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A Commentary on
WIPO's The Management of Internet Names and Addresses: Intellectual
Professor of Law & Quondam "Public Interest
Representative" to the WIPO Panel
Miami School of Law
Laina Raveendran Greene, Member WIPO Panel of Experts
has authorized me to note her agreement with the
substance of this Commentary.
Harald Tveit Alvestrand, Member WIPO Panel of Experts,
has posted his own "comments
to the WIPO process and its result"
May 19, 1999 version 1.0a [typographic changes only]
Please check http://www.law.miami.edu/~amf/commentary.htm
for updated versions of this document.
The World Intellectual Property Organization's Final
Report on "The Management of Internet Names And Addresses: Intellectual
Property Issues" is in many respects a substantial improvement on WIPO's
Report, RFC 3.
The attempt to define "abusive registrations" represents
a good-faith effort to define cybersquatting. While this new definition
will no doubt benefit from public comment and discussion it has yet to
receive, the proposal in the body of the report seems to hew closely to
the definitions evolving in the various courts that have considered the
issue. Once flaws in the formal expression of the policy in the Final Report's
Annexes have been corrected, this proposal should represent an improvement
over the current NSI dispute policy, one that will serve the legitimate
interests of trademark and service mark holders without opening the door
to "reverse domain hijacking".
Unfortunately, the Final Report leaves essentially unchanged
the proposals in the Interim Report regarding the proposed treatment of
globally famous trademarks. It proposes a baroque, ad hoc, quasi-judicial
procedure based on vague (and in one case prejudicial) criteria to define
when a trademark is sufficiently internationally famous to be granted special
privileges on the Internet, and proposes special privileges that trademarks
do not currently have under law. At present there is no agreed definition
of a globally famous mark, although WIPO-sponsored panels have been seeking
to formulate a definition for years. Furthermore, the WIPO proposal rejects
imposing any upper limit on the number of trademarks that may be declared
"famous," perhaps because it is impossible to predict how many marks will
As noted regarding the Interim Report, parties who lose
their domain names under the proposed dispute resolution procedure and
believe the arbitrator erred may find it difficult to find a court capable
of hearing their claim. Because the Final Report restricts the dispute
resolution procedure to a much narrower class of cases than did the Interim
Report, one can expect that there will be many fewer such cases than initially
feared - but not zero.
In addition, there are a number of ambiguities and possible
errors in material which appears for the first time in the Final Report.
This material will benefit from public review; and in some cases some of
this material may need revision. In particular, the procedural proposals
in the Annex contain what appears to be a serious
While not strictly an intellectual property issue, and
without wishing to minimize the complexity and importance of the real issues
that remain to be determined, the Final Report provides a less ringing
endorsement than one might have hoped for new global Top-Level Domains
(gTLDs) and for the creation of a new privacy-enhanced gTLD for non-commercial
Summary of Changes From RFC 3
of RFC 3", issued as a personal commentary during the comment period
on the Interim Report, identified the following major areas of concern
regarding the Interim Report:
Many of the above issues have been wholly or substantially
addressed in the Final Report. Although the seventh has not been addressed,
the ill effects will be lessened (although not eliminated) by the reduced
scope of the revised dispute resolution procedure. The eight and ninth
issues have been, effectively, put on ICANN's shoulders. After some fine-tuning,
especially regarding the procedural timetable, the anti-cybersquatting
provisions will represent a significant improvement over the current NSI
dispute policy-which should benefit both trademark owners and legitimate
domain name registrants. Unfortunately, the Final Report makes no material
changes in the proposed special privileges for a new class of globally
Bias. The plan was biased in favor of trademark
Excessive scope. Rather than addressing only
trademark law, and focusing on the "cybersquatting" problem, RFC 3 sought
to create a system that could adjudicate every type of intellectual-property
dispute relating to a domain name-including disputes based on controversial
theories such as the right of personality.
`Smorgasbord' approach to law. Instead of directing
arbitrators to apply otherwise applicable law, RFC 3 proposed using additional,
different, rules it selected-rules that will often disadvantage registrants.
