Ateneo Law School
International Master of Laws Program
Ateneo Professional Schools
Rockwell Drive, Rockwell Center
Makati City, Philippines
The Underpinnings of Non-Trademark Domain Names
in Partial Fulfillment
of the Requirements for the Degree of
MASTER OF LAWS (Ll.M.)
ATTY. DINO ROBERT L. DE LEON
2014
de Leon, Dino Robert L.
THE UNDERPINNINGS OF NON-TRADEMARK DOMAIN NAMES
ABSTRACT
Much has been said about the power of the internet. From being an
unimaginable global concept, the internet has become the modern day choice for
conducting commercial transactions and instantaneous communications. A domain
name serves as the user-friendly address in the internet which is widely used by
companies and individuals in order to have a strong presence in this
multijurisdictional system. Indeed, domain names play a pivotal role in the
continuous success of the internet but, there is more than what meets the eye.
While domain name disputes mostly involve violations of intellectual property
laws, not all domain names are created in relation to goods or services. Worse, not
all registrants are legitimate owners of the domain names in use. Philippine courts
are yet to encounter such controversies due to the absence of a direct applicable law
which sanctions the unauthorized use of non-trademark domain names (NTDNs). A
legal framework of the rights and remedies of NTDNs is definitely wanting.
In so doing, this thesis argues that a NTDN is property whereby the legitimate
owner acquires a bundle of rights which includes the right to exclude anyone from its
enjoyment. Consequently, a reexamination of domestic laws and jurisprudence vis-àvis foreign ones is made, including the dilemma of the current domain name
registration with respect to the enforcement of such rights. Both civil and criminal
aspects surrounding the use of NTDNs are likewise scrutinized in view of how foreign
jurisdictions have defined and treated domain names and penalized misuse thereof.
This way, owners of NTDNs are given ample protection of their respective rights
against various forms of unauthorized use.
Lastly, there is a need to formulate rules that would greatly contribute in
regulating the registration of NTDNs and to sanction the undefined type of NTDN
infringement, in harmony with other laws, to further promote the welfare of the users
of this effective yet dangerous medium of communication.
TABLE OF CONTENTS
CHAPTER I: INTRODUCTION
A. Background of the Study…………………………………………………1
B. Statement of the Problem……………………..…………………………..11
C. Objectives…………………………………………..……………………..13
D. Methodology………………………………………………..…………….14
E. Significance of the Study…………………………………………………15
F. Scope and Limitation……………………………………………………...18
G. Organization of the Thesis………………………………………………..21
CHAPTER II: THE INTERNET AND THE DOMAIN NAME SYSTEM
A. The Internet…………………………………………………………….....23
B. The World Wide Web (WWW)…………………………………………..25
C. The Domain Name System……………………………………………….27
1. Personal names…………………………………………………….32
D. The Internet Corporation for Assigned Names and Numbers (ICANN) ..36
E. The Philippine Domain Name Registry…………………………………..39
CHAPTER III: PROPERTY AND DOMAIN NAMES
A. Definition of Property…………………………………………………….42
1. Ownership…………………………………………………………43
B. Classification of Property……………………………………….………...46
C. Classification of Domain Names………………………………………….48
1. As Tangible Property……………………………………………...49
2. As Intangible Property…………………………………………….52
3. As Service Contract……………………………………………….54
4. As Intellectual Property……………………………………….......57
D. How should NTDN’s be classified in the Philippines? .............................62
CHAPTER IV: ANALYSIS OF DISPUTES AND REMEDIES
A. Under the Intellectual Property Code…………………….……………….73
1. Memorandum Circular BT Y2K-9-05…………………………….77
a. NTDNs are not service marks……………………………..79
b. Registering a NTDN is not equivalent to service…………80
B. Civil Code of the Philippines……………………………………………..81
1. Torts v. Quasi-Delicts……………………………………………..82
2. Human Relations…………………………………………………..83
3. Unauthorized use of NTDNs entitles the registrant to damages......87
a. Actual Damages…………………………………………...90
b. Moral Damages…………………………………………....94
c. Nominal Damages…………………………………………95
d. Temperate or Moderate Damages…………………………97
e. Exemplary or Corrective Damages……………………..…97
f. Liquidated Damages……………………………………....98
C. Revised Penal Code………………………………………………………99
Matrix of Remedies – Figure 1……………………………..109
CHAPTER V: STATE REGULATION OF THE DOMAIN NAME
REGISTRY………………………………………………………………………...111
CHAPTER VI: CONCLUSION AND RECOMMENDATION
A. Summary and Conclusion……………………………………………….120
B. Recommendation
1. Proposed State-Regulated Domain Name Registry……………...131
2. Proposed Legislation for Anti-NTDN Infringement……………..136
BIBLIOGRAPHY
CHAPTER I
INTRODUCTION
A. Background of the Study
“What’s in a name?” laments Juliet at her Shakespearean balcony. Four
hundred years later, Juliet’s question would be, “What’s in a domain name?”1
If the defining attribute of intellectual assets is that they can be used by
countless numbers of consumers across national borders and never be exhausted, the
internet may be the first distribution technology to fully capture this unique quality.
By detaching inventions, entertainment, and advertising from the physical products
that embody them, the internet, even more than television and radio before it, enables
the transmission of content at virtually no cost. It is this unfettered use that represents
the internet’s greatest challenge to intellectual assets. The early battle cry of internet
activists, “Information wants to be free!” captures the essence of the challenge. Habits
of free access to a seemingly endless stream of information and entertainment breed
the belief that the content itself is --- or can be --- free.2 The internet has paved the
way for the law’s evolution along its own trajectories of change.
1
Xuan-Thao N. Nguyen, Shifting the Paradigm in E-Commerce: Move Over Inherently Distinctive
Trademarks-The E-Brand, I-Brand and Generic Domain Names Ascending to Power? 50 Am. Univ. Law
Rev. 942, 943 (2001) citing William Shakespeare, Romeo and Juliet, Act 2, Sc. 1, Ins. 80-90 (William
Shakespeare the Complete Works, Barnes & Noble, Inc. 1994).
2
Paul Goldstein, Intellectual Property: The Tough New Realities That Could Make or Break Your
Business, 152 (2007).
The internet has not only changed the way people do business but also the
manner people integrate. One of the things that have catapulted the growth of the
internet to what it is today is the use of domain names. Domain names were only the
first and bluntest instruments for appropriating brand names on the internet and their
use has created the trend to treat them as protectable properties apart from any
showing of consumer protection. Companies often take advantage of the domain
name system and expanded from their brick-and-mortar offices to the cyberspace
while some have started their businesses directly in the internet even without any
offline establishment. On the other hand, some create their personal websites to
advance themselves in their respective fields and to accommodate their loyal
followers and growing fan base which is primarily not for commercial use. Clearly,
the nature of cyberspace continues to be woven into the fabric of our daily existence.3
A domain name is commonly associated with trademarks if it is used to
identify the source of goods or services, like Apple’s <www.apple.com>, in relation
to its computers, cellular phones, tablets and MP3 players and LBC’s
<www.lbcexpress.com/ph/> with respect to its courier services. A trademark domain
name (TDN) must identify a website in a manner that it leads customers to associate
the source, or sponsorship or products, or services offered with the domain name. The
3
Xuan-Thao N. Nguyen, Cyberproperty and Judicial Dissonance: The Trouble With Domain Name
Classification, 10 Geo. Mason L. Rev. 183 (2001) citing Lawrence Lessig, Code and Other Laws of
Cyberspace 190 (1999)
legal framework for TDNs is clearer compared to its non-trademark counterpart.
Therefore, the relative simplicity of domain names, in general, should not be belittled.
In the Philippines, the complexities of domain names may have been
overlooked or not prioritized. The passive treatment of domain names allows the
respective owners to fall prey to another breed of domain name disputes which arises
when the subject domain name is registered or used not in relation to any goods and
services. The plot thickens as non-trademark domain name (NTDN) disputes are yet
to be filed in courts, not only because it is relatively new, but due to the lack of a law,
rule or regulation that explicitly treats or protects domain names outside the ambit of
intellectual property principles that can be enforced within Philippine jurisdiction.
Thus, as the Internet economy matures, the lack of applicable case law involving
NTDNs will necessarily hamper their protection and use.
Despite the absence of any local jurisprudence that specifically pertains to
domain names, the Intellectual Property Code of the Philippines (IP Code), 4 together
with the U.S. Anti-Cybersquatting Consumer Protection Act (ACPA),5 the Uniform
Domain Name Dispute Resolution Policy (UDRP) of the Internet Corporation for
Assigned Names and Numbers (ICANN) and the Cybercrime Prevention Act of 2012
(CPA)6 have generally provided the theoretical obstacles and remedies of TDNs
leaving non-trademark ones without any ample security against the unauthorized use
4
Republic Act No. 8293
15 U.S.C. § 1125(d)
6
Republic Act 10175
5
of unscrupulous individuals. Proper classification of a domain name as property is
likewise wanting. Hope, however, sprung in Kremen v. Cohen.7
In 1994, Gary Kremen registered <sex.com> to his business, Online
Classifieds, and listed himself as contact person for free after sending an e-mail to
domain name registrar Network Solutions, Inc. (NSI). Similarly, con artist Stephen
Cohen8 saw the value of the domain name. Once out of prison, he sent NSI a letter
allegedly from Online Classifieds stating that the company has fired Kremen. 9 The
letter then added that Online Classifieds had decided to abandon the use of the
domain name and had no objection if Cohen used the name for his own benefit.10
After accepting the letter at face value, NSI transferred the domain name to Cohen
which he turned into a lucrative online porn empire. Kremen contacted NSI but was
told that it was too late to undo the transfer.11
The district court found that the letter was a forgery and ordered the return of
<sex.com> to Kremen including the profits that Cohen earned invoking the
constructive trust doctrine and California’s “unfair competition” statute. It awarded
$40 million as compensatory damages and another $25 million as punitive damages.
7
337 F.3d 1024 (2003)
Id. stating “Con man Stephen Cohen, meanwhile, was doing time for impersonating a bankruptcy
lawyer.”
9
Id., stating –“forced to dismiss Mr. Kremen”
10
Id., stating-but “never got around changing our administrative contact with the internet
registration and now our Board of directors has decided to abandon the domain name
sex.com.”“because we do not have a direct connection to the internet, we request that you notify the
internet registration on our behalf, to delete our domain name sex.com. Further, we have no
objections to your use of the domain name sex.com and this letter shall serve as our authorization to
the internet registration to transfer sex.com to your corporation.”
11
Id.
8
Unfortunately, Kremen could not collect the enormous awards since Cohen left for
Mexico.12 Aggrieved yet undaunted, Kremen sought to hold NSI liable through a
conversion claim. While the district court concluded that the domain name is an
intangible property, the tort of conversion does not apply. On appeal, the U.S. Court
of Appeals, Ninth Circuit affirmed the judgment of the district court that <sex.com>
is an intangible property but reversed in part stating that California’s tort on
conversion is likewise applicable to intangible properties such as domain names. The
case was remanded to the district court for further proceedings. 13
Meanwhile, the U.S. Bankruptcy Court in Utah14 ruled differently and
presented a view that a domain name is a tangible personal property.15 The case
12
Id. stating-”Kremen, unfortunately, has not had much luck collecting his judgment. The district
court froze Cohen’s assets, but Cohen ignored the order and wired large sums of money to offshore
accounts. His real estate property, under the protection of a federal receiver, was stripped of all its
fixtures---even cabinet doors and toilets---in violation of another order. The court commanded Cohen
to appear and show cause why he shouldn’t be held in contempt, but he ignored that order, too. The
district judge finally took off the gloves—he declared Cohen a fugitive from justice, signed an arrest
warrant and sent the U.S. Marshals after him. Cohen’s lawyers responded with a motion to vacate the
arrest warrant. They reported that Cohen was under house arrest in Mexico and that gunfights
between Mexican authorities and would-be bounty hunters seeking Kremen’s reward money posed a
threat to human life. The district court rejected this story as ‘implausible’ and denied the motion.
Cohen, so far as the record shows, remains at large.”
13
Id.
14
Jubber v. Search Market Direct, Inc. (In re Paige), 413 B.R. 882, 888 (Bankr. D. Utah 2009)
15
Id., citing South Cent. Utah Tel. Assoc., Inc. v. Auditing Div. of the Utah State Tax Comm'n, 951 P.2d
218, 223-24 (Utah 1997); quoting South Cent. Utah Tel. Assoc., Inc., 951 P.2d at 223-24- The court
then cited to a case from the Utah Supreme Court which held that "software is `tangible personal
property' for tax purposes, even after it has been installed on the computer."In so holding, the Utah
Supreme Court explained that "[s]oftware is information recorded in a physical form which has a
physical existence, takes up space on the tape, disc, or hard drive, makes physical things happen, and
can be perceived by the senses. The purchaser of computer software neither desires nor receives
mere knowledge but an arrangement of matter that will direct a computer to perform a particular
function."
involved the highly-valued16 <freecreditscore.com> owned by Steve Paige who filed
for bankruptcy in 2005. As he tried to sell the domain name, he found out that the
ownership was transferred to another and eventually sold to Stephen May. The
liquidating trustee for the bankruptcy proceedings filed a case of conversion in order
to recover the domain name. The court declared that domain names are tangible
property which can be the subject of a conversion claim.
Network Solutions, Inc. (NSI) v. Umbro International, Inc.,17on the other
hand, uniquely declared that “a domain name registration is the product of a contract
for services between the registrar and registrant.”18 In this case, Umbro, as judgment
creditor, obtained a default judgment and permanent injunction against a Canadian
Corporation, as judgment debtor, and its owner with regards to the registration of
<umbro.com> by the judgment debtor. The district court later awarded Umbro $23,
489.908 for attorney’s fees and expenses and enjoined the company from the use of
the domain name.19 Umbro sought to garnish 38 domain names registered by the
judgment debtor with NSI in order to fulfill the monetary award with the latter named
as garnishee and was asked to place the subject domain names on hold and to deposit
control of them into the registry of the circuit court for the names to be advertised and
sold to the highest bidder. NSI denied holding money or other garnishable property
16
Daniel Hancock, You Can Have It, But Can You Hold It?: Treating Domain Names As Tangible
Property, 99 Ky. L.J. 185, 185 (2010) stating “Estimated to be worth between $350,000 and $200
million”, at that time.
17
529 S.E.2d 80 (Supt. Ct. Va., April 21, 2000)
18
Id.
19
Umbro International, Inc. v. 3263851 Canada, Inc., No. 6:97-2779-20, (D.S.C. Dec. 31, 1997)
belonging to the judgment debtor. The circuit court held that domain name
registrations are “valuable intangible property subject to garnishment.”20 In its letter
opinion, the court concluded that the judgment debtor has a possessory interest in the
domain names registered with NSI. 21
The Supreme Court of Virginia reversed the circuit court’s decision and ruled
that a domain name registrant merely acquires the contractual right to use a unique
domain name for a specified period of time bound to the services that NSI provides.
The court further held that the contractual rights a judgment debtor has in the domain
names do not exist separate and apart from NSI’s services that make domain names
operational internet addresses. Senior Justice Compton, with whom Chief Justice
Carrico joins, thinks otherwise.
A NTDN dispute may arise not only through the registration of a domain
name belonging to another with the use of fraud like in Kremen, but also by hacking
through the system of the registrar like what David Goncalves of Union Township,
New Jersey did in 2006.
In 2005, internet entrepreneur and domain name investor Marc Ostrofsky and
attorney Albert Angel, along with his wife Lesli Angel, partnered to purchase the
domain name <P2P.com> for $160,000 from a Wisconsin company, Port to Print
20
21
NSI v. Umbro, supra note 17
Id.
Inc.22 In May 2006, Daniel Goncalves obtained unauthorized access to the GoDaddy
account of P2P.com LLC. Once inside, he initiated domain name transfer procedures
and moved <P2P.com> to his account at GoDaddy and later transferred it to a
different domain registrar. Eventually, he placed the domain up for sale on eBay and
was bought by NBA basketball player Mark Madsen for $111,211. Madsen had no
knowledge that such domain name was stolen.23Ostrofsky and the spouses Angels did
not realize the theft until a year later when a fellow domainer informed them of the
changes made to it.24
In May 2009, Goncalves was arrested by the State Police Cyber Crimes Unit
based on an investigation that began when the site’s owner, P2P.com LLC, reported
the domain theft.25 On December 14, 2010, Goncalves pleaded guilty before Judge
Stuart L. Peim in Union County Superior Court to theft by unlawful taking, theft by
deception, and computer theft, all in the second degree.26 He is serving a five-year
prison term in accordance with the plea-bargaining agreement with the New Jersey
Division of Criminal Justice.27 Otherwise, he could have received fifteen (15) years. 28
Goncalves is known to be the first person arrested for domain name theft in the U.S.
22
Available at http://www.domainnamenews.com/featured/criminal-prosecution-domain-theftunderway/5675 last accessed on June 18, 2013
23
Available at http://mashable.com/2010/12/13/man-pleads-guilty-domain-theft-case/ last accessed
on August 18, 2013
24
Available at http://news.softpedia.com/news/Man-Pleads-Guilty-in-First-Ever-Domain-Name-TheftCase-172515.shtml last accessed on June 8, 2013
25
Available at http://njlawfirm.wordpress.com/2010/12/ last accessed on June 18, 2013
26
Supra note 24
27
Available at http://www.dnjournal.com/archive/lowdown/2011/july.htm last accessed on June 26,
2013
28
Id.
Due to its unique status, it could serve as a precedent for other domain theft cases in
the U.S. and other jurisdictions.
While most domain names cases fall within the territory of intellectual
property due to the sheer involvement of trademarks, there are instances when
domain names were never registered in relation to goods or services or to distinguish
an enterprise29 but were created primarily for their respective personal use such as,
sharing their musings, preferences and opinions online such as a blog. A blog is
basically a journal that is available on the web which is typically updated daily using
software that allows people with little or no technical background. 30 It is a website in
which items are posted on a regular basis and displayed in reverse chronological
order. The term blog is a shortened form of weblog or web log. 31 It is a kind of
continual tour with a human guide who you get to know. 32 Therefore, the use of
personal names as a “<name.com>” is not uncommon because of its referential
29
See Section 121, paragraphs. 121.1-121.3, Part III of the Intellectual Property Code of the
Philippines-“Section 121.Definitions. - As used in Part III, the following terms have the following
meanings:
121.1. "Mark" means any visible sign capable of distinguishing the goods (trademark) or services
(service mark) of an enterprise and shall include a stamped or marked container of goods; (Sec. 38,
R.A. No. 166a)
121.2. "Collective mark" means any visible sign designated as such in the application for registration
and capable of distinguishing the origin or any other common characteristic, including the quality of
goods or services of different enterprises which use the sign under the control of the registered
owner of the collective mark; (Sec. 40, R.A. No. 166a)
121.3. "Trade name" means the name or designation identifying or distinguishing an enterprise;
30
Available at www.matisse.net/fiules/glosarry.html last accessed on November 26, 2013.
31
Available at www.problogger.net/archives/2005/02/05/what-is-a-blog/ last accessed on November
26, 2013.
32
Id.
function33 thereby creating a close association with the individual’s “authorized”
online persona.34
If the name is not registered as a trademark, it does not mean that the holder is
not entitled to any protection. U.S. law and jurisprudence seem to have addressed the
issue surrounding <name.com> issues due to the protection given by the ACPA
which extends the protection of the Lanham Act 35 to persons who did not consent to
the domain registration of their names. It requires, however, that an attempt to sell a
domain name for profit should be alleged in the complaint and later proven in order
for liability to attach.36 Unfortunately, it treats a <name.com> issue as a classic
cybersquatting case. The said remedy presents a dilemma if the perpetrator does not
intend to profit from his illegitimate use. In other words, problem arises when the
perpetrator did not attempt to sell the domain name.
In the Philippines, cybersquatting is one of the cybercrimes defined and
penalized by the Cybercrime Prevention Act of 2012 (CPA). 37 This is the response of
Philippine Congress to the growing problems in internet usage after the effectivity of
33
Jacqueline D. Lipton, Celebrity in Cyberspace: A Personality Rights Paradigm for Personal Domain
Name Disputes, 65 Wash. & Lee L. Rev. 1451, 1452 (2008)
34
Id.
35
Found in Title 15 of the U.S. Code and contains the federal statutes governing trademark law in the
United States
36
15 U.S.C.§1129(1)(A) -Civil liability. Any person who registers a domain name that consists of the
name of another living person, or a name substantially and confusingly similar thereto, without that
person's consent, with the specific intent to profit from such name by selling the domain name for
financial gain to that person or any third party, shall be liable in a civil action by such person.
37
Supra note 6
the Electronic Commerce Act of 2000 (ECA).38 While the CPA is the first Philippine
law that specifically included domain names as its subject, it remains to be inadequate
to provide viable solutions to this new breed of domain name disputes. Given the
limited coverage of the CPA to cybersquatting with respect to domain names and the
inevitable escalation of such disputes, the success of the CPA is more apparent than
real.
B. Statement of the Problem
Domain names, in general, are treated like trademarks because of their
common usage, which is for commercial purposes. It is only natural for a famous
name to be preferred as a domain name due to the goodwill and value that comes with
it which gives a better position in the wide cyberspace, especially with respect to
goods and services. For such use, the domain name functions as a trademark and
resort to trademark law and jurisprudence is made in case of infringement.
Other than the CPA, cybersquatting is likewise covered by the UDRP and
ACPA. The UDRP was created to combat the growing problem of “cybersquatting”--the practice of registering a domain name that corresponds to a trademark before the
trademark owner, thereby effectively blocking the owner’s access to the Internet
under its “brand name.” If left unchecked, cybersquatting could have hampered the
commercial growth of the internet by allowing wrongdoers to mislead consumers
38
Republic Act 8792
“about the source of the product or service offered on the Internet.” Domain name
registrars are required to include a clause in all registration agreements stating that the
registrant agrees that all claims involving cybersquatting will be decided pursuant to
the the UDRP.39
The ACPA addresses cybersquatting by creating a cause of action for
trademark owners against cybersquatters if the domain name is “identical or
confusingly similar” to the the mark. A bad faith intent element similar to the one
under the UDRP, is required under the ACPA. However, the ACPA’s bad faith
element has an additional requirement—it must be a bad faith intent to profit.40
Once the controversy involves NTDNs, the CPA, UDRP and ACPA do not
seem to be viable options due to its heavy reliance on trademark principles. This
posits a question: what is the remedy that can be resorted to with respect to NTDNs?
It is unclear how principles and decisions of other jurisdictions will be applied by the
courts in Philippines jurisdiction.
Thus, the issues to be resolved in this study are:
(i)
(ii)
(iii)
(iii)
39
Whether a NTDN is property;
Whether a registrant has property rights over a NTDN;
Whether there is basis for a civil action against unauthorized use of a
NTDN;
Whether there is basis for a criminal action against unauthorized use of
a NTDN;
Elizabeth C. Woodard, The UDRP, ADR, and Arbitration: Using Proven Solutions to Address
Perceived Problems with the UDRP, Fordham Int. Prop., Media and Ent. Law Jour., Vol 19, Issue 4
2009, p. 1180
40
Diane L. Kilpatrick, ICANN Dispute Resolution vs. Anti-Cybersquatting Consumer Protection Act
Remedies: Which Makes More “Cents” For the Client?, Hou. Bus. & Tax Law Jour (2002), pp. 291-292.
(iv)
(v)
Whether Philippine laws are adequate to protect legitimate owners of
NTDNs against unauthorized use, whether willful or negligent; and
Whether the government should create a Philippine domain name
registry.
At best, the current legal framework of domain names caters only to
trademark ones. With respect to domain names, the CPA focused solely on classical
cybersquatting.41 Additionally, the CPA was enacted more than twelve years after the
first cybersquatting case was decided in the U.S. 42 Hence, this study aims to fill in the
void with regards to this new class of domain name disputes.
