Wednesday

 

Master of their domain

In Property today we talked about Virtual Works, Inc. v. Volkswagen of America, Inc. (1999). This is going to be an oversimplification, but generally, the court says that Virtual Works' can't own the domain VW.net for the purposes of selling it to Volkswagen, and that in fact Volkswagen can demand that the site be transferred to them. I don't really want to discuss this case, but rather the law behind it. To the best of my ability to determine, the entire reason for this law is to prevent corporations from having to pay reasonably large sums of money to entrepreneurs. Essentially, the law prohibits the "bad faith" purchase of domain names identical or confusingly similar to a protected mark (e.g., VW).

Here's how I see the situation: Prior to someone registering a new domain name, the domain name doesn't exist. Someone chooses to bring that new thing into existence because they believe that someone else will value it. They spend $70 to register the new domain name with Network Solutions, and then wait to see whether or not some other entity really will value the domain name. If this is an accurate way of describing the case, then all that this law is designed to do is prevent speculating against the interests of corporations with protected marks.
To see how egregious this is, in this Virtual Works' really was operating an ISP for two years under this domain, they had purposes in buying it other than profiting from VW, but the fact that they at want point did try to sell it to VW for a high price and knew at the time of purchase that a situation where they were going to sell it to VW might eventuate.

What really bothers me for this law is that the prohibited behavior doesn't seem to be harmful to society at large in terms of causing an inefficiency or anything, so it's effect is just to increase the rights of a certain portion of society against another part.


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