Enabling censorship. The RFC 3 failed to protect
fundamental free-speech interests including parody, and criticism of corporations;
Potential for intimidation. RFC 3 created an
expensive loser-pays arbitration process with uncertain rules that would
intimidate persons who have registered into surrendering valid registrations
thus enabling increased "reverse domain name hijacking";
Relied on potentially unenforceable contracts.
Because the contracts of adhesion proposed by WIPO were so one-sided, there
was reason to believe they would not be enforceable in court and that the
entire proposal was therefore unworkable.
The nature of available judicial review. RFC
3 would have allowed disappointed challengers to domain names registrations
to appeal to a court in all cases, but would often deny this privilege
to the original registrant if he lost.
Zero Privacy. RFC 3 provided zero privacy protections
for the name, address and phone number of individual registrants;
Discussion of new gTLDs. RFC 3 took an over-timid
approach to new gTLDs. The Final Report's conclusions are welcome, as far
as they go - but do not go far enough.
Treatment of famous marks. RFC 3 created new,
cumbersome, unwarranted, procedures to protect a potentially unlimited
number of "famous" trademarks.
Several important issues raised for the first time
in the Final Report require careful consideration, notably the definition
of cybersquatting, and the proposed procedural timetable. As the Final
Report contains a wealth of material that is new, or substantially different
from the Interim Report, including the critical Annexes, further review
and public comment are likely to be essential before ICANN takes action.
The World Intellectual Property Organization's Final
Report on "The Management of Internet Names And Addresses: Intellectual
Property Issues" (hereinafter, "Final Report") is in many respects
a substantial improvement on the Interim
Report. However, because the Final Report contains a wealth of material
that is new, or substantially different from the Interim Report, including
the crucial Annexes, further review and public comment is likely to be
essential before ICANN takes action.
Preface: A Personal Analysis
On September 28, 1998 I was asked to serve on a World
Intellectual Property Organization "Panel of Experts" that WIPO had formed
to advise it on its forthcoming recommendations relating to domain name/trademark
issues. The WIPO official who invited me to join the panel said I had been
selected to ensure that there was a "public interest" advocate inside the
WIPO process. I accepted on condition that I be allowed to speak freely
at all stages of the process, and was assured that this condition presented
I should emphasize that what follows is a strictly personal
analysis. My attendance at WIPO regional consultations have led me to understand
that not everyone comprehends how WIPO has chosen to employ the Panel of
Experts. Our limited role is described in more detail below. In this process,
the WIPO staff drafts the documents WIPO issues (and the document is not
subject to prior review by the member states); the Panel of Experts merely
makes substantive or editorial suggestions which WIPO is free to accept
or reject. As with the Interim Report, the exigencies of a rushed schedule
greatly limited the amount of time we had to review and comment on the
Final Report before it was issued. Just as the Final Report therefore does
not necessarily speak for every member of the advisory panel of experts,
this document represents my views only. The views expressed here should
not be attributed to WIPO, nor to any other member of the advisory panel
unless otherwise stated at the top of this document.
The management of Domain Names is widely agreed to be
a core issue of Internet governance. Many people involved in the rapidly
evolving institution-building process that will perform core functions
of technical (and perhaps legal) coordination of the Internet have looked
to WIPO for leadership in resolving thorny questions relating to conflicts
created between global domain names and (often) regional and sectoral trademarks.
In a "White Paper" formally known as the "Statement
of Policy on Management of Internet Names and Addresses" (June 5, 1998)
issued by the Department of Commerce of the United States of America, the
United States Government called on WIPO to:
"initiate a balanced and transparent process, which
includes the participation of trademark holders and members of the Internet
community who are not trademark holders, to (1) develop recommendations
for a uniform approach to resolving trademark/domain name disputes involving
cyberpiracy (as opposed to conflicts between trademark holders with legitimate
competing rights), (2) recommend a process for protecting famous trademarks
in the generic top level domains, and (3) evaluate the effects, based on
studies conducted by independent organizations, such as the National Research
Council of the National Academy of Sciences, of adding new global Top-Level
Domains (gTLDs) and related dispute resolution procedures on trademark
and intellectual property holders. These findings and recommendations could
be submitted to the board of the new corporation for its consideration
in conjunction with its development of registry and registrar policy and
the creation and introduction of new gTLDs."
