Contracts, Trademarks, and European E-Commerce Law - Case Study Example

CONTRACTS, TRADEMARKS AND EUROPEAN E-COMMERCE LAW Alfred, a resident of England, has set up a small business selling computer software primarily forsmall businesses, which he writes himself. The business was established in 2006 and is called Alfsoft Ltd. Alfred wishes to sell software over the Internet. Alfred has successfully registered Alfsoft as a UK trade mark for computer software, and registers the domain name Alfsoft.com. lfred begins selling his software via his website, using an online ordering form. He sells his software both via direct download and, primarily for those with slower Internet connections, via DVD sent through the post. Alfred uses written standard terms of business which include a term “Alfsoft Ltd is not liable for the results of using this software”. The software costs Ј50, with a postage and packing charge of Ј5 if sent via DVD. Brian lives in another EU country (not the UK). He goes to Alfred’s website with the intention of downloading a copy of Alfred’s latest computer program for use in his own small business. He clicks on a “Download Now” button, inputs his address and credit card details, and is presented with Alfred’s contract terms as a ‘Click Wrap agreement. Brian scrolls down through the agreement without reading it, clicks an ‘I accept button at the bottom of the screen, and downloads the software. He then begins using it. assy lives in the UK. She goes to Alfred’s website with the intention of buying a copy of Alfred’s latest computer program on DVD, for her own personal use. She clicks on an “Order Now” button, inputs her address and credit card details, clicks a button that says Submit, and places her order. When the software arrives on DVD five days later, Cassy puts the DVD into her computer and is presented with Alfred’s contract terms as a ‘Click Wrap agreement. Cassy scrolls down through the agreement and notices the term “To the extent allowed by law, Alfsoft Ltd is not liable for the results of using this software”. Cassy clicks an ‘I accept button at the bottom of the screen, and is then able to begin using the software. Alfred’s software is vulnerable to a new computer virus which infects Brian’s and Cassy’s computers, and causes them to crash repeatedly. In consequence, Brian suffers an economic loss of Ј10, 000 due to interruption in his business. Cassy suffers an economic loss of Ј100, which is the cost of taking her computer to a local servicer to get the virus removed and Alfred’s software uninstalled. Both Brian and Cassy contact Alfred, demanding to be compensated for the losses they have incurred. eanwhile, a few weeks after registering the domain name Alfsoft.com, Alfred receives a ‘cease & desist’ letter from lawyers representing a US software company, Alpha-Software LLC, who own the trade mark Alphasoft and registered the domain name Alphasoft.com in 2001. The letter alleges that Alfsoft.com is confusingly similar to Alphasoft.com and demands that Alfred transfer Alfsoft.com to Alpha-Software, otherwise they will take action to enforce a transfer of the domain name under the UDRP. Alfred approaches you for legal advice. Introduction Contracts have become ubiquitous in people’s everyday lives. Unconsciously, they enter into different types of contractual agreements – when traveling by bus or rail, when purchasing goods and accepting services and in carrying duties regulated by contracts of employment. Contracts are so common and widespread that the ordinary man or woman in the street does not realise the legal intricacies and involvedness of a transaction they have entered into. As legal experts are aware, these transactions are not as lawfully simple as their everyday nature suggests. They require evidence of a consensus in item, or a meeting of the minds, achieved by a clear and unambiguous offer and an unqualified acceptance of that offer. Fortunately, society has developed special rules to allow people to determine what the exact terms of the contract are, when it was formed and where it is governed. The Internet is briskly growing as a global commercial market place. Approximations of its growth reveal unparalleled development. Recent figures from the Department of Trade and Industry put the current value of worldwide electronic commerce at US$12bn per annum with an estimated value of US$350-500bn by 2002. Even the DTI’s most conservative projection infers a growth in e-commerce of over 2,900% in four years. At the core of this development is the capacity to contract electronically. The question how, when and where contracts are formed over the Internet is no longer moot and academic; it has become an extremely significant commercial consideration. Soon, people will find that contracts will be entered into as freely and as simply as being done when one enters a bookshop or a café. However, the same questions must be asked of these electronic contracts as the one being asked of traditional legal agreements – when they are formed, where they are governed and what are the terms of the overall arrangement. The Case In its entirety, the case presented three major quandaries. One problem concerns Alfred confronted with a “cease and desist” letter, which in effect