C. Objectives
This study has four objectives. It aims to introduce the domain name system
(DNS) and identify the parts of a domain name. It further identifies the different kinds
of disputes with respect to the use of NTDNs and analyze the conflicting foreign
jurisprudence and remedies, in relation to domestic law in settling domain name
disputes of this kind.
It recommends a viable framework for the enforcement of the registrant’s
right against the unauthorized use of its respective name under applicable of domestic
laws. It proposes further legislation in light of current foreign laws and court rulings
which is formulated to contribute to the regulation of domain names of this nature.
41
CPA, supra note 6 at Section 4(a)(6)
Available at http://faculty.ist.psu.edu/bagby/Fall05/346F05T8/cases.htm last accessed on
November 26, 2013-Sporty Farm LLC v Sportsman’s Market Inc, (2d Cir. 2/2/2000) was the first case
decided after the ACPA was passed.
42
Although there is no international duty on the part of the Philippines to apply foreign
laws within its territory, foreign laws and jurisprudence are merely presented in
persuasion due to the absence of a direct domestic law that solely sanctions various
NTDNs disputes. The framework created by different jurisdictions with respect to
NTDNs is likewise founded on sound principles applicable to local conditions and are
not in conflict with any existing law.
D. Methodology
Despite the fact that a decision is yet to be promulgated by the Philippine
Supreme Court that properly classifies domain names, the pedagogy of property law
is heavily discussed due to the proposition that a domain name is property based on
foreign cases that have classified domain names. In the absence of any contract
between the registrant and the perpetrator, tort law is resorted to. While the Kremen,
Jubber, Umbro and Goncalves cases are given particular attention, this study likewise
covers notes and discussions of respectable authorities. A comparative analysis of
applicable domestic and foreign laws and jurisprudence, including literature review
and journal entries, is likewise made since domain names are practically multijurisdictional.
E. Significance of the Study
With the globalization nature of the internet, domain names have taken on a
new significance. The exponential expansion, however, of online communication and
the increasing commercial use of the internet by different personalities have
contributed to the number of legal complexities relating to the use and protection of
domain names. It no longer acts only as a means of locating particular computers but
have likewise become valuable assets rapidly making their way into cyberspace. As
a matter of fact, the most expensive domain name to date is VacationRentals.com
which was purchased for $35 million.43
Domain names may create a value on its own and appreciate over time. Most
prefer valuable domain names, whether for a legitimate or illegitimate purpose, since
it is easily recognizable by users placing the domain name in great position in terms
of search engine use and user recognition. Apparently, the domain space is clogged
with registrations of multiple domain names by speculators who, more often than not,
will park websites under the names and fail to utilize them for any useful purpose in
the hope that someday they may sell them for a profit.44 Even if the registration of a
43
Available at http://thenextweb.com/shareables/2013/08/13/15-of-the-most-expensive-domainsof-all-time/ last accessed on November 26, 2013 –“The most expensive sale, however, actually wasn’t
for a gambling or porn site. Instead, it was the purchase of VacationRentals.com in 2007 for a cool
$35m. Even more incredible than the price was the admission from new owner Brian Sharples,
founder of HomeAway, that he had bought the domain to stop Expedia from getting it.”
44
Jacqueline D. Lipton, Bad Faith in Cyberspace: Grounding Domain Name Theory in Trademark,
Property and Restitution, 23 Harvard Jour. Of Law & Tech. 447, 449 (2010)
domain name lacks a legitimate purpose and worse, created and registered by a
person who does not have the right to do so, simply makes things more muddled.
Domain names are like fingerprints. No two are the same. Its simplicity
should not be belittled since disputes have become more common and have been
branching out to uncharted waters as the popularity of the internet grows. The
uniqueness of a domain name has been rendered crucial and precious, especially for
those who became victims from its improper use. Based on the “first come first
served” principle, a person can do little but surrender a domain name once it has been
registered, even if it was unlawfully done.
The 1987 Philippine Constitution states that “the State shall regulate the
transfer and promote the adaptation of technology from all sources for the national
benefit and shall encourage the widest participation of private groups, local
governments, and community-based organizations in the generation and utilization of
science and technology.”45 Yet, the government’s participation on this brewing issue
on domain names is wanting, minimal, or late. To even realize that domain name
disputes have branched out to other related issues, the Philippines is still to be
considered a neophyte in this field of law. Domain names cases, whether TDNs or
NTDNs will be of first impression to Philippine courts. Thus, the practice of domain
name speculating may have moved away from trademark policy but the regulatory
45
1987 Constitution, Article XIV, Section 12
system has not. This creates an inconsistency between the robust regulation of
trademarks in the domain space and the lack of regulation over any other conduct.
Internet in the Philippines has been undergoing development since it was
made available in 1994. As of September 30, 2011, more than 30,000,000 people use
the internet in the country accounting for 33% of the total population. 46 Despite the
rising number of users taking advantage of this technology, either for personal or
commercial use, domestic laws have become outdated by the technical intricacies and
exponential growth of the internet. The development of a more vigorous domain
name theory may facilitate policy developments and will thus be an important aspect
of search engine use because of the pivotal role played by domain names in search
algorithms. A new domain name theory may also assist the Philippines in developing
policies about its own use of NTDNs. Appropriate policies should be identified as
early as possible to give multiple bodies ample time to work together in creating a
working regulatory matrix.
Unfortuantely, legislation was slow to catch up with these developments. The
CPA was borne out of the growing number of cybercrimes in the Philippines yet it
failed to endure on another brewing multi-jurisdictional name game.
Even the
Memorandum Circular Y2k-9-05 of the Intellectual Property Office (IPO) issued on
September 28, 2000 which affords priority examination for the registration of internet
domain names as service marks fails to address and promote the property rights of
46
Available at http://en.wikipedia.org/wiki/Internet_in_the_Philippines last accessed June 14, 2013
domain name owners. It should be noted that not all domain names are subject to
trademark laws because domain names are not synonymous to trademarks. 47 This
study aims to lay a viable legal groundwork for the protection of domain names
outside the realm of intellectual property principles.
F. Scope and Limitation
This study deals with NTDNs. While the traditional intellectual property law
approach to domain names is equally important, this study deviates from the common
approach. It seeks to create a framework on the unexplored aspects of domain names
since the internet, including domain names, is not exclusively used for trademark
purposes. This study will discuss the legal status of domain names vis-à-vis the
foreign cases involving property doctrines and the appropriate and available remedies
under Philippine domestic law.
This study does not cover cybersquatting and its related forms. Under the
CPA, cybersquatting is the acquisition of a domain name over the internet in bad faith
to profit, mislead, destroy reputation, and deprive others from registering the same, if
such a domain name is: (i) similar, identical, or confusingly similar to an existing
trademark registered with the appropriate government agency at the time of the
domain name registration; (ii) identical or in any way similar with the name of a
47
2 Vicente B. Amador, WWW.CYBERLAW.COM, 310 (2010)
person other than the registrant, in case of a personal name; and (iii) acquired without
right or with intellectual property interests in it.48
Under the UDRP, cybersquatting is the registration of another’s domain name
and used in bad faith.49 It is the bad faith intent to profit from that mark, including a
personal name which is protected as a mark and registers, traffics in, or uses a domain
name.50 The CPA has likewise addressed cybersquatting, although it is strongly
supported by trademark rules. Considering the fact that the implementing rules and
regulations of the CPA is yet to be formulated, alternative remedies are readily
available such as the IP Code, ACPA, and UDRP. Since businesses today rely on the
internet and electronic commerce by either selling or advertising their products
online, cases of cybersquatting often cause the most concern to trademark holders51
which justifies the resort to applicable trademark remedies because a cybersquatter is
a party who possesses no legitimate interest in a trademark and attempts to profit by
registering the trademark as a domain name before the rightful trademark can do so.
Similarly, the other forms of domain name disputes in relation to
cybersquatting, such as reverse domain name hijacking (RDNH) and typosquatting
are likewise excluded from this thesis because of their heavy reliance on trademark
principles and concepts. In RDNH, trademark holders believe that no one has the
48
CPA, supra note 6, Section 4(a)(6)
UDRP, Paragraph 4(a)(iii)
50
The Anti-Cybersquatting Consumer Protection Act, 15 USCS § 1125, (d)(1)(A)(i)(ii)
51
Available at http://cyber.law.harvard.edu/property00/domain/CaseLaw.html last accessed on
November 26, 2013
49
right to use a domain name that might relate to a trademark or product name held by
the company. Thus they sue legitimate domain name registrants to recover the
domain name even though there has clearly been no infringement or dilution. On the
other hand, typosquatters register common misspellings of domain names of a
trademark and sets up a website that promotes views opposite of those found on the
trademark owner’s site.52
RDNH occurs when a trademark owner makes an unjustified claim of
cybersquatting and forces a legitimate domain name owner to transfer his domain
name through legal means. Under the UDRP, reverse domain name hijacking means
using the (UDRP) Policy in bad faith to attempt to deprive a registered domain-name
holder of a domain name.53 This serves as a defense of a legitimate domain owner
against a trademark owner seeking for the transfer or cancellation of the subject
domain name. Meanwhile, typosquatting is also known as URL hijacking. It relies on
typographical errors made by internet users when searching a website address. Should
a user accidentally enter an incorrect website address, they may be led to an
alternative website owned by a cybersquatter, which may or may not be similar to the
goods or services offered under a fully qualified domain name. Typosquatters register
misspellings of popular domains in the hope that they will be able to make money out
52
Dara B. Gilwit, The Latest Cybersquatting Trend: Typosquatters, Their changing Tactics, and How to
Prevent Public Deception and Trademark Infringement, p. 9 citing Jews for Jesus v. Brodsky, 993 F.
Supp. 282 (D.N.J. 1998); Planned Parenthood Federation of America, Inc. v. Bucci, 42 U.S.P.Q. 2d 1430
(S.D.N.Y. 1997)
53
UDRP Rules, Paragraph 1
of traffic from unintentional typing mistakes, or fat-finger errors, made by internet
surfers.54 It is a practice by which “a registrant deliberately introduces slight
deviations into famous marks” for commercial gain.55
In the absence of a direct law that sanctions NTDNs disputes, this study
examines the application of property law to domain names and explores on the
available remedies beyond the realm of intellectual property laws, specifically the
Civil Code and the Revised Penal Code vis-à-vis the current trend in foreign
jurisdictions with respect to treatment of NTDNs and the rights thereto.
While jurisdiction is important with respect to remedies as it encompasses the
power of courts to take cognizance of a case instituted for judicial action, it is
nevertheless excluded from the scope of this study. The goal of this thesis is to
determine only the various remedies in protecting the rights surrounding NTDN’s.
The issue on jurisdiction would be best ventilated in an entirely new study.
G. Organization of the Thesis
The next chapter of this study covers a general overview of the internet and
domain names, including the latter’s characteristics and functions. An analysis of the
domain name system is undertaken together with a detailed description of what
composes a domain name. Chapter Three tackles the various classification of domain
54
Paul Ducklin, Typosquatting-What happens when you mistype a website name?, available at
http://nakedsecurity.sophos.com/typosquatting/ last accessed on October 10, 2012
55
ESPN, Inc. v. XC2, Case No.D2005-0444
names by foreign courts and identifies which classification fits best in relation to
applicable Philippine laws. Chapter Four presents an analysis of domain name
disputes involving NTDN’s and the remedies available under the IP Code, the Civil
Code of the Philippines and the Revised Penal Code in relation to the foreign cases
discussed in the preceding chapter. Lastly, a framework for a
state-regulated domain name registry is examined and further recommendations are
concluded in Chaptex Six for a more effective regulation of NTDNs in the
Philippines.
CHAPTER II
THE INTERNET AND THE DOMAIN NAME SYSTEM
A. The Internet
The internet is not a physical or tangible entity, but rather a giant network
which interconnects innumerable smaller groups of linked computer networks. It is
thus a network of networks.56
In 1969, the U.S. Defense Advanced Research Projects Agency (DARPA), an
agency within the Department of Defense, commissioned a wide-area computer
network called the ARPANET. 57 This network linked computers and computer
networks owned by the military, defense contractors, and university laboratories
conducting defense-related research. The network later allowed researchers across the
country to access directly and to use extremely powerful supercomputers located at a
few key universities and laboratories. As it evolved far beyond its research origins in
the United States to encompass universities, corporations, and people around the
world, the ARPANET came to be called the "DARPA Internet," and finally just the
"internet."58
56
Available at http://trace.wisc.edu/docs/nature_of_cyberspace/naturcyb.htm last accessed on June
28, 2013
57
Robert E. Kahn and Vinton G. Cerf, What is The Internet (And What Makes It Work), December 1999
available at http://www.cnri.reston.va.us/what_is_internet.html last accessed on November 12, 2013
58
Supra note 56
From its inception, the network was designed to be a decentralized, selfmaintaining series of redundant links between computers and computer networks,
capable of rapidly transmitting communications without direct human involvement or
control, and with the automatic ability to re-route communications if one or more
individual links were damaged or otherwise unavailable.59 Messages between
computers on the internet do not necessarily travel entirely along the same path. A
communication sent over this redundant series of linked computers could travel any
of a number of routes to its destination. Thus, a message sent from a computer in
Washington, D.C., to a computer in Palo Alto, California, might first be sent to a
computer in Philadelphia, and then be forwarded to a computer in Pittsburgh, and
then to Chicago, Denver, and Salt Lake City, before finally reaching Palo Alto. 60 If
the message could not travel along that path because of military attack, simple
technical malfunction, or other reasons, the message would automatically, without
human intervention or even knowledge, be re-routed, perhaps, from Washington,
D.C. to Richmond, and then to Atlanta, New Orleans, Dallas, Albuquerque, Los
Angeles, and finally to Palo Alto. 61 This type of transmission, and re-routing, would
likely occur in a matter of seconds.
The internet uses "packet switching" communication protocols that allow
individual messages to be subdivided into smaller "packets" that are then sent
59
American Civil Liberties Union v. Reno, 96-963, June 11, 1996
Id.
61
Supra note 56
60
independently to the destination, and are then automatically reassembled by the
receiving computer.62 While all packets of a given message often travel along the
same path to the destination, if computers along the route become overloaded, then
packets can be re-routed to less loaded computers. 63
Today, this series of linked networks is commonly known as the internet. No
single entity--academic, corporate, governmental, or non-profit-- administers the
internet. It exists and functions as a result of the fact that hundreds of thousands of
separate operators of computers and computer networks independently decided to use
common data transfer protocols to exchange communications and information with
other computers which in turn exchange communications and information with still
other computers.64 There is no centralized storage location, control point, or
communications channel for the internet, and it would not be technically feasible for a
single entity to control all of the information conveyed on the internet.65
B. The World Wide Web (WWW)
The internet and the World Wide Web have a whole-to-part relationship. The
internet is the large container, and the Web is a part within the container. It is
common in daily conversation to abbreviate them as the "net" and the "web", and then
swap the words interchangeably. But to be technically precise, the net is the
62
American Civil Liberties Union v. Reno, supra note 59
Id.
64
Id.
65
Id.
63
restaurant, and the web is the most popular dish on the menu.66 As a universe of
network accessible information, the web contains a variety of documents prepared
with quite varying degrees of care, from the hastily typed idea, to the professionally
executed corporate profile. It is a series of documents stored in different computers all
over the internet. Documents contain information stored in a variety of formats,
including text, still images, sounds, and video. An essential element of the Web is that
any document has an address which is rather like a telephone number.67
Most web documents contain "links" and the power of the web stems from the
ability of a link to point to any document, regardless of its status or physical location.
Links are short sections of text or image which refer to another document. Typically
the linked text is blue or underlined when displayed, and when selected by the user,
the referenced document is automatically displayed, wherever in the world it is
actually stored. Links for example are used to lead from overview documents to more
detailed documents, from tables of contents to particular pages, but also as crossreferences, footnotes, and new forms of information structure. Links may also take
the user from the original website to another website on another computer connected
to the internet. These links from one computer to another, from one document to
66
Available at
http://netforbeginners.about.com/od/internet101/f/the_difference_between_internet_and_web.ht
m last accessed on July 1, 2013
67
Supra note 56
another across the internet, are what unify the web into a single body of knowledge,
and what makes the web unique.68
The World Wide Web has become so popular because of its open, distributed,
and easy-to-use nature. Rather than requiring those who seek information to purchase
new software or hardware, and to learn a new kind of system for each new database
of information they seek to access, the web environment makes it easy for users to
jump from one set of information to another.69 By the same token, the open nature of
the web makes it easy for publishers to reach their intended audiences without having
to know in advance what kind of computer each potential reader has, and what kind
of software they will be using. 70
C. The Domain Name System
The internet began on a United States military computer and now an informal,
worldwide network or computers linked together for the purpose of automated
communication between members of the various computer networks.71 Every
computer connected to the internet is assigned a numeric address similar to a
telephone number, area, and country code, which the other computers on the internet
use to route messages to that computer.72 This numeric address, called an Internet
68
Id.
American Civil Liberties Union v. Reno, supra note 59
70
Supra note 56
71
Vicente B. Amador, supra note 47 at 250
72
Id.
69
Protocol (IP) address, is in the form of “123.112.101.1.”73 Internet authorities assign
comparable alphanumeric addresses to each numeric IP address due to the difficulty
to remember several strings of numbers. For example, <microsoft.com> is reachable
at 131.107.1.7, its comparable IP address or number. These alphanumeric addresses
are referred to as domain names. It is 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.74 Domain names are the simple addresses of the internet given to a group of
computers at a particular location and the specific words or characters used are often
chosen because it is a company or product name.75 A company or a prospective
website owner chooses a name and applies to the Internet Corporation for Assigned
Names and Numbers (ICANN) for registration.
Top-Level Domains (TLD) is the highest level of domain name of the
internet. TLD is the root zone of the hierarchical Domain Name System and every
domain name ends in a top-level or first-level domain label. Generic top-level
domains (gTLD’s) represent a set of categories of names and multi-organizations.
These are the domains Gov[ernment], Edu[cation], Com[mercial], Mil[itary],
Org[anisations], Net[work], and Int[ernational]. Country code top-level domains
(ccTLD) are based on the two-character territory codes of ISO-3166 country
73
Id.
Id., at 249 citing Sec. 3. Definitions, Senate Bill 2110, Anti-cybersquatting Consumer Protection Act,
Sen. Juan Flavier
75
Id., at 251
74
abbreviations. For the Philippines, the ccTLD is PH.
Internationalized Domain
Names, or IDNs, use character sets such as Chinese, Arabic, Cyrillic or any other
characters outside US-ASCII.76 An IDN variant TLD can be defined as one that may
look like or be considered exchangeable with another TLD by a user of the related
writing system.77 For example, a string in traditional Chinese commonly has an
equivalent simplified Chinese. A potential example in Latin characters is
encyclopædia and encyclopaedia.78 As of fiscal year 2011, there were 36 IDNs
delegated into the root zone which are available only to the governments and
administrations of countries and territories operating ccTLDs and listed in the ISO
3166-1 standard, or their designated representatives or operators.79 There are a
number of string requirements for IDN ccTLDs to be delegated through the process,
one of which is demonstration that the IDN ccTLD constitute a meaningful
representation of the corresponding country or territory name.80
On the left side of the dot is the second level domain. In a basic domain name
such as <www.example.com>, “example” is the second level domain or the actual
domain name. It is the subject of domain names disputes such as cybersquatting and
infringement, though a second level domain is not necessarily the protected actual
domain name in some cases like in <www.admu.edu.ph> where the second level
76
Available at http://newgtlds.icann.org/en/about/idns last accessed on May 16, 2013
Id.
78
Id.
79
Id.
80
Id.
77
domain is “edu.” Each domain level should be separated by a “dot” known as a
divider, creating third, fourth or fifth level domains. A domain name with several
domains is often the subject of doppelganger attacks. WWW is a lower level domain
or default sub-domain followed by a dot.81
The first step in registering a domain name is to select the TLD and the
second-level name you would like to register in that domain. Choose a registrar and
decide the number of years for which it will be registered. Most registrars offer
registration periods from 1 to 10 years, often with discounts for longer periods. The
availability of a preferred domain name must be verified. The search tools on
registrar website often have features that suggest variations on a name that might be
available when the primary name selected is not available for registration. 82 Once a
vacant domain name is selected, the registrar will ask for various contact and
technical information that makes up the registration. The registrar will then keep the
records of the contact information and submit the technical information to a central
directory known as the "registry." This registry provides other computers on the
Internet the information necessary to send e-mail or to the website. A registration
contract will also be required which sets forth the terms under which the registration
is accepted and will be maintained. Hosting services is needed in order for a domain
81
Available at http://www.steps-to-make-your-own-website.com/domain-name.html last accessed
on September 27, 2012
82
ICANN, Beginner’s Guide to DOMAIN NAMES, available at http://www.icann.org/ last accessed on
October 24, 2013
name to resolve on the Internet which may be availed of with the same registrar. 83
Once a user registers a domain name, he then acquires the right to use the name as an
internet identifier and it prevents all other persons in the world from doing the same.84
In addition to the technical function of locating a site on the web, a domain
name works as an online identifier. It can establish identity. Like trade names, domain
names function as trademarks if they are used to identify the source of goods or
services. Domain names must identify a website in a manner that leads customers to
associate the source, or sponsorship or products, or services offered with the domain
names. It should be noted, however, that mere registration of a domain name is not
equivalent to commercial use of the said name as trademark.85
In some instances, domain names are not registered in relation to goods or
services or to distinguish an enterprise86 but for personal and non-commercial use
such as a blog. The word blog is short for weblogs or web based log. It is a webpage
83
Available at http://www.icann.org/en/resources/compliance/faqs#2 last accessed on October 24,
2013
84
Juliet M. Moringiello, Seizing Domain Names to Enforce Judgments: Looking Back to Look To the
Future, 72 U. Cin. L. Rev. 95, 101 (2003)
85
Xuan-Thao N. Nguyen, supra note 1
86
See Section 121, paragraphs. 121.1-121.3, Part III of the Intellectual Property Code of the
Philippines-“Section 121. Definitions. - As used in Part III, the following terms have the following
meanings:
121.1. "Mark" means any visible sign capable of distinguishing the goods (trademark) or services
(service mark) of an enterprise and shall include a stamped or marked container of goods; (Sec. 38,
R.A. No. 166a)
121.2. "Collective mark" means any visible sign designated as such in the application for registration
and capable of distinguishing the origin or any other common characteristic, including the quality of
goods or services of different enterprises which use the sign under the control of the registered
owner of the collective mark; (Sec. 40, R.A. No. 166a)
121.3. "Trade name" means the name or designation identifying or distinguishing an enterprise;
where the entries or posts are organized in reverse chronological order and regarded
as a form of personal publishing on the internet.87 Simply put, a blog is a frequently
updated online personal journal or diary.88 Hence, domain names are not
automatically trade names protected under intellectual property laws, especially
where domain names are not used for commerce, such as in a case of a blog.
1. Personal names
If a domain name involves a personal name not registered as a tradename or
trademark, does it mean that the holder is not entitled to any protection? In the
Philippines, Section 4(a)(6)(ii) of the CPA punishes this as a form of cybersquatting:
CHAPTER II
PUNISHABLE ACTS
Sec. 4. Cybercrime Offenses- The following acts constitute the offense
of cybercrime punishable under this Act:
(a) Offenses against the confidentiality, integrity and
availability of computer data and systems: xxx
(6) Cybersquatting – The acquisition of a domain name
over the internet in bad faith to profit, mislead, destroy
reputation, and deprive other from registering the same,
if such a domain name is: xxx
(ii) Identical or in any way similar with the
name of a person other than the registrant, in
case of a personal name; xxx
87
National Centre for Technology in Education, NCTE Advice Sheet-35, Nov 2008, p. 1
Kenneth Byrd, What is a Blog?, available at http://blogbasics.com/what-is-a-blog/ last accessed on
January 13, 2014
88
Under the said law, the registration of a domain name which is identical or
similar with another person shall be penalized as cybersquatting, provided it was done
in bad faith to profit, mislead, destroy reputation and deprive other from registering
the name. The element of bad faith to profit, mislead, destroy reputation and deprive
other from registering the name must be proved and not presumed. The law, however,
failed to consider the fact that a person’s name may also be a name of another
individual whose existence may not be known to the former. Awaiting the
formulation of the CPA’s implementing rules and regulation, the controversy
regarding domain names involving personal names is left without any ample remedy.
