The ICANN Uniform Dispute Resolution Policy (UDRP) is procedurally flawed, its substantive rules are inconsistently applied, and if any pattern or logic can be ascertained from the rulings of its panels it would be that "might makes right" - dicussed

THE NEED FOR ICANN

Now that the scene is set, I will explore the implementation of ICANN and the UDRP, the success and the failures of its actions and the widespread criticism and praise of its decisions. A good starting point for such an analysis of ICANN is the founding philosophy of the organisation, why it was required and what it sought to achieve. The United Stated Department of Commerce commissioned a White Paper looking at the problems associated with the then current DNS system. They highlighted the following core problems;

‘1) There is widespread dissatisfaction about the absence of competition in domain name registration.

2) Conflicts between trademark holders and domain name holders are becoming more common. Mechanisms for resolving these conflicts are expensive and cumbersome.

3) Many commercial interests, staking their future on the successful growth of the Internet, are calling for a more formal and robust management structure.

4) An increasing percentage of Internet users reside outside of the U.S., and those stakeholders want to participate in Internet co-ordination.

5) As Internet names increasingly have commercial value, the decision to add new top-level domains cannot be made on an ad hoc basis by entities or individuals that are not formally accountable to the Internet community.

6) As the Internet becomes commercial, it becomes less appropriate for U.S. research agencies to direct and fund these functions.’

The paper concluded by recommending that a new private body be created to tackle these problems, ending the role of the United States Government in dealing with such matters through the use of ‘volunteers’ and contractors. As such establishing competitive domain registration (which was previously carried out exclusively by NSI) and a coherent body to deal with the associated problems of domain registration. The Internet Corporation for Assigned Names and Numbers was incorporated in October 1998 and empowered by the United States Department of Commerce to take on the role of the non-profit, private organisation that the government had envisioned. In October 1999 a new dispute policy was implemented by ICANN, the Uniform Dispute Resolution Policy (UDRP). The purpose of the mechanism was first of all to set up a clear procedure for the resolution of gTLD disputes. This is achieved by the published UDRP. Enforcement of this policy is achieved through agreements with the different gTLD registrants. As ICANN has the control over the gTLD, in order for a domain to be registered within this domain, the registrar must be accredited by ICANN. In turn, all accredited registrars must adopt the UDRP. This in turn creates a contractual obligation on any domain name owner, to commit to arbitration should a complaint arise. Furthermore, the goal of the UDRP is that it would be a cheap form of dispute resolution, operating on a ‘level playing field’. Allowing anyone to protect his or her interests in a particular domain name.

THE UDRP PROCEEDURE

ICANN does not operate arbitration services itself, instead it has delegated the task to a number of dispute resolution service providers; CPR Institute for Dispute Resolution (CRP), eResolution (E-RES), The National Arbitration Forum (NAF) and the World Intellectual Property Organization (WIPO). Each of these providers are encouraged to operate competitively between themselves, and all differ in terms of price, supplemental rules and as I will argue, decisions.  The format of the procedure is as follows. The complainant, usually the Intellectual Property holder will forward his complaint onto one of the dispute resolution providers. However, one feature of the UDRP is that the complainant has the right to choose which provider he wishes to use and the composition of the panel, either a single panellist or a three-personal panel;

‘4(d). Selection of Provider. The complainant shall select the Provider from among those approved by ICANN by submitting the complaint to that Provider. The selected Provider will administer the proceeding, except in cases of consolidation as described in Paragraph 4(f).’

The purpose of this feature of the UDRP was to develop competition between the different providers, however this does raise some concerns, in that it would be in the economic interests of the dispute providers to be perceived as sympathetic to the complainant, as it is those who pay for and choose the provider. This is a concern that I will address in turn.

In order for a complaint to be upheld, there are a number of factors that much be met, these are set out in Paragraphs 4(a) and 4(b);

‘4(a). Applicable Disputes. You are required to submit to a mandatory administrative proceeding in the event that a third party (a "complainant") asserts to the applicable Provider, in compliance with the Rules of Procedure, that

(i) your domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights; and

(ii) you have no rights or legitimate interests in respect of the domain name; and

(iii) your domain name has been registered and is being used in bad faith.

