[Congressional Record (Bound Edition), Volume 145 (1999), Part 14]
[Senate]
[Pages 20006-20013]
[From the U.S. Government Publishing Office, www.gpo.gov]



               ANTICYBERSQUATTING CONSUMER PROTECTION ACT

  Mr. BROWNBACK. Mr. President, I ask unanimous consent that the Senate 
now proceed to the consideration of Calendar No. 240, S. 1255.
  The PRESIDING OFFICER. The clerk will report the bill by title.
  The legislative clerk read as follows:

       A bill (S. 1255) to protect consumers and promote 
     electronic commerce by amending certain trademark 
     infringement, dilution, and counterfeiting laws, and for 
     other purposes.

  There being no objection, the Senate proceeded to consider the bill, 
which had been reported from the Committee on the Judiciary, with an 
amendment to strike all after the enacting clause and inserting in lieu 
thereof the following:

     SECTION 1. SHORT TITLE; REFERENCES.

       (a) Short Title.--This Act may be cited as the 
     ``Anticybersquatting Consumer Protection Act.''.
       (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 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:
       ``(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 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.

[[Page 20007]]

       ``(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 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.


                           Amendment No. 1609

(Purpose: To clarify the rights of domain name registrants and Internet 
  users with respect to lawful uses of Internet domain names, and for 
                            other purposes)

  Mr. BROWNBACK. Mr. President, Senators Hatch and Leahy have an 
amendment at the desk, and I ask for its immediate consideration.
  The PRESIDING OFFICER. The clerk will report the amendment.

       The Senator from Kansas [Mr. Brownback], for Mr. Hatch, for 
     himself and Mr. Leahy, proposes an amendment numbered 1609.

  Mr. BROWNBACK. Mr. President, I ask unanimous consent that reading of 
the amendment be dispensed with.
  The PRESIDING OFFICER. Without objection, it is so ordered.
  The amendment is as follows:

       On page 10, line 4, beginning with ``to'' strike all 
     through the comma on line 7 and insert ``or confusingly 
     similar to a trademark or service mark of another that is 
     distinctive at the time of the registration of the domain 
     name, or dilutive of a famous trademark or service mark of 
     another that is famous at the time of the registration of the 
     domain name,''.
       On page 11, strike lines 5 through 12 and insert the 
     following:
       ``(d)(1)(A) A person shall be liable in a civil action by 
     the owner of a trademark or service mark if, without regard 
     to the goods or services of the parties, that person--
       ``(i) has a bad faith intent to profit from that trademark 
     or service mark; and
       ``(ii) registers, traffics in, or uses a domain name that--
       ``(I) in the case of a trademark or service mark that is 
     distinctive at the time of registration of the domain name, 
     is identical or confusingly similar to such mark; or
       ``(II) in the case of a famous trademark or service mark 
     that is famous at the time of registration of the domain 
     name, is dilutive of such mark.
       On page 12, line 19, strike all beginning with ``to'' 
     through the comma on line 22 and insert ``or confusingly 
     similar to trademarks or service marks of others that are 
     distinctive at the time of registration of such domain names, 
     or dilutive of famous trademarks or service marks of others 
     that are famous at the time of registration of such domain 
     names,''.
       On page 13, insert between lines 3 and 4 the following:
       ``(D) A use of a domain name described under subparagraph 
     (A) shall be limited to a use of the domain name by the 
     domain name registrant or the domain name registrant's 
     authorized licensee.
       On page 16, line 24, strike the quotation marks and the 
     second period.
       On page 16, add after line 24 the following:
       ``(v) A domain name registrant whose domain name has been 
     suspended, disabled, or transferred under a policy described 
     under clause (ii)(II) may, upon notice to the mark owner, 
     file a civil action to establish that the registration or use 
     of the domain name by such registrant is not unlawful under 
     this Act. The court may grant injunctive relief to the domain 
     name registrant, including the reactivation of the domain 
     name or transfer of the domain name to the domain name 
     registrant.''.

