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GUIDE
TO UDRP PROCEDURE AND POLICY
By
Zak Muscovitch
Publisher, Domain
Name Law Reports
The
Internet Corporation for Assigned
Names and Numbers ("ICANN") arbitration procedure continues
to be popular with Complainants. Since the implementation
of the new dispute resolution policy on December 1, 1999,
more than 1,000 proceedings have been commenced, involving
moe than 1,500 disputed domain names.
The statistics also demonstrate that for Respondents, ICANN
arbitration can be dangerous. Out of the proceedings completed
thus far, less than 20% have resulted in a decision for the
Respondent. The disparity between decisions for Complainants
and Respondents is due to ICANN's dispute resolution policy,
which expressly contemplates the eviction of so-called cybersquatters.
Nevertheless, the ICANN Uniform
Domain Name Dispute Resolution Policy ("UDRP") policy
and procedure attempts to cross uncharted legal territory
and can surprise both Complainants and Respondents who are
unfamiliar with ICANN procedure and policy.
UDRP PROCEDURE
The UDRP is available for the adjudication of all
disputes involving .com, .net, and .org domain names, as well
as several other country-specific domain names, such as .nu,
.tv, and .ws. Any party who wishes to assert a right to such
a domain name as against the actual registrant of the domain
name, may commence a Complaint.
Respondents are required to participate
when a Complaint is made, unless they elect to take the matter
to court either before the proceeding is commenced or after
the proceeding is concluded. A Respondent has ten days after
losing the arbitration to file a court proceeding and avoid
the transfer of the name for the time-being. Complainants
are free to select a court action instead of commencing the
procedure to resolve a domain name dispute. The UDRP
has certain benefits over court proceedings
that may make it an appropriate venue for a party that believes
a name has been wrongly registered. In particular, ICANN provides
inexpensive and relatively swift justice.
In considering whether to initiate an UDRP
Complaint, a Complainant should pay
close attention to an important preliminary jurisdictional
issue. In order to initiate a Complaint, the Complainant must
agree to submit, with respect to any challenges to a decision
in the administrative proceeding canceling or transferring
the domain name, to the jurisdiction of the courts in at least
one specified "Mutual Jurisdiction". Mutual Jurisdiction means
a court jurisdiction at the location of either;
- the principal office of the Registrar (provided
the domain-name holder has submitted in its Registration
Agreement to that jurisdiction for court adjudication of
disputes concerning or arising from the use of the domain
name) or;
- the domain-name holder's address as shown
for the registration of the domain name in Registrar's Whois
database at the time the complaint is submitted to the Provider.
This means that by initiating a Complaint,
the Complainant agrees to be bound by the laws of the
jurisdiction of either the registrant's recorded address or
the Registrar's principal office. Registrars include private
domain name registration companies, such as Network Solutions
(Virginia), and Yesnic (Korea). Network Solutions used to
be the only Registrar, but now there are forty-four operational
Registrars world-wide with another sixty-six accredited, but
not yet operational. Accordingly, a Complainant ought to examine
a registrant's registration agreement and location before
embarking on the UDRP
procedure since by doing so, a Complainant
may be inadvertently submitting to the jurisdiction of a court
of a foreign country.
Although trademark infringement and passing-off actions involving
domain names have been relatively uncommon in Canada, a plaintiff
can expect to spend tens of thousands of dollars in discoveries,
cross-examinations, motions, and at trial, and wait at least
a year for adjudication of a contested action in the Federal
Court of Canada. In comparison, an UDRP
Complaint can cost as little as US
$750 in administration fees, is much simpler than a court
proceeding, and can take as little as a month from commencement
to judgment.
An added attraction of the UDRP
process for a Complainant, is that quite
often a Respondent will not respond to the complaint at all.
Although the Complainant will still be required to prove its
case on the merits, the process will be relatively simple,
effective, efficient, and inexpensive for the Complainant,
even when compared to a default judgment in a court proceeding.
Accordingly, a Complainant's lawyer should always consider
that it may be worth it to commence an UDRP
complaint in the hope or expectation
that it will not be defended by the Respondent. On the other
hand, if a Complainant's lawyer anticipates that even if
the Complainant wins the UDRP
arbitration, the Respondent will take
the matter to court for a new hearing, the ICANN procedure
may be a wasted effort.