The "new corporation" referred to above is now known
as ICANN-the Internet Corporation for Assigned
Names and Numbers.
Prior to the Final Report, WIPO produced three key documents
RFC2 and the
RFC3. RFC 3 was issued Dec. 23, 1998. WIPO also published a useful
information document and a process
As an organ of the United Nations, responsible to all
its member states rather than just the US, WIPO felt empowered to define
its own terms of reference. In its RFC2, paragraph 12, WIPO stated that
it intended to make recommendations concerning (1) dispute prevention,
(2) dispute resolution, (3) process for the protection of famous and well-known
marks in the gTLDs, and (4) effects on intellectual property rights of
new gTLDs. WIPO thus gave itself a considerably broader and more ambitious
charge than the fairly narrow one proposed by the US in the White Paper.
Many, both in the trademark-owning community and outside it, objected to
this ambitious agenda. The Final Report largely returns to the original
mandate suggested by the U.S. Government.
On April 30, 1999, WIPO issued the Final Report. WIPO's
recommendations in the Final Report now go to ICANN, which can adopt them,
modify them, or ignore them as it will. However, WIPO's report is likely
to be influential. Few others have been focusing on the DNS/Trademark problem
and politics, like nature, abhors a vacuum. Indeed, ICANN's draft
registrar accreditation guidelines adopted some of the features of
RFC 3, even though RFC 3 was only an interim report.
A "Purloined Letter" Process?
Significant parts of the WIPO process were open to public
view and comment, although the actual drafting of the Report was entirely
the work of the WIPO staff, operating behind closed doors. There are reasons,
however, to worry about the extent to which public participation in the
comment process may have been limited, or skewed.
The WIPO DNS/TM process has certainly been public in
a formal sense, with a series of meetings around the world, and
pages displaying documents and public comments. These web pages set
out the issues at stake in the DNS/TM process and disclosed the schedule
for WIPO's public meetings in various world capitals. There is no particular
reason, however, to assume that anyone is necessarily going to know that
those web pages are there, or would necessarily visit them. WIPO had its
own small mailing list with sign-up available to people who found the web
pages, but did not publicize the information about upcoming public hearings
on any of the external mailing lists that would likely to draw the attention
of the technical or legal communities with experience in Internet matters.
Thus, for example, I noticed no postings by WIPO announcing the public
meetings to any of the following Internet mailing lists of which I am a
member: Cyberia-l, CNI-Copyright, Cyberprof, Cypherpunks, Domain-Policy,
E-Carm, IFWP, Lawprof, Interesting People (Dave Farber), or Red Rock Eater
(Phil Agre), to name only the larger and better-known lists. Furthermore,
the members of the WIPO staff did not interact with the public participants
on the WIPO public list other than to post the occasional announcement.
There can be little debate that the public participation
in the process, at least until the time I published and publicized my
of the Interim Report, was dominated by intellectual property rights
holders and their lawyers and trade associations. Furthermore, my very
public intervention was hardly a design feature of the WIPO process. Members
of WIPO advisory panels do not ordinarily publish reports criticizing the
process of which they are a part; so far as I know, I may have been the
first, and although everyone was very polite I did not get the sense it
was especially welcome or that it is likely to lead to further requests
from WIPO to advise it on other matters.
Public participation was low for a number of reasons,
including poor publicity outside the intellectual property community and
especially the competition for the attention of the relatively small number
of people focused on the issue of Internet governance. Most of the people
concerned about Internet governance understandably focused on the debate
over the structure of ICANN, which was happening at the same time, rather
than on a merely advisory report that would in time become part of the
ICANN process itself. Turnout at the public hearings I have attended has
been small - usually under 100 and sometimes about 50, and (with the exception
of the Washington DC event that followed a publicity campaign I organized)
comprised almost entirely of trademark lawyers, government representatives,
or Internet service providers.
