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CongressLine - Cybersquatting - The Ins and Outs of Domain Dispute Resolution

By Carol M. Morrissey, Published on October 2, 2000

Carol M. Morrissey has been a Legislative Specialist in Washington, D.C. for 14 years. She is a lawyer and legislative expert, and has authored a Congressional update column for LLRX.com since 1996.

 

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At their meeting in Santiago, Chile in August of 1999, the Board of the Internet Corporation for Assigned Names and Numbers (ICANN) changed the Internet forever by passing a resolution approving the Uniform Domain Name Dispute Resolution Policy and Rules (UDRP), a mandatory alternative dispute resolution procedure for abusive domain name registrations. Officially adopted in October and effective as of December 1, 1999, the UDRP was (and still is) the product of an international effort involving WIPO (the World Intellectual Property Organization), ICANN and the U.S. Department of Commerce working towards a global solution to cybersquatting. (To access the text of the Uniform Domain Name Dispute Resolution Policy, please see: http://www.icann.org/udrp/udrp-policy-24oct99.htm. The Rules for the UDRP can be found at: http://www.icann.org/udrp/udrp-rules-24oct99.htm. A description of the UDRP published by ICANN can be found at: http://www.icann.org/udrp/udrp.htm.)

The First Process

Cybersquatting is a violation of trademark rights which occurs when a domain name is registered in bad faith, the intent of the party reserving or obtaining the address being to resell the domain name in an abuse of the trademark holders’ rights. In 1998, WIPO began the First WIPO Process on Internet Domain Names, which was to "develop recommendations concerning the intellectual property issues associated with Internet domain names, including domain name dispute resolution." (For information on the First Process, please see: http://wipo2.wipo.int/process1/index.html) During the summer of 1998 the U.S. Department of Commerce published its White Paper on Internet domain names, entitled, Management of Internet Names and Addresses. (The text of the Commerce Department report is available at: http://www.icann.org/general/white-paper-05jun98.htm.) By April of 1999, WIPO had completed its Process and had published its Report on the First WIPO Internet Domain Name Process. (The text of the Final WIPO report is at: http://wipo2.wipo.int/process1/report/index.html.) ICANN took all of these recommendations under advisement in formulating the final text of the UDRP that was adopted in the fall of 1999.

The UDRP

The Uniform Domain Name Dispute Resolution Policy is a mandatory dispute resolution procedure for the adjudication of cybersquatting disputes in what is referred to as the "top-level domains" – ". com", ". org" and ".net". This mandatory policy in no way prevents the parties from resorting to the courts, the parties can take their case to the courts prior to the filing of a dispute resolution claim or upon its final adjudication. The domain name registrars enforce the final decision of an arbitrator by either canceling or transferring the domain name to the "proper" party.

Four arbitration and mediation centers have been approved by ICANN to handle arbitration’s under the UDRP: WIPO, the National Arbitration Forum (NAF), Disputes.org/eResolution.ca Consortium and the C.P.R. Institute for Dispute Resolutions. Of the over 1,100 claims instituted since the UDRP system became effective in December of 1999, the WIPO Arbitration and Mediation Center has received the bulk of the complaints. In addition to the ICANN Policy and Rules, WIPO has developed its own set of Supplemental Rules for the UDRP. WIPO applies the UDRP rules to the generic top-level domains and to several county code domains, which have adopted the UDRP voluntarily. The filing fee for a WIPO arbitration is approximately $1,000. (The text of the WIPO Guide to UDRP can be accessed at: http://arbiter.wipo.int/domains/guide/index.html. The WIPO Domain Name Dispute Resolution Service for gTLDs can be found at: http://arbiter.wipo.int/domains/gtld/index.html. The Domain Name Resolution Services offered by WIPO are explained at: http://arbiter.wipo.int/domains/index.html and the Supplemental Rules are at: http://arbiter.wipo.int/domains/rules/supplemental.html.).