Worse, a Philippine Supreme Court decision addressing this matter is likewise
wanting. This predicament prompts a review of how such controversy is treated in
other jurisdictions.
The ACPA extended the protection of the Lanham Act to protect persons who
did not consent to the domain registration of their names. Section 1129(1)(A) of the
Act requires however an attempt to sell a domain name for profit for liability to
attach. In effect, it becomes a cybersquatting case. Similarly, the UDRP suffers from
providing ample protection on such issues due to its heavy reliance on trademark
principles.89
Personal names may or may not be trademarked and may be used as a domain
name for commercial or non-commercial purposes. If a name was used as a domain
89
Jacqueline D. Lipton, supra note 33
name for commercial purposes without the consent of the person, the IP Code,
specifically Section 169, is the primordial remedy. It mirrors the US Lanham Act and
should apply on the basis of the statutory construction principle of ‘adopted
statutes’.90 As one’s name and image are at stake, a public person has a right to be
protected from any unauthorized product endorsement which would falsely imply that
he endorsed or approved certain goods and services.91
On a similar note, the Supreme Court in Fredco Manufacturing Corporation v
President and Fellows of Harvard College,92 declared ‘Harvard’ a well-known name
and mark. It referred to Section 4(a) of Republic Act No. 166, the old trademark law,
(now Section 123.1[a] of the IP Code) as it is identical to Section 2(a) of the US
Lanham Act which is intended to protect the ‘right of publicity’ of famous individuals
and institutions from commercial exploitation of their goodwill by others. 93 The High
Court concluded that the act of Fredco in using ‘Harvard’ to evoke a desirable aura to
its products exploited Harvard University’s goodwill commercially without its
consent.94
90
Available at http://www.worldipreview.com/article/it-s-a-knockout-publicity-rights-in-thephilippines last accessed on June 20, 2013
91
Id. “Pacquiao claimed that two entities, G2K Corporation owned by petitioner Sanchez, and In-AJiffy Enterprises (IAJ), publicly misrepresented and unlawfully used his name, image and goodwill
without his prior permission, with the intention of conveying his personal endorsement of the
entities’ product called the ‘Wow Magic Sing microphone’.”
92
G.R. No. 185917, June 1, 2011
93
Id.
94
Id.
Problems persist when the misuse of an NTDN involving a personal name
does not relate to goods and services since Section 169 of the IP Code applies to false
designations of origin in connection with any goods or services or any container for
goods.95
Another dilemma arises when the personal name involved is not of a celebrity,
political or public figure but of a mere private individual. There are significantly
fewer disputed situations involving unauthorized registration and use of private
individuals’ names on the Internet96 since there is much less profit to be made on nonfamous names.97 If the registrant seeks a profit to transfer the name, it will likely
amount to cybersquatting and would be covered by Section 1129(1)(A) of the
Lanham Act, which does not require a trademark in personal name to support such an
95
Section 169.False Designations of Origin; False Description or Representation. - 169.1. Any person
who, on or in connection with any goods or services, or any container for goods, uses in commerce
any word, term, name, symbol, or device, or any combination thereof, or any false designation of
origin, false or misleading description of fact, or false or misleading representation of fact, which:(a)
Is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or
association of such person with another person, or as to the origin, sponsorship, or approval of his or
her goods, services, or commercial activities by another person; or(b) In commercial advertising or
promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or
another person's goods, services, or commercial activities, shall be liable to a civil action for damages
and injunction provided in Sections 156 and 157 of this Act by any person who believes that he or she
is or is likely to be damaged by such act.
169.2. Any goods marked or labeled in contravention of the provisions of this Section shall not be
imported into the Philippines or admitted entry at any customhouse of the Philippines. The owner,
importer, or consignee of goods refused entry at any customhouse under this section may have any
recourse under the customs revenue laws or may have the remedy given by this Act in cases involving
goods refused entry or seized. (Sec. 30, R.A. No. 166a)
96
Jacqueline D. Lipton, supra note 33
97
Id.
action.98 Similarly, the CPA does not also require that the subject personal name be
trademarked in order to file a case of cybersquatting in such form. Nevertheless,
without its implementing rules and regulations, the CPA, to date, is rather ineffective
as it would likely to cause more dismay and ambivalence among members of the
bench and bar.
Further, it would seem that if the registrant uses personal names of either a
famous or private person as a NTDN, it shall be simply decided on the “first come,
first served” rule99 in the absence of any direct and effective domestic law that covers
such situations. While a private individual may hark on his right to privacy vis-à-vis a
public person’s right to publicity, no case of such nature have reached our courts.
D. The Internet Corporation for Assigned Names and Numbers
(ICANN)
Created in 1988, the ICANN is a non-profit, public benefit corporation located
in Marina Del Rey, California that helps to keep the internet secure, stable and
interoperable. The rationale behind the creation of this group was that it was
important to establish a central figure which could not only determine but also
enforce the internet, its domain rules, regulations, and policies. ICANN has played,
and continues to play, an essential role in the creation and maintenance of the
98
99
Id.
Id.
internet.100 It serves as the authority on domain names and on a series of internetrelated tasks.
The ICANN is managed by a Board of Directors, which is composed of
representatives of the Supporting Organizations, sub-groups that focus on specific
sections of the policies under ICANN's realm, independent representatives of the
general public interest that are selected through a nominating committee in which all
of the constituencies of ICANN are represented; and finally the President and CEO,
appointed by the rest of the Board.101
The ICANN’s role is to coordinate the Domain Name System (DNS), Internet
Protocol (IP) addresses, space allocation, protocol identifier assignment, generic
(gTLD) and country code (ccTLD) Top-Level Domain name system management,
and root server system management functions. These services were originally
performed under U.S. Government contract by the Internet Assigned Numbers
Authority (IANA)102 and other entities, which are now performed by ICANN. It is
100
Available at http://www.domaintools.com/learn/what-is-icann-and-how-is-it-related-to-registriesand-registrars-420/ last accessed on January 14, 2014
101
Id.
102
National Telecommunications & Information Administration, United States Department of
Commerce, available at http://www.ntia.doc.gov/page/iana-functions-purchase-order last accessed
on October 9, 2013 which provides:
“IANA Functions Contract-Critical to the DNS is the continued performance of the Internet Assigned
Numbers Authority (IANA) functions. The IANA functions have historically included: (1) the
coordination of the assignment of technical Internet protocol parameters; (2) the administration of
certain responsibilities associated with Internet DNS root zone management; (3) the allocation of
Internet numbering resources; and (4) other services related to the management of the .ARPA and
.INT top-level domains. The Internet Corporation for Assigned Names and Numbers (ICANN) currently
performs the IANA functions, on behalf of the United States Government, through a contract with
NTIA.”
dedicated to preserving the operational stability of the internet, to promoting
competition, to achieving broad representation of global internet communities, and to
developing policy appropriate to its mission through bottom-up consensus-based
processes.
Given the complexity, diversity, and international nature, some assert that a
multi stakeholder model of governance is appropriate, where all stakeholders from
both the public and private sectors arrive at a consensus through a transparent bottomup process while other argue that a greater role for national governments is necessary,
either through increased influence through the multi stakeholder model or under the
auspices of an international body exerting intergovernmental control. 103
While
ICANN’s mandate is to manage portions of the technical infrastructure of the
internet, specifically domain names and IP addresses, many of the decisions ICANN
makes affect other aspects of internet policy, including areas such as intellectual
property, privacy, and cybersecurity. These are the areas which many national
governments have addressed for their own citizens and constituencies through
domestic legislation, as well as through international treatises.
As part of the debate over the appropriate model of internet governance,
criticisms of ICANN have arisen on two fronts. One criticism reflects the tension
between national governments and the current performance and government
processes of ICANN, whereby governments feel they lack adequate influence over
103
Lennard G. Kruger, Internet Governance and the Domain Name System: Issues for Congress,
Congressional Research Service Report, January 2, 2013, p. 10
ICANN decisions that affect a range of internet policy issues.104 The other criticism is
fueled by concerns of many nations that the U.S. government holds undue legacy
influence and control over ICANN and the domain name system. 105 Recently, this
debate has been rekindled by two ICANN actions in 2011: the approval of the .xxx
top-level domain and the approval of a process to allow an indefinite number of new
gTLDs.
When the new gTLDs go “live”, many stakeholders are concerned that various
forms of domain name abuse (e.g. trademark infringement, consumer fraud, malicious
behavior, etc.) could manifest themselves within the hundred of new gTLD domain
spaces.106 Thus, the effectiveness of ICANN’s approach to addressing such issues as
intellectual property protection of second level domain names and mitigating
unlawful behavior in the domain name space will be of interest as the new gTLD
program goes forward.107 Despite the introduction of new gTLDs, ICANN did not
amend its policies and procedures of its UDRP. It still relies on trademark policies
subjecting claims over NTDNs to be denied for lack of basis or merit.
E. The Philippine Domain Name Registry
A domain registrar is a company that is in the business of registering domain
names. They have to be an authorized registrar to perform this function. ICANN is
104
Id.
Id.
106
Id., at p.14
107
Id.
105
responsible for giving out authorization for selling domain names. 108 The domain
name registrant is the organization or individual registering the domain name. During
the domain name registration process, the registrant will be asked by the registrar to
provide the contact and technical information. The registrar will then submit the
information to the central directory, also known as the registry. The registry enters
your information into their database so that other computers on the Internet can lookup the necessary information to find the website.109
The body that manages country specific domains or ccTLDs can be different
than the general domain registrar. dotPh is the official domain registry of the
Philippines. It offers .ph, .com.ph, .net.ph and .org.ph domain registration, bulk
domain registration, trademark protection, whois, domain name promotion, free
domain forwarding, domain reselling, expiring domain renewals, waitlisting,
webhosting and additional services for affiliates, associates, partners, registrars and
resellers.110 The Philippine Network Foundation, Inc. (PHNET), on the other hand,
administers edu.ph and ph.net111 while the Advance Science and Technology Institute
of the Department of Science and Technology (DOST-ASTI) administers the gov.ph
domain names.112
108
Available at http://www.webpagemistakes.ca/register-domain-name/ last accessed on November
27, 2013
109
Available at https://www.website.com/beginnerguide/registeringdomain/4/5/domain-nameregistrant--registrar--and-registry.ws last accessed on November 27, 2013
110
dotPH Direct, available athttp://www.dot.ph/faq last accessed on September 27, 2012
111
Available at http://www.ph.net/ last accessed on September 27, 2012
112
Available at http://dns.gov.ph/ last accessed on September 27, 2012
In every domain name dispute, the right to exclusively use it is usually
enforced based allegedly on ownership despite the lack of a no clear-cut
characterization of domain names due to its nature. Properties have entirely distinct
attributes that are automatically not comparable to those existing in cyberspace as the
latter is not tied to any physical sphere. The succeeding chapter, however, presents a
view that the concept of property and ownership can be applied to NTDNs.
CHAPTER III
PROPERTY AND DOMAIN NAMES
A. Definition of Property
Property is an economic concept, meaning a mass of things or objects useful
to human activity and which are necessary to life, for which reason they may in one
way or another be organized and distributed, but always for the use of man. 113 It is an
object or a right which is appropriated or susceptible of appropriation by man, with
capacity to satisfy human wants and needs. All things which are or may be the object
of appropriation are considered property. 114
As a legal concept, property has utility, substantivity and appropriability.
Utility or the capacity to satisfy human wants, such as for food, shelter, clothing,
knowledge, comfort and recreation, endows property with value susceptible of
pecuniary estimation. Substantivity or individuality refers to the quality of having
existence apart from any other thing. Thus, parts of the human body cannot exist by
themselves independent of the body and may become property only when separated
from the body of the person to whom they belong. Appropriability is the
susceptibility of being possessed by men.115 Hence, those which cannot be
113
2 Arturo M. Tolentino, Commentaries and Jurisprudence on the Civil Code of the Philippines, 1994
Ed.,
p. 1 citing 2 Valverde 34-35, 58-62
114
Civil Code, Article 414
115
Hector S. De Leon, Comments and Cases on Property, Fourth Ed (2003), p. 2
appropriated because of their distance, depth, or immensity, cannot be considered as
property.
1. Ownership
The right to property is clearly different from property itself and is defined as
the juridical tie by virtue of which a person has the exclusive power to receive or
obtain all the benefits from a thing, except those prohibited or restricted by law or by
the rights of other. The distinction, however, between ownership and the right to
property is more historical than actual. They refer to the same idea, except that right
to property emphasizes the vinculum between man and the thing while ownership
refers to the mass of rights over the thing. At present, the two terms are used
synonymously and interchangeably. 116
Ownership is that independent right of a person to the exclusive enjoyment
and control of a thing including its disposition and recovery subject only to the
restrictions or limitations established by law and the rights of others.117 By virtue of
ownership, a thing pertaining to one person is completely subjected to his will in
everything not prohibited by public law or the concurrence with the rights of
another.118
116
Arturo M. Tolentino, supra note 113
Hector S. De Leon, supra note 115 at 75
118
Ernesto L. Pineda, Property, 1999 Ed., at p. 42
117
Intellectual creation is an original mode of acquiring ownership.119 It is
independent of any pre-existing right of another person, hence, it is necessarily free
from burdens or encumbrances. Another original mode of acquisition of ownership
not mentioned by the Code is work, which is broader in coverage than intellectual
creation.120
Ownership confers rights to the owner such: as the right to possess (jus
possidendi), the right to use and enjoy (jus utendi), the right to the fruits (jus fruendi),
the right to accessories (jus accesionis), the right to consume the thing by its use (jus
abutendi), the right to dispose or alienate (jus disponendi)121 and the right to exclude
from the possession of the thing owned any other person to whom the owner has not
transmitted such thing, by the proper action for restitution, with the fruits, accessions
and indemnification of damages (jus vindicandi).122
Real rights or jus in re over a domain name are acquired once ownership is
established. A real right is “the power belonging to a person over a specific thing,
without a passive subject individually determined against whom such right may be
personally exercised.”123 It gives a person a direct and immediate juridical power over
a thing, which is susceptible of being exercised, not only against a determinate
119
Article 712, Civil Code
Arturo M. Tolentino, supra note 113 at 418
121
Hector S. De Leon, supra note 115 at 76
122
Arturo M. Tolentino, supra note 113 at 43
123
Id., at 5 citing 3 Planiol & Ripert 47.
120
person, but against the whole world.124 The characteristics of real rights are
manifested in three elements: (1) a subject and an object connected by a relation of
ownership of the former over the latter; (2) a general obligation or duty of respect for
such relation, there being no particular passive subject; and (3) effective actions
recognized by law to protect such relation against anyone who may want to disturb it.
A personal right, on the other hand, is the “power belonging to one person to
demand of another, as a definite passive subject, the fulfillment of a prestation to
give, to do or not to do.”125 Personal right is sometime known as jus in personam or
jus ad rem126 but more properly called right of obligation or simply obligation.127
Personal right has the following elements: (1) active subject or the person to whom
the right resides, (2) passive subject or the person against whom the right is available,
(3) object or prestation or the conduct which must be observed by the debtor which
may consist in giving, doing or not doing, and (4) juridical or legal tie or that which
binds the parties to the obligation.128
In order for a property right over a domain name be established, its creator
should register the domain name with an accredited domain registrar based on the
“first-come first-served” procedure in the domain name registry currently managed by
the ICANN. As a product of intellectual creation, the registrant receives the bundle of
124
Id.
Id., at 6
126
Hector S. De Leon, supra note 115 at 5
127
Arturo M. Tolentino, supra note 113 at 6
128
Hector S. De Leon, supra note 115 at 5
125
rights under the law. The effective date of registration stated in the registration
agreement is the reckoning period when the registrant acquires real rights over the
domain name. The effectivity date is sometimes referred to as the “activation date”
which usually pertains to the time when the registrar provides the registrant the
password that will allow him to personally administer the registered domain name. 129
B. Classification of Property
Property is generally classified: as to their nature (real, personal or mixed), as
to their ownership (public or private), as to their divisibility (divisible or indivisible),
as to their consumability (consumable or non-consumable), as to their susceptibility
of substitution (fungible or non-fungible), as to their alienability (within or outside
the commerce of man), as to their existence in time (existing or future), as to their
dependence (principal or accessory), as to their designation (generic or specific) and
as to their manifestability to the senses (corporeal or incorporeal).130
Article 414 of the Civil Code provides for the most fundamental juristic
classification of things considered with respect to ownership. It is based on the nature
itself, that is, its mobility or immobility. 131 Article 414 generally classified property
as either (1) immovable or real property or (2) movable or real property. The Civil
Code does not provide for a concrete definition of real and personal property and goes
129
Available at http://www.ipmirror.com/service_agreements/agreement_domains last accessed on
September 24, 2013
130
Hector S. De Leon, supra note 115 at 6-7
131
Id., at 7
by way of enumeration instead. Article 415 refers to real property while Articles 416
to 418 pertain to personal properties. The enumerations are not complete nor do they
supply an absolute criterion on the distinction between real and personal properties.
Generally, real properties are things that are permanently fixed to another thing, or
cannot be transferred from place to place, or if they can be transferred, the transfer
cannot be done without injury or damage to the immovable to which they are
attached; otherwise, they are personal properties.132
On account of its physical characteristics, property is further classified as
tangibles/corporeal or intangibles/incorporeal. Tangible properties refer to the
“material, corporeal or physical” that can be manifested to the senses and exists in
space.133 These are concrete properties with physical attributes that can be touched
and has physical existence.134
Intangible property, on the other hand, refers to
incorporeal ones that have characteristics which cannot be manifested to the senses.
In other words, intangibles are those that do not have physical attributes that are
observable by human senses. Additionally, intangibles must be susceptible to be
appropriated as defined under Article 414 to be considered as property, such as shares
of stock or choses in action.135 Otherwise, it will be treated as a mere thing.
132
Id., at 8
Arturo M. Tolentino, supra note 113 at 8
134
Ernesto L. Pineda, supra note 118 at 3
135
Civil Code, Article 417
133
Intellectual property such as copyrights, patent, trademarks and right to inventions are
examples of incorporeal personal property.136
C. Classification of Domain Names
To date, <facebook.com> and <sulit.com.ph> are resepectively the most
visited social media137 and e-commerce websites138 in the Philippines where domain
names are treated as trademarks due to the common practice of using a brand or trade
name in its second-level or third-level domain. The Intellectual Property Office of the
Philippines (IPO) even issued Memorandum Circular BT Y2K-09-05 which affords
priority examination for the registration of domain names as services. Once domain
names are created not to function as a trademark, its proper characterization is unclear
due to the lack of any direct law that will solely address such inquiry and a Philippine
Supreme Court decision promulgated to that effect. Be that as it may, it is imperative
to examine the classification of domain names by other jurisdictions which shall serve
as a guide in categorizing NTDNs within the context of property law.
In the U.S., domain names, however, have been categorized as a service
contract, a tangible property and intangible property by different courts which
136
Hector S. De Leon, supra note 115 at 36
Available at http://www.techpinas.com/2011/07/top-10-most-visited-websites-in.html;
http://www.techinasia.com/10-popular-ecommerce-sites-philippines/ last accessed on January 10,
2013
137
manifests the lack of uniformity in classifying them. While domain names may
function as trademarks with reference to goods and services, this is not automatic.
There is no such presumption. After all, to force existing trademark laws to be applied
to NTDNs may cause a dissonance between providing protection to NTDN’s and
well-established trademark jurisprudence.
While the U.S. cases presented are
mostly state decisions which are not mandatory authorities outside of their respective
states, they are deemed persuasive authorities to which other courts may follow.
These cases are cited to serve as a guide in creating a viable framework for NTDNs
since disputes of this class are of first impression to the Philippine bench and bar.
1. As Tangible Property
In the Philippines, tangible properties are known as material, corporeal or
physical properties which are manifest to the senses, may be touched or taken, exist in
space and have a body, whether animate or inanimate.139 Although a domain name is
can be seen, it cannot be physically touched nor taken. For consideration is Jubber v.
Search Market Direct, Inc (In re Paige)140 in the absence of a Philippine
jurisprudence classifying domain names. In Jubber, the U.S. Bankruptcy Court, D.
Utah, Central Division presented a view that a domain name is a tangible personal
139
140
Arturo M. Tolentino,supra note 113 at 8
Jubber v. Search Market Direct, Inc. (In re Paige), supra note 14
property.141 Steve Paige, the owner of the highly-valued142 <freecreditscore.com>,
filed for bankruptcy in 2005. When he tried to sell the domain name, he found out
that the ownership was transferred to another and was eventually sold to Stephen
May. The liquidating trustee for the bankruptcy proceedings filed a case of
conversion in order to recover the domain name. The court declared that domain
names are tangible property which can be the subject of a conversion claim because
like web pages and software, domain names can be perceived by the senses and
access to them can be physically restricted by the use of passwords and other security
measures in relation to the ruling of the Utah Supreme Court characterization of
software in Margae, Inc. v. Clear Link Technologies, LLC.143
141
Id., citing South Cent. Utah Tel. Assoc., Inc. v. Auditing Div. of the Utah State Tax Comm'n, 951 P.2d
218, 223-24 (Utah 1997); quoting South Cent. Utah Tel. Assoc., Inc., 951 P.2d at 223-24 - The court
then cited to a case from the Utah Supreme Court which held that "software is `tangible personal
property' for tax purposes, even after it has been installed on the computer."In so holding, the Utah
Supreme Court explained that "[s]oftware is information recorded in a physical form which has a
physical existence, takes up space on the tape, disc, or hard drive, makes physical things happen, and
can be perceived by the senses. The purchaser of computer software neither desires nor receives
mere knowledge but an arrangement of matter that will direct a computer to perform a particular
function."
142
Supra note 16
143
620 F.Supp.2d 1284 (D.Utah 2009);SeeJubber v. Search Market Direct, Inc. (In re Paige), supra note
14 stating –“The Court, instead, is persuaded by the reasoning in Margae, Inc. v. Clear Link
Technologies, LLC,171 a recent decision from this District. In Margae, an entrepreneur filed an action
against a competitor alleging, among other things, conversion of its web pages and other intellectual
property. The issue before the court was whether Utah law recognized a claim for conversion of
intangible intellectual property. While noting that this was a case of first impression, the court
explained that Utah would not allow a conversion claim for intangible property because it follows the
Restatement (Second) of Torts for guidance.It reasoned that the "Restatement generally limits
conversion actions involving intangible property to intangible property that is `customarily merged in
a document.'"The court rejected the defendant's argument, however, that web pages are intangible
property subject to the merger requirement. Instead, the court ruled that "Utah would consider web
pages as a type of tangible property."