ICANN is able to provide this relatively efficient system
by employing private companies, called Dispute
Resolution Providers, to provide the arbitration services.
There are currently four different companies that are accredited
by ICANN to provide dispute resolution services; the CPR
Institute for Dispute Resolution, the National
Arbitration Forum, the World
Intellectual Property Forum, and Disputes.org/eResolution
Consortium.
Remarkably, the entire arbitration proceedings
from the initial filing of the Complaint to the release of
the judgment, is accomplished on-line, via email correspondence.
When initiating a proceeding, the Complainant must select
either a one-member or three-member panel. Most Complainants
select a one-member panel because it is less expensive, even
if it carries with it more risk of an aberrant decision. Panelists
are selected by the Dispute Resolution Provider from a roster
of candidates that they are affiliated with. eResolution,
the Canadian Dispute Resolution Provider, has sixty arbitrators
on its roster, including six Canadian lawyers. EResolution
maintains an impressive list of law professors, judges, and
lawyers, drawn from as far away as Peking, China and Bologna,
Italy.
UDRP
POLICY
The fact that most arbitrators have a background
in intellectual property law does not necessarily ensure consistency
of decisions. Because the UDRP
procedure is brand new, parties to
a dispute do not have the same degree of comfort in the outcome
that is present with a regular court proceeding. Court proceedings
are bound by stricter rules of precedent and in some cases,
have the benefit of years of developing case law.
Fortunately, a party that is unsatisfied with
an UDRP
decision is not bound by it, and may
take the dispute to a court of competent jurisdiction. Because
the UDRP
process is so new, here are very few
court cases which indicate the degree of deference that a
court will show to an UDRP
decision. Instituting an on-line appellate
division of the ICANN dispute resolution procedure would be
a means of providing greater comfort and certainty in the
ICANN dispute resolution process, and perhaps provide a means
of avoiding subsequent court proceedings. Appeal procedures
have of course, traditionally served court systems well, by
weeding out aberrant or wrongly decided cases.
Pursuant to the UDRP Policy, which are the
terms of reference for the panelists, a Complainant must prove
each of the following parts of a three-part test:
- the Respondent's domain name is identical
or confusingly similar to a trademark or service mark in
which the Complainant has rights; and
- the Respondent has no rights or legitimate
interests in respect of the domain name; and
- the Respondent's domain name has been registered
and is being used in bad faith.
Most ICANN UDRP
decisions turn on whether the Complainant
has shown that the Respondent has acted in bad faith. This
particular concept of 'bad faith' is unique to domain name
disputes and has no real parallel in conventional trade-mark
law. Pursuant to the UDRP, the following factors are considered
demonstrative of bad faith:
- circumstances indicating that you have
registered or you have 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
- you have 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 you have engaged in a pattern of such conduct;
or
- you have registered the domain name primarily
for the purpose of disrupting the business of a competitor;
or
>
- by using the domain name, you have intentionally
attempted to attract, for commercial gain, Internet users
to your web site or other on-line location, by creating
a likelihood of confusion with the complainant's mark as
to the source, sponsorship, affiliation, or endorsement
of your web site or location or of a product or service
on your web site or location.
Essentially, this provision of the UDRP, outlaws
speculation in domain names in most cases where the domain
name or something similar to it, is already used as a Complainant's
trade-mark. The application of this provision to particular
factual situations is often very simple. For example, WAL-MART
STORES, INC., the huge and well known American retail department
store chain, commenced a Complaint
against the registrant of WALMARTCANADA.COM. The Complainant
held trade-mark registrations for WAL-MART for use in retail
department stores in the United States and Canada. After registering
the name, the Respondent listed the name for sale on a web
site called Great Domains, for the sum of $5,000,000, and
emailed the Complainant to advise of the sale. After receiving
a 'cease and desist' letter from the Complainant, the Respondent
turned his mind to developing a site for, of course, 'wall
products'.
