With the increasing use of the World Wide Web as a means of communication to millions of consumers, businesses have become consumed by the war over domain names. Domain names, the portion of an internet address preceding .com, .gov, .org, and .edu, link internet users to thousands of web sites. In recent years, numerous companies have applied for and received the rights to domain names that include the names or parts of the names of other businesses throughout the world. Companies usually reserve their own name as well as related variations (e.g. cocacola.com, coke.com, etc.) for their addresses, a practice which invites controversy when those variations overlap with another company's title or logo.

To date, there is no established global intellectual property law and therefore, no forum for adjudicating intellectual property disputes, such as overlapping or 'stolen' domain names. "Coincidental" similarities in domain names created by cybersquatting entrepreneurs who reserve scores of names in hopes of selling to the highest bidder have opened the floodgates of litigation over trademarks and copyrights. Recently, groups such as the World Intellectual Property Organization (WIPO) have addressed this issue and have pushed to increase outlets for alternative dispute resolution. With the uncertainty surrounding questions of whether some domain names are protected by copyrights or trademarks, international organizations, foreign countries, and the White House have become involved in the quest to provide a framework for regulation of the web.

In the United States, the vast majority of domains are controlled by Network Solutions, Inc. (NSI), a corporate registry under contract from the National Science Foundation. As part of the government-sponsored InterNIC (Internet Network Information Center) project, NSI employs a multi-tiered system that includes a general Top Level Domain (gTLD), such as .com, as well as a Second Level Domain (SLD) assigned to the individual or business (e.g. www.sony.com). The SLD and gTLD are combined to create a web address, or URL (uniform resource locator), which may be trademarked, and can be reached by anyone using web browser software. NSI is responsible for assigning .org for non-profit organizations, .com for businesses (for a $50/year maintenance fee), and ..net for Internet service providers under contract with the National Science Foundation. Because of burgeoning interest in creating corporate web sites, .com has become the premier domain name among commercial users, boasting millions of assignments; this lucrative domain has created upheaval in the corporate quest to conquer the internet.

Along with the surge of web site controversies, there is much uncertainty over what companies will administer these domains. The U.S. government's exclusive contract with NSI will expire soon, leaving open a huge market for domain name authorization. After years of criticism and dissatisfaction with its administration of domain structures, NSI faces an end to its five-year license from the U.S. government on March 31, and there is no official decision as to its future after that date. After a probable short-term extension of its current government contract, NSI will be forced to contend with competitors such as PG Media, a relatively small company, and the Policy Oversight Committee. The National Science Foundation, the government organization in charge of NSI, has strongly indicated that it would like to withdraw from commercially-motivated Internet activities as a gesture of the U.S. government's desire to further promote free market competition. But the inability of other companies to effectively compete with NSI has nevertheless prompted litigation, such as PG Media's suit against NSI in U.S. District Court for the Southern District of New York. PG Media alleges that NSI maintains a monopoly in the domain name market with its exclusive control of the Internet's central configuration file and root name-servers, effectively preventing the creation of alternative domain registries. The Policy Oversight Committee (POC) has garnered some support for its strategy, detailed in the WIPO's Memorandum of Understanding, to set up seven new top-level domains, but the committee has no U.S. government or industry support. The POC's main benefactor, however, has been WIPO Property Organization, which has given it the necessary publicity to gain increasing support for its controversial strategy.

In May, 1997, WIPO produced the "Memorandum of Understanding on the Generic Top-Level Domain Name Space of the Internet Domain Name System" (gTLD-MoU), which implements the February 1997 report of the now-dissolved International Ad Hoc Committee (IAHC). The Memo's stated objective is to provide an "international governance framework in which policies for the administration and enhancement of the Internet's global Domain Name System are developed and deployed." The Memorandum creates seven new gTLDs (referred to as COREgTLDs) and a self-governing structure (referred to as CORE) including a number of oversight committees to observe and authorize second level domain names. The proposed gTLDs include .firm, .nom, .arts, .rec, .web, .info, and ..store. The IAHC voiced its support of new registries created to compete with NSI, and proposed a mandatory waiting period before domain names are issued, allowing potential trademark challengers to come forward and to verify that the applicant sought the name with good intentions. WIPO has offered its support of most of IAHC's proposals, and has also suggested dispute resolution mechanisms such as online arbitration and mediation.

