner who knowingly and materially misrepresents 
to the domain name registrar or registry that a domain name is 
infringing is liable to the domain name registrant for damages 
resulting from the suspension, cancellation, or transfer of the domain 
name. Our bill also promotes the continued ease and efficiency users of 
the current registration system enjoy by codifying current case law 
limiting the secondary liability of domain name registrars and 
registries for the act of registration of a domain name.
  Finally, our bill includes an explicit savings clause making clear 
that the bill does not affect traditional trademark defenses, such as 
fair use, or a person's first amendment rights, and it ensures that any 
new remedies created by the bill will apply prospectively only.
  Mr. President, this bill is an important piece of legislation that 
will promote the growth of online commerce by protecting consumers and 
providing clarity in the law for trademark owners in cyberspace. It is 
a balanced bill that protects the rights of Internet users and the 
interests of all Americans in free speech and protected uses of 
trademarked names for such things as parody, comment, criticism, 
comparative advertising, news reporting, etc. It reflects many hours of 
discussions with senators and affected parties on all sides. I want to 
thank Senator Leahy for his cooperation in crafting this particular 
measure, and also Senator Abraham for his cooperation in this effort. I 
expect that the substance of this bill will be offered as a Committee 
substitute to Senator Abraham's legislation when the Judiciary 
Committee turns to that bill tomorrow, and I look forward to broad 
bipartisan support at that time. I similarly

[[Page S9751]]

look forward to working with my other colleagues here in the Senate to 
report this bill favorably to the House, and I urge their support in 
this regard.
  I ask unanimous consent that the text of the bill and a section-by-
section analysis of the bill be printed in the Record.
  There being no objection, the material was ordered to be printed in 
the Record, as follows:

                                S. 1461

       Be it enacted by the Senate and House of Representatives of 
     the United States of America in Congress assembled,

     SECTION 1. SHORT TITLE; REFERENCES.

       (a) Short Title.--This Act may be cited as the ``Domain 
     Name Piracy Prevention Act of 1999''.
       (b) References to the Trademark Act of 1946.--Any reference 
     in this Act to the Trademark Act of 1946 shall be a reference 
     to the Act entitled ``An Act to provide for the registration 
     and protection of trade-marks used in commerce, to carry out 
     the provisions of certain international conventions, and for 
     other purposes'', approved July 5, 1946 (15 U.S.C. 1051 et 
     seq.).

     SEC. 2. FINDINGS.

       Congress finds the following:
       (1) The registration, trafficking in, or use of a domain 
     name that is identical to, confusingly similar to, or 
     dilutive of a trademark or service mark of another that is 
     distinctive at the time of registration of the domain name, 
     without regard to the goods or services of the parties, with 
     the bad-faith intent to profit from the goodwill of another's 
     mark (commonly referred to as ``cyberpiracy'' and 
     ``cybersquatting'')--
       (A) results in consumer fraud and public confusion as to 
     the true source or sponsorship of goods and services;
       (B) impairs electronic commerce, which is important to 
     interstate commerce and the United States economy;
       (C) deprives legitimate trademark owners of substantial 
     revenues and consumer goodwill; and
       (D) places unreasonable, intolerable, and overwhelming 
     burdens on trademark owners in protecting their valuable 
     trademarks.
       (2) Amendments to the Trademark Act of 1946 would clarify 
     the rights of a trademark owner to provide for adequate 
     remedies and to deter cyberpiracy and cybersquatting.

     SEC. 3. CYBERPIRACY PREVENTION.

       (a) In General.--Section 43 of the Trademark Act of 1946 
     (15 U.S.C. 1125) is amended by inserting at the end the 
     following:
       ``(d)(1)(A) Any person who, with bad-faith intent to profit 
     from the goodwill of a trademark or service mark of another, 
     registers, traffics in, or uses a domain name that is 
     identical to, confusingly similar to, or dilutive of such 
     trademark or service mark, without regard to the goods or 
     services of the parties, shall be liable in a civil action by 
     the owner of the mark, if the mark is distinctive at the time 
     of the registration of the domain name.
       ``(B) In determining whether there is a bad-faith intent 
     described under subparagraph (A), a court may consider 
     factors such as, but not limited to--
       ``(i) the trademark or other intellectual property rights 
     of the person, if any, in the domain name;
       ``(ii) the extent to which the domain name consists of the 
     legal name of the person or a name that is otherwise commonly 
     used to identify that person;
       ``(iii) the person's prior use, if any, of the domain name 
     in connection with the bona fide offering of any goods or 
     services;
       ``(iv) the person's legitimate noncommercial or fair use of 
     the mark in a site accessible under the domain name;
       ``(v) the person's intent to divert consumers from the mark 
     owner's online location to a site accessible under the domain 
     name that could harm the goodwill represented by the mark, 
     either for commercial gain or with the intent to tarnish or 
     disparage the mark, by creating a likelihood of confusion as 
     to the source, sponsorship, affiliation, or endorsement of 
     the site;
       ``(vi) the person's offer to transfer, sell, or otherwise 
     assign the domain name to the mark owner or any third party 
     for substantial consideration without having used, or having 
     an intent to use, the domain name in the bona fide offering 
     of any goods or services;
       ``(vii) the person's intentional provision of material and 
     misleading false contact information when applying for the 
     registration of the domain name; and
       ``(viii) the person's registration or acquisition of 
     multiple domain names which are identical to, confusingly 
     similar to, or dilutive of trademarks or service marks of 
     others that are distinctive at the time of registration of 
     such domain names, without regard to the goods or services of 
     such persons.
       ``(C) In any civil action involving the registration, 
     trafficking, or use of a domain name under this paragraph, a 
     court may order the forfeiture or cancellation of the domain 
     name or the transfer of the domain name to the owner of the 
     mark.
       ``(2)(A) The owner of a mark may file an in rem civil 
     action against a domain name if--
       ``(i) the domain name violates any right of the registrant 
     of a mark registered in the Patent and Trademark Office, or 
     section 43 (a) or (c); and
       ``(ii) the court finds that the owner has demonstrated due 
     diligence and was not able to find a person who would have 
     been a defendant in a civil action under paragraph (1).
       ``(B) The remedies of an in rem action under this paragraph 
     shall be limited to a court order for the forfeiture or 
     cancellation of the domain name or the transfer of the domain 
     name to the owner of the mark.''.
       (b) Additional Civil Action and Remedy.--The civil action 
     established under section 43(d)(1) of the Trademark Act of 
     1946 (as added by this section) and any remedy available 
     under such action shall be in addition to any other civil 
     action or remedy otherwise applicable.