The arbitration forum with the next highest caseload is NAF. The NAF filing fees are based on the number of domain names in dispute, as well as the character of the arbitrator panel requested. The fee for a case involving a single disputed domain name with a single arbitrator panel is $750.00. (The NAF homepage is at: http://www.arb-forum.com/ and information on the NAF Arbitration Forum can be found at:http://www.arb-forum.com/domains/.) Next in line is Disputes.org/eResolution.ca Consortium, which created the Disputes.org arm of their organization to handle domain name arbitration’s. EResolution has developed a set of Supplemental Rules in addition to ICANN’s UDRP policies and rules. The fee for a Disputes.org arbitration for 1 to 2 domain names is $1,250 (this fee is effective as of October 1, 2000). (The eResolution.ca homepage is at: http://www.eresolution.ca/. The domain name disputes page is at: http://www.eresolution.ca/services/dnd/dnd.htm. The Supplemental Rules are at: http://www.eresolution.ca/services/dnd/p_r/supprules.htm and the Disputes.org information page is located at: http://www.disputes.org/.) The arbitration organization with the lightest caseload (it has decided one case) is the CPR Institute for Dispute Resolution. The filing fee for a domain name arbitration was not available from their website, but the cost is probably within range of the other organizations. (The CPR site is at: http://www.cpradr.org/.)

A Weighted System

The ICANN UDRP process has been in place for slightly less than one year (as of October, 2000) and like any high profile system, has gained its supporters as well as its detractors. The most frequently heard objection is that WIPO and NAF have developed a reputation for siding with the complainants - who are often large corporations, as well as trademark holders. Out of the 525 cases decided by late summer, 2000 by WIPO, 80% were decided in favor of the complainant. On the other hand, Disputes.org/eResolution.ca is creating a body of case law which tends to side with the existing holder of the domain name. These highly skewed statistics have led to concerns that complainants will go "forum shopping" to select the arbitration body most likely to rule in their favor. Intellectual property organizations worry that although ICANN created the UDRP, the large numbers of decisions being handed down by WIPO alone has placed WIPO in a policy formulation as well as an arbitration position.

Trademark Cyberpiracy Prevention Act

On November 29, 1999, President Clinton signed into law a consolidated appropriations package, P.L. 106-113. Besides various and sundry appropriations- related measures, this legislation also contained the Trademark Cyberpiracy Prevention Act, popularly known as the Anticybersquatting Act. The law creates a cause of action for Internet domain name holders under a new section of the Lanham Act. Unlike the UDRP, damages can be sought in the form of injunctive relief, the defendant’s profits, actual damages and costs or a fine of $1,000 to $100,000 per domain name. (The text of the Act can be accessed at: http://www.domain-name.org/cybersquatact.htm.) As an excellent resource and guide, the International Trademark Association has compiled a side-by-side comparison of the Anticybersquatting Act and the ICANN UDRP. (The side-by-side can be accessed at: http://www.inta.org/news/compchart.shtml.)

Many have questioned the need for cybersquatting legislation, citing the UDRP and established case law demonstrates that our courts were already dealing effectively with the issue. The Domain Name Rights Coalition, for one, objects to both the Cyberpiracy Prevention Act and the UDRP as threats to domain name holders and on the basis that they infringe upon our right to freedom of speech on the Internet. (The DNRC website can be found at: http://www.domain-name.org/.)

WIPO 2

In response to formal requests by 20 of its member states that the process be revisited, WIPO commenced the Second WIPO Internet Domain Name Process in July, 2000. In this next round, WIPO intends to review the intellectual property rights involving: geographical regions, personality rights, names and acronyms of intergovernmental organizations and International Nonproprietary Names for pharmaceuticals. (The press release announcing the Second WIPO can be found at: http://wipo2.wipo.int/process2/press/235.html.) Organizations watching the process have expressed concerns about these proposed expansions of intellectual property rights in their relation to Internet domain names. Several associations have filed their comments, although not as many as WIPO had hoped since the original comment period was extended to September 15, 2000. The Consumer Project on Technology (CPT) has filed their comments, which are highly critical of WIPO’s UDRP decisions in general. (The CPT comments on the Second Process can be found at: http://www.cptech.org/ecom/icann/wipo-rfc-aug11-2000.html.)

Choices

Adding to the available options, or perhaps the confusion, is a California law on Cyberpiracy which will take effect on January 1, 2001. California SB 1319 is similar to the Trademark Cyberpiracy Prevention Act, but it has expanded the list of protected entities to the heirs of the famous and to people who are not famous today, but eventually become famous. Now that California has taken the lead, it is highly likely that other states will follow in their footsteps.(The text of SB 1319 can be found here.)

The Final report on the Second WIPO Process is scheduled to be released in the late Spring, early Summer of 2001. Time will tell whether the UDRP system is working for everyone – and perhaps the Second Process will give ICANN a welcome opportunity to fine-tune their system.