To apply this characterization, however, counters the classification of property
as to susceptibility to touch. Tangible property, while can be manifested through the
senses, is one which could be physically touched and has physical existence whether
real or personal property, such as a house, car, and jewelry. Intangible property, on
the other hand, is one which could not be physically touched 144 and conceived only
by the understanding145 such as credit, goodwill, and rights. Intangible property or
assets do not have a physical or financial embodiment, but the range of intangible
assets is considerably broader. One classification groups intangibles into three types:
(a) computerized information, such as software and databases, (b) innovative
property, such as scientific and nonscientific research and development, copyrights,
designs, trademarks, and (c) economic competencies, including brand equity, firmspecific human capital, networks joining people and
institutions, organizational
know-how that increases enterprise efficiency, and aspects of advertising and
marketing.146 Hence, the decisions of the United States Bankruptcy Court, D. Utah in
Jubber and that of the Utah Supreme Court in Margae, although persuasive as to each
other with the latter case being adopted in Jubber, they do not coincide with the
presentation of renowned Philippine civil law commentators, Arturo M. Tolentino
144
Ernesto L. Pineda, supra note 118 at 3
Arturo M. Tolentino, supra note 113 at 8
146
Andrews, D. and A. de Serres (2012), “Intangible Assets, Resource Allocation and Growth: A
Framework for Analysis”, OECD Economics Department Working Papers No. 989, OECD Publishing
availablehttp://dx.doi.org/10.1787/5k92s63w14wb-en last accessed on January 14, 2014
145
and Ernesto L. Pineda, in their respective works that tangible properties are
susceptible to touch.147
2. As Intangible Property
In Kremen v. Cohen,148 Gary Kremen became the owner of <www.sex.com>
having the same registered for free under the name of his business Online Classifieds
and listed himself as contact. Con man Stephen Cohen sent Network Solutions, Inc
(NSI), the registrar of Kremen’s domain name, a letter allegedly from Online
Classifieds stating that the company dismissed Mr. Kremen and never got around to
changing the administrative contact with the internet registration. 149 It also stated that
the Board of Online Classifieds has decided to abandon the domain name
<www.sex.com> and it has no objections to the use of the name and authorizes any
transfer of it.150 NSI made no effort to contact Kremen and instead accepted the letter
at face value and transferred the name to Cohen. When Kremen contacted NSI, he
was told that it was too late to undo the transfer.151
After the district court’s finding that the letter was indeed a forgery, it
awarded Kremen $40 million in compensatory damages and another $25 million in
punitive damages invoking the constructive trust doctrine and California’s unfair
147
Arturo M. Tolentino,supra note 113 at 8; Ernesto L. Pineda, supra note 118 at 3
Kremen v. Cohen, supra note 7
149
Id.
150
Id.
151
Id.
148
competition statute. Sadly, Kremen cannot collect the enormous awards since Cohen
left for Mexico. This time, Kremen sought to hold NSI liable in a conversion claim.
The conversion claims, however, fared no better. The district court agreed that
<www.sex.com> was Kremen’s property. It concluded that though it was intangible
property, the tort of conversion does not apply. Kremen appealed to the U.S. Court of
Appeals, Ninth Circuit.
The Court ruled that Kremen’s domain name, as an intangible property, is
covered by the remedy of conversion under California law. Hence, the judgment of
the district court is reversed and the case remanded for further proceedings.
The United States Bankruptcy Court, D. Utah in Jubber rejected the decision
of the United States Court of Appeal, Ninth Circuit in Kremen since it applied
California law.152 Federal courts bind other federal courts only when they interpret
and apply federal law while state courts bind other state courts only when they
interpret and apply state law.153
The Kremen decision, however, remains to be a persuasive authority. It is
sound in its analysis and reasoning on the proper classification of domain names, in
general. It is consistent with the traditional bundle of rights theory whereby the owner
of a domain name has the right to exert control over the domain name, the exclusive
right to use the domain name, and the right to alienate the domain name. It satisfies
152
Jubber v. Search Market Direct, Inc. (In re Paige), supra note 14
The Writing Center at Georgetown University Law Center, Which Court Is Binding? Mandatory vs.
Persuasive Cases, 2004
153
the elements of property such as utility, substantivity, and appropriability.
Consequently, domain names should be recognized as property, or more precisely,
intangible property.154
3. As Service Contract
The word “property” is used sometimes to denote the thing with respect to
which legal relations between persons exist---the res over which rights, particularly
ownership, may be exercised and sometimes to the rights with respect to the thing. 155
The rights that may be considered as property are of two kinds: real and personal.
Real right is the “power belonging to a person over a specific thing, without a
passive subject individually determined against whom such right may be personally
exercised.”156 It gives to a person a direct and immediate juridical power over a thing,
which is susceptible of being exercised not only against a determinate person, but
against the whole world. Personal right is “the power belonging to one person to
demand of another, as a definite passive subject, the fulfillment of a prestation to
give, to do or not to do.” It is the equivalent of a right of obligation which means the
obligee can enforce the right against the obligor.157 If a person registers an NTDN, he
acquires a real right over the said domain name which the whole world is bound to
recognize.
154
Xuan-Thao N. Nguyen, supra note 3 at 205
Hector S. De Leon, supra note 115 at 3
156
Arturo M. Tolentino, supra note 113 at 5
157
Ernesto L. Pineda, supra note 118 at 5
155
In Network Solutions, Inc. v. Umbro International, Inc.,158 the Supreme Court
of Virginia declared that “a domain name registration is the product of a contract for
services between the registrar and registrant,”159 hence, not subject to garnishment.
Judgment creditor Umbro filed a garnishment case against a Canadian
Corporation and a Canadian citizen, who owns the company, with respect to
<umbro.com>. In its order, the district court permanently enjoined judgment debtor
from further use of the domain name and awarded Umbro $23, 489.908 for attorney’s
fees and expenses.160
After acquiring a Certificate of Judgment for Registration with another district
court, Umbro obtained a writ of fieri facias161 from the Circuit Court of Fairfax
County and sought to garnish 38 domain names that the judgment debtor had
registered with NSI. The latter was named as garnishee and was asked to place the
subject domain names on hold and to deposit control of them into the registry of the
circuit court for the names to be advertised and sold to the highest bidder. NSI
answered the garnishment summons, stating that it held no money or other
garnishable property belonging to the judgment debtor. It characterized what Umbro
sought to garnish as “standardized, executor service contracts” or “domain name
registration agreements.” Additionally, NSI asserted that 8 of the 38 domain names
158
NSI v. Umbro, supra note 17
Id.
160
Umbro International, Inc. v. 3263851 Canada, Inc., supra note 19
161
Available at http://definitions.uslegal.com/f/fieri-facias/ (last accessed November 27, 2013) - “Fieri
facias is a Latin term that refers to a writ of execution directing a sheriff to take goods or property of
someone against whom a judgment has been rendered.”
159
listed in the garnishment summons either were not then, or never had been subject to
a domain name registration agreement between them and the judgment debtor.
Without explicitly rejecting the classification of the circuit court,162 the
Supreme Court of Virginia reversed the decision and ruled that a domain name
registrant merely acquires the contractual right to use a unique domain name for a
specified period of time bound to the services that NSI provides. The court further
ratiocinated that the contractual rights a judgment debtor has in the domain names do
not exist separate and apart from NSI’s services that make domain names operational
internet addresses.163
In his opinion, Senior Justice Compton maintains that the judgment debtor, as
correctly pointed out by the circuit court, has a current possessory interest in the use
of the domain names, that is, a contractual right to the exclusive use of the names by
virtue of the domain name registration agreements with NSI. 164 Since NSI received
everything that is required for the judgment debtor be granted to the exclusive right to
use the domain names, the contractual right, a valuable asset, is the intangible
personal property in which the judgment debtor has a possessory interest. The right
162
NSI v. Umbro, supra note 17-“After a hearing on Umbro's show cause motion, the circuit court
determined that the judgment debtor's Internet domain name registrations are “valuable intangible
property subject to garnishment.”
163
Id.
164
Id.
exists separate and apart from NSI’s various services that make the domain names
operational internet addresses and such services are mere conditions subsequent.165
Despite NSI’s acknowledgement during the oral argument for this case that
the right to use a domain name is a form of intangible personal property, the court
ruled that it is a service contract.
If courts would adhere to this characterization of domain names, it will defy
the established and basic principles of property law. Once the registrar sends a
confirmation electronic mail (e-mail) which provides for the password after the
registrant registers a domain name by giving the essential information and paying the
registration fee, the registrant acquires a real right against the whole world, even
against the registrar, to exclusively use the newly-registered domain name. The right
to use the domain name and the domain name itself are two different properties as
“property” may refer to the thing itself or to the rights with respect to the thing.
4. As Intellectual Property
When a registrant registers a domain name with an ICANN-accredited
registrar, the registrant has to provide for information and contact details in the
registration agreement, including the desired domain name. It leaves the registrar the
165
Id.
assignment of the numeric IP address for the preferred domain name. According to
the IP Code, the term “intellectual property rights consist” of:166
[a] Copyright and Related Rights;
[b] Trademarks and Service Marks;
[c] Geographic Indications;
[d] Industrial Designs;
[e] Patents;
[f] Layout-Designs (Topographies) of Integrated Circuits; and
[g] Protection of Undisclosed Information
Trademark or "mark" means any visible sign capable of distinguishing the
goods or services (service mark) of an enterprise and shall include a stamped or
marked container of goods. "Collective mark" means any visible sign designated as
such in the application for registration and capable of distinguishing the origin or any
other common characteristic, including the quality of goods or services of different
enterprises which use the sign under the control of the registered owner of the
collective mark; "Trade name" means the name or designation identifying or
distinguishing an enterprise.167 Copyright is the right over literary and artistic works
which are original intellectual creation in the literary and artistic domain protected
from the moment of creation.168 Patent, on the other hand, is the protection given to
any technical solution of a problem in any field of human activity which is new,
involves an inventive step and is industrially applicable. 169 While geographic
indications identify a good as originating in the territory or a region or locality in that
166
IP Code, supra note 4, Section 4.1
Id., Section 121
168
Kho v. CA, G.R. No. 115758, March 11, 2002
169
IP Code, supra note 4, Sec. 21
167
territory, where a given quality, reputation or other characteristics of the good is
essentially attributable to its geographical origin, 170 an industrial design refers to any
composition of lines or colors or any three-dimensional form, whether or not
associated with lines of colors.171 With respect to the protection of undisclosed
information, natural and legal persons shall have the possibility of preventing
information lawfully within their control from being disclosed to, acquired by, or
used by others without their consent in a manner contrary to honest commercial
practices so long as the information:172
(1) is a secret in the sense that it is not, as a body or in the precise
configuration and assembly of its components, generally known
among or readily accessible to persons within the circles that normally
deal with the kind of information in question;
(2) has commercial value because it is a secret; and
(3) has been subject to reasonable steps under the circumstances, by
the person lawfully in control of the information, to keep it secret.
Lastly, layout-design is synonymous with 'topography' and means the threedimensional disposition, however expressed, of the elements, at least one of which is
an active element, and of some or all of the interconnections of an integrated circuit,
or such a three-dimensional disposition prepared for an integrated circuit intended for
manufacture.173An integrated circuit means a product, in its final form, or an
intermediate form, in which the elements, at least one of which is an active element
170
Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), Article 22[1], Section
3
171
IP Code, supra note 4, Sec. 112
TRIPS, Art. 39[2]2, Sec. 7
173
IP Code, supra note 4, as amended by Republic Act No. 9150, August 6, 2001, Sec. 112(3)
172
and some or all of the interconnections are integrally formed in and/or on a piece of
material, and which is intended to perform an electronic function. 174 Only layout designs of integrated circuits that are original shall benefit from protection under this
Act. A layout-design shall be considered original if it is the result of its creator's own
intellectual effort and is not common place among creators of layout-designs and
manufacturers of integrated circuits at the time of its creation. 175 From the foregoing,
domain names are often associated with trademarks and service marks because of the
usual use thereof in relation to goods or services online.
A domain name is an intellectual property. The Intellectual Property Office of
the United Kingdom (IPOUK) included domain names in defining the scope of
intellectual property rights:176
Intellectual property rights provide legal protection for some of
the most important aspects of a brand e.g. the name, logo, design,
domain name and sometimes the product itself.
However, a careful reading of the IPOUK’s definition would show that it
associates domain names with trademarks or a brand which, in reality, is not always
the case. The International Chamber of Commerce (ICC)’s treatment of domain
174
IP Code, supra note 4, as amended by Republic Act No. 9150, August 6, 2001, Sec. 112(2)
IP Code, supra note 4, as amended by Republic Act No. 9150, August 6, 2001, Sec. 113.3
176
Available at http://www.ipo.gov.uk/types/tm/t-about/t-whatis/t-brands.htm last accessed on
December 19, 2013
175
names seems to be broader in scope as it covers all sorts of domain names due to the
absence of any distinction between TDNs and NTDNs:177
Intellectual property is a creation of the intellect that is owned
by an individual or an organization which can then choose to share it
freely or to control its use in certain ways.
Intellectual property is found almost everywhere – in creative
works like books, films, records, music, art and software, and in
everyday objects like cars, computers, drugs and varieties of plants, all
of which have been developed thanks to advances in science and
technology. The distinctive features that help us choose the products
we buy, like brand names and designs, can fall within the scope of
intellectual property.
Even the place of origin of a product can have rights attached
to it, as is the case with Champagne and Gorgonzola. Much of what
we see and use on the Internet, be it a web page or a domain name,
also includes or represents some form of intellectual property.
Since intellectual creation is a mode of acquiring ownership178 and domain
name is an intellectual property being a product of the mind, then the domain name
holder of a registered NTDN acquires ownership and real rights over the said name.
Additionally, if intellectual property is an incorporeal personal property179 and a
domain name is an intellectual property, hence a domain name is also an incorporeal
personal property.
The focus of the discussion on domain name as an intangible property is to
highlight the incorporeal or non physical nature of domain names as decided in the
177
Available at http://www.iccwbo.org/Advocacy-Codes-and-Rules/Areas-of-work/IntellectualProperty/Intellectual-Property-Basics/ last accessed on December 19, 2013
178
Civil Code, Article 712
179
Hector S. De Leon, supra note 115 at 36
much-celebrated case of Kremen in contrast with the classification in Jubber. The
discussion on domain names as intellectual property is meant to present a view that
even though domain names are not included in the enumeration of intellectual
property under the IP Code, it is still an intellectual property not only because of its
common association with trademarks and service marks, but due mainly to the fact
that it is a product of the mind. In this sense, a domain name can be deemed as a sui
generis intellectual property and as such, it should be related to Article 712 of the
Civil Code which refers to intellectual creation as a mode of acquiring ownership.
D. How should NTDN’s be classified in the Philippines?
A NTDN suffers from an identity crisis. Its classification as to whether it is
property and as to what specie of property has never been linear as expected. Domain
names have been variably classified as a service contract, a tangible property, an
intangible property and an intellectual property. Consequently, the rights and
remedies involving NTDN’s are unclear in the midst of the growing number of
disputes involving such kind of domain names, which in some cases maybe highly
valued. For example, the domain name <sex.com> was valued at $250 million;
<business.com> at $7.5 million, and <loan.com> at $3.0 million.180 Given the
purpose and “the monetary value of some domain name suggests that it would be
180
Xuan-Thao N. Nguyen, supra note 3 at 184
proper to classify domain names as property.” 181 The ambivalence, however, of both
courts and legislatures with respect to the treatment of domain names leaves an issue
of whether an NTDN is property.
A property, as distinguished from a thing, is an object or a right which is
appropriated or susceptible of appropriation by man, with capacity to satisfy human
wants and needs.182 Things refers to existing objects which can be of some use to
man.183 The term thing is broader in scope than property. All kinds of property are
things but not all things are property. Things refer to all objects that exist including
those which could not be appropriated by man unlike property which refers to objects
already possessed by man or are in their possession.184 Things involve only corporeal
objects whereas property may refer to intangible matters like rights and credits. 185
For an object to be considered as property, as previously discussed, it should
have: (1) utility or the capacity to satisfy human wants, (2) substantivity or
individuality or a separate and autonomous existence, and (3) appropriability or the
susceptibility of being possessed by man. A NTDN is a property since it has all the
requirements.
As mentioned, a NTDN has dual functions. It is an alphanumeric address
registered with or assigned by a registrar as part of an electronic address on the
181
Id., at p. 185
Ernesto L. Pineda, supra note 118 at 1
183
Id.
184
Id., at p. 2
185
Id.
182
internet. It is the address that is assigned to a computer connected to the internet that
allows other computers therein to route messages, like an electronic mail, to the
former. Internet authorities assign domain names to each numeric IP address due to
the difficulty of remembering several strings of numbers. Domain names have
assisted the vision that the internet should be user-friendly. It directs the users to the
website associated with a web user’s educated guess to find a website by entering a
word or phrase in a search engine. A NTDN can also establish online identity which
is the basis for the prosecution of online impersonation in other jurisdictions. The
number of cases involving domain names and the business behind the domain name
market is a reflection that such names have utmost importance and value. NTDNs
indeed satisfy human wants with respect to the ease of use of the Internet.
Substantivity refers to the quality of having existence apart from any other
thing,186and a NTDN has the element of individuality. It can be separated from the
website to it is affixed and is only an independent component of the website which
has the primary function to identify the location of the site for the convenience of
internet users. A website is a compilation of data content that is uploaded, stored
online, arranged and controlled by a website designer or manager. 187 A domain name
186
187
Hector S. De Leon, supra note 115 at 2
Daniel Hancock, supra note 16 at 200
may be transferred to its legitimate owner without including the website to which it
was initially associated.188
A NTDN is likewise susceptible of being appropriated or being possessed by
man. The physical impossibility that curtails the element of appropriability refers to
the distance, depth and immensity of things such as the sun, the stars, the ocean and
the core of the earth.189 That is not the case with respect to NTDNs. Once the
registrar provides the registrant the password that will allow him to personally
administer the registered domain name, he already have the NTDN in his possession
being the only person who have direct control and management of it. Additionally, a
registrant acquires the right use that NTDN as an internet identifier and he may
prevent all other person in the world from doing the same. While a NTDN is indeed
property since it has all the elements needed to be considered as such, can the
registrant acquire property rights over his NTDNs?
Since a NTDN is a product of the mind and intellectual creation is a mode of
acquiring ownership,190 a bundle of rights is conferred to the registrant from the
effectivity date stated in the registration agreement. As mentioned, the bundle of
rights is composed of: the right to possess (jus possidendi), the right to use and enjoy
(jus utendi), the right to the fruits (jus fruendi), the right to accessories (jus
accesionis), the right to consume the thing by its use (jus abutendi), the right to
188
Kremen v. Cohen, supra note 7 – (The district court found that the letter was indeed a forgery and
ordered the domain name returned to Kremen.)
189
Arturo M. Tolentino, supra note 113 at 3
190
Civil Code, Article 712
dispose or alienate (jus disponendi)191 and the right to exclude from the possession of
the thing owned any other person to whom the owner has not transmitted such thing,
by the proper action for restitution, with the fruits, accessions and indemnification of
damages (jus vindicandi).192
After the registrar sends the password to the registrant, it thereby gives the
latter the right to possess the newly-registered NTDN. As a distinct legal concept,
possession is the holding of a thing or the enjoyment of a right. 193 The fact that the
registrant holds the password to the domain name assumes that he exercises some
degree of control over the object. Consequently, the registrant may likewise change
the password as often in order to secure his right to use and control the subject
domain name vis-a-vis his right to exclude anyone from the use and enjoyment of the
NTDN, provided that the required fees are paid.194 The registrant may simply park his
domain name or proceed in creating a website for whatever purpose subject to the
limitations provided by law. The registrant may use such force as may be reasonably
necessary to repel or prevent an actual or threatened unlawful invasion or usurpation
of property.195
The registrant has the right to the fruits of a domain name. The law protects
the owner of the domain name due to the substantial investment he has devoted to
191
Hector S. De Leon, supra note 115 at 76
Arturo M. Tolentino, supra note 113 at 43
193
Civil Code, Article 523
194
Juliet M. Moringiello, supra note 84 at 101
195
Civil Code, Article 429
192
building the goodwill in the domain name.196 The registrant will bear the financial
gain once he sells the NTDN to the highest bidder online, using one of the many
auction sites such as GreatDomain.com197 pursuant to his right to dispose. An owner
may dispose of or alienate his property either totally, as in sale and donation, or
partially, without transferring ownership, encumber as in lease, pledge, and
mortgage.198
The right to consume means the right of the owner to consume a thing by its
use, the use that extinguishes.199 The owner has even the right to abuse or even
destroy the thing owned. 200 In case of NTDNs, the registrant has the right to consume
or destroy his domain name by not paying the required fees as stated in the
registration agreement or by not renewing his registration. The effect of registration is
that it grants the registrant the privilege to use the domain name for a period of time
agreed upon by the registrant and the registrar at the time of registration.
201
The
privilege to use the domain name expires if it is not renewed.202
The right to recover means that the registrant has the right to be respected in
his possession and should he be disturbed therein he shall be protected in or restored
196
Xuan-Thao N. Nguyen, supra note 3 at 194
Id., at 191
198
Hector S. De Leon, supra note 115 at 79
199
Id.
200
Id.
201
Xuan-Thao N. Nguyen, supra note 3 at 197
202
Id., at 191
197
to said possession by the means established by the laws and Rules of Court. 203 The
true owner must resort to judicial process for the recovery of the property 204 as he
cannot take the law in his hands.
Additionally, the Court in Kremen concluded that there are property rights in
domain names:205
The preliminary question, then, is whether registrants have
property rights in their domain names. Network solution all but
concedes that they do. This is no surprise, given its positions in prior
litigation. The district court agreed with the parties on this issue, as do
we.
Property is a broad concept that includes “every intangible
benefit and prerogative susceptible of possession or disposition.” We
apply a three-part test to determine whether a property right exists:
“First, there must be an interest capable of precise definition; second,
it must be capable of exclusive possession or control; and third, the
putative owner must have established a legitimate claim to
exclusivity.” Domain names satisfy each criterion.Like a share of
corporate stock or a plot of land, a domain name is a well-defined
interest. Someone who registers a domain name decides where on the
Internet those who invoke that particular name---whether by typing it
into their web browsers, by following a hyperlink, or by other means--are sent. Ownership is exclusive in that the registrant alone makes that
decision. Moreover, like other forms of property, domain names are
valued, bought and sold, often for millions of dollars and they are now
even subject to in rem jurisdiction.
Finally, registrants have a legitimate claim to exclusivity.
Registering a domain name is like staking a claim to a plot of land at
the title office. It informs others that the domain name is the
registrant’s and no one else’s. Many registrants also invest substantial
203
Civil Code, Article 539
Id., Article 422
205
Kremen v. Cohen, supra note 7, citing Downing v. Mun. Court, 88 Cal. App.2d 345, 350, 198 P.2d
923 (1948); G.S. Rasmussen, 958 F.2d at 903; Greg Johnson, The Costly Game for Net Names, L.A.
Times, Apr. 10, 2000, at A1; 15 U.S.C. § 1125(d)(2)
204
time and money to develop and promote websites that depend on their
domain names. Ensuring that they reap the benefits of their
investments reduces uncertainty and thus encourages investment in the
first place, promoting the growth of the Internet overall.
Kremen therefore had an intangible property right in his
domain name, and a jury could find that Network Solutions
“wrongfully disposed of” that right to his detriment by handing the
domain name over to Cohen.
A property model best accord with the way market participants relate to
domain names. Even though a domain name is a form of contractual license from a
registrar to a registrant, it results in a valuable asset that is freely traded on the open
market and that is occasionally stolen by a bad faith actor. Even though transfer of a
domain name is, in reality, a de-registration from the original registrant and reregistration to the new registrant, it is now treated routinely as a seamless transfer, as
if the name was being handed directly from the original registrant to the new
registrant. Further, the acceptance of a property rights rationale for regulating generic
domain names could take advantage of existing property-based laws such as theft and
conversion, and simply extend them judicially to virtual property. 206 The presence of
all the elements that pertain to property, together with the bundle of rights acquired
upon the activation date in the registration agreement, justifies the conclusion that an
NTDN is property and the registrant has property rights over it. In sum, the bundle of
206
Tucows.com Co. v. Lojas Renner,106 O.R. (3d) 561 (2011) citing Jacqueline D. Lipton, Bad Faith in
Cyberspace: Grounding Domain Name Theory in Trademark, Property and Restitution, 23 Harv. J.L. &
Tech. 446, 473 (2010).
rights resides in domain names and consequently, domain names should be
recognized as property.207
One of the several classifications of property is based on immobility, such as
movable or personal and immovable or real property. Property is further classified
based on their manifestability to the senses: corporeal or tangible and incorporeal or
intangible property. Anything that does not fall within the enumeration under Article
415 of the Civil Code is deemed a personal property. If the property can be carried
from place to place without injuring the real property to which it is attached, if any, it
is also a personal property.