     SEC. 4. DAMAGES AND REMEDIES.

       (a) Remedies In Cases of Domain Name Piracy.--
       (1) Injunctions.--Section 34(a) of the Trademark Act of 
     1946 (15 U.S.C. 1116(a)) is amended in the first sentence by 
     striking ``section 43(a)'' and inserting ``section 43 (a), 
     (c), or (d)''.
       (2) Damages.--Section 35(a) of the Trademark Act of 1946 
     (15 U.S.C. 1117(a)) is amended in the first sentence by 
     inserting ``, (c), or (d)'' after ``section 43 (a)''.
       (b) Statutory Damages.--Section 35 of the Trademark Act of 
     1946 (15 U.S.C. 1117) is amended by adding at the end the 
     following:
       ``(d) In a case involving a violation of section 43(d)(1), 
     the plaintiff may elect, at any time before final judgment is 
     rendered by the trial court, to recover, instead of actual 
     damages and profits, an award of statutory damages in the 
     amount of not less than $1,000 and not more than $100,000 per 
     domain name, as the court considers just. The court shall 
     remit statutory damages in any case in which an infringer 
     believed and had reasonable grounds to believe that use of 
     the domain name by the infringer was a fair or otherwise 
     lawful use.''.

     SEC. 5. LIMITATION ON LIABILITY.

       Section 32(2) of the Trademark Act of 1946 (15 U.S.C. 1114) 
     is amended--
       (1) in the matter preceding subparagraph (A) by striking 
     ``under section 43(a)'' and inserting ``under section 43 (a) 
     or (d)''; and
       (2) by redesignating subparagraph (D) as subparagraph (E) 
     and inserting after subparagraph (C) the following:
       ``(D)(i) A domain name registrar, a domain name registry, 
     or other domain name registration authority that takes any 
     action described under clause (ii) affecting a domain name 
     shall not be liable for monetary relief to any person for 
     such action, regardless of whether the domain name is finally 
     determined to infringe or dilute the mark.
       ``(ii) An action referred to under clause (i) is any action 
     of refusing to register, removing from registration, 
     transferring, temporarily disabling, or permanently canceling 
     a domain name--
       ``(I) in compliance with a court order under section 43(d); 
     or
       ``(II) in the implementation of a reasonable policy by such 
     registrar, registry, or authority prohibiting the 
     registration of a domain name that is identical to, 
     confusingly similar to, or dilutive of another's mark 
     registered on the Principal Register of the United States 
     Patent and Trademark Office.
       ``(iii) A domain name registrar, a domain name registry, or 
     other domain name registration authority shall not be liable 
     for damages under this section for the registration or 
     maintenance of a domain name for another absent a showing of 
     bad faith intent to profit from such registration or 
     maintenance of the domain name.
       ``(iv) If a registrar, registry, or other registration 
     authority takes an action described under clause (ii) based 
     on a knowing and material misrepresentation by any person 
     that a domain name is identical to, confusingly similar to, 
     or dilutive of a mark registered on the Principal Register of 
     the United States Patent and Trademark Office, such person 
     shall be liable for any damages, including costs and 
     attorney's fees, incurred by the domain name registrant as a 
     result of such action. The court may also grant injunctive 
     relief to the domain name registrant, including the 
     reactivation of the domain name or the transfer of the domain 
     name to the domain name registrant.''.

     SEC. 6. DEFINITIONS.

       Section 45 of the Trademark Act of 1946 (15 U.S.C. 1127) is 
     amended by inserting after the undesignated paragraph 
     defining the term ``counterfeit'' the following:
       ``The term `Internet' has the meaning given that term in 
     section 230(f)(1) of the Communications Act of 1934 (47 
     U.S.C. 230(f)(1)).
       ``The term `domain name' means any alphanumeric designation 
     which is registered with or assigned by any domain name 
     registrar, domain name registry, or other domain name 
     registration authority as part of an electronic address on 
     the Internet.''.

     SEC. 7. SAVINGS CLAUSE.

       Nothing in this Act shall affect any defense available to a 
     defendant under the Trademark Act of 1946 (including any 
     defense under section 43(c)(4) of such Act or relating to 
     fair use) or a person's right of free speech or expression 
     under the first amendment of the United States Constitution.

     SEC. 8. SEVERABILITY.