  Mr. HATCH. Mr. President, today the Senate considers legislation to 
address the serious threats to American consumers, businesses, and the 
future of electronic commerce, which derive from the deliberate, bad-
faith, and abusive registration of Internet domain names in violation 
of the rights of trademark owners. For the Net-savvy, this burgeoning 
form of cyber-abuse is known as ``cybersquatting.'' For the average 
consumer, it is simply fraud, deception, and the bad-faith trading on 
the goodwill of others.
  Our trademark laws have long recognized the communicative value of 
brand name identifiers, which serve as the primary indicators of 
source, quality, and authenticity in the minds of consumers. These laws 
prohibit the unauthorized uses of other people's marks because such 
uses lead to consumer confusion, undermine the goodwill and 
communicative value of the brand names they rely on, and erode consumer 
confidence in the marketplace generally. Such problems of brand-

[[Page 20008]]

name abuse and consumer confusion are particularly acute in the online 
environment, where traditional indicators of source, quality, and 
authenticity give way to domain names and digital storefronts that take 
little more than Internet access and rudimentary computer skills to 
erect. In many cases, the domain name that takes consumers to an 
Internet site and the graphical interface that greets them when they 
get there are the only indications of source and authenticity, and 
legitimate and illegitimate sites may be indistinguishable to online 
consumers.
  Despite the protections of existing trademark law, cyber-pirates and 
online bad actors are increasingly taking advantage of the novelty of 
the Internet and the online vulnerabilities of trademark owners to 
deceive and defraud consumers and to hijack the valuable trademarks of 
American businesses. In some cases these bad actors register the well-
known marks of others as domain names with the intent to extract 
sizeable payments from the rightful trademark owner in exchange for 
relinquishing the rights to the name in cyberspace. In others they use 
the domain name to divert unsuspecting Internet users to their own 
sites, which are often pornographic sites or competitors' sites that 
prey on consumer confusion. Still others use the domain name to engage 
in counterfeiting activities or for other fraudulent or nefarious 
purposes.
  In considering this legislation, the Judiciary Committee has seen 
examples of many such abuses. For example, we heard testimony of 
consumer fraud being perpetrated by the registrant of the 
``attphonecard.com'' and ``attcallingcard.com'' domain names who set up 
Internet sites purporting to sell calling cards and soliciting 
personally identifying information, including credit card numbers. We 
also heard examples of counterfeit goods and non-genuine Porsche parts 
being sold on a number of the more than 300 web sites found using 
domain names bearing Porsche's name. The risks posed to consumers by 
these so-called ``dot.con'' artists continue to escalate as more people 
go online to buy things like pharmaceuticals, financial services, and 
even groceries.
  I was also surprised to learn that the ``dosney.com'' domain was 
being used for a hard-core pornography website--a fact that was brought 
to the attention of the Walt Disney Company by the parent of a child 
who mistakenly arrived at that site when looking for Disney's main 
page. 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 popular computer game of the same name, but ended up at a 
pornography site. Young children are not the only victims of this sort 
of abuse. Recently the Intel Corporation had the ``pentium3.com'' 
domain snatched up by a cybersquatter who used it to post pornographic 
images of celebrities and offered to sell the domain name to the 
highest bidder.
  The Committee also heard numerous examples of online bad actors using 
domain names to engage in unfair competition. For example, one domain 
name registrant used the name ``wwwcarpoint.com,'' without a period 
following the ``www,'' to drive consumers who are looking for 
Microsoft's popular Carpoint car buying service to a competitor's site 
offering similar services. Other bad actors don't even bother to offer 
competing services, opting instead to register multiple domain names to 
interfere with companies' ability to use their own trademarks online. 
For example, the Committee was told that Warner Bros. was 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.''
  It is time for Congress to take a closer look at these abuses and to 
respond with appropriate legislation. The bill the Senate considers 
today will address these problems by clarifying the rights of trademark 
owners 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. And 
while the bill provides many important protections for trademark 
owners, it is important to note that the bill we are considering today 
reflects the text of a substitute amendment that Senator Leahy and I 
offered in the Judiciary Committee to carefully balance the rights of 
trademark owners with the interests of Internet users. The text is 
substantively identical to the legislation that Senator Leahy and I 
introduced as S. 1461, with Senators Abraham, Torricelli, DeWine, Kohl, 
and Schumer as cosponsors. In short, it represents a balanced approach 
that will protect American consumers and the businesses that drive our 
economy while at the same time preserving the rights of Internet users 
to engage in protected expression online and to make lawful uses of 
others' trademarks in cyberspace.
  Let me take just a minute to explain some of the changes that are 
reflected in the bill as it has been reported to the Senate by the 
Judiciary Committee. While the current bill shares the goals of, and 
has some similarity to, the bill as introduced, it differs in a number 
of substantial respects. First, like the legislation introduced by 
Senator Abraham, this 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. The reported 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 the bill as reported, 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 reported 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. The reported 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 
original legislation.
  Second, the reported 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 domain name violates the mark owner's 
substantive trademark rights and 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. The bill, as reported, 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 or others who are 
online incognito for similar 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