is really an order for him to change or modify the domain name (Alfsoft.com) he has registered; reason for such is that his domain name is “confusingly similar” to another American software company. The two other dilemmas are related except that these are broached by two different people – Brian who demands from Alfred damages because of the business deficits he incurred as a result of using Alfred’s software and Cassy who, just like Brian, also demands compensation from Alfred due to the economic losses that she sustained as she makes use of the software that Alfred wrote and published. Click Wrap Agreements A click-wrap agreement is an agreement, drafted and established in an online environment such as the Internet that sets forth the rights and obligations between parties. The term comes from the fact that such online arrangements usually necessitate clicking the mouse on an on-screen icon or button to signal a party’s acceptance of the contract. Among other things, click-wrap agreements are used to: (1) establish the terms for the download and use of software over the Internet; (2) set forth a Web sites Terms of Service, i.e., the rules by which users may access the Web site or a portion of the Web site such as a chat or message service; and (3) establish the terms for the sale of goods and services online. At the same time, these agreements are intended to substitute for direct bargaining between parties in an online environment and can be used in a wide array of applications. It would be inefficient, if not impossible, for example, for a Web site owner or other online service provider ("OSP") to bargain with each person who visits its Web site. Accordingly, the Web site owner may instead place an agreement on its Web site and require visitors to assent to the terms of the agreement in order to access the site, download software, purchase a product/service, and so forth. A click-wrap agreement may, for example: (1) put users on notice that the material contained on the Web site, as well as any software downloaded from that site, is proprietary; (2) impose limitations on the use of the site and the downloaded software; and (3) make it easier for the OSP to pursue users for any violations or infringement. Click-wrap agreements can also be used to limit the OSPs potential liability. For example, through the use of a click-wrap, an OSP can attempt to absolve itself from liability associated with content on the OSPs Web site. This includes any losses associated with use of such content, any errors or problems with respect to software downloaded, or products/services purchased, from the Web site. Traditionally, two or more parties enter into a contract before the customer takes possession of the purchased goods. The terms of the contract are negotiated and sometimes recorded in a written agreement. In comparison, the license terms and conditions for a click wrap agreement are often not provided until the time of installation of the software that has been previously purchased. In most instances, it is debatable whether the contract arose when the software was purchased or later when the customer agrees to the terms of the click wrap agreement, which may not be displayed until the software is installed. The notion of agreeing to contractual terms by clicking your mouse rather than by written signature also challenges the traditional concepts of contractual agreement. Brian’s case is a classic example of an electronic business transaction with a contract that is totally enforceable. As the case presents, prior to Brian’s installation and making use of Alfred’s software, he had the chance or was afforded the chance to read the terms and conditions in Alfred’s contract. It must be borne in mind that Brian did not read the contract, instead, Brian scrolls down briskly through the agreement without any attempt to understand and assess the stipulations of the contract, clicks the I accept button at the bottom of the screen, and downloads the software. In the said contract was a proviso or a warning which states “To the extent allowed by law, Alfsoft Ltd is not liable for the results of using this software.” Either Brian did not notice this explicit warning because he didn’t take the effort to meticulously read the provisions in front of him or he saw the stipulation but didn’t give much attention to it; whichever is the case, Brian has given his explicit consent and concurrence to the contract by clicking on the I accept button and by downloading that specific computer program. Brian’s demand for compensation due to the economic loss he experienced is not justified. Yes, it is true that he suffered financial shortfalls and his business was disastrously prejudiced because of the software, however, everything was entirely his fault. For one, Brian was negligent. It is common practice for sensible and literate adults who enter into a contractual agreement to read first and make the effort to know and determine what are the conditions that he/she is about to agree or disagree to. A basic tenet clearly affirms that “ignorance of the law excuses no one.” If ignorance cannot be excused, how much more of Brian’s act of ignoring or totally disregarding an explicit written caveat? His act is tantamount to