Domain Name Ruling Opens an Internet Can of Worms

In a decision that could prevent tens of thousands of people from using their last names to identify themselves on the Internet, a federal judge in Los Angeles has ruled that a Canadian firm must relinquish the avery.net and dennison.net domain names to business supplies maker Avery Dennison Corp.

U.S. District Judge J. Spencer Letts last week ordered Vancouver-based FreeView Listings to sell the domain names to Pasadena-based Avery Dennison for $300 apiece--a $200 markup over what the firm paid for them.

Legal experts say the decision could have a far-reaching impact on the way trademark law is applied to the Internet.

FreeView had reserved the names--along with thousands of other common surnames--so it could lease them to people seeking e-mail addresses that contain their last names. FreeView allows people who share a surname to use the same domain name for e-mail, as in john@doe.net

Avery Dennison sued FreeView and its founder, Jerry Sumpton, for trademark violations and unfair competition.

While corporations routinely trademark their company names, they may not consider registering them as a domain name. Avery Dennison trademarked its brand name, then went on to register https://www.avery.com and https://www.averydennison.com

In his ruling, Letts said FreeView’s use of the names would dilute Avery Dennison’s trademark. Sumpton said he will appeal the decision.

The ruling suggests that people who share names with corporations--such as Johnson & Johnson, Procter & Gamble, Sherwin Williams and Ford--may be unable to use their names in e-mail or Web site addresses if companies have already trademarked them.

Sumpton’s lawyer said the decision “turns trademark law on its head” by giving companies the exclusive use of people’s last names online.

“The concept that someone with a trademark has a monopoly over all given uses has . . . simply never been the law in any case I’ve ever seen,” said Eric Bakri Boustani, an attorney with Monterey-based Davis & Schroeder.

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According to Boustani, Avery Dennison registered at least 12 new domain names, including averynet.com, averycorp.com, dennisonavery.net and dennisonavery.com after Letts’ ruling.

Avery Dennison attorney David Quinto defended the ruling and pointed out that Sumpton could have leased the domain names to the company’s competitors, who could then have used them to promulgate misinformation about the company.

“This is a victory for consumers, who are less likely to be misled by people who register other people’s trademarks as their domain names,” said Quinto, of the firm Quinn Emanuel Urquhart Oliver & Hedges in Los Angeles. “People who use the Internet expect to be able to find information about companies or products by looking for those trademarks.”

Quinto’s firm has also sued Network Solutions on behalf of Lockheed Martin, alleging that the domain name issuer improperly registered the aerospace company’s trademarked Skunkworks name to several other parties. That case was dismissed last year and has been appealed to the U.S. 9th Circuit Court of Appeals in San Francisco.

Legal experts say these cases and a growing number like them underscore the clash between current trademark law and the nature of the Internet. Trademark law recognizes distinctions that allow several firms to use the same name, such as United Airlines, United Van Lines and United Parcel Service.

“The way the domain name system is set up is that a domain name is treated as a unique asset,” said Edward G. Poplawski, a Los Angeles-based attorney at Pretty, Schroeder & Poplawski, who represents Network Solutions. “If I register avery.com, then I’m the only one who can have that.”

Herndon, Va.-based Network Solutions was also named as a defendant in the suit, but Letts dismissed Avery Dennison’s claims against the company.

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But the argument that companies’ have exclusive rights to their trademarks online doesn’t sit well with some cyberlaw experts.

“A trademark doesn’t give you the right to stop anyone from using the word altogether,” said Eugene Volokh, a UCLA law professor. “Think about Johnson & Johnson. Does it stop people from using the name Johnson? No. But it does stop you from using Johnson for commerce in a way that would cause confusion.”

Volokh added: “If this decision is upheld, it would really increase the number of trademark conflicts that are out there online.”

The issue could grow as the Internet community prepares to adopt new top-level domains, such as .firm and .web that can substitute for .com and .net. The plan was intended to increase the number of available domain names. But if companies with trademarks have exclusive rights to their names, the benefit of creating new suffixes will be jeopardized, Sumpton said.

In the FreeView case, the company was hurt by its apparent similarity to so-called cybersquatters, who register domain names they think will be valuable to other companies and then try to sell them at big profits. Ironically, the ruling makes FreeView a cybersquatter by forcing the firm to turn over the domain names in exchange for a 300% markup.

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On Friday, the 9th Circuit Court upheld a trademark-infringement ruling against Dennis Toeppen, an Illinois man who registered the panavision.com domain name and then tried to sell it to motion picture camera maker Panavision International of Woodland Hills for $13,000.

Rob Dreben, a partner at Morgan, Lewis & Bokius in Washington and co-editor of the Intellectual Property and Technology Law Letter, said the judge may have decided the case differently if Avery Dennison had sued a person with the name “Avery” instead of Sumpton and his company.

“This defendant may have cybersquatted with some finesse, but the court considered him a cybersquatter nonetheless,” Dreben said.

In other cases, cybersquatters have prevented some famous individuals from using their names as domain names. For example, johnfkennedyjr.com and oprahwinfrey.com have already been registered by other people. One domain name broker has put a $1-million price tag on billgates.com

“Perhaps I should be flattered that somebody imagines the name is worth so much, especially since my parents gave me the same name 42 years ago for free,” the billionaire co-founder of Microsoft said.

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Jennifer Oldham can be reached at jennifer.oldham@latimes.com and Karen Kaplan can be reached at karen.kaplan@latimes.com