In the administrative proceeding, the complainant must prove that each of these three elements are present.

4(b). Evidence of Registration and Use in Bad Faith. For the purposes of Paragraph 4(a)(iii), the following circumstances, in particular but without limitation, 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 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

(ii) 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

(iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) 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.’

Therefore, in order to successfully prove their case, the complainant must satisfy the panel that the three-part test in Paragraph 4(a) has been met. He must hold a service or trademark that is identical or ‘confusingly similar’. There must be no legitimate use of the domain name by the respondent and the domain name must be used in bad faith. This bad faith requirement, although listed in Paragraph 4(b), is not a strict test, allowing the full discretion of the panel to rule on the bad faith requirement. Mueller remarks, that this means, ’virtually any form of behaviour that they don’t like constitutes bad faith’. Although, it must be said that if this policy is interpreted strictly, it appears to provide a fair balance between the interests of the legitimate user (thus constraining the aggressive ‘reverse domain name hijacking’ problem) and the complainant, in protecting his interest in the name against the actions of the cybersquatters. However in order for a policy like this to be effective, it must be interpreted fairly and consistently. However, some critics argue that this is not always the case. I shall attend to these concerns.

Once a complaint has been received, it is passed on to the respondent, who has a mere 20 days in order to make a written response. Usually this response will be framed by Paragraph 4(c), which outlines the way in which a legitimate interest may be demonstrated. Following this, the arbitration panel is required to makes its decision with 14 days of receiving all of the papers. The limitations of this procedure are; first of all that its findings are not binding in the courts.  If either of the parties decides to take the matter before a court of competent jurisdiction, the dispute proceedings may be suspended or cancelled. Secondly, the UDRP has no appeal available, court action may be inevitable if either party is wishes to dispute the panel’s decision. The cost of such an appeal to the courts would limit this recourse to larger organisations. The concern here is that although a respondent may win in an ICANN arbitration, in the long-term the position could be reversed through the courts, where the arguably ‘level playing field’ of ICANN is non-existent. This outlines a number of procedural concerns regarding the UDRP that I will also tackle.

 RESOLUTION SERVICE PROVIDERS

Some concern has been directed towards the policy of ICANN to allow the complainants to choose between the different resolution providers. Although the reasoning behind this policy is a worthy one, promoting competition between the providers, some argue that this has lead to the possibility of bias. Froomkin and Post in a letter to ICANN’s Board of Directors, expressed their concern;

‘Complainant choice has the useful property of promoting price competition. Unfortunately, economic theory suggests that it will also tend to promote other types of competition, including competition among dispute resolution service providers to be perceived as being most “complainant-friendly” in order to capture all, or a disproportionate share of the market.’

One would assume that in a fair system, the only distinguishing factor between the different providers would be a matter of price, assuming all of them provide a fair and reliable resolution service for that price. With this being the case, it is equally fair to assume that the provider who charges the lowest would have the largest market share of the complaints, i.e if all things are equal, why pay any more?