[[Page 20009]]

the Net. The approach in this 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 original Abraham bill, the substitute amendment 
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 cybersquatting. The 
bill goes further, however, in order to protect the rights of domain 
name registrants against overreaching trademark owners. Under the 
reported 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. In addition, the court may award 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, the 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, the reported 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.
  In addition, the Senate is considering today an amendment I am 
offering with Senator Leahy to make three additional clarifications. 
First, our amendment will clarify that the prohibited ``uses'' of 
domain names contemplated by the bill are limited to uses by the domain 
name registrant or his authorized licensee and do not include uses by 
others, such as in hypertext links, directory publishing, or search 
engines.
  Second, our amendment clarifies that, like the Federal Trademark 
Dilution Act, uses of names that dilute the marks of others are 
actionable only where the mark that is harmed has achieved the status 
of a ``famous'' mark. As reported by the Committee, the bill does not 
distinguish between famous and non-famous marks. I supported this 
outcome because I believe the bill should provide protection to all 
mark owners against the deliberate, bad-faith dilution of their marks 
by cybersquatters--particularly given the proliferation of small 
startups that are driving the growth of electronic commerce on the 
Internet. Nevertheless, in the interest of moving the bill forward to 
provide much needed protection to trademark owners in a timely fashion 
and to build more closely on the pattern set by established law, I 
agreed to support an amendment limiting the scope of the bill to famous 
marks in the dilution context. Thus, our amendment clarifies that, like 
substantive trademark law generally, uses of others' marks in a way 
that causes a likelihood of consumer confusion is actionable whether or 
not the mark is famous, but like under the Federal Trademark Dilution 
Act, dilutive uses of others' marks is actionable only if the mark is 
famous.
  Finally, our amendment clarifies that a domain name registrant whose 
name is suspended in an extra-judicial dispute resolution procedure can 
seek a declaratory judgment that his use of the name was, in fact, 
lawful under the Trademark Act. This clarification is consistent with 
other provisions of the reported bill that seek to protect domain name 
registrants against overreaching trademark owners.
  Let me say in conclusion that this 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. Let me thank Senator Leahy for his work in crafting this 
particular measure, as well as Senator Abraham for his cooperation in 
this effort, and all the other cosponsors of the bill and the 
substitute amendment adopted by the Judiciary Committee last week. I 
look forward to my colleagues' support of this measure and to working 
with them to get this important bill promoting e-commerce and online 
consumer protection through the Senate and enacted into law.
  Mr. LEAHY. Mr. President, I am pleased that the Senate is today 
passing the Hatch-Leahy substitute amendment to S. 1255, the 
``Anticybersquatting Consumer Protection Act.'' Senator Hatch and I, 
and others, 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 as ```a unique and wholly new medium of worldwide 
human communication.'' Reno v. ACLU, 521 U.S. 844 (1997).
  On July 29, 1999, Senator Hatch and I, along with several other 
Senators, introduced S. 1461, the ``Domain Name Piracy Prevention Act 
of 1999.'' This bill then provided the text of the Hatch-Leahy 
substitute amendment that we offered to S. 1255 at the Judiciary 
Committee's executive business meeting the same day. The Committee 
unanimously reported the substitute amendment favorably to the Senate 
for consideration. This substitute amendment, with three additional 
refinements contained in a Hatch-Leahy clarifying amendment, is the 
legislation that the Senate considers today.
  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 
trademarked 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,'' 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

[[Page 20010]]