The relative dearth of consumer representatives, public
interest groups, and citizens groups participating in the WIPO process
should serve to remind us all of the many reasons why we entrust major
aspects of social policy making to elected officials. Legislatures and
national executives are not paragons of rectitude. But when they are elected,
the same political process that may make them over-solicitous to those
bearing campaign contributions imposes some form of accountability to the
public at large. Equally important, presentation of a matter to an elected
official is a way of putting a question onto the public agenda. In contrast,
a hearing in front of a subcommittee, a vote by a house of Congress, even
a publication of a proposed rule in the federal register by an unelected
bureaucrat, would serve to put the public (in one country) on notice in
a tolerably effective way --at least in a routine and knowable way-- of
the rules that someone proposes to lay down upon them. The problem of finding
a suitable means of public notice for Internet-based governance procedures
is in no way limited to WIPO, and to some extent its process may have suffered
the usual fate of any first-mover. Nevertheless, more could and should
have been done to publicize the process to groups both on and off the Internet
who were outside the core government and intellectual property communities.
It is not obvious to me that all the relevant portions
of governments understood what was going on, or made efforts to contact
all the relevant non-government stakeholders. WIPO sent notices of its
proposals to every one of its member states, but one suspects from the
responses received that these were directed at the patent and trademark
offices with which WIPO ordinarily corresponds. Whether these notices were
then circulated to other departments is hard to ascertain; it is easy to
imagine why something about "trademarks" might not get flagged as having
human rights aspects, for example, as the two make an unusual pairing.
Certainly in the US, for example, it appears from his testimony in Washington
that the US small business advocate learned of the WIPO initiative very
late in the process.
Role of the Experts
I joined the Experts Group during the comment period
on RFC 2 and attended one of the consultative meetings in the first round.
In addition, the Experts Group met in Geneva for two days in December 1998
to discuss the Interim Report that was due to issue shortly thereafter.
Unfortunately, we were provided with only minimal text in advance of our
meeting-some by email shortly before we left, more under the door of our
hotel rooms the night before our first meeting.
While our debates are, I am told, confidential, I think
it breaks no confidence to say that our meeting in Geneva was not a drafting
session. Rather, we were invited to comment on the issues, and discussed
the texts we had been given. WIPO then revised the texts very extensively,
and e-mailed us the revised versions. We had only a very short turnaround,
of a few days late in the holiday season, to comment by e-mail on what
was, to my eye, a wholly new document. WIPO then made some additional changes,
including the insertion of new material, and on Dec. 23, 1998 WIPO issued
RFC 3, the "Interim
Report," which contains WIPO's first draft of its proposals.
Many of the Experts attended various regional consultations
in the second round. We had another two-day meeting to discuss the comments
on the Interim Report in Geneva in March, 1999. Again, this was not a drafting
session. We were promised time to review the text of the final report before
it would be issued. In fact, chapters 2-5 arrived during what proved to
the final week before publication, with the last one arriving perhaps two
days before the report was issued. This made commenting in detail rather
None of the Annexes were sent to the Experts prior to publication.
As WIPO itself notes in the Final Report, Annex
1, this is WIPO's report, not the experts'.
An Introduction to
the Intellectual Property Issues
The domain name system was designed to make it easy
for people to remember the addresses of computers linked to the Internet.
Each unique name maps to a unique IP number that is the unique identifier
for a computer linked to the Internet. Under the current system, both these
numbers and the associated names need to be unique. Currently only a minority
of top level domains (TLDs) are open to all comers. Of the so-called generic
TLDs (gTLDs), .com, .org and .net are open to anyone who can afford the
small fee required to register a second-level domain. Country-code TLDs
(ccTLDs) carry a suffix that identifies them with a particular nation (e.g.
.fr, .uk), but they are equally accessible everywhere in the world. Of
the 240 or so ccTLDs, about a quarter accept registrations from non-residents.
