
Domain Name Dispute Resolution
by Guest Blogger, 3/12/2002
Portions of the following information are drawn from previous postings on the NPTalk discussion list. The following material is provided merely for background and reference information, and should not be considered or substituted for legal advice. Please consult with your organization's legal counsel for more information.
To date, nonprofit legal battles over Internet domain names would seem to suggest a common theme: the holders of trademarked names tend to get the benefit of the doubt in disputes with domain name registrants. This is generally because of the consideration paid to the public's association of a trademark name with its holder. But it is also because entities holding trademarks are presumed to actually have used them to deliver goods and services (or demonstrated the intent to do so).
Thanks to extensions of trademark protections-- like the 1995 Federal Trademark Dilution Act, and the 1999 Anticybersquatting Protection Act (ACPA)-- mark holders have been increasingly proactive about monitoring domain name registrations, and issuing warnings and challenges to registrants that sign up domain names that cut a little to close for comfort.
Earlier this month, for example, the National Collegiate Athletic Association (NCAA) filed its fourth domain name lawsuit this year. In the most recent suit, an Arizona company registered some ten domain names to promote NCAA championship tickets, resold at a higher price. NCAA alleges that the domain names violate its trademarks-- not to mention that the ticket reselling allegedly resembles "ticket scalping". The three previous legal challenges, involving unauthorized use of a trademark in connection with online gambling sites, ended with either payments to the NCAA or removal of the offending sites.
One of the interesting footnotes to the NCAA's current lawsuit is that an arbitration panel actually first weighed the original dispute. When the panel issued a decision that did not acknowledge it's cybersquatting and cyberpiracy claims, the NCAA filed suit.
Arbitrating an Alternative to Lawsuits?
Despite ignoring the result, NCAA's arbitration highlights the fact that lawsuits are not the only (or primary) means for resolving domain name disputes. The Internet Corporation for Assigned Names and Numbers (ICANN)-- the administrative body for the domain name system and directory of Internet server addresses that determine the identity and location of websites and e-mail addresses-- has what is known as a Uniform Domain-Name Dispute-Resolution Policy (UDRP).
UDRP is significant because it is also being proposed as the global process for resolving Internet domain-name disputes. It is also raising issues around general Internet governance, the tension between harmonization of conflicting (and sometimes arbitrary) rules, the online legal sovereignty of other countries, and perceptions of preference towards commercial entities in what is viewed as an already-commercialized and less public Internet.
There are a number of legal protections presumed to belong to commercial entities (and individuals) in the form of patents, copyrights, and marks of trade. Courts in the U.S., however, have been attempting to stretch those protections to the Internet, resulting in a number of gaps-- especially with respect to cases outside the U.S.-- as well as First Amendment issues involving freedom of speech online. Add to this set of constraints the simple amount of time and money involved for both sides in a legal dispute, and it's not hard to see why many were clamoring for an easier way to settle domain name disputes.
In June 1998, when the U.S. began the process of creating ICANN, language was included in the U.S. Department of Commerce's initial ICANN organizing white paper, requesting the World Intellectual Property Organization (WIPO) to consult on developing a process to resolve combined domain and trademark name disputes. WIPO is the United Nations agency advocating for strong intellectual property protections around the world.
In the days when Network Solutions (now owned by VeriSign) enjoyed a monopoly as the sole Internet domain name registrar, it employed a name dispute resolution process, during which contested names were put "on hold", while interested parties hashed out their issues in courtrooms. Pending a court ruling, the only thing the registrar would do is transfer, retain, or remove the domain name. Commercial domain name holders, in particular, found this to be a cumbersome, lengthy, and costly process, which offered no guarantees that their trademarks could withstand the "first come, first served" rush of domain name registrants-- some (but not all) of whom were cybersquatting.
In October 1999, eventually ICANN adopted its UDRP , after allowing for public comments and suggestions from domain name registrars that were incorporated along with WIPO's recommendations. It became effective January 3, 2000 for Network Solutions and December 1, 1999 for the then-new domain name registrants. [NOTE: A good one-stop for UDRP updates and information is Udrplaw.net.]
What is UDRP?
UDRP is a formal agreement between each domain name registrar (for the .biz, .com, .info, .name, .net, and .org top-level domains) and domain name registrants, requiring the latter to participate in third-party arbitration (involving designated dispute resolution service providers) should they be accused of registering domain names in "bad faith." We should add here that conveniently enough, by the end of November 1999, WIPO-- the entity most responsible for laying out the UDRP system-- was approved as the first domain-name dispute-resolution service. The National Arbitration Forum, eResolution, and the CPR Institute for Dispute Resolution are the other arbitration service providers as of this writing.
The dispute solution service has to transmit the complaint to the domain name registrant within three days. The registrant then, within 20 days, has to respond to all of the items within the complaint, and make a case as to why the name should not be relinquished. Five days after the response is received, an arbitration panel is named, which makes decisions within 14 days of their appointment. Both parties receive word within three days after a decision is made.
All told, it can take, at most, about a month and an half for a dispute to be settled. A complainant can only receive a decision to receive or cancel the domain name at issue, and not monetary awards, under UDRP proceedings. Decisions can, however, be challenged in a court of law. A domain name registrant can trigger arbitration if it registers a name that treads too close to an existing trademark, the registrant has no legitimate interest or protections with respect the domain name, and the name is not actually being used on bona fide ("good faith") terms.