A NTDN is personal property because it is not mentioned in the exclusive
enumeration of Article 415. Its owner can freely access, control and manage the
NTDN anywhere, as long as he has the corresponding security password and a
reasonable Internet connection. Such freedom to access would not damage the
internet and the affixed website. ICANN’s Transfer Dispute Resolution Policy
(TDRP) bolsters this characteristic of NTDNs since the TDRP applies to transactions
in which a domain name holder transfers or attempts to transfer a domain name to a
new registrar. Similarly, the transferability of NTDN’s would likewise not cause
damage to the Internet, website, or to any other property.
A NTDN is an intangible property. Intangible properties are personal
prestations, or act or services productive of utility. They are not manifest to the
207
Xuan-Thao N. Nguyen, supra note 3 at 192
senses, but are conceived only by understanding.208 They are also termed as choses in
action which may include credits, shares of stocks, franchises and goodwill.209 The
Court in Kremen has likewise considered a domain name as an intangible property
which can be a subject of a conversion claim. As discussed, the Kremen case is most
consistent with the elementary rules of property including the bundle of rights theory
whereby the owner of a domain name has the right to exert control over the domain
name, the exclusive right to use it, and the right to alienate the same.210
Additionally, a NTDN is an intangible property inasmuch as it is also an
intellectual property; it is not so because it is explicitly covered by the IP Code, but
because it is a product of the mind, in relation to Article 712 of the Civil Code. The
Intellectual Property Office of the United Kingdom has included domain names in
defining the scope of intellectual property rights 211 while the International Chamber
of Commerce believes that a domain name represents some form of intellectual
property. Since intellectual property is an incorporeal personal property212 and a
domain name is an intellectual property, hence, a NTDN is also an incorporeal
personal property.
208
Arturo M. Tolentino, supra note 113 at 10
Alicia Sempio-Diy, Handbook on Conflict of Laws, 158 (2007)
210
Xuan-Thao N. Nguyen, supra note 3 at 183
211
Supra note 176-“Intellectual property rights provide legal protection for some of the most
important aspects of a brand e.g. the name, logo, design, domain name and sometimes the product
itself.”
212
Hector S. De Leon, supra note 115 at 36
209
In Tucows.com Co. v. Lojas Renner S.A.,213 the Ontario Court of Appeals
acceded to the classification of a domain name as an intangible property in Kremen:
The dominant view emerging from international jurisprudence
and academic commentary appears to be that domain names are a new
type of intangible property. American jurisprudence treating domain
names as intangible property includes Kremen v. Cohen, 337 F. 3d
1024 (9th Cir. 2003), where the United States Court of Appeals, Ninth
Circuit held, at p. 1030 F. 3d, that a domain name is intangible
property because it satisfies a three-part test for the existence of a
property right: it is an interest capable of precise definition; it is
capable of exclusive possession or control; and it is capable of giving
rise to a legitimate claim for exclusivity. xxx
Recognizing a NTDN as an intangible property is a step in the right direction
in formulating a framework in the absence of direct law covering such subjects. It
would harmonize the principles of law and the advancement of technology. To force
the application of trademark law will not only destroy established trademark
pedagogy but would lead to more disarray among members of the bar and bench and
NTDN holders, as well.
213
Supra note 206
CHAPTER IV
ANALYSIS OF DISPUTES AND REMEDIES
A. Under the Intellectual Property Code
Generally, a mark is any visible sign capable of distinguishing the goods (i.e.
trademark) or services (i.e. service mark) of an enterprise.214 Specifically, trademark
identifies and distinguishes the goods of one manufacturer from the goods of other
manufacturers. Trademark broadly includes any name (Tom Ford, Paul Smith), word
(Zara), phrase (Have a break. Have a KitKat.), device (the pony device of Ralph
Lauren) or symbol (swoosh symbol of Nike), or any combination thereof. It is any
sign, or any combination of signs, capable of distinguishing the goods or services of
one undertaking from those of other undertakings, shall be capable of constituting a
trademark. Such signs, in particular words including personal names, letters,
numerals, figurative elements and combinations of colors as well as any combination
of such signs, shall be eligible for registration as trademarks.215
It is imperative for a website to be properly identified in a global internet
especially in cases where similar goods or services already exist in the global
cyberspace arena. More often than not, trademarks and names of businesses are
registered as their actual domain name in order to position themselves properly in the
global internet. Despite efforts to protect trademarks, counterfeiters are more
214
215
IP Code, Sec. 121.1
TRIPS, Article 15(1), Section 2
determined and aggressive than ever in infringing their competitor’s brand due to the
enormous gain they can derive from free riding on the goodwill of their rival’s
product. The birth of the internet presented greater challenges to trademark owners on
how they may protect their marks.
The Electronic Commerce Act of 2000216 clearly punishes piracy of
copyrighted works through the use of the internet,217 yet, it fails to penalize trademark
infringement committed over the cyberspace. Thus, a resort to the Intellectual
Property Code of the Philippines218 (IP Code) is expected. Trademark law seeks to
accomplish two goals. First, it strives to protect consumers who form a particular
association with a trademark. Second, it attempts to preserve the rights of the
trademark owner who substantially invested in their trademarks. These two goals
balance each other. The source-identifying role of trademarks is to benefit both the
consuming public and trademark owners.219
Under the IP Code, any person who shall, without the consent of the trademark
owner, use in commerce counterfeit trademarks; reproduce, counterfeit, copy or
colorable imitate a trademark, and label his goods with such counterfeit trademark; in
216
Supra note 38
Id., Section 33(b) penalizes piracy or the unauthorized copying, reproduction, dissemination,
distribution, importation, use, removal, alteration, substitution, modification, storage, uploading,
downloading, communication, making available to the public, or broadcasting of protected material,
electronic signature or copyrighted works including legally protected sound recordings or phonograms
of information material on protected works, through the use of telecommunication networks, such as,
but not limited to, the Internet, in a manner that infringes intellectual property rights.
218
Supra note
219
Xuan-Thao N. Nguyen, supranote 1 at943 citing Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159,
163-64 (1995)
217
such a way as to cause confusion, mistake or deception as to the origin of the goods,
shall be liable for trademark infringement.220
Trademark infringement in the cyberspace can be committed in several ways,
such as: by copying trademarked logos and using them in websites to imply some
authorized connection to well-known products, by using the trademark of a
competitor in meta tags for the vendor’s own website so that search engines will
direct customers looking for the trademark products to the competitor’s website
instead and by cybersquatting.
To properly establish trademark infringement, the following elements must be
shown: (1) that the trademark being infringed is registered in the Intellectual Property
Office, however, in infringement of a tradename, the same need not be registered, (2)
that the trademark or name is reproduced, counterfeited, copied, or colorably imitated
by the infringer, (3) the infringing mark or trade name is used in connection with the
sale, offering for sale, or advertising of any goods, business or services, or the
infringing mark or trade name is applied to labels, signs, prints, packages, wrappers,
receptacles or advertisements intended to be used upon or in connection with such
goods, business or services, (4) the use or application of the infringing mark or trade
name is likely to cause confusion or mistake or to deceive purchasers or others as to
the goods or services themselves or as to the source or origin of such goods or
services or the identity of such business, and (5) it is without the consent of the
220
IP Code, Sec. 155
trademark or trade name owner or the assignee thereof. Among the elements, the
element of likelihood of confusion is the gravamen of trademark infringement.221
There are two tests to determine likelihood of confusion: the dominancy test
and holistic test. The dominancy test focuses on the similarity of the main, prevalent
or essential features of the competing trademarks that might cause confusion.
Infringement takes place when the competing trademark contains the essential
features of another. Imitation or an effort to imitate is unnecessary. The question is
whether the use of the marks is likely to cause confusion or deceive purchasers. The
holistic test considers the entirety of the marks, including labels and packaging, in
determining confusing similarity. The focus is not only on the predominant words
but also on the other features appearing on the labels.222 In cases involving trademark
infringement, no set of rules can be deduced. Each case must be decided on its own
merits.223
A domain name may be an arbitrary and fanciful trademark which receive
automatic trademark protection because they serve solely to identify the particular
source of a product.224 They bear no relationship with the goods the marks
represent,225 like APPLE (for computers), and SHELL (for gasoline and oil products).
221
Societe Des Produits Nestle, S.A. v. Martin T. Dy, Jr., G.R. No. 172276, August 8, 2010
Id.
223
Id.
224
Xuan-Thao N. Nguyen, supra note 1 at 945
225
Id.
222
Fanciful trademarks are non-dictionary words,226 like CLOROX (detergent) and
KODAK (for film goods). Trademark law provides arbitrary and fanciful trademarks
the highest level of protection because these highly unique and inherently distinctive
trademarks have a greater chance of the public mistaking a similar or related junior
mark from the original mark.227
1. Memorandum Circular BT Y2K-9-05
The Intellectual Property Office (IPO) issued on September 28, 2000
Memorandum Circular BT Y2k-9-05 affording priority examination for the
registration of internet domain names as service marks. A service mark is any visible
sign capable of distinguishing the services of an enterprise, including a stamped or
marked container of goods.228 The application should specify the services covered
from the following:
Class 35- Advertising; Business mangement; Business
administration; Office functions
Class 36- Insurance; Financial Affairs; Monetary
Affairs; Real Estate Affairs
Class 37- Building construction; Repair; Installation
Services
Class 38- Telecommunications
Class 39- Transport; Packaging and Storage of goods;
Travel arrangement
Class 40- Treatment of materials
Class 41- Education; Providing of training;
Entertainment; Sporting and Cultural Activities
226
Id.
Id.
228
IP Code, Sec. 121.1
227
Class 42- Providing of food and drink; Temporary
Accomodation; Medical, hygienic and beauty
care; Veterinary and Agricultural services; Legal
services; Scientific and industrial research;
Computer programming; Services
that cannot be places in other classes.
Domain names that deals with any of the services mentioned may be
registered as a service mark and any improper use of a mark may be liable for
infringement. Problem arises when a domain name is created and registered for
personal use and is not offering any goods or services online. One may easily be
misled of the “Computer programing” category under Class 42 to which NTDNs
might seek protection. The foregoing classification was directly patterned after the
NICE Classification.229 Under Class 42230 of the NICE Classification, it included
“creating and maintaining web sites for others”231 as service for the registration of a
domain name as a service mark.
229
It is an International classification system used to classify goods and services for the purposes of
the registration of marks, available at
http://www.wipo.int/classifications/nice/en/about_the_ncl/faq.html last accessed on November 30,
2013
230
Scientific and technological services and research and design relating thereto; industrial analysis
and research services; design and development of computer hardware and software.available at
http://web2.wipo.int/nicepub/edition-20130101/taxonomy/class
42/?pagination=no&lang=en&mode=flat&explanatory_notes=hide&basic_numbers=show
last
accessed on November 30, 2013
231
Id., Item No. 420199
a.) NTDNs are not servicemarks.
It would seem that NTDNs do not have any protection under intellectual
property rules primarily because such kind of domain names does not relate to
services. Further, the registration of a domain name in order to create a website is not
necessarily done or maintained for others. “Service” becomes inconsistent with the
registration of a domain name when it is created for personal use and enjoyment.
Memorandum Circular BT Y2K-9-05 requires that the application for the
registration of a domain name as service mark should specify the service to be offered
or conducted. It means that the said circular is only applicable to domain names
which offer any of the services enumerated by the circular in their respective
websites. When a domain name is classified as an NTDN, it also follows that it does
not relate to any of the services mentioned since a service mark is but a class of
trademark. In defining trademark in Kho v. Court of Appeals,232 the Supreme Court
treated service mark as trademark:
Trademark, copyright and patents are different intellectual
property rights that cannot be interchanged with one another. A
trademark is any visible sign capable of distinguishing the goods
(trademark) or services (service mark) of an enterprise and shall
include a stamped or marked container of goods. In relation thereto,
a trade name means the name or designation identifying or
distinguishing an enterprise. Meanwhile, the scope of a copyright is
confined to literary and artistic works which are original intellectual
creations in the literary and artistic domain protected from the moment
of their creation. Patentable inventions, on the other hand, refer to any
232
G.R. No. 115758, March 11, 2002
technical solution of a problem in any field of human activity which is
new, involves an inventive step and is industrially applicable.
b.) Registering an NTDN is not equivalent to
service.
The IP Code also failed to define what constitutes “service” for a mark, or in
this case a domain name, to be a service mark. Even a reference to the General
Agreement on Trade In Services (GATS) failed to give a comprehensive definition of
service233:
"services" includes any service in any sector except services
supplied in the exercise of governmental authority;
In its ordinary or general meaning, service is the duty or labor to be rendered
by one person to another, the former being bound to submit his will to the direction
and control of the latter. It is the act of serving the labor performed or the duties
required,234 the performance of work commanded or paid for by another. 235 In other
words, “service” is based on a contract.236 Under the Civil code, obligations arise
from law, contract, quasi-contracts, delicts and quasi-delicts.237 Accordingly, it gives
the registrant a positive personal obligation.
233
GATS, Article 1 (3)(b)
Black’s Law Dictionary, 1990 Ed.
235
Webster’s Third New International Dictionary of the English Language Unabridged, 2002 Ed.
236
Civil Code, Article 1305 - “A contract is the meeting of minds between two persons whereby one
binds himself with respect to the other, to give something or to render some service.” (emphasis
supplied)
237
Civil Code, Article 1157
234
This should not be the case. The creation and registration of domain names
does not arise from any of the sources of obligation. The concept of service is
dispensed with as to the registration of NTDNs for personal use. After all, the
registration of a NTDN is a personal choice not prompted by any obligation nor
contract. Given that “service” is incompatible with NTDNs, whether the act
registration or the contents of its associated website, ergo, the Intellectual Property
Code, much less the Memorandum Circular BT Y2k-9-05, is not the proper law that
will provide protection over NTDNs.
B. Civil Code of the Philippines
In Kremen and Jubber, the nature of domain name in relation to a conversion
claim was placed in dispute. Although the courts gave a different position on the
nature of domain names, a conversion claim under their respective torts law may
nevertheless proceed. Conversion is an intentional tort that evolved to protect against
interference with possessory and ownership interests in personal property. It consists
of the wrongful exercise of dominion or control over personal property, which so
seriously interferes with another's right to control the property that the converter is
required to pay the other the full value of the property as damages for the
conversion.238
238
Available at http://www.kinseylaw.com/clientserv2/civillitigationserv/conversion/conversion.html
last accessed on December 20, 2013
In Anglo-American Law, tort includes not only negligence but also intentional
criminal acts, such as assault and battery, false imprisonment and deceit. Hence, an
intentional injurious act is punishable as a crime and a tort.
1. Torts v. Quasi-Delicts
Quasi-delict is defined by Article 2176 of the Civil Code:
Whoever by act or omission causes damage to another, there
being fault or negligence, is obliged to pay for the damage done. Such
fault or negligence, if there is no pre-existing contractual relation
between the parties, is called a quasi-delict and is governed by the
provisions of this Chapter.
The Code Commission which drafted the new Civil Code decided to use the
term “quasi-delicts” for those obligations which do not arise from law, contract,
quasi-contracts, and criminal offenses. It rejected the use of the word “tort” in AngloAmerican jurisprudence, which is much broader in coverage than the SpanishPhilippine concept of obligations arising from non-contractual negligence or culpa
aquiliana as it includes intentional or malicious act. The latter, in the general plan of
the Philippine legal system, are governed by the Penal Code.239
The use of a NTDN without the consent of the owner violates the bundle of
rights granted to him by law on account of his ownership of the name which causes
damage to his person, property or right. The act gives rise to an obligation to pay for
239
Ernesto L. Pineda, Torts and Damages Annotated, 2004 Ed., at p. 3 citing Report of Code
Commission, pp. 161-162; Cariaga v. Laguna Tayabas Bus Company, et al, G.R. No. L-11037, December
29, 1960
the damage done regardless of whether it was intentionally done or not or the act is
punishable by the Penal Code or not. The aggrieved registrant has the option: (1) to
pursue a criminal action which includes the claim for civil liability arising from the
crime based on Article 100 of the Revised Penal Code; or (2) to pursue an
independent civil action based on quasi-delict under Article 2176 of the Civil Code.
But the plaintiff cannot recover damages twice for the same act or omission of the
defendant.240
2. Human Relations
Human relations refers to the rules needed to govern the inter relationships of
human beings in a society for the purpose of maintaining social order. Since people
have diverse and different interests and desires, it is but natural that clashes of
interests arise in their interactions. To balance opposing or intertwined interests, there
is a need for regulation and control to secure a rightful relationship between human
beings and for the stability of the social order. Thus, it is designed to indicate certain
norms that spring from the fountain of good conscience. This guide for human
conduct should run as golden threads through society, to the end that law may
approach its supreme ideal, which is the sway and dominance of justice. 241 A
discussion of Articles 19, 20 and 21 of the Civil Code is necessary since they can be
invoked as basis for the award of damages:
240
241
Civil Code, Article 2177
Ernesto L. Pineda, supra note 239 at 254 citing Report of Code Commission, p. 39
Article 19. Every person must, in the exercise of his rights and in the
performance of his duties, act with justice, give everyone his due, and
observe honesty and good faith.
Article 20. Every person who, contrary to law, willfully or negligently
causes damage to another, shall indemnify the latter for the same.
Article 21. Any person who willfully causes loss or injury to another
in manner that is contrary to morals, good customs or public policy
shall compensate the latter for the damage.
Articles 19, 20, and 21 of the Civil Code are “catch-all” provisions that serve
as basis of any imaginable tort action.242 They were intended to expand the concept of
torts in this jurisdiction by granting adequate legal remedy for the untold number of
moral wrongs which is impossible for human foresight to specifically provide in the
statutes.243 The statutory provisions afford relief against novel forms of misconduct
when necessary and appropriate. It is now difficult to conceive of any malevolent
exercise of a right that could not be checked by the application of these articles.244
Although the requirements of each provision are different, Articles 19, 20 and 21 are
all related to each other. Article 19 enumerated the standards of conduct, Article 20
provides for violation of other laws, and Article 21, the remedy for the person injured
by the willful act of another in a manner that is contrary to morals, good customs or
public policy.245
242
Timoteo B. Aquino, Torts and Damages, 2013 Ed, at p. 7
Id., citing Philippine National Bank v. The Court of Appeals, et al., 83 SCRA 237
244
Id., citing Albenson Enterprises Corp. v. Court of Appeals, 217 SCRA 16 (1993)
245
Hector S. de Leon and Hector S. de Leon, Jr., Comments and Cases on Torts and Damages, 2012
Ed., at p. 72
243
Article 19 speaks of the principle of abuse of rights. It departs from the
classical theory that “he who uses a right injures no one.” The modern tendency is to
depart from the classical and traditional theory, and to grant indemnity for damages in
cases where there is an abuse of rights, even when the act is not illicit. If mere fault or
negligence in one’s act can make him liable for damages for injury caused thereby,
with more reason should abuse or bad faith make him liable.246 While Article 19 lays
down a rule of conduct for the regulation of human relations and for the maintenance
of social order, it does not provide a remedy for its violation. Generally, an action for
damages under either Article 20 or Article 21 would be proper.247
Article 20 is intended for those cases where the law does not provide its own
sanctions. It cover all legal wrongs done in violation of law, whether willfully or
negligently and provides for the general sanction, which is the indemnification for
damages. It embraces the Spanish-Philippine concept of quasi-delict and the tort in
Anglo-American jurisprudence. In this manner, Article 20, together with Article 21,
compliments the principle of abuse of rights enumerated in Article 19. 248 Article 20
pervades the entire legal system, and renders it impossible now for a person who
246
Ernesto L. Pineda, supra note 239 at 254-255 citing Sea Commercial Company, Inc., 319 SCRA 211;
BPI Express Card Corp. v. CA, 296 SCRA 260
247
Hector S. de Leon and Hector S. de Leon, Jr., supra note 245 citing Globe Mackay Cable and Radio
Corporation vs. Court of Appeals, 176 SCRA 778 [1989]
248
Id., at 77
suffers damages because another has violated some legal provision, to find himself
without relief.249
Article 21, on the other hand, refers to act contra bonus mores. It is intended
to fill in the countless gaps in statutes which leave so many victims of moral wrongs
helpless, even though they have actually suffered material and moral injury. 250 In
comparison with Article 20, Article 21 requires that the act is done willfully and is
contrary to morals, good customs or public policy, while under Article 20, the act is
done either willfully or negligently and is contrary to law. Under Article 21, liability
for damages may arise even from acts which do not constitute a violation of statute
law if such acts are contrary to morals, good customs or public policy. It is immaterial
whether the damage is caused by a positive act or omission as long as it is willful, i.e.,
the actor was aware of its injurious consequence to the person injured or to a third
party. Thus, the moral wrong covered by Article 21 has the following requisites: (a)
an act which is legal, (b) the act is contrary to morals, and (c) the act was done
willfully with intent to cause loss or injury.251
There is a common element under Articles 19 and 21, and that is, the act must
be intentional. However, Article 20 does not distinguish: the act may be done either
249
Ernesto L. Pineda, supra note 239 at 260 citing the Report of Code Commission, p. 39
Id., at 261 citing Report of Code Commission, p.. 39-40
251
Hector S. de Leon and Hector S. de Leon, Jr., supra note 245 at 80
250
“willfully,” or “negligently.” Under any of these three provisions, an act which causes
injury to another may be made the basis for an award for damages. 252
3. Unauthorized use of NTDNs entitles the registrant
to damages.
The unauthorized use of another’s NTDN is an abuse of right. Although the
intent of the perpetrator may vary, either to benefit from the established goodwill of
the NTDN, to take away the followers or subscribers of the affixed site or page or to
mislead the general public, it is contrary to the socio-economic purpose of the internet
and violates ownership rights. True, a person may freely register any domain name,
provided that it would not encroach on someone else’s right over a specific name.
After all, the mere fact that the same NTDN is being used by another not only proves
the lack of creativity of the registrant but may likewise reflect his awareness of its
existence prior to the subsequent registration which violates the right of the owner.
Every abnormal exercise of a right, contrary to its socio-economic purpose is
an abuse that will give rise to liability. 253 The socio-economic purpose of the internet
is to provide an inexpensive and free-flowing medium of interaction. Hence, the costs
of interconnectivity were kept to a minimum. This allows even a man of moderate
means to register his own domain name and maintain a presence in cyberspace. This
252
Id., citing Albenson Enterprises vs. Court of Appeals, 217 SCRA 162 [1993]
Ernesto L. Pineda, supra note 239 at 255 citing 6 Planiol and Rippert, 793-795; 1 Camus 352;
Tolentino, Vol. I, 1990 Ed., p.62
253
“democratic” administration of the internet is in keeping with the purpose of the
internet as a global network.
Modern jurisprudence does not permit acts which, although not unlawful, are
anti-social. There is undoubtedly an abuse of right when it is exercised for the sole
purpose of prejudicing or injuring another. When the objective of the actor is
illegitimate, the illicit act cannot be concealed under the guise of exercising the right.
The principle does not permit act which, without utility or legitimate purpose cause
damage to another, because they violate the concept of social solidarity which
considers law as rational and just.254According to Borel Macia,
xxx the exercise of a right ends when the right disappears, and
it disappears when it is abused, especially to the prejudice of others.
The mask of a right without the spirit of justice which gives it life, is
repugnant to the modern concept of social law. It cannot be said that a
person exercises a right when he unnecessarily prejudices another or
offends morals or good customs xxx
Hence, the unauthorized use of NTDNs violates the “cardinal law on human
conduct”255 expressed in Article 19 which entitles the legitimate registrant to damages
under Articles 20 and 21 of the Civil Code.