knowing about something but pretending he doesn’t know about it or worse, disregarding what he already knows or has been made to be aware of. Second, on the issue of the nature of the contract. Brian could not make the assertion that the agreement did not exist or that it was null and void. In the case of CompuServe v. Patterson and in the legal dispute between Hotmail Corp. and Van Money Pie, the enforceability of these licenses have been held and strongly affirmed. Legal practitioners and luminaries generally believe that click-wrap agreements present an even stronger argument for enforceability, as the Internet user is in fact able to review the terms of such an agreement prior to purchase and affirmatively indicate his or her acceptance of the terms. Cassy’s scenario is similar to that of Brian’s except that she perfunctorily considered the terms and conditions of the transaction and actually noticed Alfred’s warning, but like Brian, she also clicked on the button that automatically represents her concurrence of the whole transaction. In this situation, Cassy wasn’t negligent, she had full knowledge of the many possibilities that could take place when using the software, despite the warning, and she concurred by way of “placing her order.” This act was clear acceptance which also means that the final element of a contract was consummated. Again, in this set-up, Alfred is not obligated to compensate her of whatever losses sustained through the use of the software. This sounds absurd but in the field of e-commerce, this is perfectly true. As it is, the “as is” language appears everywhere. If the computer program installed in the system crashes the hard drive and causes one to lose a day of work, these license agreements claim that the software company is not responsible. The License Agreement for Executive Software(r) International, Inc. perhaps says it most clearly, “ESI does not warrant the functions contained in the software will meet your requirements or that the operation of the software will be uninterrupted or error free. The entire risk as to the quality and performance of the software is with you.” Such a claim, that the quality and performance of a product is not the responsibility of the manufacturer, would make little sense in any other field. However, this software agreement, which must be accepted in order to use the program, contracts away liability on the part of the manufacturer for a defective product. If, for some reason, that product were to wipe out the memory of your office computer, there would be no remedy under the user agreement that was accepted when you opened the sealed package containing the software. Similar decided cases affirm the enforceability of online contracts and how these agreements legally bind the parties to electronic-commercial arrangements. In Bruce G. Forrest v. Verizon Communications Inc. and Verizon Internet Services, Inc. 805 A.2d 1007 (Dist. of Columbia Court of Appeals, August 29, 2002), the Court held that plaintiff had entered into a binding agreement with VIS by clicking the "Accept" icon, appearing on VIS’s website, indicating his assent to be bound by the contracts terms, which terms appeared online in a "scroll box" directly above that icon.  Only a portion of the contracts terms, including the words "Please Read The Following Agreement Carefully," were visible when the user first viewed the web page on which they were found.  To view the balance of the contract, including the forum selection clause at issue, it was necessary to scroll down. In another case, DeJohn v. The .TV Corporation International, et al. 245 F. Supp. 2d 913 (C.D. Ill. 2003), Court holds that plaintiff entered into a binding online click-wrap agreement by clicking an I Agree icon, which indicated he had read, understood and agreed to the terms of the parties contract.  The contracts terms were available for review online by clicking on a link which appeared on the Register.com website just above the I Agree icon. Likewise, the same ruling took place in the case of Steven J. Caspi, et al. v. The Microsoft Network, L.L.C., et al. 1999 WL 462175, 323 N.J. Super. 118, 732 A.2d 528 (N.J. App. Div., July 2, 1999), on this appeal, the Appellate Division affirmed the determination of the Superior Court of New Jersey that the plaintiffs had entered into a binding contract by agreeing on-line via the click of a mouse to be bound by the terms of the Microsoft Networks subscriber agreement. It must always be remembered that when a software program is downloaded using a click wrap agreement, an interesting question arises as to the liability for the distribution of the program, should it contain material, which infringes a third party’s copyright. Arguably, an infringement occurs when the software is downloaded as this is when the unauthorised copy is made. If such an infringement occurs, the customer could possibly be found liable for copyright infringement, as they have directly caused the infringement to occur, even where the customer had no knowledge that the infringement was occurring. It would be necessary to analyse the terms of the click wrap licence to determine whether the customer had any recourse against the supplier. If one is offering goods or services over