       If any provision of this Act, an amendment made by this 
     Act, or the application of such provision or amendment to any 
     person or circumstances is held to be unconstitutional, the 
     remainder of this Act, the amendments made by this Act, and 
     the application of the provisions of such to any person or 
     circumstance shall not be affected thereby.

     SEC. 9. EFFECTIVE DATE.

       This Act shall apply to all domain names registered before, 
     on, or after the date of enactment of this Act, except that 
     statutory

[[Page S9752]]

     damages under section 35(d) of the Trademark Act of 1946 (15 
     U.S.C. 1117), as added by section 4 of this Act, shall not be 
     available with respect to the registration, trafficking, or 
     use of a domain name that occurs before the date of enactment 
     of this Act.
                                  ____


    Section by Section Analysis--S. 1461, the ``Domain Name Piracy 
                       Prevention Act of 1999.''


                   section 1. short title; references

       This section provides that the Act may be cited as the 
     ``Domain Name Piracy Prevention Act of 1999'' and that any 
     references within the bill to the Trademark Act of 1946 shall 
     be a reference to the Act entitled ``An Act to provide for 
     the registration and protection of trademarks used in 
     commerce, to carry out the provisions of certain 
     international conventions, and for other purposes'', approved 
     July 5, 1946 (15 U.S.C. 1051 et seq.), also commonly referred 
     to as the Lanham Act.


                          section 2. findings

       This section sets forth Congress' findings that 
     cybersquatting and cyberpiracy--defined as the registration, 
     trafficking in, or use of a domain name that is identical to, 
     confusingly similar to, or dilutive of a distinctive 
     trademark or service mark of another with the bad faith 
     intent to profit from the goodwill of that mark--harms the 
     public by causing consumer fraud and public confusion as to 
     the true source or sponsorship of goods and services, by 
     impairing electronic commerce, by depriving trademark owners 
     of substantial revenues and consumer goodwill, and by placing 
     unreasonable, intolerable, and overwhelming burdens on 
     trademark owners in protecting their own marks. Amendments to 
     the Trademark Act would clarify the rights of trademark 
     owners to provide for adequate remedies for the abusive and 
     bad faith registration of their marks as Internet domain 
     names and to deter cyberpiracy and cybersquatting.