If someone be damaged by another, he does not necessarily have the right to
be indemnified. It is essential that some right of his be impaired.256 In case of
unauthorized use of NTDNs, the real right of the original registrant to exclusively use
254
Padalhin v. Lavina, G.R. No. 183026, November 14, 2012
Ernesto L. Pineda, supra note 239 at 256
256
Felipe v. Leuterio, L-4606, May 30, 19652, 91 Phil. 482
255
the subject domain names is violated and entitles the registrant to damages, regardless
of whether the damage was done willfully or negligently as pronounced in Article 20.
A duty with which the law of tort is concerned is to respect the property of other. A
cause of action may be predicated upon an unlawful interference by one person with
the enjoyment by another of his private property. 257
The unauthorized use of NTDNs is likewise covered by Article 21 being an
act contra bonus mores, especially when the legitimate registrant loses access to the
domain name due to the means and methods used such as hacking into the registrar’s
system to deprive him of the intangible personal property. As discussed in the later
portion of this work, the act constitutes a crime of theft. In the field of tort, trespass
extends to all cases where a person is deprived of his personal property which
therefore covers theft or robbery. 258 It also includes cases covered by accession
continua with respect to movable property, such as domain names, where the person
who took possession of the property of another was in bad faith.259
Cogeo-Cubao Operators and Drivers Association v. Court of Appeals,260 is an
example of tort of trespass that is contrary to morals and good customs under Article
21. The Supreme Court ruled that:
xxx Although there is no question that petitioner can exercise their
constitutional right to redress their grievances with respondent
Lungsod Corp., the manner by which this constitutional right is to be,
257
Hector S. de Leon and Hector S. de Leon, Jr., supra note 245 at 46
Timoteo B. Aquino, supra note 242 at 427
259
Id.
260
G.R. No. 100727 March 18, 1992
258
exercised should not undermine public peace and order nor should it
violate the legal rights of other persons.Article 21 of the Civil Code
provides that any person who willfully causes loss or injury to another
in a manner that is contrary to morals, good customs or public policy
shall compensate the latter for the damage. The provision covers a
situation where a person has a legal right which was violated by
another in a manner contrary to morals, good customs or public policy.
It presupposes loss or injury, material or otherwise, which one may
suffer as a result of such violation. It is clear from the facts of this case
that petitioner formed a barricade and forcibly took over the motor
units and personnel of the respondent corporation. This paralyzed the
usual activities and earnings of the latter during the period of ten days
and violated the right of respondent Lungsod Corp. to conduct its
operations thru its authorized officers. xxx
When an injury cognizable by law is shown to have been inflicted on plaintiff,
the fact that the manner of infliction of injury is novel, is not deterrent to application
thereto of recognized principles of law.261
a.) Actual Damages
The perpetrator, in using another’s NTDN without the owner’s consent, shall
be liable for all damages which are the natural and probable consequences of the act.
It is not necessary that such damages have been foreseen or could have reasonably
been foreseen by him.262 Damages that may be claimed as provided by the Civil Code
are: actual or compensatory, moral, nominal, temperate or moderate, liquidated or
exemplary or corrective.263
261
Hector S. de Leon and Hector S. de Leon, Jr., supra note 245 at 31
See Civil Code, Article 2202
263
Id., Article 2197
262
Actual or compensatory damages are those awarded to the aggrieved party as
adequate compensation only for such pecuniary loss suffered by him as he has alleged
and duly proved. Despite being a NTDN, actual damages are recoverable because of
pecuniary loss suffered in respect to the property.264 Actual compensatory damages
simply make good or replace the loss caused by the wrong. They proceed from a
sense of natural justice, and are designed to repair that of which one has been
deprived by the wrong of another.265 On the other hand, no proof of pecuniary loss is
necessary in order that moral, nominal, temperate, liquidated or exemplary damages
may be adjudicated.266 The assessment of such damages, except liquidated one, is left
to the discretion of the court, according to the circumstances of each case. 267 Claims
for actual damages must be especially alleged and substantiated by proof. It is
necessary for the claimant to produce competent proof or the best evidence obtainable
such as receipts to justify an award of actual damages. 268
Actual or compensatory damages are classified as: dano emergente269and
lucro cessante.270 Dano emergente is the value of the actual pecuniary loss for what
the claimant already possesses before the incident which must be supported by
receipts or the best evidence available while lucro cessante refers to the expected
264
See Algarra vs. Sandejas, 27 Phil. 284
Id.
266
Civil Code, Article 2216
267
Id.
268
People v. Ereno, 326 SCRA 157; People v. Tan, 314 SCRA 424; People v. Guillermo, 302 SCRA 257
269
Also known as damnum emrgens or amno vitando
270
Also known as lucrum cessans or lucro captando
265
profits which were not realized by reason of the act of the offender.271 Given that
NTDNs are not primarily registered for profit but for personal use, thus a claim for
lucro cessante would not be appropriate. For claims for dano emergente, it should be
supported by the best evidence available, but what is the best evidence with respect to
domain names?
Numerous websites offer domain name appraisal services. Some of the free
appraisal sites include: URL Appraisal, EstiBot.com and Valuate. These appraisals
are just guesses. They are not a guarantee that a domain will sell for the price they
list. It can be tempting to believe only the appraisal site that gives the highest value,
but the reality is that if you can run an appraisal on your site domain, so can other
people. 272 Even if the valuation is conducted by the Association of Certified DomainAppraisers, which provides the internet community of qualified appraisers who
specializes in valuation of domain names for a fee, 273 its valuation does assure award
of actual damages since the appraiser should testify as to the details of its appraisal.
In PNOC Shipping and Transport Corporation v. Court of Appeals, et al.,274
the Supreme Court rejected the price quotations for being hearsay evidence:
271
Ernesto L. Pineda, supra note 239 at 126
Jennifer Kyrnin, How to Value a Domain Name Buying and Selling Domains,available at
http://webdesign.about.com/od/domains/a/value-a-domain-name.htm last accessed on January 16,
2014
273
Available at http://www.the-office.com/appraiser/index.htm#appraiser last accessed on January
16, 2014
274
G.R. No. 107518, October 8, 1998
272
The exhibits were presented ostensibly in the course of Del Rosario's
testimony. Private respondent did not present any other witnesses
especially those whose signatures appear in the price quotations that
became the bases of the award. We hold, however, that the price
quotations are ordinary private writings which under the Revised
Rules of Court should have been proffered along with the testimony of
the authors thereof. Del Rosario could not have testified on the
veracity of the contents of the writings even though he was the
seasoned owner of a fishing fleet because he was not the one who
issued the price quotations. Section 36, Rule 130 of the Revised Rules
of Court provides that a witness can testify only to those facts that he
knows of his personal knowledge.
For this reason, Del Rosario's claim that private respondent incurred
losses in the total amount of P6,438,048.00 should be admitted with
extreme caution considering that, because it was a bare assertion, it
should be supported by independent evidence. Moreover, because he
was the owner of private respondent corporation whatever testimony
he would give with regard to the value of the lost vessel, its equipment
and cargoes should be viewed in the light of his self-interest therein.
We agree with the Court of Appeals that his testimony as to the
equipment installed and the cargoes loaded on the vessel should be
given credenceconsidering his familiarity thereto. However, we do not
subscribe to the conclusion that his valuation of such equipment, cargo
and the vessel itself should be accepted as gospel truth. We must,
therefore, examine the documentary evidence presented to support Del
Rosario's claim as regards the amount of losses.
The price quotations presented as exhibits partake of the nature of
hearsay evidence considering that the persons who issued them were
not presented as witnesses. Any evidence, whether oral or
documentary, is hearsay if its probative value is not based on the
personal knowledge of the witness but on the knowledge of another
person who is not on the witness stand. Hearsay evidence, whether
objected to or not, has no probative value unless the proponent can
show that the evidence falls within the exceptions to the hearsay
evidence rule. On this point, we believe that the exhibits do not fall
under any of the exceptions provided under Sections 37 to 47 of Rule
130.
The issue of domain name valuation is of first impression only, but on account
of the difficulty of proving actual or compensatory damages with regards to domain
names with a credible appraiser, it leaves a claim for dano emergente without basis
unless a qualified domain name appraiser in the Philippines is already available.
b.) Moral Damages
Article 2217 of the Civil Code did not define the term “moral damages”
because of the difficulty to define as many injuries similar or having resemblance to
the different pains enumerated therein which might be excluded. According to the
law, moral damages include physical suffering, mental anguish, fright, serious
anxiety, besmirched reputation, wounded feelings, moral shock, social humiliation,
and similar injury. 275 The enumeration is not exclusive because of the phrase “and
similar injury”. Though incapable of pecuniary computation, moral damages maybe
recovered if they are the proximate result of the defendant’s wrongful act or
omission.276 Moral damages are designed to compensate the claimant for actual injury
suffered and not to impose a penalty on the wrongdoer. It will serve to alleviate the
moral suffering he has undergone, by reason of the defendant’s action. Since the
unauthorized use of a NTDN falls within the purview of Article 21 of the Civil Code,
as previously mentioned, there is basis for a claim for moral damages in addition to
the pain and anxiety that the registrant may have suffered. Article 2219 explicitly
275
276
Civil Code, Article 2217
Id.
states that moral damages may be recovered in acts and action referred to in Article
21.277 Additionally, in the adjudication of moral damages, the sentimental value of
property, real or personal may be considered.278 The presence of sentimental value
when properly established will have the persuasive effect of justifying an increase in
the amount of moral damages payable to the owner279 of the NTDN.
c.) Nominal Damages
The court may likewise award nominal damages in every obligation arising
from any source enumerated in Article 1157 or in every case where property right has
been invaded.280 Since the unauthorized use of NTDN is quasi-delict as contemplated
by Article 2176 which violates the right of the registrant to exclusively use the
domain name, an intangible personal property, then he is entitled to nominal
damages. Nominal damages are adjudicated in order that a right of the plaintiff,
which has been violated or invaded by the defendant, may be vindicated or
recognized, and not for the purpose of indemnifying the plaintiff for any loss suffered
by him.281 In Cogeo,282 the Supreme Court affirmed the award of nominal damages
by the Court of Appeals in finding that there was a violation of the appellee’s
property right:
277
See Id., Article 2219
Id., Article 2218
279
Ernesto L. Pineda, supra note 239 at 183
280
Civil Code, Article 2222
281
Id., Article 2221
282
Supra note 260
278
As to the propriety of damages in favor of respondent Lungsod Corp.,
the respondent appellate court stated:
. . . it does not necessarily follow that plaintiff-appellee
is entitled to actual damages and attorney's fees. While
there may have been allegations from plaintiffcooperative showing that it did in fact suffer some form
of injury . . . it is legally unprecise to order the payment
of P50,000.00 as actual damages for lack of concrete
proof therefor. There is, however, no denying of the act
of usurpation by defendants-appellants which
constituted an invasion of plaintiffs'-appellees' property
right. For this, nominal damages in the amount of
P10,000.00 may be granted. (Article 2221, Civil Code).
(p. 18, Rollo)
No compelling reason exists to justify the reversal of the ruling of the
respondent appellate court in the case at bar. Article 2222 of the Civil
Code states that the court may award nominal damages in every
obligation arising from any source enumerated in Article 1157, or in
every case where any property right has been invaded. Considering the
circumstances of the case, the respondent corporation is entitled to the
award of nominal damages.
While the assessment of nominal damages is left to the sound discretion of the
court, it cannot be awarded together with compensatory damages. Where the court
has already awarded compensatory and exemplary damages that is already a juridical
recognition that plaintiff’s right was violated. 283
283
Ernesto L. Pineda, supra note 239 at 225 citing Vda. de Medina v. Cresencia, 99 Phil. 506.
d.) Temperate or Moderate Damages
Temperate or moderate damages, which are more than nominal but less than
compensatory damages, may be recovered when the court finds that some pecuniary
loss has been suffered but its amount cannot, from the nature of the case, be provided
with certainty.284In People v. Briones,285 the Supreme Court said that temperate
damages may be recovered in lieu of actual damages where the prosecution was able
to show that the victim’s family suffered some pecuniary loss more that the amount of
P1,000.00 but its exact amount cannot be proved with certainty.
e.) Exemplary or Corrective Damages
Exemplary or corrective damages are required by public policy, for wanton
acts must be suppressed. They are an antidote so that the poison of wickedness may
not run through the body politic.286 Exemplary damages are imposed, by way of
example or correction for the public good, in addition to the moral, temperate,
liquidated or compensatory damages.287 The plaintiff must show, however, that he is
entitled to moral, temperate or compensatory damages before the court may consider
the question of whether or not exemplary damages should be awarded.288 Further, in
quasi-delicts exemplary damages may be granted if the defendant acted with gross
284
Civil Code, Article 2224
344 SCRA 149
286
Ernesto L. Pineda, supra note 239 at 234 citing Diaz v. Amante, 104 Phil. 968
287
Civil Code, Article 2229
288
Id., Article 2234
285
negligence,289 but even if there is gross negligence, the grant is not automatic and is
subject to the discretion of the court due to the use of the word “may” in Article 2231.
f.) Liquidated Damages
Lastly, liquidated damages are those agreed upon by the parties of the
contract, to be paid in case of breach thereof.290 Given the fact that there is no
contract between the legitimate registrant of the NTDN and the perpetrator with
respect to the subject domain name, a claim for liquidated damages on the basis of the
perpetrator’s violation becomes moot and academic.
When the second registrant, however, has registered the NTDN of another
without negligence, fault or intent to deprive him of ownership or to harm him, an
action for damages may not prosper due to lack of legal basis. It may be decided on
the basis of the “first come, first serve” principle. With this principle, the first
registrant would necessarily hark on his prior registration in order to be declared the
absolute owner of the subject domain name. But, self-serving statements, if not
coupled with evidence, do not have any probative value. A certification of ownership
issued by a domain name registrar that is not located in the Philippines would not
cure the defect as the issuing authority must testify on the matters alleged therein.
Therefore, on this instance, there is a need to examine the regulation of the domain
289
290
Id., Article 2231
Id., Article 2226
name registry in relation to issues of ownership prompted by an act without
negligence, fault or malice.
C. Revised Penal Code
Article 308 of the Revised Penal Code is broad enough to cover domain
names as the object of theft which is committed by:
any person who, with intent to gain but without
violence against or intimidation of persons nor force
upon things, shall take personal property of another
without the latter’s consent.
In theft, taking is considered complete only when the offender is able to place
the thing taken under his control.291 It is immaterial to the product of the felony that
the offender, once having committed all the acts of execution for theft, is able or
unable to freely dispose of the property stolen since the deprivation from the owner
alone has already ensued from such acts of execution.292 Further, there is "taking" of
personal property, and theft is consummated when the offender unlawfully acquires
possession of personal property even if for a short time; or if such property is under
the dominion and control of the thief. The taker, at some particular amount, must
have obtained complete and absolute possession and control of the property adverse
to the rights of the owner or the lawful possessor thereof.293 It is not necessary that
291
Luis B. Reyes, The Revised Penal Code Book Two, 18th Ed. at p. 733
Id. at 735
293
Laurel v. Abrogar, 283 SCRA 41 (2009), citing People v. Ashworth, 222 N.Y.S. 24 (1927)
292
the property be actually carried away out of the physical possession of the lawful
possessor or that he should have made his escape with it.294 Neither asportation nor
actual manual possession of property is required. Constructive possession of the thief
of the property is enough.295 The essence of the element is the taking of a thing out of
the possession of the owner without his privity and consent and without animus
revertendi.296
The nature of an object, whether tangible or intangible, may still be the
subject of theft. In United States v. Carlos,297 the Supreme Court ruled that the quality
of being incorporeal is immaterial in theft such in the case of electricity:
It is true that electricity is no longer, as formerly, regarded by
electricians as a fluid, but its manifestation and effects, like those of
gas, may be seen and felt. The true test of what is a proper subject of
larceny seems to be not whether the subject is corporeal, but whether it
is capable of appropriation by another than the owner.
It is well-settled that illuminating gas may be the subject of larceny,
even in the absence of a statute so providing. xxx
In the case of Commonwealth vs. Shaw, supra, the court, speaking
through Chief Justice Bigelow, said:
There is nothing in the nature of gas used for
illuminating purposes which renders it incapable of
being feloniously taken and carried away. It is a
valuable article of merchandise, bought and sold like
other personal property, susceptible of being severed
from a mass or larger quantity, and of being transported
from place to place. In the present case it appears that it
294
Id., citing People v. Salvilla, G.R. No. 86163, April 26, 1990, 184 SCRA 671, 677 (1990)
Id., citing Harris v. State, 14 S.W. 390 (1890)
296
Id., citing Woods v. People, 78 N.E. 607 (1906)
297
21 Phil. 553 (1912)
295
was the property of the Boston Gas Light Company;
that it was in their possession by being confined in
conduits and tubes which belonged to them, and that the
defendant severed a portion of that which was in the
pipes of the company by taking it into her house and
there consuming it. All this being proved to have been
done by her secretly and with intent to deprive the
company of their property and to appropriate it to her
own use, clearly constitutes the crime of larceny.
Electricity, the same as gas, is a valuable article of merchandise,
bought and sold like other personal property and is capable of
appropriation by another. So no error was committed by the trial court
in holding that electricity is a subject of larceny.
The rationale of this doctrine was reiterated in United States v.
Tambunting298with regards to gas and in Laurel v. Abrogar299with respect to the
business of providing intangible international telephone service by the Philippine
Long distance Telephone Company (PLDT).
Theft of a NTDN becomes qualified when: (1) the theft is committed by a
domestic servant, (2) the theft is committed with grave abuse of confidence, and (3)
the property was taken on the occasion of fire, earthquake, typhoon, volcanic
eruption, or any other calamity, vehicular accident or civil disturbance. The other
circumstances stated under Article 310 of the Revised Penal Code that qualifies theft
is not applicable to NTDNs because they are premised on the very subject of the
crime such as: the property stolen is either a motor vehicle, mail matter or large cattle;
298
299
41 Phil 364 (1921)
Supra note 293
the property stolen consists of coconuts taken from the premises of a plantation; or
the property stolen is fish taken from a fishpond or fishery. 300
Due to the absence of any domain name theft case filed in any Philippine
court, much less decided by the Supreme Court, an examination of a case of such
nature from another jurisdiction is necessary in order to elucidate further on this novel
crime. Case in point is the Goncalves case.
In May 2006, Daniel Goncalves of Union Township, New Jersey obtained
unauthorized access to the GoDaddy account of P2P.com, LLC. The account was
used to manage <P2P.com> which was acquired by the three partners from a different
company for $160,000. He surreptitiously initiated the transfer procedures and moved
<P2P.com> to his account at GoDaddy which he later transferred to another domain
registrar and placed it for sale until it was bought by Mark Madsen for $111,211, who
at that time had no knowledge that the domain was stolen. The legitimate owners did
not realize the theft until a year later when a fellow domainer informed them of the
changes made to <P2P.com>.301 Ultimately, the rightful name holder was deprived of
access or control over the subject domain name.
On December 14, 2010, David Goncalves of New Jersey pleaded guilty to
domain name theft and is now serving five-year prison term in accordance with the
300
301
Revised Penal Code, Article 310
Supra note 24
plea-bargaining agreement with the New Jersey Division of Criminal Justice.302 He is
the first person known to be arrested for domain name theft in the United States.
According to the ICANN Security and Stability Advisory Committee (SSAC),
domain name theft, also known as domain name hijacking, refers to the wrongful
taking of control of a domain name form the rightful name holder. The common use
of the term encompasses a number of attacks including:





impersonation of a domain name registrant in
correspondence with a domain name registrar,
forgery of a registrant’s account information by a
registrar,
forgery of a transfer authorization communication from
a registrant to a registrar,
impersonation or a fraudulent act that leads to the
unauthorized transfer of domain from a rightful name
holder to another party, and
unauthorized DNS configuration changes that disrupt or
damage service operated under a domain name,
including web site defacement, mail service disruption,
pharming and phishing attacks.303
The intent of a domain name thief is to gain or at least disrupt the control of a
rightful domain name holder like what David Goncalves did to <P2P.com>. At
present, victims of domain name theft may regain control of the stolen domain names
through dispute resolution procedures namely the UDRP and the TDRP established
by ICANN. In order to succeed in a UDRP proceeding, a complainant must establish
302
Supra note 27
ICANN Security and Stability Advisory Committee, Domain Name Hijacking: Incidents, Threats,
Risks and Remedial Actions, July 12, 2005, p. 8
303
three elements: (1) the domain name is identical or confusingly similar to a trademark
or service mark in which the complainant has rights; (2) the registrant does not have
any rights or legitimate interests in the domain name; and (3) the registrant registered
the domain name and is using it in “bad faith.”304
In order to establish whether a domain name has been registered in “bad
faith,” the UDRP panel will examine several factors, such as (1) whether the
registrant registered the domain name with the aim of selling the domain name
registration to the complainant, (2) whether the registrant registered the domain name
to prevent the owner of the trademark or service mark from using the mark
corresponding to his name, (3) whether the registrant registered the domain name
primarily to disrupt the business of a competitor, and (4) whether the registrant tried
to attract visitors by creating a likelihood of confusion with the complainant’s
mark.305
On the other hand, the TDRP is used for resolving disputes between two
registrars engaging in Inter-Registrar domain name transfers. A TDRP dispute can be
brought to the registry for a decision, or to a third-party dispute resolution service
provider. In case that a registry operator is chosen, the decision of this registry
operator may be appealed by the registrars to an independent dispute resolution
304
305
UDRP, Paragraph 4(a)
Id., Paragraph 4(b)
provider. A decision made by an independent dispute resolution provider may be
appealed only before a court.306
The UDRP, however, does not cover NTDNs due to its heavy reliance to
trademark principles as one of its elements to be present to initiate such proceeding.
Furthermore, Paragraph 4(a) of the UDRP in relation to Paragraph (b) refers more to
classical cybersquatting whereby other than the involvement of a trademark or service
name, the infringer at least attempted to sell the domain name to the complainant or
his infringement created a likelihood of confusion. The primary dependence of the
UDRP to trademark principles dissuades resort thereto for the protection or recovery
of a NTDN.
Even the TDRP is not adequate to address this dilemma. The TDRP only
applies to transactions in which a domain name holder transfers or attempts to
transfer a domain name to a new registrar. In other words, it concerns registrar
disputes under the Inter-Registrar Transfer Policy, which is followed by the .biz,
.com, .info, .name, .net, .org, and .pro TLDs. 307 The complainant under the TDRP is
the registrar instead of the legitimate domain name holder.
Assuming David Goncalves obtained unauthorized access to the GoDaddy
account of P2P.com, LLC, which deprived the owners control of the subject domain
name within Philippine jurisdiction, he likewise violates Section 33 of the Electronic
306
307
See TDRP available at http://www.icann.org/en/help/dndr/tdrp last accessed on June 21, 2013
Available at http://www.icann.org/en/help/dndr#tdrp last accessed on June 21, 2013
Commerce Act308 because theft was consummated by hacking the registrar’s system.
Under the law, hacking:
xxx refers to unauthorized access into or interference in a
computer system/server or information and communication system; or
any access in order to corrupt, alter, steal, or destroy using a computer
or other similar information and communication devices, without the
knowledge and consent of the owner of the computer or information
and communications system, including the introduction of computer
viruses and the like, resulting in the corruption, destruction, alteration,
theft or loss of electronic date massages or electronic document shall
be punished by a minimum fine of one hundred thousand pesos
(P100,000.00) and a maximum commensurate to the damage incurred
and a mandatory imprisonment of six (6) months to three (3) years xxx
It should be noted, however, that not all unauthorized use of a domain name
deprives a rightful domain name holder access and control over it. Based on the “first
come, first served” principle underlying the registration of domain names, a person
may register <www.juandelacruz.net> while the original <www.juandelacruz.com>
exists. The owner of the .com version has jus vindicandi against the owner of the .net
version which flowed from his ownership of the name “juandelacruz” acquired by
intellectual creation. He has the right to exclude any person from the enjoyment and
disposal of the name,309 most especially in case wherein the general public might be
misled that he is connected to the .net version. In this case, there is no unlawful taking
depriving owner of control over the .org version and similarly, there is no hacking
done.