The first part of the three-part test is whether
the disputed domain name is identical or confusingly similar
to the Complainant's trade-mark. The Panelist, the Honourable
Sir Ian Barker, Q.C., an esteemed and experienced retired
judge from New Zealand, held that persons dealing with, or
even perusing the web site of, WALMARTCANADA.COM could easily
conclude that the registrant of the domain name was associated
with the Wal-Mart operation in Canada. Accordingly, the Complainant
met the first part of the three-part test.
The second part of the three-part test is
whether the Respondent has any rights or legitimate interest
in the disputed domain name. Ostensibly, the Respondent attempted
to demonstrate his legitimate interest in the name by starting
work on his web site for the sale of 'wall products'. The
Panelist however, found that there was no evidence that the
Respondent, before receiving notice of the dispute, used or
demonstrably prepared to use the domain name in connection
with a bona fide offering of services. In fact, the
Respondent admitted that it was only after receiving the "cease
and desist" letter that he turned his mind to developing the
site for the sale of wall products etc. Apparently, the Panelist
simply did not believe that the Respondent was genuinely interested
in selling wall products. Accordingly, the Complainant met
the second-part of the test.
The third part of the three-part test is whether
the Respondent's domain name was registered and is being used
in bad faith. The fact of soliciting the sale and placing
the domain name on the Internet for sale has been regarded
in a number of WIPO cases as being evidence of abuse and bad
faith. The Panelist held that by soliciting the sale and placing
the domain name on the Internet for a sum greater than the
Respondent's out-of-pocket expenses, the Respondent had registered
and used the name in bad faith. Accordingly, the Complainant
met the third part of the three-part test and was awarded
the transfer of the WALMARTCANADA.COM domain name.
The WALMARTCANADA.COM case is similar to many
other decided cases that involve well-known or famous marks,
such as WAL-MART. A Respondent must meet the onus of demonstrating
that they genuinely registered the disputed name for a good
reason. Coming up with a flimsy rationale for registering
the name will not be enough to demonstrate a legitimate interest.
If something smells funny, the Panelist may
impute bad faith, but not always. In a case
involving the domain name, RBCINSURANCE.COM, the Respondent
was successful in persuading the Panelist that it had a legitimate
interest in the domain name, even though RBC INSURANCE was
a well-known and registered trade-mark of the Royal Bank of
Canada. The Respondent, maintained that the domain name referred
to Rahim Bismillah Crop Insurance. In support of its legitimate
use of the domain name, the Respondent pointed to the fact
that Rahim Bismillah Crop Insurance is registered to do business
in the United Republic of Tanzania and has incorporated in
the Republic of Zambia. The Respondent used the name RBC Insurance
in connection with a web site that provides information about
agriculture and crop protection and offers links to related
information.
The Panelist held that although the Respondent's
web site did not have much depth, it did provide information
about agricultural development, crop insurance, and crop protection.
Furthermore, the Panelist held that the Respondent appeared
to be "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." It is the Complainant's burden to prove that the
Respondent has acted in bad faith and the Panelist found no
evidence to support the Complainant's allegations. The Panelist
was Sandra Sellers, former Software Publishers Association,
Vice President of Intellectual Property Education and Enforcement.
Bad faith can be difficult to prove. In a
decision
that surprised many observers and made headlines, the Rockport
Boat Line lost its Complaint against its passenger boat competitor,
the Gananoque Boat Line, who operated its business two miles
west of the Complainant, near Rockport, Ontario. The disputed
domain name was ROCKPORTBOATLINE.COM. In brief written reasons,
Retired Kentucky Circuit Court judge, the Honourable Edmund
P. Karem, held that the Respondent's acquisition of the domain
name , ROCKPORTBOATLINE.COM, was in accordance with its expansion
plans which include utilizing a federally owned wharf in the
city of Rockport should such a wharf become available.
The application of the UDRP becomes difficult
when a disputed domain name is similar, even identical to
a Complainant's trade-mark, but the domain name is generic.
Such was the case
involving ESQUIRE.COM. Esquire Magazine was the registrant
of several U.S. trade-marks dating back to 1922, and had a
web site called ESQUIREMAG.COM. The Respondent was in the
business of buying and selling domain names. The Respondent
owned numerous domain names that incorporated famous trade-marks,
such as porschesource.com, buicksource.com, and chryslersource.com.