                   section 3. cyberpiracy prevention

       Subsection (a). In General. This subsection amends section 
     the Trademark Act to provide an explicit trademark remedy for 
     cybersquatting under a new section 43(d). Under paragraph 
     (1)(A) of the new section 43(d), actionable conduct would 
     include the registration, trafficking in, or use of a domain 
     name that is identical to, confusingly similar to, or 
     dilutive of the trademark or service mark of another, 
     provided that the mark was distinctive (i.e., enjoyed 
     trademark status) at the time the domain name was registered. 
     The bill is carefully and narrowly tailored, however, to 
     extend only to cases where the plaintiff can demonstrate that 
     the defendant registered, trafficked in, or used the 
     offending domain name with bad-faith intent to profit from 
     the goodwill of a mark belonging to someone else. Thus, the 
     bill does not extend to innocent domain name registrations by 
     those who are unaware of another's use of the name, or even 
     to someone who is aware of the trademark status of the name 
     but registers a domain name containing the mark for any 
     reason other than with bad faith intent to profit from the 
     goodwill associated with that mark.
       Paragraph (1)(B) of the new section 43(d) sets forth a 
     number of nonexclusive, nonexhaustive factors to assist a 
     court in determining whether the required bad-faith element 
     exists in any given case. These factors are designed to 
     balance the property interests of trademark owners with the 
     legitimate interests of Internet users and others who seek to 
     make lawful uses of others' marks, including for purposes 
     such as comparative advertising, comment, criticism, parody, 
     news reporting, fair use, etc. The bill suggests a total of 
     eight factors a court may wish to consider. The first four 
     suggest circumstances that may tend to indicate an absence of 
     bad-faith intent to profit from the goodwill of a mark, and 
     the last four suggest circumstances that may tend to indicate 
     that such bad-faith intent exists.
       First, under paragraph (1)(B)(i), a court may consider 
     whether the domain name registrant has trademark or any other 
     intellectual property rights in the name. This factor 
     recognizes, as does trademark law in general, that there may 
     be concurring uses of the same name that are noninfringing, 
     such as the use of the ``Delta'' mark for both air travel and 
     sink faucets. Similarly, the registration of the domain name 
     ``deltaforce.com'' by a movie studio would not tend to 
     indicate a bad faith intent on the part of the registrant to 
     trade on Delta Airlines or Delta Faucets' trademarks.
       Second, under paragraph (1)(B)(ii), a court may consider 
     the extent to which the domain name is the same as the 
     registrant's own legal name or a nickname by which that 
     person is commonly identified. This factor recognizes, again 
     as does the concept of fair use in trademark law, that a 
     person should be able to be identified by their own name, 
     whether in their business or on a web site. Similarly, a 
     person may bear a legitimate nickname that is identical or 
     similar to a well-known trademark, such as in the well-
     publicized case of the parents who registered the domain name 
     ``pokey.org'' for their young daughter who goes by that name, 
     and these individuals should not be deterred by this bill 
     from using their name online. This factor is not intended to 
     suggest that domain name registrants may evade the 
     application of this act by merely adopting Exxon, Ford, or 
     other well-known marks as their nicknames. It merely provides 
     a court with the appropriate discretion to determine whether 
     or not the fact that a person bears a nickname similar to a 
     mark at issue is an indication of an absence of bad-faith on 
     the part of the registrant.
       Third, under paragraph (1)(B)(iii), a court may consider 
     the domain name registrant's prior use, if any, of the domain 
     name in connection with the bona fide offering of goods or 
     services. Again, this factor recognizes that the legitimate 
     use of the domain name in online commerce may be a good 
     indicator of the intent of the person registering that name. 
     Where the person has used the domain name in commerce without 
     creating a likelihood of confusion as to the source or origin 
     of the goods or services and has not otherwise attempted to 
     use the name in order to profit from the goodwill of the 
     trademark owner's name, a court may look to this as an 
     indication of the absence of bad faith on the part of the 
     registrant.
       Fourth, under paragraph (1)(B)(iv), a court may consider 
     the person's legitimate noncommercial or fair use of the mark 
     in a web site that is accessible under the domain name at 
     issue. This factor is intended to balance the interests of 
     trademark owners with the interests of those who would make 
     lawful noncommercial or fair uses of others' marks online, 
     such as in comparative advertising, comment, criticism, 
     parody, news reporting, etc. The fact that a person may use a 
     mark in a site in such a lawful manner may be an appropriate 
     indication that the person's registration or use of the 
     domain name lacked the required element of bad-faith. This 
     factor is not intended to create a loophole that otherwise 
     might swallow the bill by allowing a domain name registrant 
     to evade application of the Act by merely putting up a 
     noninfringing site under an infringing domain name. For 
     example, in the well known case of Panavision Int'l v. 
     Toeppenn, 141 F.3d 1316 (9th Cir. 1998), a well known 
     cybersquatter had registered a host of domain names mirroring 
     famous trademarks, including names for Panavision, Delta 
     Airlines, Neiman Marcus, Eddie Bauer, Lufthansa, and more 
     than 100 other marks, and had attempted to sell them to the 
     mark owners for amounts in the range of $10,000 to $15,000 
     each. His use of the ``panavision.com'' and ``panaflex.com'' 
     domain names was seemingly more innocuous, however, as they 
     served as addresses for sites that merely displayed pictures 
     of Pana Illinois and the word ``Hello'' respectively. This 
     bill would not allow a person to evade the holding of that 
     case--which found that Mr. Toeppen had made a commercial use 
     of the Panavision marks and that such uses were, in fact, 
     diluting under the Federal Trademark Dilution Act--merely by 
     posting noninfringing uses of the trademark on a site 
     accessible under the offending domain name, as Mr. Toeppen 
     did. Rather, the bill gives courts the flexibility to weigh 
     appropriate factors in determining whether the name was 
     registered or used in bad faith, and it recognizes that one 
     such factor may be the use the domain name registrant makes 
     of the mark.
       Fifth, under paragraph (1)(B)(v), a court may consider 
     whether, in registering or using the domain name, the 
     registrant intended to divert consumers away from the 
     trademark owner's website to a website that could harm the 
     goodwill of the mark, either for purposes of commercial gain 
     or with the intent to tarnish or disparage the mark, by 
     creating a likelihood of confusion as to the source, 
     sponsorship, affiliation, or endorsement of the site. This 
     factor recognizes that one of the main reasons cybersquatters 
     use other people's trademarks is to divert Internet users to 
     their own sites by creating confusion as to the source, 
     sponsorship, affiliation, or endorsement of the site. This is 
     done for a number of reasons, including to pass off inferior 
     goods under the name of a well-known mark holder, to defraud 
     consumers into providing personally identifiable information, 
     such as credit card numbers, to attract eyeballs to sites 
     that price online advertising according to the number of 
     ``hits'' the site receives, or even just to harm the value of 
     the mark. Under this provision, a court may give appropriate 
     weight to evidence that a domain name registrant intended to 
     confuse or deceive the public in this manner when making a 
     determination of bad-faith intent.
       Sixth, under paragraph (1)(B)(vi), a court may consider a 
     domain name registrant's offer to transfer, sell, or 
     otherwise assign the domain name to the mark owner or any 
     third party for substantial consideration, where the 
     registrant has not used, and did not have any intent to use, 
     the domain name in the bona fide offering of any goods or 
     services. This factor is consistent with the court cases, 
     like the Panavision case mentioned above, where courts have 
     found a defendant's offer to sell the domain name to the 
     legitimate mark owner as being indicative of the defendant's 
     intent to trade on the value of a trademark owner's marks by 
     engaging in the business of registering those marks and 
     selling them to the rightful trademark owners. It does not 
     suggest that a court should consider the mere offer to sell a 
     domain name to a mark owner or the failure to use a name in 
     the bona fide offering of goods or services is sufficient to 
     indicate bad faith. Indeed, there are cases in which a person 
     registers a name in anticipation of a business venture that 
     simply never pans out. And someone who has a legitimate 
     registration of a domain name that mirrors someone else's 
     domain name, such as a trademark owner that is a lawful 
     concurrent user of that name with another trademark owner, 
     may, in fact, wish to sell