The increasing commercialization of the Internet has
focused attention on domain names. Firms, and others, increasingly seek
to have an Internet presence and see securing an appropriate second-level
domain name in an appropriate TLD as akin to hanging out their nameplate
in cyberspace. Domain names in .com/.net/.org (and in some of the more
commercial ccTLDs), however, have traditionally been issued on a first-come,
first-served basis. This has caused various types of conflict.
Trademarks are issued on a national and sectoral basis.
With the exception of some treaty-based registration systems that allow
multiple registration in a unified process, trademarks are issued by national
governments-one country at a time. Further, trademarks generally are issued
for one or only a few categories of goods of services at a time. Thus,
a firm can trademark the word "United" for air transport, but this will
not extend to moving vans unless the firm is in that business also. Trademark
registrations generally require use to remain effective; while they are
in effect they give the holder important rights against others who unfairly
would seek to capitalize on the goodwill of the mark by confusing consumers.
Equally importantly, trademarks protect consumers against those who might
seek to pass off their goods as produced by the mark holder. As a general
matter, however, in the US at least, trademark infringement requires commercial
use by the infringer. Absent commercial use, some type of unfair competition,
or a very small number of other specialized offenses (e.g. "tarnishment"
of a mark by associating it with obscenity), trademark law does not make
the use of the mark an offense. Thus, for example, in the United States
and many other countries parody, criticism, names of pets, and references
in literature, and every other use one might make of a basic dictionary
word such as "united," are all permissible uses of a trademarked word.
Indeed, unless the mark falls into a very small category of "famous" marks
where it is considered likely that any product which bears the mark will
be associated with a single source, it generally is permissible to make
commercial use of a name trademarked by another so long as it is not likely
to cause customer confusion. Even some types of commercial use are protected
against famousness, e.g. accurate comparative advertising and news reporting
and news commentary.
An underlying legal issue is whether registration of
a domain name that is identical to a trademarked term is in and of itself
a trademark violation. Generally speaking, in the US at least, one does
not violate a trademark right without commercial use (and, absent a finding
that the mark is famous, likelihood of confusion). Unless, therefore, registration
is itself a commercial use, mere registration without use of a domain name
cannot be a violation of a trademark right. This is particularly clear
in the case of trademarks in common words and in terms trademarked by more
than one party. On the other hand, two courts, one in the US and one in
the UK, have held otherwise. They found that a person who made a practice
of registering others' trademarks for potential resale was making commercial
use of those trademarks. Assuming that these decisions are correct, which
is itself controversial, I do not believe that the precedents would or
should apply to persons who are not in the business of registering domains
that contain trademarked terms for resale on a similar scale.
Types of Conflicts
The Internet is notoriously international, and every
one of the major TLDs gives access to sites that are accessible world-wide.
[There are some "alternate" gTLDs that require pointing one's browser to
a different DNS server. Although not heavily used at the moment, that may
change depending on the reaction to ICANN's actions.] A system that relied
on geographic distance and sectoral differentiation maps badly to a borderless
world in which every participant in the global network needs a unique address.
A number of conflicts have arisen between trademark
holders and others who register character strings identical or similar
to their trademarks. In so-called "cyber-squatting" cases, the allegation
is usually that the registrant is not using the domain but rather warehousing
in hopes of reselling it at a (sometimes substantial) profit. Not every
string conflict, however, necessarily involves a claim of mis-use of a
domain and not all warehousing is necessarily a mis-use. For example, firms
sometimes acquire domains with the same name as a trademark they have registered
even though they have no intention of using the domain. They do so in order
to prevent someone else from using it and causing customer confusion. Similarly,
firms and others sometime acquire domains for future use. A firm may register
a domain name before trademarking a term as part of the often-secret process
of preparing a new product or campaign. In fact, these practices have given
rise to some expressed concern that without new gTLDs large amounts of
the attractive part of the namespace might become unavailable to users.