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 inexpensive and expeditious 
procedures for resolving trademark disputes over the assignment of 
domain names. Both the Internet Corporation for Assigned Names and 
Numbers (ICANN) 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,'' S. 1461, which formed the 
basis for the substitute amendment to S. 1255 that the Senate considers 
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 
legislation 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 or confusingly similar 
to another's trademark or dilutive of a famous trademark. The ICANN 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 ``yankee stadium.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 Committee's 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 month 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 
pass today 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.
  Commercial sites are not the only ones suffering at the hands of 
domain name pirates. Even the Congress is not immune: while cspan.org 
provides detailed coverage of the Senate and House, cspan.net is a 
pornographic site. Moreover, Senators and presidential hopefuls are 
finding that domain names like bush2000.org and hatch2000.org are being 
snatched up by cyber poachers intent on reselling these names for a 
tidy profit. While this legislation does not help politicians protect 
their names, it will help small and large businesses and consumers 
doing business online.
  As introduced, S. 1255 was flawed.--I appreciate the efforts of 
Senators Abraham, Torricelli, Hatch and McCain to focus our attention 
on this important matter. As originally introduced, S. 1255 proposed to 
make 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 that, 
in its original form, S. 1255 would have a number of unintended 
consequences that could hurt rather than promote electronic commerce, 
including the following specific problems:
  The definition was overbroad.--As introduced, S. 1255 covered 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.
  The original bill threatened hypertext linking.--The Web operates on 
hypertext linking, to facilitate jumping from one site to another. The 
original bill could have disrupted 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.
  The original bill would have criminalized dissent and protest 
sites.--A number of Web sites collect complaints about trademarked 
products or services, and use the trademarked names to identify 
themselves. For example, there are protest sites named ``boycott-
cbs.com'' and ``www.PepsiBloodbath.com.'' While the speech contained on 
those sites is clearly constitutionally protected, as originally 
introduced, S. 1255 would have criminalized the use of the trademarked 
name to reach the site and made them difficult to search for and find 
online.
  The original bill would have stifled legitimate warehousing of domain 
names.--The bill, as introduced, would have changed current law and 
made liable persons who merely register domain names similar to other

[[Page 20011]]

trademarked names, whether or not they actually set up a site and used 
the name. The courts have recognized that companies may have legitimate 
reasons 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 deal. The original bill would have made 
that company liable for trademark infringement.
  For these and other reasons, Professor Litman concluded that, as 
introduced, the ``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 and substitute 
amendment to S. 1255 are a better solution.--S. 1461, the ``Domain Name 
Piracy Prevention Act,'' which Senators Hatch and I, and others, 
introduced and which provides the text of the substitute amendment to 
S. 1255, addresses the cybersquatting problem without jeopardizing 
other important online rights and interests. Along with the Hatch-Leahy 
clarifying amendment we consider today, this legislation 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, without regard to the goods or services of the parties, 
registers, traffics in or uses a domain name that is identical or 
confusingly similar to a distinctive trademark or dilutive of a famous 
trademark. The fact that the domain name registrant did not compete 
with the trademark owner would not be a bar to recovery.
  Uses of infringing domain names that support liability under the 
legislation are expressly limited to uses by the domain name registrant 
or the registrant's authorized licensee. This limitation makes clear 
that ``uses'' of domain names by persons other than the domain name 
registrant for purposes such as hypertext linking, directory 
publishing, or for search engines, are not covered by the prohibition.
  Domain name piracy is a real problem. Whitehouse.com has probably 
gotten more traffic from people trying to find copies of the 
President's speeches than those interested in adult material. As I have 
noted, the issue has struck home for many in this body, with aspiring 
cyber-poachers seizing domain names like bush2000.org and trying to 
extort political candidates for their use.
  While the problem is clear, narrowly defining the solution is 
trickier. The mere presence of a trademark is not enough. Legitimate 
conflicts may arise between companies offering different services or 
products under the same trademarked name, such as Juno lighting inc. 
and Juno online services over the juno.com domain name, or between 
companies and individuals who register a name or nickname as a domain 
name, such as the young boy nicknamed ``pokey'' whose domain name 
``pokey.org'' was challenged by the toy manufacturer who owns the 
rights to the Gumby and Pokey toys. In other cases, you may have a site 
which uses a trademarked name to protest a group, company or issue, 
such as pepsibloodbath.com, or even to defend one's reputation, such as 
www.civil-action.com, which belongs not to the motion picture studio, 
but to W.R. Grace to rebut the unflattering portrait of the company as 
a polluter and child poisoner created by the movie.
  There is a world of difference between these sorts of sites and those 
which use deceptive naming practices to draw attention to their site 
(e.g., whitehouse.com), or those who use domain names to misrepresent 
the goods or services they offer (e.g., dellmemory.com, which may be 
confused with the Dell computer company).
  We must also recognize certain technological realities. For example, 
merely mentioning a trademark is not a problem. Posting a speech that 
mentions AOL on my web page and calling the page aol.html, confuses no 
one between my page and America Online's site. Likewise, we must 
recognize that while the Web is a key part of the Internet, it is not 
the only part. We simply do not want to pass legislation that may 
impose liability on Internet users with e-mail addresses, which may 
contain a trademarked name. Nor do we want to crack down on newsgroups 
that use trademarks descriptively, such as alt.comics.batman.
  In short, it is important that we distinguish between the legitimate 
and illegitimate use of domain names, and this legislation does just 
that. Significant sections of this legislation 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 address on the Internet. Since registrars only register 
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 a 
domain name that is identical or confusingly similar to another's mark 
or dilutive of a famous mark are not covered by the legislation'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 name 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 
intentional 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