[[Page S9753]]

     that name to the other trademark owner. This bill does not 
     imply that these facts are an indication of bad-faith. It 
     merely provides a court with the necessary discretion to 
     recognize the evidence of bad-faith when it is present. In 
     practice, the offer to sell domain names for exorbitant 
     amounts to the rightful mark owner has been one of the most 
     common threads in abusive domain name registrations.
       Seventh, under paragraph (1)(B)(vii), a court may consider 
     the registrant's intentional provision of material and 
     misleading false contact information in an application for 
     the domain name registration. Falsification of contact 
     information with the intent to evade identification and 
     service of process by trademark owners is also a common 
     thread in cases of cybersquatting. This factor recognizes 
     that fact, while still recognizing that there may be 
     circumstances in which the provision of false information may 
     be due to other factors, such as mistake or, as some have 
     suggested in the case of political dissidents, for purposes 
     of anonymity. This bill balances those factors by limiting 
     consideration to the person's contact information, and even 
     then requiring that the provision of false information be 
     material and misleading. As with the other factors, this 
     factor is nonexclusive and a court is called upon to make a 
     determination based on the facts presented whether or not the 
     provision of false information does, in fact, indicate bad-
     faith.
       Eighth, under paragraph (1)(B)(viii), a court may consider 
     the domain name registrant's acquisition of multiple domain 
     names that are identical to, confusingly similar to, or 
     dilutive of others' marks. This factor recognizes the 
     increasingly common cybersquatting practice known as 
     ``warehousing'', in which a cybersquatter registers multiple 
     domain names--sometimes hundreds, even thousands--that mirror 
     the trademarks of others. By sitting on these marks and not 
     making the first move to offer to sell them to the mark 
     owner, these cybersquatters have been largely successful in 
     evading the case law developed under the Federal Trademark 
     Dilution Act. This bill does not suggest that the mere 
     registration of multiple domain names is an indication of bad 
     faith, but allows a court to weigh the fact that a person has 
     registered multiple domain names that infringe or dilute the 
     trademarks of others as part of its consideration of whether 
     the requisite bad-faith intent exists.
       Paragraph (1)(C) makes clear that in any civil brought 
     under the new section 43(d), a court may order the 
     forfeiture, cancellation, or transfer of a domain name to the 
     owner of the mark.
       Paragraph (2)(A) provides for in rem jurisdiction, which 
     allows a mark owner to seek the forfeiture, cancellation, or 
     transfer of an infringing domain name by filing an in rem 
     action against the name itself, where the mark owner has 
     satisfied the court that it has exercised due diligence in 
     trying to locate the owner of the domain name but is unable 
     to do so. As indicated above, a significant problem faced by 
     trademark owners in the fight against cybersquatting is the 
     fact that many cybersquatters register domain names under 
     aliases or otherwise provide false information in their 
     registration applications in order to avoid identification 
     and service of process by the mark owner. This bill will 
     alleviate this difficulty, while protecting the notions of 
     fair play and substantial justice, by enabling a mark owner 
     to seek an injunction against the infringing property in 
     those cases where, after due diligence, a mark owner is 
     unable to proceed against the domain name registrant because 
     the registrant has provided false contact information and is 
     otherwise not to be found, provided the mark owner can show 
     that the domain name itself violates substantive trademark 
     law. Paragraph (2)(B) limits the relief available in such an 
     in rem action to an injunction ordering the forfeiture, 
     cancellation, or transfer of the domain name.
       Subsection (b). Additional Civil Action and Remedy. This 
     subsection makes clear that the creation of a new section 
     43(d) in the Trademark Act does not in any way limit the 
     application of current provisions of trademark, unfair 
     competition and false advertising, or dilution law, or other 
     remedies under counterfeiting or other statutes, to 
     cybersquatting cases.


                    section 4. damages and remedies

       This section applies traditional trademark remedies, 
     including injunctive relief, recovery of defendant's profits, 
     actual damages, and costs, to cybersquatting cases under the 
     new section 43(d) of the Trademark Act. The bill also amends 
     section 35 of the Trademark Act to provide for statutory 
     damages in cybersquatting cases, in an amount of not less 
     than $1,000 and not more than $100,000 per domain name, as 
     the court considers just. The bill requires the court to 
     remit statutory damages in any case where the infringer 
     believed and had reasonable grounds to believe that the use 
     of the domain name was a fair or otherwise lawful use.


                   section 5. limitation on liability

       This section amends section 32(2) of the Trademark Act to 
     extend the Trademark Act's existing limitations on liability 
     to the cybersquatting context. This section also creates a 
     new subparagraph (D) in section 32(2) to encourage domain 
     name registrars and registries to work with trademark owners 
     to prevent cybersquatting through a limited exemption from 
     liability for domain name registrars and registries that 
     suspend, cancel, or transfer domain names pursuant to a court 
     order or in the implementation of a reasonable policy 
     prohibiting cybersquatting. This section also protects the 
     rights of domain name registrants against overreaching 
     trademark owners. Under a new section subparagraph (D)(iv) in 
     section 32(2), a trademark owner who knowingly and materially 
     misrepresents to the domain name registrar or registry that a 
     domain name is infringing shall be liable to the domain name 
     registrant for damages resulting from the suspension, 
     cancellation, or transfer of the domain name. In addition, 
     the court may grant injunctive relief to the domain name 
     registrant by ordering the reactivation of the domain name or 
     the transfer of the domain name back to the domain name 
     registrant. Finally, in creating a new subparagraph (D)(iii) 
     of section 32(2), this section codifies current case law 
     limiting the secondary liability of domain name registrars 
     and registries for the act of registration of a domain name, 
     absent bad-faith on the part of the registrar and registry.