the internet, one should consider whether the rights in relation to the goods and services allow one to offer the same to the world. In many distribution agreements, the territory may be expressed to exclude distribution by electronic means. It is particularly important if one is appointing distributors for the product and wants to retain sole control over electronic distribution that the territory allotted to the distributor(s) expressly excludes distribution via the Internet. A US matter of A & A Records Inc and Ors v Internet Site known as Fresh Kutz and Anor saw various record companies applying for relief from the Court including an order that the Internet Service Provider which hosts the web site prevent any access to the site to prevent further copyright infringement and to prevent destruction of evidence. Fresh Kutz provided illegal copies of musical recordings at no fee and enabled visitors to the site to download and create further illegal copies. Despite the fact that the owner of the web site was unknown at the time, the Court ordered, amongst other things, that the owner of the web site or its agents cease infringing the record companies’ copyright, from destroying any records and computer files connected to the web site, and to block access to all infringing copies of musical recordings on the web site. Domain Names When the Internet was in its infancy, domain names like were created to serve as useful mnemonic means of locating specific computers on the Internet.  With the globalization and commercialization of the Internet, domain names have taken on new significance as business identifiers.  Domain names are now highly visible in real space as well -  showing up on television commercials, billboards, magazine ads, and even the sides of buses.  In these new guises, they sometimes conflict with trademarks and other traditional business identifiers.  Two factors exacerbate this conflict.  First, domain names are global and must be unique - a particular string of letters can link to only one site - while trademarks may overlap in different industries or different geographical locations.  Second, it is common practice for many Internet users to guess at domain names.  Thus domain names based on intuition become valuable corporate assets. The rapid growth of the Internet and the use of web sites have generated a rapidly growing set of disputes between firms asserting traditional trademark entitlements and the registrants of identical or confusingly similar domain names.  Typically, the trademark owner demands that the domain-name registrant cease using the name and/or relinquish it to the trademark owner.  Disputes of this sort have been progressing through the litigation system since 1994.  While much of the case law is fact specific, at least one general conclusion is possible.  If a court finds that a domain name registrant was acting in bad faith, the court will find a means of preventing the domain name holder from continuing the use of the domain name, whether traditional trademark analysis seems to apply or needs to be stretched.  This is true of courts around the world.  In the absence of a finding of bad faith, the response of a court is much less predictable. Alfred’s problem with the American software firm is a case that must be addressed utulising the UDNDRP adopted in 1999. Upon receipt of the complaint, it is imperative that Alfred respond to it. Under paragraph 5 of the Rules for Uniform Domain Name Dispute Resolution Policy, he must, within twenty (20) days of the date of commencement of the administrative proceeding, submit a response to the Provider. Now, this response needs to be submitted in hard copy and in electronic form and should specifically respond to the pronouncements and contentions contained in the complaint, likewise, he has to include in his written response all his reasons and bases as to why, he being the domain-name holder, must retain registration and use of the disputed domain name. Consequently, with this response, he needs to provide his full name, postal and e-mail addresses, telephone and telefax numbers and any of his representatives authorised to act in his behalf during the administrative proceeding. While the mandatory administrative proceeding progresses, the panel conducting the investigation must, based on its assessments of all evidence presented, must find any of the following circumstances to demonstrate Alfred’s rights or legitimate interests to the domain name: (i) before any notice of the dispute, the use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or (ii) Alfred ---as an individual, business --- has been commonly known by the domain name, even if he has acquired no trademark or service mark rights; or (iii) Alfred is making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue. If after considering the submissions, the Panel finds that the complaint was brought in bad faith, for instance, it was an attempt commit acts mentioned under the Reverse Domain Name Hijacking clause or was brought principally to hassle or hound the domain-name holder, the Panel shall declare in its decision that the complaint was brought in bad faith and constitutes an abuse of the administrative proceeding. On the part of ICANN, they can