The Respondent maintained that ESQUIRE.COM was a generic name,
and therefore he had every right to deal with it as he pleased.
Two of the three presiding panelists disagreed with the Respondent,
and ordered the transfer of the name to the Complainant magazine
publisher. The majority of the Panel, led by former Charleston,
South Carolina Municipal Court Judge, the Honourable Louis
E. Condon, held that by rejecting out of hand bids of $500.00,
the Respondent was clearly seeking much more than the cost
of registering the domain name, and this amounted to bad faith.
In a strongly worded dissenting opinion, decrying
the "insupportable" decision of the majority, retired Judge
Milton L. Mueller, who is an Associate Professor and Director,
of the Graduate Program in Telecommunications and Network
Management at Syracuse University, as well as the author of
a study on the relationship between trade-marks and domain
names, held that while recognizing that Esquire Magazine is
well-known, the word "esquire" by itself is too generic and
widely used to be exclusively associated with the magazine.
Judge Mueller went on to say:
the term [ESQUIRE] has common meaning as
a descriptor for lawyers, or more broadly for gentlemen.
The unadorned term "esquire" is also a registered trademark
for well-known shoe care products and for a variety of other
products and services. The character string "esquire" appears
in over 280 domain names in the .com space. It follows inexorably,
then, that the domain name "esquire.com" can be used legitimately
as a domain name by a large number of people and in a variety
of ways, without infringing the rights of the Complainant.
The UDRP is intended to prevent trademark owners from being
extorted by cybersquatters, but it is also intended to protect
legitimate registrations from being threatened by overreaching
trademark owners.
This dissenting opinion demonstrates that
a strong argument exists which differentiates between cybersquatters
and mere domain name speculators. It is not bad faith to make
money on a domain name in all cases. Speculating on a generic
domain name such as BUSINESS.COM or SHOES.COM is not necessarily
bad faith. In a case involving the domain name CONCIERGE.COM,
the panel agreed that the first person or entity to register
the domain name should prevail in circumstances where the
domain name is a generic word and where that word is widely
used as a trade or service mark. The Panel therefore refused
to transfer the domain name, even though the Complainant had
a registered Canadian trade-mark for Concierge.
Sometimes even genericism will not save a
Respondent who acts in 'bad faith' by trying to sell the name.
In a case
involving the domain name 1800ROCKPORT.COM, the Complainant
alleged that the disputed domain name was identical or confusingly
similar to its registered trade-mark for ROCKPORT in connection
with shoes, clothing, and bags, as well as its 1-800 telephone
number. The Complainant alleged that the Respondent demonstrated
bad faith by registering such a similar name and then trying
to sell it to the Complainant.
The Respondent claimed that he registered
the Domain Name either for his own use or in order to sell
it to a city with the name "Rockport". The Respondent pointed
out that Rockport is the name of three U.S. cities, in Texas,
Indiana, and Massachusetts, respectively, and as such was
a descriptive or generic name that he had as good a right
to as anybody. The Panelist disagreed. The Panel found it
hard to understand why a city with the name Rockport would
be interested in a domain name with, what would be for that
city, an irrelevant number. Also, the Respondent himself offered
no explanation for his choice of the number "1800" as part
of the Domain Name. This case demonstrates once again, that
underlying the UDRP, is a sense among panelists that they
know bad faith when they see it.
This case also shows how the result of an
ICANN arbitration is in many ways, subject to the discretion
of the presiding panelist rather than a rigorous application
of rules and precedent. This however, is not such a great
departure from traditional jurisprudence, where a particular
judge may figure prominently in the outcome of a particular
case. A significant difference between ICANN arbitration and
traditional court systems then, is the degree of legitimacy,
acceptance, and consistency that the two respective institutions
impart to litigants. By ensuring the consistent quality of
panelists and providing for an appeal system, the ICANN procedure
can continue to provide an important answer to the problem
of voluminous domain name disputes. As the body of ICANN UDRP
case law grows, panelists and litigants
will also enjoy a greater degree of consistency and certainty
in the ICANN process.
Zak Muscovitch is the publisher of Domain
Name Law Reports. This stuff is his opinion. It ain't
legal advice;just a some info for academic purposes. Go ahead.
Learn.
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