                         section 6. definitions

       This section amends the Trademark Act's definitions section 
     (section 45) to add definitions for key terms used in this 
     Act. First, the term ``Internet'' is defined consistent with 
     the meaning given that term in the Communications Act (47 
     U.S.C. 230(f)(1)). Second, this section creates a narrow 
     definition of ``cybersquatting'' to target the specific bad 
     faith conduct sought to be addressed while excluding such 
     things as screen names, file names, and other identifiers not 
     assigned by a domain name registrar or registry.


                       section 7. savings clause

       This section provides an explicit savings clause making 
     clear that the bill does not affect traditional trademark 
     defenses, such as fair use, or a person's first amendment 
     rights.


                        section 8. severability

       This section provides a severability clause making clear 
     Congress' intent that if any provision of this Act, an 
     amendment made by the Act, or the application of such 
     provision or amendment to any person or circumstances is held 
     to be unconstitutional, the remainder of the Act, the 
     amendments made by the Act, and the application of the 
     provisions of such to any person or circumstance shall not be 
     affected by such determination.


                       section 9. effective date

       This section provides that new statutory damages provided 
     for under this bill shall not apply to any registration, 
     trafficking, or use of a domain name that took place prior to 
     the enactment of this Act.

  Mr. LEAHY. Mr. President, I am pleased to join Senator Hatch, and 
others, today in introducing the ``Domain Name Piracy Prevention Act of 
1999.'' We have worked hard to craft this legislation in a balanced 
fashion to protect trademark owners and consumers doing business 
online, and Internet users who want to participate in what the Supreme 
Court has described `` `a unique and wholly new medium of worldwide 
human communication.' '' Reno v. ACLU, 521 U.S. 844 (1997).
  Trademarks are important tools of commerce. The exclusive right to 
the use of a unique mark helps companies compete in the marketplace by 
distinguishing their goods and services from those of their 
competitors, and helps consumers identify the source of a product by 
linking it with a particular company. The use of trademarks by 
companies, and reliance on trademarks by consumers, will only become 
more important as the global marketplace becomes larger and more 
accessible with electronic commerce. The reason is simple: when a 
trademark name is used as a company's address in cyberspace, customers 
know where to go online to conduct business with that company.
  The growth of electronic commerce is having a positive effect on the 
economies of small rural states like mine. A Vermont Internet Commerce 
report I commissioned earlier this year found that Vermont gained more 
than 1,000 new jobs as a result of Internet commerce, with the 
potential that Vermont could add more than 24,000 jobs over the next 
two years. For a small state like ours, this is very good news.
  Along with the good news, this report identified a number of 
obstacles that stand in the way of Vermont reaching the full potential 
promised by Internet commerce. One obstacle is that ``merchants are 
anxious about not being able to control where their names and brands 
are being displayed.'' Another is the need to bolster consumers' 
confidence in online shopping.
  Cybersquatters hurt electronic commerce. Both merchant and consumer 
confidence in conducting business online are undermined by so-called 
``cybersquatters'' or ``cyberpirates,''

[[Page S9754]]

who abuse the rights of trademark holders by purposely and maliciously 
registering as a domain, name the trademarked name of another company 
to divert and confuse customers or to deny the company the ability to 
establish an easy-to-find online location. A recent report by the World 
Intellectual Property Organization (WIPO) on the Internet domain name 
process has characterized cybersquatting as ``predatory and parasitical 
practices by a minority of domain registrants acting in bad faith'' to 
register famous or well-known marks of others--which can lead to 
consumer confusion or downright fraud.
  Enforcing trademarks in cyberspace will promote global electronic 
commerce. Enforcing trademark law in cyberspace can help bring consumer 
confidence to this new frontier. That is why I have long been concerned 
with protecting registered trademarks online. Indeed, when the Congress 
passed the Federal Trademark Dilution Act of 1995, I noted that:

       [A]lthough no one else has yet considered this application, 
     it is my hope that this antidilution statute can help stem 
     the use of deceptive Internet addresses taken by those who 
     are choosing marks that are associated with the products and 
     reputations of others. (Congressional Record, Dec. 29, 1995, 
     page S19312)

  In addition, last year I authored an amendment that was enacted as 
part of the Next Generation Internet Research Act authorizing the 
National Research Council of the National Academy of Sciences to study 
the effects on trademark holders of adding new top-level domain names 
and requesting recommendations on expensive and expeditious procedures 
for resolving trademark disputes over the assignment of domain names. 
Both the Internet Corporation for Assigned Names and Numbers (I-CANN) 
and WIPO are also making recommendations on these procedures. Adoption 
of a uniform trademark domain name dispute resolution policy will be of 
enormous benefit to American trademark owners.
  The ``Domain Name Piracy Prevention Act of 1999,'' which we introduce 
today, is not intended in any way to frustrate these global efforts 
already underway to develop inexpensive and expeditious procedures for 
resolving domain name disputes that avoid costly and time-consuming 
litigation in the court systems either here or abroad. In fact, the 
bill expressly provides liability limitations for domain name 
registrars, registries or other domain name registration authorities 
when they take actions pursuant to a reasonable policy prohibiting the 
registration of domain names that are identical, confusingly similar to 
or dilutive of another's trademark. The I-CANN and WIPO consideration 
of these issues will inform the development by domain name registrars 
and registries of such reasonable policies.
  The Federal Trademark Dilution Act of 1995 has been used as I 
predicted to help stop misleading uses of trademarks as domain names. 
One court has described this exercise by saying that ``attempting to 
apply established trademark law in the fast-developing world of the 
Internet is somewhat like trying to board a moving bus . . . ``Bensusan 
Restaurant Corp. v. King, 126 F.3d 25 (2d Cir. 1997). Nevertheless, the 
courts appear to be handling ``cybersquatting'' cases well. As 
University of Miami Law Professor Michael Froomkin noted in testimony 
submitted at the Judiciary Committee's hearing on this issue on July 
22, 1999, ``[i]n every case involving a person who registered large 
numbers of domains for resale, the cybersquatter has lost.''
  For example, courts have had little trouble dealing with a notorious 
``cybersquatter,'' Dennis Toeppen from Illinois, who registered more 
than 100 trademarks--including ``yankeestadium.com,'' 
``deltaairlines.com,'' and ``neiman-marcus.com''--as domain names for 
the purpose of eventually selling the names back to the companies 
owning the trademarks. The various courts reviewing his activities have 
unanimously determined that he violated the Federal Trademark Dilution 
Act.
  Similarly, Wayne State University Law Professor Jessica Litman noted 
in testimony submitted at the Judiciary Committees hearing that those 
businesses which `'have registered domain names that are confusingly 
similar to trademarks or personal names in order to use them for 
pornographic web sites . . . have without exception lost suits brought 
against them.''