cancel, transfer or otherwise make changes to domain name registrations under the following circumstances – a) subject to the provisions of Paragraph 8, the receipt of written or appropriate electronic instructions from respondent or his/her authorized agent to take such action; b) their receipt of an order from a court or arbitral tribunal, in each case of competent jurisdiction, requiring such action; and/or c) their receipt of a decision of an Administrative Panel requiring such action in any administrative proceeding to which the respondent was a party and which was conducted under the Policy or a later version of the Policy adopted by ICANN. We may also cancel, transfer or otherwise make changes to a domain name registration in accordance with the terms of the respondent’s Registration Agreement or other legal requirements. Bad Faith Paragraph 4, Sec (b) enumerates the circumstances whereby, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith: (i) circumstances indicating that respondent has registered or has acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or (ii) has registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that respondent has engaged in a pattern of such conduct; or (iii) has registered the domain name primarily for the purpose of disrupting the business of a competitor; or (iv) by using the domain name, respondent has intentionally attempted to attract, for commercial gain, Internet users to the web site or other on-line location, by creating a likelihood of confusion with the complainants mark as to the source, sponsorship, affiliation, or endorsement of the web site or location or of a product or service on the respondent’s web site or location. A classic example is the case JRR Tolkein Estate Limited v. Network Operations Center, Alberta Hot Rods, Case No. D2003-0837 (www.jrrtolkien.com) - The complainant, the estate of the late JRR Tolkien, owned the trademark “TOLKIEN”, and had licensed it exclusively to HarperCollins for the sale of books, audio tapes, and other merchandise.  Respondent registered jrrtolkien.com and used it to attract customers to his website www.celebrity100.com.  He had previously lost similar WIPO disputes with Pamela Anderson, Michael Crichton, and Pierce Brosnan among others.  The panelist concluded that the respondent’s pattern of registering well-known individual’s name, combined with the diversion of traffic to the commercial website www.celebrity100.com constituted bad faith registration and use. Still another dispute involved Sportys Farm LLC v. Sportsmans Market, Inc. , 202 F.3d 489 (2d Cir. 2000)- The plaintiff Sportsman’s Market, which had been using the trademark “Sporty’s” in reference to its aviation products catalogue since the 1960s, prevailed in a suit against the defendant Omega, a Christmas tree Internet company. In 1994-95, Omega created a subsidiary called Pilot’s Depot and Sporty’s Farm and registered the domain name “sportys.com.” The court granted Sportsman’s Market the domain name, concluding that the defendant had registered the name to prevent the plaintiff from using it. Then we have Mattel , 55 U.S.P.Q.2d 1620 (S.D.N.Y. 2000)- Mattel, the manufacturer of Barbie dolls, sued the defendant, who hosted a subscription-based pornographic site at “barbiesplaypen.com.” The judge declared in his opinion that the defendants were trying to profit from the “favorable public image of the Barbie doll.” “The Barbie dolls, with their long blond hair and anatomically improbable dimensions are ostensibly intended to portray wholesomeness to young girls,” wrote the judge. “The ‘models’ on the barbiesplaypen.com site, although many have long hair and anatomically improbable dimensions, can in no way be described as engaging in ‘wholesome’ activities.” Finally, the Northern Light Technology, Inc, v. Northern Lights Club, Jeffrey K. Burgar and 641271 Alberta Ltd , 236 F.3d 57 (1st Cir. 2001)- In January 2001, the First Circuit Court of Appeals upheld the lower court ruling for the plaintiff.  The plaintiff registered the domain name “northernlight.com” in September 1996 and began using the corresponding website as a search engine in August 1997. The Canadian defendants registered “northernlights.com” in October 1996 and offered vanity web-based e-mail accounts under the domain name “northernlights.com” that users could access through other sites such as “flairmail.com.” No actual website resolved to “northernlights.com.” After a USA Today article in March 1999 about search engines erroneously referred to the plaintiff’s website as “northernlights.com,” the plaintiffs entered into unsuccessful negotiations with the defendants for sale of the domain name. Subsequently, the defendants ran an active website from “northernlights.com” that featured a search engine for limited words and phrases and links to other members of the “Northern Lights Community,” including a link to the plaintiff. One case that can illustrate the intricacies involved in domain disputes is the case of eToys.com. This dispute has caught the attention of the media and has been dubbed a battle between “Corporate America” and a small group of international artists.  In September, 1999, eToys -- a U.S.-based online toy store, operating under the name -- filed suit against a small artist site using the domain name .  