President Clinton, with the help of his Internet advisor, Ira Magaziner, is pushing to relinquish NSI's government-authorized control over domain names. White House officials are concerned, however, about the potential monopoly or cartel power available to emerging domain name agencies, and that there is not an effective international enforcement for trademark and copyright infringements. Clinton hopes that NSI will have viable competitors by the end of March, and in a recent government green paper, Clinton and Magaziner encouraged greater use of the United States national top-level domain, .us, rather than .com or .net. The paper said if more businesses registered with .us, there would be a reduction in "conflicts between American companies and others vying for the same domain name." Numerous businesses have resisted this suggestion because using the .us extension often requires the name of the state or city to be used in the address as well, and because users are generally less familiar with geographical gTLDs. U.S. government aspirations that the green paper would be embraced by the international technology community were dashed, however, with Europe's backlash against a perceived U.S. administrative takeover of the web.

In reaction to the tidal wave of complaints regarding its administration of domain names, the NSI redrafted its Domain Name Dispute Policy. Under the revision, the owner of a trademark registered in the U.S. or in a foreign jurisdiction, may challenge the use of an identical SLD by submitting the federally-registered trademark certificate to the NSI. The challenger must also prove that she has sent the would-be infringer notice of her claim and that she registered her trademark prior to the infringer's first use of the domain name. Thereafter, NSI allows the infringer 30 days to provide evidence that he has a trademark registration for the same mark in the U.S. or any foreign country. This policy might have been effective, except that NSI did not account for the deluge of submissions of trademarks from Tunisia, where registration can be achieved in less than 30 days, thereby circumventing NSI's process. If the domain name holder cannot demonstrate that he has an identical registered trademark, then he must relinquish his ownership of the domain within 90 days. The 90 days provide a transition period whereby NSI can further investigate the allegations and decide who will gain the rights to the domain name (i.e. the domain name is placed on hold pending a resolution to the dispute).

This process has attracted much criticism, mainly because of the user fees imposed upon domain holders in a formerly free system, and the blatant favoritism (which some have argued is unwarranted) toward those who already possess trademark registrations. Furthermore, NSI's revision of its earlier policy has failed to stem the tide of increasing litigation and has arguably invited even more lawsuits than before. Many of the web site controversies encountered by NSI arise because a domain name often functions as a trademark (TM) or service mark (SM). NSI does not exercise veto power over the use of controversial domain names, and requires parties applying for a name to indemnify and defend the company against any lawsuits and damages arising out of related disputes. Thus, controversial similarities in web addresses frequently invite allegations of trademark infringement. In the last three years, accusations of trademark and copyright infringement over pirated names have spiraled out of control, prompting much of the recent discussions about greater regulation. Companies such as McDonald's, MTV, Coke, Microsoft, and Avon have been jolted by the realization that a "cybersquatter" has obtained a domain name that conspicuously resembles the corporation's title. These enterprising individuals or small businesses are quite willing to sell the corporate giant the coveted domain name for an inflated price (as in the Princeton Review-Kaplan scandal). In another example of cybersquatting, Planned Parenthood discovered that an anti-abortion advocate acquired a domain name with a variation of the company's name in order to discourage visitors from using birth control. To prevent future litigation, many companies have acquired numerous, different possible domain names for each of their products (Kraft has registered parkay.com, velveeta.com, etc.; Proctor & Gamble has diarrhea.com, underarm.com, etc.).

Current trademark law prohibits use of the same mark on competing goods or services where consumer confusion is likely as to the sponsor of the goods or services associated with the mark, such as in the case of copycat websites. The newly enacted Federal Trademark Dilution Act (1996) prohibits the dimunition and tarnishing of valuable advertising marks. Dilution occurs when a trademark or its likeness is copied or used in such a way as to tarnish or dilute its distinctive quality. Unlike in an infringement claim, a dilution case does not require the court to assess whether the consumer audience is confused between the goods offered by the authorized trademark and the goods offered by the unauthorized trademark. Such dilution laws place greater emphasis on the protection of trademark owners' investments, as well as preventing deception of the public. Courts are primarily concerned with the length of time that the mark has been popularly recognized and the degree to which the mark was diluted or blurred, resulting in injury to the mark's selling power. In a recent case involving Panavision, Inc., the court held that "registering a famous mark as a domain name for the purpose of trading on the value of the mark by selling the domain name to the trademark owner violates the federal and state dilution statutes." The Dilution Act allows exceptions, however, for certain uses and protects parties who may "innocently" register a famous trademark as a domain name.