308
309
Supra note 28
Civil Code, Article 429
In the U.S., this crime is referred to as online impersonation. This new breed
of cyber act has been the subject of the latest technology legislation in the state of
Texas to which Arizona’s Online Impersonation bill310 is based. Under Section 33.07
of the Texas Penal Code, online impersonation is committed when:
(a) A person commits an offense if the person, without obtaining the
other person's consent and with the intent to harm, defraud, intimidate,
or threaten any person, uses the name or persona of another person to:
(1) create a web page on a commercial social
networking site or other Internet website; or
(2) post or send one or more messages on or through a
commercial social networking site or other Internet
website, other than on or through an electronic mail
program or message board program.
(b) A person commits an offense if the person sends an electronic
mail, instant message, text message, or similar communication that
references a name, domain address, phone number, or other item of
identifying information belonging to any person:
(1) without obtaining the other person's consent;
(2) with the intent to cause a recipient of the communication to
reasonably believe that the other person authorized or
transmitted the communication; and
(3) with the intent to harm or defraud any person.
Based from the foregoing, the registrant of <www.juandelacruz.net> can be
held liable for online impersonation since he used “juandelacruz” to create a web site
310
AZ HB 2004/2013, available at http://legiscan.com/AZ/text/HB2004/id/670151 last accessed on
November 25, 2013
without the consent of the real owner of <www.juandelacruz.com>, especially when
the legitimate owner’s name is indeed Juan dela Cruz.
Digital identity is an online or networked identity adopted or claimed in
cyberspace by an individual, organization or electronic device. These users may also
project more than one digital identity through multiple communities. A digital
identity is linked to one or more digital identifiers, like an email address, URL or
domain name.311A domain name is used to establish an identity. 312 Once a user
registers a domain name, he then acquires the right use that name as an internet
identifier and it prevents all other person in the world from doing the same. 313 Hence,
the unauthorized use of a NTDN, which may or may not involve a personal name,
may be penalized for online impersonation.
The way the online impersonation law is phrased outlines a key difference
between identity theft and online impersonation. Identity theft is meant to benefit the
thief, while online impersonation is meant to harm someone other than the
impersonator. Further, identity theft typically involves stealing very specific personal
information, like a social security number or a credit card number. It often involves
much more than using the name or telephone number of another.
311
314
The lack of an
Available at http://www.techopedia.com/definition/23915/digital-identity last accessed on
November 24, 2013
312
See Chapter II, p. 25 of this work
313
Juliet M. Moringiello, supra note 84
314
Available at https://www.allclearid.com/blog/online-impersonatin-vs-identity-theft last accessed
on November 28, 2013
online impersonation law in the Philippines leaves this form of violation unpunished
based on the maxim nullum crimen nulla poena sine lege.315
Matrix of Remedies- Figure 1
Means
Unauthorized
Registration
of NTDN
under the
same gTLD
(original
registrant lost
access to
control NTDN)
Unauthorized
registration of
NTDN under
the same
gTLD by
means of
Hacking
Action
Actual
Damages
Moral
Damages
Exemplary
Damages
For
damages
[(Art. 20,
Civil
Code
(CC)] or
Acts
Contra
Bonus
Mores,
(Art. 21,
(CC)]
Available
(Art,
2199,
CC)
Available
(Arts.
2217, 2219
(10), CC)
Not
available
unless
defendant
acted with
gross
negligence
(Art. 2231,
CC)
Theft
(Art.
308,
RPC)
Available
(Art.
2202,
CC)
Available
(Art. 2217,
CC)
Available,
part of civil
liability if
there is
aggravating
circumstanc
e (Art. 2230,
CC)
N/A
Theft
(Art.
308,
RPC) and
Hacking
(Sec.33,
E-Comm
Act)
Available
(Art.
2202,
CC)
Available
(Art.2217,
CC)
Available,
part of civil
liability if
there is
aggravating
circumstanc
e (Art. 2230,
CC)
N/A
(original
registrant lost
access to
control NTDN)
315
“There is no crime when there is no law punishing it.”
Liquidated
Damages
Not
Available
(N/A)
Temperate
Damages
Available,
in lieu of
actual
damages,
when
pecuniary
loss is
suffered
but cannot
be proved
w/
certainty
(Art. 2224,
CC)
Available,
in lieu of
actual
damages,
when
pecuniary
loss is
suffered
but cannot
be proved
w/
certainty
(Art. 2224,
CC)
Available,
in lieu of
actual
damages,
when
pecuniary
loss is
suffered
but cannot
be proved
w/
certainty
(Art. 2224,
CC)
Nominal
Damages
Available
(Art.
2222,CC)
Available
(Art.
2222, CC)
Available
(Art.
2222, CC)
Unauthorized
Registration
and Use of
NTDN using
different gTLD
(original
registrant still
has access to
his NTDN,
property
rights
violated)
Culpa
Available Available
Not
N/A
Available,
Available
Aquilian
(Art,
(Art. 2217,
available,
in lieu of
(Art.
a (Art. 2199 or
2219 (10),
unless
actual
2222, CC)
2176,
2202,
CC)
defendant
damages,
CC)-if
CC), as
acted with
when
negligen
the case
gross
pecuniary
t;
For may be.
negligence
loss is
damages
suffered
(Art. 2231,
[(Art. 20,
but cannot
CC)
Civil
be proved
Code
w/
(CC)],
certainty
whether
(Art. 2224,
negligen
CC)
t or not;
(Art. 21,
(CC)], if
wilful.
If the other registrant acted without fault, negligence or intent to harm the owner, no remedy
available. Hence, the recommendation for the enactment of an Anti-NTDN Infringement Act as
presented and discussed in Chapter VI, B(2) of this work.
Criminal action-Since there is no law that defines and punishes this act as a crime, the principle
of “nullum crimen nulla poena sine lege” shall apply. In view of this paper’s position that such
act is detrimental to the rights of the legitimate owner of the subject domain name, an AntiNTDN Infringement Act as presented and discussed in Chapter VI, B(2) of this work, is
respectfully recommended.
CHAPTER V
STATE REGULATION OF THE DOMAIN NAME REGISTRY
Recent survey shows that government regulation is the top issue facing the
domain name market.316 Currently, the ICANN is responsible for managing names
and numbers in view of the ideology of the Clinton administration to have a “selfregulating” industry. “Self-regulation” allegedly meant that US government would
not create the new organization or specifically define its powers or structure. Instead,
it invited the private sector to form the organization based on a broad consensus
among industry stakeholders. Once the private sector came to the government with a
proposal for an organization that could legitimately claim the consensual support of
the internet community, it would be handed to control the assets. After a two-year
monitoring period, the government would walk away. 317
On the registrar level, the market is plagued by various ICANN-accredited
registrars in view of the “self-regulation” principle imbued by the US to the domain
name system. The survey may be perceived as a wake-up call for the government to
step in. Government regulation has been a grinding issue with respect to internet
316
Available athttp://domainnamewire.com/2012/02/28/government-regulation-domains/ last
accessed on October 13, 2013
317
Milton Mueller, ICANN and Internet Governance: Sorting Through the Debris of ‘Self-Regulation,
The Journal of Policy, Regulation and Strategy for Telecommunications Information and Media, Vol. 1
No.6 Dec. 1999, p. 498
governance. The rising number of perplexing cyber problems is a manifestation that
authorities should consider regulating the internet.
Government regulation of domain name registries is possible and, to a greater
extent, more beneficial to the stakeholders. The most direct way to influence the
administration of a registry is through an agency under the direct control of the
government. A recent example is Ireland, where the administration of the <.ie>
domain name space was previously managed by a non-profit organization but
transferred over to the Commission for Communication Regulation, the statutory
body responsible for the regulation of the electronic-communications sector in
Ireland.318 In Singapore, the <.sg> domain is administered by the Singapore Network
Information Centre, a fully owned subsidiary of the Infocomm Development
Authority of Singapore.319 In both examples, however, their respective government is
limited to the accreditation of domain name registrars and is not directly involved in
the registration of domain names.
In Finland, the administration of the <.fi> domain name space is vested in the
Finnish Communications Regulatory Authority (FICORA) under the Ministry of
Transport and Communications.320 It is responsible for communications regulations in
Finland and is created to promote the development of the information society within
318
ComReg, available at http://www.comreg.ie/about_us/about_us.472.html last accessed on
September 8, 2013
319
SGNIC, available at http://www.sgnic.sg/page/company-info last accessed on September 8, 2013
320
FICORA, available at http://www.ficora.fi/en/ last accessed on September 8, 2013
its own sector.321 In other words, FICORA, as a government agency, is the domain
name registry for <.fi> domain names. In the Philippines, .dotPH, a private entity,
handles the <.ph> domain. With FICORA as a model, the government has full control
over the staff that manages the domain space and owns or otherwise directly controls
the necessary hardware and system.
There are advantages to a state regulated domain name registry. One of which
is the application of Section 1, Rule 129 of the Rules of Court on mandatory judicial
notice:
RULE 129
What Need Not Be Proved
Section 1.Judicial notice, when mandatory. — A court shall take
judicial notice, without the introduction of evidence, of the existence
and territorial extent of states, their political history, forms of
government and symbols of nationality, the law of nations, the
admiralty and maritime courts of the world and their seals, the political
constitution and history of the Philippines, the official acts of
legislative, executive and judicial departments of the Philippines,
the laws of nature, the measure of time, and the geographical divisions.
Judicial notice is the cognizance of certain facts without proof because they
already known of them. It is based on considerations of expediency and convenience.
It displaces evidence since, being equivalent to proof, it fulfills the object which the
evidence is intended to achieve and therefore, make evidence unnecessary. 322 In other
words, judicial notice is the cognition by the judge of certain facts on the supposition
321
322
Id.
2 Florenz D. Regalado, Remedial Law Compendium, Tenth Rev. Ed., p. 788
that such facts are within his knowledge. In dispensing the presentation of evidence
based on the mandatory judicial notice, the court accepts the veracity of the document
that the person named therein is indeed the owner of the registered domain name
since the certification is an official act of the executive department of the government.
Similarly, Lopez v. Sandiganbayan323 applied the judicial notice rule with
respect to the certification of the Records Officer of the Office of the Provincial
Governor being an official act of the executive department:
We uphold the submission that the factual defenses of
petitioner are matters within the concept of mandatory judicial notice.
While it is true that, as pontificated by the Court a quo, factual
defenses on the part of the accused are evidentiary matters which may
be presented only during trial on the merits, the facts alleged by the
accused are facts admitted, whether directly or impliedly, in pleadings
of the prosecution and in the reports of the Provincial Prosecutor of
Davao Oriental and Graft Investigator Gay Maggie Balajadia.
Consequently, the disposition of the matter in the questioned
Resolution which states that "The nature, scope and legal
consequences of the inculpatory allegations in the Amended
Information, with respect to accused-movant, remains (sic) to be
ascertained during the trial," is not at all correct.
Judicial notice may be taken of petitioner's oath taking before
the Regional Trial Court Judge of Mati, Davao Oriental, the Hon.
Roque A. Agton, as evidenced by a certification from the Records
Officer of the office of the Provincial Governor. The oath taking
partakes of an official act, while the certification is an official act of
an official of the Executive Department of the government.
Since the certification of registration or ownership of a domain name issued
by a state regulated domain name registry is an official act of the executive
323
G.R. No. 103911 October 13, 1995
department, it is a public document as defined by paragraph (a), Section 19 of Rule
132 of the Rules of Court, which states:
Sec. 19. Classes of Documents – For the purpose of their
presentation in evidence, documents are either public or private.
Public documents are:
(a) The written official acts, or records of the official acts of
the sovereign authority, official bodies and tribunals, and
public officers, whether of the Philippines, or of a foreign
country; xxx
The additional advantage of a public document is that its authenticity and due
execution is already presumed and shall be prima facie evidence of the facts stated
therein as contemplated by Section 19 in conjunction with Section 23324 of Rule 132
and Section 44325 of Rule 130. Prima facie evidence means “evidence good and
sufficient on its face. Such evidence as, in the judgment of the law, is sufficient to
establish a given fact, or the group or chain of facts constituting the party's claim or
defense, and which if not rebutted or contradicted, will remain sufficient. Evidence
which, if unexplained or uncontradicted, is sufficient to sustain a judgment in favor of
324
Section 23.Public documents as evidence.— Documents consisting of entries in public records
made in the performance of a duty by a public officer are prima facie evidence of the facts therein
stated. All other public documents are evidence, even against a third person, of the fact which gave
rise to their execution and of the date of the latter.
325
Section 44.Entries in official records. — Entries in official records made in the performance of his
duty by a public officer of the Philippines, or by a person in the performance of a duty specially
enjoined by law, are prima facie evidence of the facts therein stated.
the issue it supports, but which may be contradicted by other evidence.” 326 Hence, the
certification creates a presumptive right of ownership of the domain name, unless
otherwise controverted by evidence. The law reposes a particular confidence in public
officers that it presumes that they will discharge their several trusts with accuracy and
fidelity.327
In trademark registration, a certificate of registration of a mark, once issued,
constitutes prima facie evidence of the validity of the registration, of the registrant’s
ownership of the mark, and of the registrant’s exclusive right to use the same in
connection with the goods or services and those that are related thereto specified in
the certificate.328 Since domain names may sometimes be trademarks, the registration
of domain names, in general, should be given the same effects so as to harmonize the
interplay of the different presumptions of law and bolster the proposition that a stateregulated domain name registry eases the difficulty of proving domain name
ownership.
A certification of domain name registration or ownership issued by a
government registry will likewise enjoy a strong presumption of regularity under the
Rules of Court.329 The legal presumption of regularity in the performance of official
duty is indulged by law for purposes of strengthening the infirmity of evidence and
326
Robert P. Wa-acon v. People, G.R. No. 164575, December 6, 2006 citing H. Black, et al., Black's Law
Dictionary 1190 (6th ed.,1990)
327
Eduardo B. Peralta, Jr., Perspectives of Evidence, 2005 Ed. at p. 575 citing Francisco, The Revised
Rules of Court in the Philippines, Part II, 1991 edition, pp. 503
328
IP Code, Section 138
329
Rules of Court, Rule 131, Section 3, par. (m) rt
upholding transactions intimately connected with the public peace and the security of
private property.330
As the name suggests, a disputable presumption, such as the regularity in the
performance of official duty, can be sufficient by itself to maintain the proposition
affirmed unless refuted by the adverse party against whom the inference is invoked.
This presumption subsists until it is overcome by evidence or by some stronger
presumption.331 It must be kept in mind that the peculiar effect of a presumption of
law is merely to invoke a rule of law compelling the jury to reach the conclusion in
the absence of evidence to the contrary from the opponent.332
A presumption is an inference required by a rule of law to be drawn as to the
existence of one fact from the existence of some other established basic fact. Such
rules usually grow out of experience which has demonstrated the natural connection
between the basic and assumed facts.333 It is an inference of the existence or nonexistence of a fact which courts are permitted to draw from the proof of other
facts.334A presumption like Section 3, Rule 131 of the Rules of Court can also
dislodge the necessity of evidence on a factual matter.335 The presumption is in favor
330
Eduardo B. Peralta, Jr., supra note 327 at 575 citing Francisco, The Revised Rules of Court in the
Philippines, Part II, 1991 edition, pp. 105-106
331
Id., at 359 citing 1 Jones on Evidence, page 22.
332
Id., at p. 353 citing Wigmore on Evidence, page 3534
333
Id., at p. 352 citing 1 Jones on Evidence, pp. 16-17
334
Id., citing 1 Jones on Evidence, pp. 16-17 citing 2 Regalado, Remedial Law Compendium, Ninth
Revised Edition, 2001, p. 672
335
Id., at p. 351
of the prosecution which thereby gives the burden to overturn such presumption juris
to defendant.
The government authority should create a system that should avoid rather than
resolve conflicts. It should regulate the registration and use of domain names more
efficiently and investigate into possible conflict of interests of various registrants of
NTDNs. A stringent, but effective registration procedure should therefore be
established to minimize future conflicts involving NTDNs. While a stricter regulation
will complicate the registration process, it would however, discourage those who
have no genuine intention to register. Simply put, the creation and registration of
domain name through a state-regulated registry would become prohibitive against
those without any legitimate objective to go online because of a stricter regulation by
the government.
Hence, it is respectfully recommended that the Philippine domain name
registry should be regulated and administered by the DOST-ASTI since the institute’s
experience and know-how in managing <gov.ph> domain names would greatly assist
in the administration of a registry.At best, government regulation of the domain name
registry would contribute not only in the exigency of combating the unauthorized use
of existing NTDNs but would also strengthen the claims of ownership because courts
should take judicial notice of an official act of the government. It would likewise be a
prima facie evidence of ownership of the domain name for being a public document
which further enjoys a presumption of regularity as provided by the Rules of Court.
If the registrant does not have any certification from a registry, it does not
necessarily mean that he is not the owner. As previously discussed, since a domain
name is a sui generis intellectual property because it is a product of the mind, the
registrant thereof acquires the bundle of rights from the time of creation which is
reckoned from the effectivity date given by the registrar. It cannot be presumed,
however, that a person who has a certification from a private domain name registry is
automatically the owner of the subject NTDN. On both occasions, a person alleging
ownership would nevertheless be constrained to prove it in accordance with the Rules
of Court.
In the first scenario, the alleged owner would merely harp on his self-serving
statement of ownership over the name in the absence of documentary or real
evidence, which has little to no probative value. With respect to the second scenario,
a proper foundation must be laid for the admission of documentary evidence; that is
the identity and authenticity of the document must be reasonable established as a
prerequisite to its admission in evidence336 and this proves to be more of a challenge
especially when the person who issued the said certification is located outside of the
Philippines.
336
Id., at p. 492; See Rules of Court, Rule 132, Sections 20 -22, Rule 132 which refer to the rules on
authentication of a private document.
CHAPTER VI
CONCLUSION AND RECOMMENDATION
A. Summary and Conclusion
In an era when technology dominates, the internet has become an
indispensable and expedient source for a wealth of information. The internet is often
described as a “network of networks” because it is not a single physical entity, but
hundreds of thousands of interconnected networks linking hundreds of millions of
computers around the world.337 Every computer on the public internet has a unique
numeric address similar to the uniqueness of a telephone number. This string of
numbers that is difficult for users to remember is called the Internet Protocol (IP)
address. To make it easier to find a given location on the internet, the DNS was
invented. The DNS translates IP addresses into unique alphanumeric addresses called
domain names. Internet users will get the related website once they instruct their
browser software to go to a particular domain name, as opposed to entering a lengthy
IP number. If users cannot remember the address, they can make “an educated guess
about the key words in the domain name of a sought after company.” 338 Entering
these key words into search engines allows the users to quickly locate the website.339
It is truly the easiest and most convenient way technology has provided us access to
337
Lennard G. Kruger, supra note 103 at 1
Rachel Ehrlich Albanese and Avi Fox, Chapter 11.com: New Life for the Failed Retailer, 22 BBLR
1132, 2, (08/19/2010) citing Berneman, Navigating the Bankruptcy Water, at 62.
339
Id.
338
almost any material on cyberspace.340 Without this uniqueness, the DNS would be
less predictable and reliable.
Using trademarks as domain names helps businesses create a strong presence
on the internet, yet, domain name registration has become a profitable venture for
clever but unscrupulous entrepreneurs such as cybersquatters. With various laws
available such as the UDRP, ACPA, IP Code and the CPA, owners of trademarked
domain names are given ample protection against cybersquatting and infringement.
Even the IPO issued Memorandum Circular BT Y2k-9-05 which affords priority
examination for the registration of internet domain names as service marks.
Considering, however, that domain names are not always created for the purpose
identifying goods and services, protecting NTDNs against illegitimate use and
registration has become primordial.
A NTDN is property since it has all the requirements of substantivity,
appropriability and utility. Being a product intellectual creation, a bundle of rights is
conferred to the registrant from the effectivity date stated in the registration
agreement, which includes jus vindicandi or the right to exclude from the possession
of the thing owned any other person to whom the owner has not transmitted such
thing, by the proper action for restitution, with the fruits, accessions and
340
21st BILETA Conference : Globalisation and Harmonisation in Technology Law, April 2006, Malta,
Mohammed S. Al Ramahi, Internet domain names & Trademark Law: Does the current legal scheme
provide an adequate protection to domain names under the US & the UK jurisdictions, 1.
indemnification of damages.341 Even the Kremen case acknowledged the presence of
property rights in domain names.
The presence of all the elements that pertain to property, together with the
bundle of rights, justifies the conclusion that an NTDN is property and that the
registrant has property rights over it. In other words, the bundle of rights resides in
domain names and consequently, domain names should be recognized as property. 342
But what kind of property are NTDNs?
An NTDN is an intangible personal
property. It is personal property simply because it is not mentioned in the exclusive
enumeration of Article 415 and the domain name holder can freely access, control
and manage the NTDN anywhere. It is also intangible property because it not
manifest to the senses, but are conceived only by understanding.343 The persuasive
Kremen case has likewise considered a domain name as an intangible property which
is most consistent with the elementary rules of property law including the bundle of
rights theory whereby the owner of a domain name has the right to control, use and
alienate the same. Like the other intellectual properties such as trademarks,
copyrights and patents, a NTDN is a sui generis intellectual property because it is a
product of the mind. But as such, can NTDNs seek protection under “traditional”
trademark laws and remedies, especially Memorandum Circular Y2K-9-05 which was
issued specifically for domain names?
341
Arturo M. Tolentino, supra note 113 at 43
Xuan-Thao N. Nguyen, supra note 3 at 192
343
Arturo M. Tolentino, supra note 113 at 10
342
Despite the issuance of Memorandum Circular Y2K-9-05 by the IPO, it failed
to provide adequate protection for NTDNs since this kind of domain names is not
used primarily in relation to services as required by the said Circular and the IP Code.
Similarly, the UDRP and TDRP are not viable remedies with respect to NTDNs due
to its heavy reliance to trademark principles. As a matter of fact, one of the elements
that needs to be alleged and proven in a UDRP case is that the domain name is
identical or confusingly similar to a trademark or service mark in which the
complainant has rights. 344
Worse, Paragraph 4(a) of the UDRP in relation to
Paragraph (b)345 refers more to classical cybersquatting whereby the infringer at least
attempted to sell the domain name to the complainant or his infringement created a
likelihood of confusion. The TDRP, on the other hand, concerns registrar disputes
under the Inter-Registrar Transfer Policy wherein a domain-name holder transfers or
attempts to transfer a domain name to a new registrar. The complainant under the
TDRP is the registrar instead of the legitimate domain name holder. A NTDN is
coined as such because it does not relate nor distinguishes itself in relation to goods
and/or services of another to which, logically speaking, any trademark law or rule
should not be applied thereto.
But the legitimate registrant of a NTDN is not left without any remedy, for it
is axiomatic that when there is a right, there is a remedy. The exercise of right ends
when the right disappears, and it disappears when it is abused, especially to the
344
345
UDRP, Paragraph 4(a)
See Chapter IV, p. 84 of this work.
prejudice of others. The mask of a right without the spirit of justice which gives it
life, is repugnant to the modern concept of social law. It cannot be said that a person
exercised a right when he unnecessarily prejudices another or offends morals or good
customs.346
As an incorporeal or intangible personal property, there are remedies under
the Civil Code and Revised Penal Code that may be resorted to in protecting against
violations of property rights over NTDNs. Violations thereof may consist of the
registration of an existing NTDN in favor of another person which deprives the
original owner access and control over his cyber property. It may also consist of
creating a domain name with the same second-level domain but with a different
gTLD, whether for the same purpose and format of the original or not. Article 2176,
in relation to Articles 19, 20 and 21, of the Civil Code may be resorted to by the
aggrieved real owner of a NTDN for damages against the unlawful use of his domain
name, which is considered as quasi-delict.