[[Page 20012]]

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 personam 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 confusingly similar to another's 
trademark, or dilutive of a famous 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 legislation 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, a domain name registrant, whose domain name has been 
suspended, disabled or transferred, may sue upon notice to the mark 
owner, to establish that the registration or use of the domain name by 
the registrant is lawful. The court in such a suit is authorized to 
grant injunctive relief, including the reactivation of a 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 
authorized 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.
  Mr. ABRAHAM. Mr. President, I am pleased to rise today in order to 
comment on S. 1255, the Anticybersquatting Consumer Protection Act of 
1999. Through the tremendous help of several of my colleagues, notably 
Senators Hatch, Leahy, Torricelli, McCain, Breaux, and Lott, we moved 
this bill in little over one month from a concept to final product, 
through the Judiciary Committee with unanimous support, and again with 
unanimous support through the Senate floor. I thank all involved for 
their help, and I am comfortable in my belief that we have accomplished 
a great feat here today: the Senate has taken an important step in 
reforming trademark law for the digital age, and in protecting the 
expectations and safety of consumers, and the property rights of 
business nationwide.
  This legislation will combat a new form of high-tech fraud that is 
causing confusion and inconvenience for consumers, increasing costs for 
people doing business on the Internet, and posing substantial threat to 
a century of pre-Internet American business efforts. The fraud is 
commonly called ``cybersquatting,'' a practice whereby individuals in 
bad faith reserve Internet domain names or other identifiers of online 
locations that are similar or identical to trademarked names. Once a 
trademark is registered as an online identifier or domain name, the 
``cybersquatter'' can engage in a variety of nefarious activities--from 
the relatively benign parody of a business or individual, to the 
obscene prank of redirecting an unsuspecting consumer to pornographic 
content, to the destructive worldwide slander of a centuries-old brand 
name. This behavior undermines consumer confidence, discourages 
Internet use, and destroys the value of established brand names and 
trademarks.
  Electronic of ``E'' commerce in particular has been an engine of 
great economic growth for the United States. E-commerce between 
businesses has grown to an estimated $64.8 billion for 1999. Ten 
million customers shopped for some product using the Internet in 1998 
alone. International Data Corporation estimates that $31 billion in 
products will be sold over the Internet in 1999. And 5.3 million 
households will have access to financial transactions like banking and 
stock trading by the end of 1999.
  Our economy, and its ability to provide high paying jobs for American 
workers, is increasingly dependent upon technology--and on e-commerce 
in particular. If we want to maintain our edge in the global 
marketplace, we must address those problems which endanger continued 
growth in e-commerce. Some unscrupulous--though enterprising--people 
are engaged in the thriving and unethical business collecting and 
selling Internet addresses containing trademarked names.
  Cybersquatting has already caused significant damage. Even computer-
savvy companies buy domain names from cybersquatters at extortionate 
rates to rid themselves of a headache with no certain outcome. For 
example, computer maker Gateway recently paid $100,000 to a 
cybersquatter who had placed pornographic images on the website 
``www.gateway20000''. But rather than simply give up, several 
companies, including Paine Webber, have instead sought protection of 
their brands through the legal system. However, as with much of the 
pre-Internet law that is applied to this post-Internet world, precedent 
is still developing, and at this point, one cannot predict with 
certainty which party to a dispute will win, and on what grounds, in 
the future.
  Whether perpetrated to defraud the public or to extort the trademark 
owner, squatting on Internet addresses using trademarked names is 
wrong. Trademark law is based on the recognition that companies and 
individuals build a property right in brand names because of the 
reasonable expectations they raise among consumers. If you order a 
Compaq or Apple computer, that should mean that you get a computer made 
by Compaq or Apple, not one built by a fly-by-night company pirating 
the name. The same goes for trademarks on the Internet.
  To protect Internet growth and job production, Senators Torricelli, 
Hatch, McCain, and I introduced an anticybersquatting bill which 
received strong public support. A number of suggestions convinced me of 
the need for substitute legislation addressing the problem of in rem 
jurisdiction and eliminating provisions dealing with criminal 
penalties, and I have been pleased to work with Senators Hatch and 
Leahy to that effect.
  Our final legislative product would establish uniform federal rules 
for dealing with this attack on interstate electronic commerce, 
supplementing existing rights under trademark law. It establishes a 
civil action for registering, trafficking in, or using a domain name 
identifier that is identical to, confusingly similar to, or dilutive of 
another person's trademark or service mark that either is inherently 
distinctive or had acquired distinctiveness.
  This bill also incorporates substantial protections for innocent 
parties,