Bad faith is categorized as:
- registering a name mainly to sell or offer it to the trademark holder (or one of its competitors) for profit;
- disturbing the operations of a competing entity;
- gaining profit by creating confusion in among the online public; and
- showing a track record of blocking trademark owners from exercising their mark online.
- the registration was for a name that was actually going to be used to deliver goods or services;
- the name was not intended to mislead the public but simply represented an honest example of fair or noncommercial use;
- the domain name reflects a common association with the registrant's identity offline (even if it isn't trademarked).
- The boundaries of law within which UDRP arbitrators can (and do) ground their decisions are not clear, especially since the terms of a trademark are not technically spelled out in the UDRP. As a result, arbitrators may be stepping outside the UDRP rules, and not limiting their review to disputes around alleged trademark abuses, and basic generally accepted principles of trademark law, to make their decisions. The UDRP panel in the precedent-setting World Wrestling Federation UDRP proceeding, for example, decided that a registrant's offer to sell domain names to the trademark holder could be considered use, such that the act itself constitutes bad faith. Curiously, as a number of voices have pointed out, none of the items of bad faith cited actually stress "active use" as a determinant-- except one regarding registration with intent to resell or transfer a domain name. In short, simply signing up a domain and offering to turn it over for profit proves registration *and* use in bad faith, making the other three bad faith tests almost moot.
- UDRP does not dictate with which party the burden of proof rests, and permits aggrieved trademark holders to file a complaint before they've even communicated their intentions to, much less attempted a resolution with, the domain name registrant. Recall an earlier NPTalk, where we found that, while trademarks don't need to be registered in order for them to exist, registration gives courts a presumption that the registrant has more of an interest and good faith than other parties. UDRP, however, does not clearly state who has the burden for proving a trademark exists or that one was not violated, or even what constitutes evidence and how it is to be handled and weighed. Parody, for example, is treated as fair use exception to lawsuits and even arbitration around domain name disputes. Yet UDRP arbitrators (many of whom are presumed to be trademark lawyers, according to McCarthy) have been said to demonstrate a bias against sites, which target corporations and other trademarked names. UDRP has been accused of showing a bias against such sites because the parodies contain critiques or criticisms of trademark holders-- in other words, their clients. In a number of disputes, arbitrators have awarded control of parody site domains to the commercial entities they target, to save those targets the trouble of contending with negative public criticism raised by such sites.
- Under UDRP, the complaining party can also choose the arbitration service, which conducts most of its business online, not in person. The timeline for the arbitration process is too tight, especially for the domain name registrant under scrutiny. Remember, the registrant's 20-day time window to respond to the allegations starts when the arbitrator-- and not the registrant-- first hears of the complaint, while the trademark holder can bring a complaint with the luxury of time to prepare beforehand. This means any additional information discovered outside of that time window is not likely to be included for consideration. Arbitrators have the authority to decide who judges which cases, making transparency and accountability difficult. Worse, as more services enter the fray, the bar for competition is raised, such that there is great incentive to rule in favor of complainants in order to continue to attract business. McCarthy also argues that UDRP arbitration rulings cannot be appealed. If a decision is reached against them, domain name registrants can make a point that they are willing to transfer the domain name, as long as they are compensated for their troubles-- including removing the name from printed materials, removing links to their site, and reestablishing a business identity. Where it gets tricky is that if the asking price is too high, they can be accused of bad faith. Early UDRP decisions, however, also stated that too low a price could also be interpreted as an intention to simply unload a name, rather than using it for legitimate purposes.
- exempting domain names which have been registered and held for three years from UDRP challenges;
- incorporating "declaratory judgments" for domain name registrants to initiate UDRP proceedings that prove their legitimate interests in domain names;
- enabling domain name registrars to sign contracts with arbitration service providers, such that all disputes involving that registrar are handled with one firm, rather than initiated on a case-by-case basis by complainant parties;
- closing the loophole allowing trademark holders to preempt domain name registrant appeals in court through the tactics mentioned in the preceding sections.
- personal names of individuals
- nonproprietary names for pharmaceutical products
- international intergovernmental organizations (including the United Nations and, well, WIPO itself)
- geographic identifiers (not country codes)
- trade names (the popular names under which entities conduct business, versus the corporate names by which they are formally registered. They differ from trademarks in that they identify a firm or organization, rather than the specific product, good, or service covered by a mark)
- preventing the registration of domain names determined by WIPO or the U.N.'s World Health Organization to be identical to its list of nonproprietary pharmaceutical names;
- establishing individual national-level dispute resolution systems for intergovernmental bodies to protect against the registration of domain names that mimic or incorporate the acronyms of those bodies;
- weighing how to apply existing mark protections, like the certification for products based upon geographic source, to domain names reflecting geographic indicators;
- no action be pursued with respect to trade names (which are not, with a few exceptions, protected as trademarks), since it is difficult to codify each nation's set of standards regarding what trade names are protected.
- they have legal protections with respect to a name, and are actively using it to deliver goods and services;
- another party has registered a domain name, closely resembling the trademarked name, to deliver goods and services;
- there is a strong chance for the trademarked name's audience to be confused as to which name is which.
- the strength of the mark (whether it truly helps set the services of the plaintiff apart from others including the defendant);
- the nature of the defendant's activities (including the quality of the services offered);
- the quality and condition of the marketplace (was there potential for confusion and was the public smart enough to navigate through it)