By and large, men owe a duty to use care in connection with their affirmative
conduct, and they owe it to all who may foreseeably be injured if that conduct is
negligently carried out. Based on Article 2176, a quasi-delict is an act or omission by
a person which causes damage to another in his person, property or rights, giving rise
to an obligation to pay for the damage done, there being fault or negligence but there
346
Ernesto L. Pineda, supra note 239 at 256
is no pre-existing contractual relation between the parties. 347 Article 2176 is the basic
provision which refers to those obligations which do not arise from law, contracts,
quasi-contracts or criminal offenses.
The owner of the NTDN is given the privilege to treat the illegitimate use of
his domain name as a quasi-delict, and not as a delict, and accordingly, base his civil
action for damages on the theory of quasi-delict, which shall proceed independently
and be entirely separate and distinct from the criminal prosecution. In the civil action,
the matter at issue is not whether the act complained of constitutes a crime, but
whether said act has caused damage to the plaintiff as a consequence of the fault or
negligence of the defendant for which reason, the defendant under Article 2176, “is
obliged to pay for the damage done.”348
Article 19 is known as the principle of abuse of rights which grants indemnity
for damages in case where there is an abuse of right, even when the act is not illicit. It
was intended to expand the concept of torts by granting adequate legal remedy for the
untold number of moral wrongs which is impossible for human foresight to provide
specifically in statutory law.349 Damages may also be based on Article 20, which
states that “every person who, contrary to law, willfully or negligently causes damage
to another, shall indemnify the latter for the same.” It provides for the general
sanction, the indemnification of damages, when the law does not provide for a
347
Hector S. de Leon and Hector S. de Leon, Jr., supra note 245 at 183
Id., at 185
349
Ernesto L. Pineda, supra note 239 at 255
348
specific one. It is broad enough to cover all situations, including torts based on malice
and on negligence, as well as all other legal wrongs not constitutive of a breach of
contract.350 Article 21, on the other hand, was incorporated in the interest of justice
brought by the countless gaps in statutes leaving victims of moral wrongs helpless.
There are many injurious act that are contrary to public policy but are not forbidden
by statute which have not been foreseen by lawmakers, 351 such as the case of
unauthorized use of NTDNs. Damages are recoverable even though no positive law
has been violated but it is necessary that the act should have been willfully done and
more it is contrary to moral, good customs or public policy. 352
Thus, under any of these provisions of law, an act which causes injury to
another may be made the basis for an award of damages. There is a common element
under Articles 19 and 21, and that is, the act must be intentional. Article 20, however,
does not distinguish. The act may be done either willfully or negligently. In addition,
Article 19 is broad enough to cover cases that are considered contrary to morals under
Article 21. These three provisions provide legal bedrock for the award of damages to
a party who suffers damage whenever one commits an act in violation of some legal
provision, or an act which though not constituting a transgression of positive law,
nevertheless violates certain rudimentary right of the aggrieved party.353 Hence, when
a person registers a domain name involving an existing NTDN, the registrant of the
350
Id., at 260
Id., at 261
352
Id.,citing Report of Commission, p. 26
353
Timoteo B. Aquino, supra note 242 at 388
351
latter has the right to recover damages in view of the “catch-all” provisions of the
Civil Code as it violated his property rights over the subject NTDN. The defendant is
liable even if he does not know the identity of the victim. 354 But what kind of
damages may the registrant claim?
Only actual or compensatory, moral, temperate, nominal and exemplary or
corrective damages can be claimed with respect to NTDNs. Liquidated damages is
not available due to the absence of a contract between the registrant and the
perpetrator.
With respect to actual or compensatory damages, lucro cessante may not be
claimed by the registrant due to the fact that NTDNs are not created for profit. It is
highly improbable to determine the expected profit required by law for damages if the
subject of the controversy is not made to generate profit. Dano emergente may be
claimed, provided however that a qualified domain name appraiser in the Philippines
is already available because the value of the domain name at the time of taking should
be based on the best evidence available supported by the testimony of the person who
made such appraisal. Otherwise, the appraisal made would be inadmissible in
evidence for being hearsay.
The registrant may claim moral damages in view of the suffering he has
undergone, by reason of the defendant’s action. The unauthorized use of a NTDN
falls within the purview of Article 21 of the Civil Code which, as previously
354
Hector S. de Leon and Hector S. de Leon, Jr., supra note 245 at 185
mentioned, is the basis to claim moral damages as explicitly mentioned in Article
2219. In awarding moral damages, the sentimental value of the domain name may be
considered.355 The presence of sentimental value when properly established may
justify the increase in the amount of moral damages to be awarded.
Since the act of the perpetrator is a disturbance of the registrant’s property
right over the subject NTDN, he is also entitled to nominal damages which are
adjudicated in order that a right of the plaintiff, which has been violated or invaded by
the defendant, may be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him.356 Nominal damages,
however, cannot be awarded together with compensatory damages. 357
Temperate or moderate damages may be claimed when the court finds that
some pecuniary loss has been suffered but its amount cannot, from the nature of the
case, be provided with certainty. 358 Further, temperate damages may be recovered in
lieu of actual damages where pecuniary loss is established but its exact amount
cannot be proved with certainty. Lastly, exemplary damages may be awarded by way
of example or correction for the public good, in addition to the moral, temperate,
liquidated or compensatory damages.359 The registrant, however, must show that he is
355
Civil Code, Article 2218
Id., Article 2221
357
Armovit v. Court of Appeals, et al., G.R. No. 88561, April 20, 1990
358
Civil Code, Article 2224
359
Id., Article 2229
356
entitled to moral, temperate or compensatory damages to before the court considers
his claim for exemplary damages. 360
If the illegitimate use of another’s NTDN would deprive the owner control or
access to manage it curtailing his bundle of rights over the said name, the perpetrator
may be held liable for theft under Article 308 of the Revised Penal Code. Theft is
committed by any person who, with intent to gain but without violence against or
intimidation of persons nor force upon things, shall take personal property of another
without the latter's consent.361
NTDNs can be a subject of theft because it is a personal property and its
nature of being intangible or incorporeal will not hinder its capacity to be a subject
thereof. The cases of United States v. Carlos,362 United States v. Tambunting363 and
Laurel v. Abrogar364 have settled that the true test of what is a proper subject of theft
seems to be not whether the subject is corporeal, but whether it is capable of
appropriation by another than the owner. The case of Goncalves proves that domain
names can be appropriated by person other than the registered owner. The element of
“taking” referred to in the law is the act of depriving another possession and
dominion of movable thing coupled with the intention, at the time of the “taking,” of
360
Id., Article 2234
Revised Penal Code, Article 308
362
Supra note 297
363
Supra note 298
364
Supra note 293
361
withholding it with the character of permanency. 365 To appropriate means to deprive
the lawful owner of the thing366 which is realized once the owner has lost control or
access to manage his registered NTDN due to the stealth and strategy employed by
the perpetrator in taking the subject domain name.
Further, if the offender gravely abused the confidence instilled in him which
existed between him and the offended party, there is qualified theft punishable under
Article 310 of the same penal code. If the act of stealing involved hacking, such is
punishable under the Electronic Commerce Act of 2000. To reiterate, hacking refers
to unauthorized access into or interference in a computer system/server or
information and communication system; or any access in order to corrupt, alter, steal,
or destroy using a computer or other similar information and communication devices,
without the knowledge and consent of the owner of the computer or information and
communications system, including the introduction of computer viruses and the like,
resulting in the corruption, destruction, alteration, theft or loss of electronic date
massages or electronic document.367
365
Luis B. Reyes, supra note 291 citing People v. Galang, et al., C.A., 43 O.G. 577
Florenz D. Regalado, Criminal Law Conspectus, 2003 Rev. Ed. at p. 543
367
Supra note 28, Section 33
366
B. Recommendation
1. Proposed State-Regulated Domain Name Registry
A state-regulated domain name registry would bring notable advantages to the
use of NTDN’s, especially with respect to actions that surround ownership of domain
names.
Tenets of evidence assume legal significance since a fact is in issue before a
forum. It is proffered to establish an alleged or disputed fact. A positive allegation of
ownership should be supported by evidence as a claim for ownership can easily be
concocted and would have no probative value for being self-serving. Logically, the
best evidence of ownership is a title or certification from the domain name registrar.
But certifications of current domain name registrars would likewise have questionable
probative value since the issuing authority must be presented in court to testify on the
veracity of the certification. The difficulty arises due to the fact that current domain
name registrars are not located within the Philippines. Hence, the proposal for a stateregulated domain name registry.
As previously discussed, a certification from a state-regulated domain name
registry would allow the court to take judicial notice of it being an act of the
executive department of the government as provided by Section 1, Rule 129 of the
Rules of Court. As a public document, its authenticity and due execution would be
presumed and shall be prima facie evidence of the facts stated therein as
contemplated by Section 19 in relation to Section 23 of Rule 132 and Section 44 of
Rule 130. Hence, the certification creates a presumptive right of ownership of the
domain name, unless otherwise refuted by evidence by the other party. This would
also add value to the “first come first serve” principle of domain name registration. A
strict yet effective registration procedure would diminish future conflicts involving
NTDNs and would discourage frivolous registrations.
MEMORANDUM CIRCULAR NO.__________
REGISTRATION OF NON-TRADEMARK DOMAIN NAMES (NTDNs)
TO: __________________________
Director, Advance Science and Technology Institute (ASTI)
DATE: ___________________
==============================================================
==========
Due to the clamor of the general public for a state-regulated domain
name registry and in view of the number of conflicts involving
NTDN’s, the ASTI is requested toorganize a standard registration of
NTDNs in accordance with the foregoing guidelines:
A. The Application
1. The application must clearly indicate the NTDN
sought to be registered. The application must be
automatically rejected if the domain name is a
trademark or service mark. Supporting documents may
be attached to the application, if necessary.
2. A special lane shall be provided for application for
re-issuance of certificate of registration or for a
permanent certificate of registration for those who have
been issued with a temporary one pursuant to paragraph
B hereof.
B. Verification
1. The NTDN sought to be registered must be a
“working” domain name. “Parked” NTDNs may be
temporarily registered but only for a period of thirty
(30) days otherwise its registration will automatically
expire. The expiration date should be clearly indicated.
If within the said period the “parked” NTDN is now
live and working, the temporary registration will
become permanent only after ASTI’s second
verification and payment of fees provided that an
affidavit to that effect is submitted thereto.
2. After the verification stage, the applicant shall pay
the appropriate fees. DOST-ASTI shall issue an official
receipt upon payment.
C. Publication and Opposition
1. After payment of the corresponding fees, all NTDN’s
sought to be registered must be published at: (i) the
official website of the DOST-ASTI; (ii) at a
conspicuous place within the vicinity of the DOSTASTI office and (iii) in the Official Gazette. The
publication shall be for a period of thirty (30) days.
2. Any opposition to the application must be filed with
the DOST-ASTI within the thirty (30) day period
above-stated, provided that the filing fee mentioned
below has been paid. If the period lapsed without any
opposition, all oppositions thereto are deemed waived
and the published applied NTDN’s are approved,
except for “parked” NTDN’s which failed to comply
with the requirements under paragraph B hereof.
3. The applicant has a period of ten (10) days from
notice of such opposition to file its comment thereto.
After the filing of the comment or the lapse of the
period to file it, the opposition is automatically
submitted for resolution.
C. Fees
1. DOST-ASTI shall collect a processing fee for the
application, verification, publication and issuance of
certificate of registration. The suggested fees are as
follows:
a.) P500.00 – for every NTDN applied
(including certification, except for “parked”
NTDNs whereby P300 pesos will be collected
after the first verification and only a temporary
certification will be issued, in the absence of
any opposition to the application. The remaining
amount of P300 should be paid upon reverification with surrender of the temporary
certification for the issuance of the permanent
certification.
b.) P500.00 – for reissuance of certification for
one (1) NTDN
c.) P500.00 – filing fee per opposition for one
(1) NTDN application
D. Issuance of Certificate of Registration/Proof of Ownership
1. Upon surrender of the office copy of the cashier’s
receipt as proof of payment of applicable fees, the ASTI
Domain Name Registration Officer then shall issue a
Certificate of Registration/Proof of Ownership or a
Temporary Certificate of Registration in favor of the
applicant, as the case may be, after confirming the
absence of an opposition to his application or a
resolution of the DOST-ASTI granting the NTDN to his
favor.
E. Custody and Safekeeping of Issued Certifications
1. DOST-ASTI will maintain an original hard copy of
every issued certification, whether permanent or
temporary. A soft copy thereof may likewise be
maintained.
FOR IMMEDIATE COMPLIANCE.
Secretary
Department of Science and Technology
Since registration before the DOST-ASTI by virtue of the proposed
Memorandum Circular is not mandatory, it would nevertheless be a useful tool for
owners of NTDN’s who wish to go an extra mile in protecting their creations given
the substantial benefits under the Rules of Court which owners could take advantage
in proving ownership of this kind of cyber property in court.
It bears to reiterate that if the registrant does not have any certification from a
registry, it does not necessarily mean that he is not the owner. On the other hand, a
person who has a certification from a private domain name registry cannot be
presumed to be the owner of the subject NTDN. Persons alleging ownership would be
constrained to prove their respective claims in accordance with the Rules of Court,
yet with the risk that it might be considered as hearsay, especially with respect to
certifications issued by foreign domain name registries. While the latter may be
notarized by the issuing registry before a notary public within its location to be
converted into a public instrument, this proves to be more burdensome and tedious
due to distance and location. The inevitable delay may derail the proper
administration of justice. Further, it is deemed as an inefficient approach given that
the NTDN sought to be protected or recovered may not have a reasonable value
commensurate to the expenses acquired in having a certification issued by a registry
located outside of the Philippines converted into a public instrument in accordance
with their rules before presenting it in court to aptly prove ownership.
On this score, having a state-regulated domain name registry proves to be
beneficial in protecting online identity and property rights due to the interplay of
various presumptions of law under the Rules of Court with respect to a certification of
ownership issued by the executive department, in this case, the DOST-ASTI.
2. Proposed Legislation for Anti-NTDN
Infringement
While the provision on theft is broad enough to consider domain names as a
subject of the crime being a personal property as earlier discussed, it cannot protect
all NTDN owners at all times since not all intrusions result to deprivation of property.
On the basis of the “first come, first served” rule with respect to the registration of
domain names, a person may register a domain name which consists of a second-level
domain of an existing NTDN yet under a different TLD. The registrant of the NTDN
has jus vindicandi against the registrant of the other version since the former’s
second-level domain is used without consent in which the general public may be
misled that he is connected to the later version. After all, a domain name functions as
an online identifier and once a user registers a domain name, he then acquires the
right use that name as an internet identifier and it prevents all other person in the
world from doing the same.368
The previously discussed provisions of the Civil Code may be resorted to in
order to claim damages caused by this vexing act. It would not, however, deter the
practice of registering similar NTDN’s without any consent or authority from its
rightful owner. Despite the available civil remedies, this would remain to be a
perennial problem because such act is easier to consummate compared to domain
name theft and the valuation of NTDN’s with respect to the computation of damages
may not be prohibitive so as to dissuade future cyber posers. A stringent law is
definitely wanting in this case.
With respect to the use of NTDNs, the Texas Online Impersonation Law 369
would serve as a reasonable model law that would further protect the rights of
legitimate domain name registrant against those who may unlawfully register a
similar domain name in violation of the original creator’s right to use it exclusively.
Such Texas Law prohibits inter alia the use of the name or persona of another person
to create a web page with intent to harm, defraud, intimidate or threaten any person.
New York’s version of the law requires that the impersonation be done by
communication by internet website or electronic means with intent to obtain a
benefit or injure or defraud another, or by such communication pretends to be a
368
369
Juliet M. Moringiello, supra note 84 at 101
Texas Penal Code, Section 33.07
public servant inorder to induce another to submit to such authority or act in
reliance on such pretense.370 In California, a person should impersonate another
actual person by electronic means, which includes opening an e-mail account or an
account or profile on a social networking internet website in another person’s name
for purposes of harming, intimidating, threatening, or defrauding another person.371 In
Louisiana, it is unlawful for any person, with the intent to harm, intimidate, threaten,
or defraud, to send an electronic mail, instant message, text message, or other form of
electronic communication that references a name, domain address, phone number, or
other item of identifying information belonging to another actual person without the
consent of that person and with the intent to cause the recipient of the communication
to believe that the other person authorized or transmitted the communication.372
From the foregoing, it is only Texas’ version that punishes online
impersonation from mere creation of website and without the requisite of
communicating or sending an electronic mail to another provided, however, that the
creation of the site is to cause harm to any person under another’s persona or identity.
Domain names are used in Universal Resource Locators (URLs) to identify
particular
web
pages.
For
example,
in
the
URL
http://www.pcwebopedia.com/index.html, the domain name is pcwebopedia.com.373 A
370
NY Penal Code, Article 190.25
California Penal Code, Section. 528.5
372
Louisiana Penal Code, RS 14:73.10
373
Available at http://www.webopedia.com/TERM/D/domain_name.html last accessed on December
29, 2013
371
URL is a formatted text string used by web browsers, email clients and other software
to identify a network resource on the internet. Network resources are files that can be
plain web pages, other text documents, graphics, or programs. 374 Due to the ease of
registering a domain name, abuse of NTDNs should be classified as a crime in
keeping with the spirit of the model Texas Law and the CPA that punishes various
cybercrimes:
REPUBLIC ACT NO:_____
AN ACT DEFINING NON-TRADEMARK DOMAIN NAME
INFRINGEMENT,
PROVIDING
FOR THE
PENALTIES
THEREFOR AND FOR OTHER PURPOSES
Be it enacted by the Senate and House of Representatives of the
Philippines in Congress assembled:
SECTION 1. Title. – This Act shall be known as the “Anti-NonTrademark Domain Name (NTDN) Infringement Act of 2014.”
SECTION 2. Declaration of Policy – The State recognizes the
importance of providing an environment conducive to the
development, acceleration, and rational application and exploitation of
information and communications technology (ICT) to attain free, easy,
and intelligible access to exchange and/or delivery of information; and
the need to protect and safeguard the integrity and privacy of a person
from all forms of misuse of personal identity and information by
making punishable under the law such conduct or conducts. In this
light, the State shall adopt sufficient powers to effectively prevent and
combat such offenses by defining the act and providing a penalty
therefor.
374
Available at http://compnetworking.about.com/od/internetaccessbestuses/g/bldef-url.htm last
accessed December 29, 2013
SECTION 3. Definition of NTDN Infringement - (a) A person who,
without any right or interest, creates a domain name under a different
top level domain (TLD), website or webpage using the name, identity,
or persona of another person or any other online identity already
registered as a domain name without the registrant’s authority or
consent.
(b) A non-trademark domain name (NTDN) is an
alphanumeric address registered with a domain name registry which
does not refer to goods or services.
SECTION 4. Prior Right principle—(a) The person who first
registered the subject NTDN is presumed to be the legitimate owner
thereof, unless otherwise proved. A certificate of ownership from the
DOST-ASTI shall be prima facie evidence of the information stated
therein.
(b) Any person who registers a domain name already
registered, owned and used by another shall surrender to the court,
upon its lawful order, the use, access and control of the subject domain
name after it has been proved that he has no right or interest over the
subject domain name. Thereafter, the court shall give it to the rightful
owner thereof.
SECTION 5. Penalties- (a) Any person found guilty of NTDN
infringement defined by this Act in Section 3 shall be punished with a
fine of at least One Hundred Thousand Pesos (Php 100,000.00) up to
an amount commensurate to the damage incurred and proved.
(b) In cases where actual intent to harm to any person is
shown, in the discretion of the court, the damages may be doubled.
(c) The costs of transfer under Section 4 hereof shall be
borne by the person who infringed the subject domain name. Any
profits earned during the use of the name should likewise be
transferred to the legitimate owner.
SECTION 6. Implementing Rules and Regulations- The Department of
Science and Technology Advance Science and Technology Institute
(DOST-ASTI) and the Department of Justice (DOJ) shall jointly
formulate the necessary rules and regulation within ninety (90) days
from approval of this Act, for its effective implementation.
SECTION 7. Separability Clause- If any provision of this Act is held
invalid, the other provision not affected shall remain in full force and
effect.
SECTION 8. Repealing Clause – All laws, decrees or rules
inconsistent with this Act are hereby repealed or modified accordingly.
SECTION 9. Effectivity- This Act shall take effect fifteen (15) days
after the completion of its publication in the Official Gazette or in at
least two (2) newspapers of general circulation.
Approved: __________, 2014.
As previously stated, a domain name is a sui generis intellectual property
because it is a product of the mind whereby the registrant acquires the bundle of
rights from the time of creation which is reckoned from the effectivity date given by
the registrar. The purpose of the proposed Anti-NTDN Infringement Act is to protect
the property right of the registrant against those who, without any right or interest,
would create another domain name using the former’s NTDN without his consent or
authority. This is to assure legitimate registrants protection of their cyber properties
against such form of infringement which is easier to commit due to the ease of use of
the internet. While the provisions of the Civil Code can hold the perpetrator civilly
liable in the absence of the proposed law, it would nevertheless be an inefficient
remedy since NTDNs do not hold their value well. Worse, there is no domestic
domain name appraiser that can accurately give a proper valuation. Ergo, civil
liability alone would not deter the commission of this nefarious act that blatantly
violates the registrant’s property right, specifically, jus vindicandi.
The power of the internet is insuperable. It has provided to new ideas, more
information, unlimited possibilities, and a whole new world of communities. It has
grown and evolved to influence how people interact, how businesses are conducted,
how knowledge is gained, and how things simply proceed daily. As it has changed
people’s lives in the process, the internet itself has changed too. The use of domain
names has accelerated the trend in trademark law to treat brands as protectable
properties apart from any showing of consumer confusion375 while in the background
is the question of whether, and to what extent, trademark law is needed in an Internet
environment specially where users do not exclusively use the internet for the
promotion, advertisement, or sale of goods and services.
This treatise has analyzed the issue of whether the current legal scheme in the
Philippines provides adequate protection to legitimate owners of NTDNs. After
examining the legislations and jurisprudence in different jurisdictions vis-à-vis the
growing complexities of the use of NTDNs, domain name holdersinitially have little
to no protection in the Philippines, in the absence of a direct regulating law or the
lack of state-regulated domain name registry. This paper has explained that due to the
significant differences between TDNs and NTDNs, some aspects lie beyond the reach
of trademark law. After all, to force existing trademark laws to protect holders of
375
Paul Goldstein, supra note 2 at 153
NTDNs would destroy established trademark jurisprudence developed by both
statutory and common law. If there is concern in identifying the boundaries of
trademark law on the internet, situations that do not really involve trademarks should
likewise be addressed by more targeted and effective means.376 Hence, the resort to
property and criminal law, albeit the protection is limited to cover all possible issues
surrounding NTDNs or even domain names, in general.
To protect domain names more adequately and accurately, it should be noted
that just as no single type of dispute exists, there is no single model to solve the
problem.377 It may be naive and impractical to conceive a resolution for all kinds of
domain names disputes because of the numerous technical, legal and factual issues
involved. Due to their corresponding strengths and weaknesses, this study is of the
opinion that the judicial, legislative and regulatory systems should go hand in hand
and supplement each other in dealing with these disputes. A combination of reshaping
the domestic domain name registry, enacting special legislation, improving
enforcement and proper information can hopefully achieve favorable results in
creating an effective framework to protect the rights of owners of this novel cyber
property known as NTDNs.
376
377
Jacqueline D. Lipton, supra note 33
Supra note 340 at 25
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