  Enforcing or even modifying our trademark laws will be only part of 
the solution to cybersquatting. Up to now, people have been able to 
register any number of domain names in the popular ``.com'' domain with 
no money down and no money due for 60 days. Network Solutions Inc. 
(NSI), the dominant Internet registrar, announced just last week that 
it was changing this policy, and requiring payment of the registration 
fee up front. In doing so, the NSI admitted that it was making this 
change to curb cybersquatting.
  In light of the developing case law, the ongoing efforts within WIPO 
and ICANN to build a consensus global mechanism for resolving online 
trademark disputes, and the implementation of domain name registration 
practices designed to discourage cybersquatting, the legislation we 
introduce today is intended to build is intended to build upon this 
progress and provide constructive guidance to trademark holders, domain 
name registrars and registries and Internet users registering domain 
names alike.
  Other Anti-cybersquatting Legislation Is Flawed. This is not the 
first bill to be introduced this session to address the problem of 
cybersquatting, and I appreciate the efforts of Senators Abraham, 
Toricelli, Hatch, and McCain, to focus our attention on this important 
matter. They introduced S. 1255, the ``Anticybersquatting Consumer 
Protection Act,'' which proposed making it illegal to register or use 
any ``Internet domain name or identifier of an online location'' that 
could be confused with the trademark of another person or cause 
dilution of a ``famous trademark.'' Violations were punishable by both 
civil and criminal penalties.
  I voiced concerns at a hearing before the Judiciary Committee last 
week that S. 1255 would have a number of unintended consequences that 
could hurt rather than promote electronic commerce, including the 
following specific problems:
  The definition in S. 1255 is overbroad. S. 1255 covers the use or 
registration of any ``identifier,'' which could cover not just second 
level domain names, but also e-mail addresses, screen names used in 
chat rooms, and even files accessible and readable on the Internet. As 
one witness pointed out, `` the definitions will make every fan a 
criminal.'' How? A file document about Batman, for example, that uses 
the trademark ``Batman'' in its name, which also identifies its online 
location, could land the writer in court under that bill. 
Cybersquatting is not about file names.
  S. 1255 threatens hypertext linking. The Web operates on hypertext 
linking, to facilitate jumping from one site to another. S. 1255 could 
disrupt this practice by imposing liability on operators of sites with 
links to other sites with trademark names in the address. One could 
imagine a trademark owner not wanting to be associated with or linked 
with certain sites, and threatening suit under this proposal unless the 
link were eliminated or payments were made for allowing the linking.
  S. 1255 would criminalize dissent and protest sites. A number of Web 
sites collect complaints about trademarked products or services, and 
sue the trademarked names to identify themselves. For example, there 
are protest sites named ``boycotts-cbs.com'' and 
``www.PepsiBloodbath.com.'' While the speech contained on those sites 
is clearly constitutionally protected, S. 1255 would criminalizes the 
use of the trademarked name to reach the site and make them difficult 
to search for and find online.
  S. 1255 would stifle legitimate warehousing of domain names. The bill 
would change current law and make liable persons who merely register 
domain names similar to other trademarked names, whether or not they 
actually set up a site and use the name. The courts have recognized 
that companies may have legitimate reason for registering domain names 
without using them and have declined to find trademark violations for 
mere registration of a trademarked name. For example, a company 
planning to acquire another company might register a domain name 
containing the target company's name in anticipation of the

[[Page S9755]]