Looking at prices alone, we can therefore establish that CPR ranks as the most expensive provider, followed by WIPO, leaving E-RES and NAF as the cheaper alternatives. Therefore we might expect NAF as the cheapest to have the highest market share of the disputes. Mueller has undertaken a comprehensive statistical analysis of the different providers in order to demonstrate a pattern of logic. Unfortunately, his research is confined to WIPO, NAF and E-RES as he felt that there was not a sufficient case record to evaluate CPR. In evaluating his research, I must therefore confine myself to three resolution providers. Statistically, the highest market share has been achieved by WIPO taking approximately 60.8% of the caseload from January to October 2000, leaving 31.1% and 7.3 % to NAF and E-RES respectively.  Clearly then there must be some other distinguishing factor between the resolution providers, since out of the three WIPO is the most expensive and has the highest market share. So regardless of price, what other factors might influence a complainant’s decision to use a particular provider?  A very concerning trend appears when the success rate for the complainant is considered. Mueller shows that in the first 621 cases, WIPO ruled for the complainant 82% of the time, NAF 81% of the time, leaving the complainant success for E-RES at 51%. This is particularly worrying when considering that out of the three, WIPO is the most expensive, has the highest share and in its first 320 cases has ruled for the complainant 82% of the time. Mueller submits that although there are other considerations for choosing a providing including time of decision and geographical location and reputation, the fact that statically NAF and WIPO favour the complainant, has implications on the fairness of the UDRP procedure. He concludes that as competition increases within the procedure, the effects of such ‘forum shopping’ will only be magnified. More recent statistics, as promoted on the WIPO website suggest that to date, 64.5% of cases result in the domain name being cancelled or transferred. While only 14.8% of cases have resulted in the complaint being denied. It must be acknowledged however, statistics are only indicators of bias to a certain degree; they do not take into account the individual information and circumstances of each case. Just because 82% of the time, WIPO have ruled for the complainant, this does not mean, that the merits of the cases should have resulted in a different decision. It could be argued that it is coincidence that different providers have a different success-rate for the complainant. Looking at the quality and consistency of individual decisions can provide a far greater analysis.

CONSISTENCY & QUALITY

Mueller argues that in some cases, ‘differences in outcomes are created when panellists ignore critical aspects of the policy, or stretch the defined criteria so broadly that they become almost meaningless’. As I have already shown, the UDRP sets out a clear procedure for justifying the merits of complaints. Following Paragraph 4(a) narrowly, requires the panellist to ascertain first of all whether or not a domain name is ‘is identical or confusingly similar to a trademark or service mark’. If this is the case, then the panellist has to determine whether the domain name holder has a ‘no legitimate interest’ in the name. Finally if both of the above criteria can be met, the panel must conclude that the domain name was ‘registered and is being used in bad faith’. Mueller argues that many of the panellists for NAF and WIPO do not follow this policy as narrowly as intended. He states that that first the panels make a judgement as to whether or not the registrant ‘is a cybersquatters of some sort’, ‘if they believe that the registrant is a bad actor, they tend to stretch the UDRP definitions to cover the particular facts of the case’. He proceeds to argue that in some of the very worst cases, ‘the panellists appear to ignore both the language and the intent of the policy and set themselves up as judges of who has a more meritorious claim on the name’. I will now examine some of these ‘bad’ decisions.

• J. Crew International, Inc. v. crew.com

This case centred on the registration of the ‘crew.com’ domain name. The complainants held a registered trademark in the name ‘crew’ and ‘j.crew’. The respondent was a domain name speculator who held domain registrations for several ‘generic’ domain names. Although it was clear that the complainant satisfied the Paragraph 4(a)(i) requirement, there was some doubt regarding the decision made in relation to 4(a)(ii-iii). The panel is this case was made up from three arbitrators. In the majority, the view taken was that speculation of domain names in relation to generic terms was not considered a legitimate use of the site, furthermore under a very broad interpretation of Paragraph 4(b), the requirement of bad faith was extended to include a concept of ‘preclusion’.

The majority turned to the example offered in Paragraph 4(b)(ii);

(ii) 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

They interpreted this to the facts, ruling that the registration of the generic term ‘crew’ amounted to preventing the complainant from registering the domain name. This might have been acceptable if the domain was not a generic one, however given that fact that the term ‘crew’ was such a commonplace word, it is ludicrous to say that there was bad faith on the part of the registrant. The dissenting panellist looked at the UDRP in its intended, much narrower meanings. He argued that ICANN’s policy, ‘covers only clear cases “cybersquatting” and “cyberpiracy” and does not cover every dispute that might rise over domain names’. He argues that this policy was limited to ‘abusive registrations’ that sought to profit specifically from the trademarks of others. In conclusion he stated, ‘we are not legislators but arbitrators’. ‘The majority, in an effort to stop a practice that it seems to take upon itself to believe is an unstated purpose of the ICANN policy, has completely over-stepped its mandate as arbitrators.’