[[Page 20013]]

keying on the bad faith of a party. Civil liability would attach only 
if a person had no intellectual property rights in the domain name 
identifier, the domain name identifier was not the person's legal first 
name or surname; and the person registered, acquired, or used the 
domain name identifier with the bad-faith intent to benefit from the 
goodwill of a trademark or service mark of another.
  Just to be clear on our intent, the ``bad-faith'' requirement may be 
established by, among others, any of the following evidence:
  First, if the registration or use of the domain name identifier was 
made with the intent to disrupt the business of the mark owner by 
diverting consumers from the mark owner's online location;
  Second, if a pattern is established of the person offering to 
transfer, sell, or otherwise assign more than one domain name 
identifier to the owner of the applicable mark or any third party for 
consideration, without having used the domain name identifiers in the 
bona fide offering of any goods or services; or
  Third, if the person registers or acquires multiple domain name 
identifiers that are identical to, confusingly similar to, or dilutive 
of any distinctive trademark or service mark of one or more other 
persons.
  In addition, under this legislation, the owner of a mark may bring an 
in rem action against the domain name identifier itself. This will 
allow a court to order the forfeiture or cancellation of the domain 
name identifier or the transfer of the domain name identifier to the 
owner of the mark. It also reinforces the central characteristic of 
this legislation--its intention to protect property rights. The in rem 
provision will eliminate the problem most recently and prominently 
experienced by the auto maker Porsche, which had an action against 
several infringing domain name identifiers dismissed for lack of 
personal jurisdiction.
  In terms of damages, this legislation provides for statutory civil 
damages of at least $1,000, but not more than $100,000 per domain name 
identifier. The plaintiff may elect these damages in lieu of actual 
damages or profits at any time before final judgment.
  The growth of the Internet has provided businesses and individuals 
with unprecedented access to a worldwide source of information, 
commerce, and community. Unfortunately, those bad actors seeking to 
cause harm to businesses and individuals have seen their opportunities 
increase as well. In my opinion, on-line extortion in this form is 
unacceptable and outrageous. Whether it's people extorting companies by 
registering company names, misdirect Internet users to inappropriate 
sites, or otherwise attempting to damage a trademark that a business 
has spent decades building into a recognizable brand, persons engaging 
in cybersquatting activity should be held accountable for their 
actions. I believe that these provisions will discourage anyone from 
``squatting'' on addresses in cyberspace to which they are not 
entitled.
  I again wish to thank my colleagues for their assistance in this 
effort, and I look forward to final passage of this legislation after 
careful and thoughtful consideration by the House of Representatives.
  Mr. BROWNBACK. Mr. President, I ask unanimous consent that the 
amendment be agreed to, the committee amendment, as amended, be agreed 
to, the bill be read a third time and passed, as amended, the motion to 
reconsider be laid upon the table, and any statements relating to the 
bill be printed in the Record.
  The amendment (No. 1609) was agreed to.
  The committee amendment, as amended, was agreed to.
  The bill (S. 1255), as amended, was read the third time, and passed.
  [The bill was not available for printing. It will appear in a future 
issue of the Record.]

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