Etoy.com is operated by a group of European artists, who have used the site since 1995 to present their anti-corporate art projects.  In November, 1999, a Los Angeles court granted eToys a preliminary injunction, thus shutting down the etoy.com site. While the preliminary injunction required the shut down of the web site only, NSI also put the domain name on hold, thereby blocking email service to etoy.com. According to free-speech proponents, this is a clear case of a large company misapplying the law.  The group of artists at etoy.com is not competing in a similar industry with eToys and even registered their domain name years before eToys registered its in 1997.  They argue that giving up their domain name would bring an end to their artistic project.  On the other hand, eToys claims that etoy.com is sufficiently similar to its own name that it constitutes trademark infringement.  Etoys claims that customers mistakenly log on to the etoy.com web site and what they find there is pornographic, profane and confusing. The dispute was settled on January 25, 2000, with the art group emerging victorious.  EToys initially requested some control over the content of the etoy site as part of their proposal to drop the suit.  Etoy rejected this proposal and eToys eventually settled without it.  EToys reimbursed the art group for up to $40,000 in legal fees and other expenses the group incurred during the dispute. Another illustrative case is that of SatelLife, a non-profit humanitarian organization named SatelLife has been using the domain name HealthNet.org since 1993.  The organisation provides health and medical information to the developing world through a complex electronic network that serves people who dont have access to the World Wide Web.  Its partner sites are referred to as HealthNets - thus the reason for the domain name.   According to SatelLife, its service provides a lifeline to doctors in rural locations overseas.  It has invested over a decade in building its reputation as an unbiased source of health information and feel that this reputation is tied to the "healthnet" name.  For example, in its annual report the UN refers to the organization as HealthNet not SatelLife.   The organization also issues a weekly publication called "HealthNetNews". SatelLife was recently contacted by a large California HMO named Health Net, which claims to have trademarked the Health Net name in 1981.  The HMO sent SatelLife a cease-and-desist letter, demanding that it stop using the HealthNet.org domain name immediately.  Days before the name was to be put on hold (under the NSI procedure described above), SatelLife filed an action in federal court, seeking to preserve its right to the domain name.  Health Networks claims that if SatelLife had done a trademark search when it first started using the name HealthNet for its e-mail network, SatelLife would have discovered that the name had already been registered as a trademark by the HMO in 1981.  A domain name search in 1993, however, when SatelLife registered its name would not have brought up "Healthnet.com" [Note the difference from "Healthnet.org"] since Health Networks did not register the former name until 1996. According to a spokesperson at SatelLife, "[f]or a financially challenged non-profit to be compelled to change its identification is a possible death sentence. In any case it will foster confusion and may deny health professionals in the most impoverished countries of the world vital information they have come to depend on. We work in an entirely different domain than the HMO; we neither interfere with the clientele of the Healthnet HMO in California, nor dilute their message or affect their identity."   They anticipate that changing their domain name could cost approximately $1 million in addition to the intangible costs attributable to the confusion it would cause those who rely on their system. Types of Claims Disputes There are two types of legitimate competing claims disputes.  In the first type, the trademark holder sues a domain name holder who has a legitimate claim, but no trademark rights.  Because the domain name system is not a corollary to the trademark system, a domain name registrant need not have a corresponding trademark in order to have a legitimate right to the name.  For example, in Gateway 2000 v. Gateway.com, Inc., Gateway.com, Inc. reserved the domain name gateway.com years before the mega computer maker Gateway 2000 attempted to register the name.  Gateway 2000 sued but lost because the court found that Gateway.com had a legitimate reason for owning the domain name and had chosen it six years earlier - long before domain names had the value that they do today and before Gateway 2000 became a well-known trademark.  One of the keys to the decision was that the defendant was not opportunistically trying to capture value by seizing a well-known mark. In the second type of legitimate dispute, both parties have a trademark claim in the name.  While one might think that the first to register the domain name would easily win in such a case, that is not always the outcome.  In Data Concepts, Inc. v. Digital Consulting, Inc. both entities had trademark rights in DCI.  