 

• Tata Sons Limited v. D & V Enterprises

The complainant in this case was a investment holding company for the Tata Group of Companies. It held the trademark ‘Tata’ in respect of its business activities that were wide and substantial amounting to an annual turnover in excess of $9 Billion. The respondent in this case registered the domain name ‘bodacious-tatas.com’, which it used to publish pornographic material. Unfortunately the respondent did not make a submission. However the reasoning given to the subsequent cancellation of the domain name it quite concerning. The Panel concluded that the respondents use of the domain name amounted to bad faith. The respondent had sought to divert visitors from legitimate Tata group web sites. Furthermore, the display of pornographic material would cause 'bewilderment, if not astonishment' to customers of the complainant; visitors to the web site would be given the impression that the complainant had entered into 'business activities in the area of sexuality and pornography', or that they had licensed or authorised the use of the 'Tata' name in relation to such activities. Although there could have been some truth in these assertions, I submit that it is frivolous to say that there could be any confusion between the trademark ‘Tata’ and the domain name ‘bodacious-tatas.com’. Clearly this decision takes Paragraph 4(a)(i) too far. As Mueller remarked, ‘well beyond the breaking point’.

• Excelentisimo Ayuntamiento de Barcelona v. Barcelona.com Inc.

The complainant in this case was the Barcelona City Government. They held several trademarks in Spain including the term ‘Barcelona’. The Respondent in this case was Barcelona.com, Inc. They had obtained the domain name in order to ‘develop links between the different cities having the name Barcelona’, and provided the arbitrators with evidence of these intentions. Furthermore, the respondent had filed for the registration of the US trademark ‘Barcelona.com’. The panel concluded that the respondent had demonstrated Bad faith using the definitions provided by Paragraph 4(b)(i),(ii) & (iv). In doing so, interpreting all of these elements very broadly. Again, moving away from the very narrow policy of ICANN and ignoring the legitimate use that the Respondent had demonstrated, remarking that any such legitimate interests ‘be always subject to the lack of disputes with parties having better rights or more legitimate interests’. This is completely beyond the reasonable interpretation of Paragraph 4(a)(ii), which only seeks to establish that such an interest exists (see Paragraph 4(c)), and not to make a value judgement in relation to any such interest.

These cases serve as an example to how some panellists are willing to extend and create policy to deal with what they believe to be inappropriate registration. This clearly goes beyond what ICANN envisioned to be included in the UDRP and only seeks to undermine the protection incorporated to prevent ‘reverse domain name hijacking’. Whether or not these decisions are due to a willingness to be complainant friendly, or a lack of experience or understanding of their role as arbitrators I am unsure. However it certainly fuels critics who already believe the fairness of the UDRP process is undermined. As Berryhill remarks, ‘it is clear that any pro-registrant provision that managed to sneak its way into the UDRP can be effectively negated by the overall structure built into the way that the UDRP is administered’.

Apart from decisions of questionable merit, the UDRP also displays problems concerning the consistency of decisions.

A particularly clear case of inconsistency can be seen in the treatment of the ‘Quirk’ cases. Although it must be noted that ICANN dispute resolution providers do not have to follow any existing precedent by deferring to prior decisions. The only regulation that panellists must follow is Rule 15(a);

‘15(a) A Panel shall decide a complaint on the basis of the statements and documents submitted and in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable.’

However, it has become common practice for parties and panel members to quote previous UDRP decisions in new proceedings.