deal. S. 1255 would make that company liable for trademark 
infringement.
  For these and other reasons, Professor Litman concluded that this 
``bill would in many ways be bad for electronic commerce, by making it 
hazardous to do business on the Internet without first retaining 
trademark counsel.'' Faced with the risk of criminal penalties, she 
stated that ``many start-up businesses may choose to abandon their 
goodwill and move to another Internet location, or even to fold, rather 
than risk liability.''
  The Hatch-Leahy Domain Name Piracy Prevention Act is a better 
solution. The legislation we introduce today addresses the 
cybersquatting problem without jeopardizing other important online 
rights and interests. This bill would amend section 43 of the Trademark 
Act (15 U.S.C. Sec. 11125) by adding a new section to make liable for 
actual or statutory damages any person, who with bad-faith intent to 
profit from the goodwill of another's trademark, registers or uses a 
domain name that is identical to, confusingly similar to or dilutive of 
such trademark, without regard to the goods or services of the parties. 
the fact that the domain name registrant did not compete with the 
trademark owner would not be a bar to recovery. Significant sections of 
this bill include:
  Definition. Domain names are narrowly defined to mean alphanumeric 
designations registered with or assigned by domain name registrars or 
registries, or other domain name registration authority as part of an 
electronic authority as part of an electronic address on the Internet. 
Since registrars only second level domain names this definition 
effectively excludes file names, screen names, and e-mail addresses 
and, under current registration practice, applies only to second level 
domain names.
  Scienter requirement. Good faith, innocent or negligent uses of 
domain names that are identical or similar to, or dilutive of, 
another's mark are not covered by the bill's prohibition. Thus, 
registering a domain name while unaware that the name is another's 
trademark would not be actionable. Nor would the use of a domain name 
that contains a trademark for purposes of protest, complaint, parody or 
commentary satisfy the requisite scienter requirement. Bad-faith intent 
to profit is required for a violation to occur.
  This requirement of bad-faith intent to profit is critical since, as 
Professor Litman pointed out in her testimony, our trademark laws 
permit multiple businesses to register the same trademark for different 
classes of products. Thus, she explains:

       [a]lthough courts have been quick to impose liability for 
     bad faith registration, they have been far more cautious in 
     disputes involving a domain name registrant who has a 
     legitimate claim to use a domain name and registered it in 
     good faith. In a number of cases, courts have refused to 
     impose liability where there is no significant likelihood 
     that anyone will be misled, even if there is a significant 
     possibility of trademark dilution.

  The legislation outlines the following non-exclusive list of eight 
factors for courts to consider in determining whether such bad-faith 
intent to profit is proven: (i) the trademark rights of the domain name 
registrant in the domain name; (ii) whether the domain name is the 
legal or nickname of the registrant; (iii) the prior use by the 
registrant of the domain name in connection with the bona fide offering 
of any goods or services; (iv) the registrant's legitimate 
noncommercial or fair use of the mark at the site under the domain 
name; (v) the registrant's intent to divert consumers from the mark's 
owner's online location in a manner that could harm the mark's 
goodwill, either for commercial gain or with the intent to tarnish or 
disparage the mark, by creating a likelihood of confusion as to the 
source, sponsorship, affiliation or endorsement of the site; (vi) the 
registrant's offer to sell the domain name for substantial 
consideration without having or having an intent to use the domain name 
in the bona fide offering of goods or services; (vii) the registrant's 
international provision of material false and misleading contact 
information when applying for the registration of the domain name; and 
(viii) the registrant's registration of multiple domain names that are 
identical or similar to or dilutive of another's trademark.
  Damages. In civil actions against cybersquatters, the plaintiff is 
authorized to recover actual damages and profits, or may elect before 
final judgment to award of statutory damages of not less than $1,000 
and not more than $100,000 per domain name, as the court considers 
just. The court is directed to remit statutory damages in any case 
where the infringer reasonably believed that use of the domain name was 
a fair or otherwise lawful use.
  In Rem actions. The bill would also permit an in rem civil action 
filed by a trademark owner in circumstances where the domain name 
violates the owner's rights in the trademark and the court finds that 
the owner demonstrated due diligence and was not able to find the 
domain name holder to bring an in persona civil action. The remedies of 
an in rem action are limited to a court order for forfeiture or 
cancellation of the domain name or the transfer of the domain name to 
the trademark owner.
  Liability limitations. The bill would limit the liability for 
monetary damages of domain name registrars, registries or other domain 
name registration authorities for any action they take to refuse to 
register, remove from registration, transfer, temporarily disable or 
permanently cancel a domain name pursuant to a court order or in the 
implementation of reasonable policies prohibiting the registration of 
domain names that are identical or similar to, or dilutive of, anothers 
trademark.
  Prevention of reverse domain name hijacking. Reverse domain name 
hijacking is an effort by a trademark owner to take a domain name from 
a legitimate good faith domain name registrant. There have been some 
well-publicized cases of trademark owners demanding the take down of 
certain web sites set up by parents who have registered their 
children's names in the .org domain, such as two year old Veronica 
Sams's ``Little Veronica'' website and 12 year old Chris ``Pokey'' Van 
Allen's web page.
  In order to protect the rights of domain name registrants in their 
domain names the bill provides that registrants may recover damages, 
including costs and attorney's fees, incurred as a result of a knowing 
and material misrepresentation by a person that a domain name is 
identical or similar to, or dilutive of, a trademark. In addition, the 
domain name or the transfer or return of a domain name to the domain 
name registrant.
  Cybersquatting is an important issue both for trademark holders and 
for the future of electronic commerce on the Internet. Any legislative 
solution to cybersquatting must tread carefully to ensure that any 
remedies do not impede or stifle the free flow of information on the 
Internet. In many ways, the United States has been the incubator of the 
World Wide Web, and the world closely watches whenever we venture into 
laws, customs or standards that affect the Internet. We must only do so 
with great care and caution. Fair use principles are just as critical 
in cyberspace as in any other intellectual property arena.
  I am pleased that Chairman Hatch and I, along with Senators Abraham, 
Torricelli, and Kohl have worked together to find a legislative 
solution that respects these considerations. We also stand ready to 
make additional refinements to this legislation that prove necessary as 
this bill moves through the legislative process.
                                 ______