Data Concepts registered the domain name dci.com in 1993.   Digital Consulting attempted to retrieve the domain name from Data and the dispute ended up in court.  It would seem in these cases (where both parties have trademark rights) that the first to register the domain name would be able to keep it.  The Sixth Circuit, however, ruled that there was a possibility of infringement.  Since trademark infringement is a mixed question of fact and law, the dispute must go to a full trial for an infringement determination. Transfers during a Dispute Transfers of a Domain Name to a New Holder – one may not transfer your domain name registration to another holder (i) during a pending administrative proceeding brought pursuant to Paragraph 4 or for a period of fifteen (15) business days (as observed in the location of one’s principal place of business)after such proceeding is concluded; or (ii) during a pending court proceeding or arbitration commenced regarding your domain name unless the party to whom the domain name registration is being transferred agrees, in writing, to be bound by the decision of the court or arbitrator. ICANN reserves the right to cancel any transfer of a domain name registration to another holder that is made in violation of this subparagraph. Changing Registrars -- You may not transfer your domain name registration to another registrar during a pending administrative proceeding brought pursuant to Paragraph 4 or for a period of fifteen (15) business days (as observed in the location of our principal place of business) after such proceeding is concluded. You may transfer administration of your domain name registration to another registrar during a pending court action or arbitration, provided that the domain name you have registered with for instance ICANNshall continue to be subject to the proceedings commenced against you in accordance with the terms of this Policy. In the event that you transfer a domain name registration during the pending status of a court action or arbitration, such dispute shall remain subject to the domain name dispute policy of the registrar from which the domain name registration was transferred. Losing a domain name can mean going out of business. A domain name is important because its loss would at the very least cause disruption and monetary expense, and in many cases would put a company out of business. Roadrunner Computer Systems, Inc. ("RCS"), an Internet service provider in New Mexico, had some 700 customers who relied on roadrunner.com as part of their email addresses. After NSI wrote to RCS stating that its domain name would be cut off in 30 days, RCS sued NSI for a court order blocking the cutoff. RCSs president stated under penalty of perjury that loss of the domain name "would be disastrous" and that one-fourth of the customers would be lost, in part because all of the customers would have had to change their email addresses. Sources Uniform Domain Name Dispute Resolution Policy, Adopted August 26, 1999 Hotmail Corp. v. Van Money Pie, Inc., et al., 47 U.S.P.Q. 2D (BNA) 1020, 1025 (N.D. Cal. 1998), 1998 US Dist. LEXIS 10729, at *20. ProCD, Inc. v. Zeidenberg, 86 F.3d 1447, 1449-50 (7th Cir. 1996). Hill v. Gateway 2000, 105 F.3d 1147, 1148 (7th Cir. 1997; Brower v. Gateway 2000, Inc., 246 A.D. 2d 246, 250 (N.Y. App. Div. 1998), 1998 WESTLAW 481066. See Hill v. Gateway 2000, 105 F.3d at 1149. M.A. Mortenson Co. v. Timberline Software Corp., 970 P.2d 803, 812 (Wash. Ct. App. 1999). (holding that a software license embedded in the softwares packaging materials as a valid agreement when determining whether the license had been violated by a user of the software). Green Book Int. Corp. v. Inunity Corp., 2 F. Supp.2d 112 (D. Mass. 1998) (declining to grant preliminary injunction on grounds that license had not been violated by the user of the software). Arizona Retail Systems v. Software Link, Inc., 831 F. Supp. 759 (D. Ariz. 1993); Step-Saver Data Systems, Inc. v. Wyse Technology, 939 F.2d 91 (3d Cir. 1991) (rejecting the enforceability of shrink-wrap agreements). The Step-Saver and Arizona Retail courts held that, unless the terms of the shrink-wrap license are presented or otherwise known at the time, price, quantity, and goods are offered and accepted, such terms will not form part of the initial contract. For a more detailed discussion of these cases and the enforceability of shrink-wrap license agreements both online and off-line. See David L. Hayes, Esq., The Enforceability of Shrink-wrap License Agreements On-Line and Off-line (Nov. 11, 1999) . David L. Hayes, Esq., The Enforceability of Shrinkwrap License Agreements On-line and Off-line (Nov. 11, 1999) . William Landes and Richard Posner, "An Economic Analysis of Copyright Law," Journal of Legal Studies, 18 (1989): 325.  A. C. Pigou, The Economics of Welfare, 2nd ed. (London: Macmillan and Co., 1924). William Landes and Richard Posner, "Trademark Law: An Economic Perspective," Journal of Law and Economics, 30 (1987): 265.   Daniel McClure, “Trademarks and Competition:  The Recent History,” Law and Contemporary Problems, 59 (1996): 13-43. www.outlaw.com Department of Trade & Industry, Our Competitive Future: Building the Knowledge Driven Economy (HMSO, London, 1998), para. 4.14 Read More