The Quirk cases concerned the registration of a number of domain names including; Quirkmotors.com, Quirknissan.com, Quirkvolkwagon.com and Quirkmazda.com. The compliant, Daniel J Quirk, owned a car dealership and rights in several corresponding trademarks including ‘Quirk’, ‘Quirk Nissan’ etc. The Respondent, who unhappy with the service he had received from the complainant, registered the domain names and set up a web site that criticised the complainant. The complaints were themselves dealt with in three separate cases, each with a different NAF arbitrator. In two of the cases the panellist ordered the domain name to be transferred, concluding that the use of the company name for the purposes of criticising the business did not constitute legitimate use. However the third case had a completely different outcome. The panellist ruled that such use did not constitute bad faith, holding that a ‘non-commercial site which provided consumer information and was protected by the First Amendment of the US Constitution.’

PROCEDURAL FLAWS

There are several procedural flaws that have implications on the overall effectiveness of the ICANN UDRP. One of the main objections to the procedure is that there is no avenue of appeal within the system. This means that even in the ‘bad’ decisions, that I have already outlined, the respondent has no avenue of appeal. If he seeks to challenge the decision in the courts, he has up to 10 days following the decision to file in a court of competent jurisdiction. Of course expensive litigation of this sort was exactly what the UDRP aimed to avoid, allowing small organisations and individuals to effetely uphold their legitimate interests without being bullied by the power and money of larger organisations. Therefore, As I contended, even where an arbitrator has made an outrageous decision in transferring a domain name to the complainant, the only alternative for the respondent is the courts. This is of course something than more often than not, they would simply not be able to afford. Even if the respondent wins UDRP arbitration, the complainant can still take action in the courts (as UDRP decisions are not binding), which the respondent may not be able to challenge.

Another potential flaw is the time frame governed by the procedure. Under UDRP rules, a respondent must reply to the complaint within 14 days. This is something that is increasing not done with the rise is respondent defaults. Therefore we must ask ourselves why this is? Is it because the respondent knows that he is in the wrong and accepts his fate, or is 14 days enough time to formulate a response? With the increasing use of parties quoting previous decisions and relying on complex rules of law can we expect a respondent, who is often acting without legal assistance to formulate an appropriate response? Clearly the balance of time is biased towards the complaint that has all the time he requires formulating his complaint. Clearly these procedural elements do have some fairness implications, however I am without any evidence as to whether they have had any appreciable affect on decisions and outcome, therefore they must remain areas of potential danger.

CONCLUSION

A statistical analysis of the results and market share of some resolution providers, specifically WIPO, although not conclusive evidence of bias towards the complainant, duly cause concern. Looking at the actual evidence of some arbitration, there is a clear indication that some panellists see their role as protectors of intellectual property rights, and not as the neutral policy applicators that their role demands. Further evidence can be seen from how some arbitration forums measure their success. A successful result should be the consistent and fair application of the UDRP procedure. However, it appears that some regard success through triumph for the Intellectual Property holder. Indeed WIPO makes the point of stating that they are, ‘the leading dispute resolution service provider for challenges related to abusive registration’. Furthermore they publish the fact that, ‘in 4 out of 5 cases, complainants have prevailed’. So why do WIPO regard themselves as the best, is this because they are able to evict more domain owners than other providers? The evidence here is at best circumstantial, however I think that it does raise significant questions. If we could categorically confirm that some providers are biased, this would not reflect on the good intents of ICANN to create a policy allowing a ‘level playing field’ with a cheap and relatively quick dispute mechanism. I think that the lengths that ICANN went to in order to provide that the complainant must not only prove his rights, but the lack of legitimate interest on the part of the respondent and the use in ‘bad faith’ shows policy fairness. However criticism that can justifiably be directed towards ICANN relate to the procedural flaws of time and lack of appeal. Furthermore, unless ICANN adopts a procedure or issues guidelines to the providers, reiterating their role and jurisdiction, or even more actively revoking the complaints right to choose providers, this will only reflect on their poor management of the UDRP process. In writing this paper, I must acknowledge that in the majority of cases, the UDRP proves to be an effective forum for resolving domain name disputes, without forcing parties to suffer the associated encumbrances of traditional litigation within the courts. However, to ensure that this valuable service is not undermined, ICANN must take steps to ensure that its policy is being effectively upheld.

[5,642]

BIBLIOGRAPHY

---