Wednesday, February 18, 1998

Chaos over trademarks means Internet sites can be misleading

By TED BRIDIS / Associated Press Writer

WASHINGTON (AP) -- When Kathy Elkins was looking for coupons to save money on diapers for her growing family, she logged onto the Internet and went straight to www.huggies.com, a Web site run by the Kimberly-Clark Corp.

Elkins, who lives outside Birmingham, Ala., with a toddler and is expecting twins, uses the Internet often enough to make an educated guess about finding a product's Web site.

Good thing. If she had done a general search, she would have been bombarded by more than 2,000 Web addresses, including at least one pornographic site and others selling foam holders to keep canned drinks cold.

In the chaos of cyberspace, there's no guarantee you can find a company at its most obvious address. For $100, anyone can register virtually any address under a first-come, first-served policy that's become one of the biggest problems online for corporations protecting their trademarks.

It's also a huge hurdle for those who contend the Internet will become the world's biggest trusted vehicle for commerce worth tens of billions into the next century.

How can consumers trust using the Web, where guessing about a company's address can be like playing shopper's roulette? Imagine visiting your local grocery store and finding no milk or eggs but auto parts instead. Imagine walking into Burger King and being offered computer software.

Want the official site of the Spice Girls, the British pop group? Don't jump to www.spicegirls.com -- that site is owned by England-based Global Media Communications, a company sued over the address and others it offered to sell. (On the Internet, those companies are disdained as "cyberpirates").

The trademark confusion is significant enough that when the White House released its plan last month to turn over its control of the Internet to a yet-unformed non-profit corporation, it included an entire chapter on trademarks. Its recommendation? "It is unclear what system would work best," the report said. No one knows exactly what to do.

Only a fraction of the Web's 1.6 million addresses are ever challenged. But when disputes arise, the stakes can be high: The Coca-Cola Co., with $18 billion in sales last year, didn't get the rights to www.coke.com until last summer.

Network Solutions Inc., the company that assigns addresses under a federal government contract, is changing its policies, effective next week, to make it easier for trademark holders to fight for their addresses.

"The mechanisms for resolving conflict between trademark holders and domain name holders are expensive and cumbersome," said Ira Magaziner, the senior White House adviser in charge of the proposal.

"It gives me a headache whenever I get too far into trademark law," Magaziner said. "If you ask (industry experts) how you see this going, big problems are coming up in the next couple years."

Some of America's biggest companies have responded by seizing every variation of whatever trademarks they already own. Nike has already grabbed nike.com; airjordan.com; swoosh.com; justdoit.com and others.

"If you are a large trademark holder, with 300 to 500 trademarks, policing the current system is a nightmare," said John Wood, a London-based Internet consultant.

Experts say the trademark problem likely will worsen before it improves. Under its proposal last month, the White House recommended five new suffixes for Web addresses, such as .firm, .shop or .info to expand the estimated 1.6 million commercial Web sites. Companies fear they'll need to register all their trademarks with each new suffix to protect themselves.

"Do you think McDonald's is going to allow mcdonalds.firm?" asked Mark Hellmann, a Chicago attorney with Holleb & Coff who specializes in Internet law. "They're going to come in and grab all the top-level names with their mark.... There are trillions of dollars at stake."

McDonald's in fact was involved in a well-known case involving domain names. Journalist Joshua Quittner registered www.mcdonalds.com in 1994 and relinquished it only when the restaurant chain donated computer equipment to a Brooklyn school.

In another dispute, toy maker Hasbro Inc. filed suit against Internet Entertainment Group, which sent pornography over the Internet via a Web site named for one of Hasbro's most popular children's games, Candyland. The toy company got the name back.

Procter & Gamble Co. has already registered at least 132 Web addresses, ranging from toothpaste.com to badbreath.com to pampers.com -- the top competitor to Kimberly-Clark's huggies.com diaper site.

The Cincinnati-based company said it will take "prudent steps" to protect all its brand names on the Internet.

"It's still the Wild West out there," spokesman Greg Sanders said. "The rules of the road are so nebulous. You've got all kinds of opportunists trying to cash in on this new medium."