As part of its first
round of consultations, WIPO sought testimony about the extent of the
domain name/trademark conflicts. Despite this effort, in my opinion the
factual record for any decisions regarding the extent to which there is
a domain name/trademark problem that needs solving remains depressingly
sparse. It is disappointing (if understandable given the very short amount
of time available) that WIPO has not sought to do, or commission, independent
quantitative research on the subject other than contacting existing registration
authorities and asking for data. Nevertheless, the largely anecdotal evidence
[see RFC 3, paras 254-260, for a summary of some of it] submitted to WIPO
and/or available from other sources in my opinion establishes the following
points with sufficient clarity to guide a modest amount of cautious future
policy making pending further research:
Conflicts can arise between multiple owners of a trademark
in the same "string" of characters. The owners may be
sectorally separate (same country, but different use
or different category of goods and services), or
geographically separate (same business, but different
countries or regions within a country), or
both sectorally and geographically separate.
Conflicts can arise between trademark holders and persons
with some other indisputably legitimate interest in a mark not deriving
from a trademark.
Domain name disputes involve a tiny fraction of the
number of domains registered in the open gTLDs. The NSI policies are very
favorable to trademark holders, so one would reasonably expect that a large
fraction of the trademark holders whose cases fit the criteria would choose
to invoke it; nothing, however, requires them to do so. The NSI dispute
policy, which applies only to conflicts involving an exact string match,
was invoked 838 times in 1998. This represents a 10% reduction over 1997.
The decline in disputes brought to NSI is all the more dramatic when one
considers that NSI registrations more than doubled in the same period from
962,000 in 1997 to 1.9 million registrations in 1998.
Of course, many disputes are never reported to NSI at
all because they do not fit NSI's criteria. For example, if "startrek"
is a trademarked term, then attempts to register that name by non-trademark
holders will be reviewable under the NSI policy. But an attempt to register
"startrek1" would not be unless there were a separate trademark for that
exact term. In the absence of firm data we must rely on anecdotal evidence
for the extent of the overall problem. One data point is the testimony
of Ms. Sarah Deutsch, Sr. Intellectual Property Counsel, Bell Atlantic,
who stated that in a year her office identified 784 domain names that it
considered infringed one of its trademarks, but only 10 could be resolved
through NSI's dispute resolution policy. Second
D.C. Consultation Transcript. Using that approximately 80:1 ratio to
inflate the NSI data suggests that of the 1.9 million new domain name registrations
in 1999, about 67,000 (i.e. 80*838) allegedly infringed a trademark. While
this is not a trivial number, it is still only a fraction of all registrations.
The suggestion that the number of domain name disputes
may have reached a plateau, or even peaked, is not entirely consistent
with some of the anecdotal evidence presented to WIPO, but it may be that
may be that precisely those who have been most affected by the conflicts
have had the most incentive to participate in the WIPO process. The Marques
study, Final Report paragraph 313, also can be read to suggest otherwise,
but one needs to consider whether the companies surveyed were representative
or likely to be particular targets, and the very small sample size.
A very small number of notorious "cyber-pirates" have
been engaged in systematic registration of domain names identical to trademarked
terms. Although at present there are no reliable data that permit one to
estimate the percentage of "cyber-pirate" or "cyber-squatting" cases attributable
to this group, trademark holders suggest it represents a considerable percentage
of the problems they believe that they face.
There is also an unquantified amount of what might be
termed amateur domain name speculation, in which individuals who are not
engaged in the wholesale registration of domains containing trademarked
character strings register domains that trademark holders believe are rightfully
theirs. The data on offer do not allow one to form a reliable estimate
of the percentage that so-called amateur speculators make up of the total
cases that trademark holders believe that they face.
In many cases these individuals avoid paying for registrations
by taking advantage of the 60-day period between registration and payment
under the current NSI terms of service. A substantial fraction of NSI's
domain name registrations are not in fact paid for at the end of the 60-day
An appreciable but unquantifiable fraction of the cases
alleged by trademark holders to fall in the above cases, and in particular
the allegedly amateur speculator cases, in fact appear to be cases where
the registrant has at least a colorable, and perhaps a very legitimate,
claim to the domain name. In some cases this arises from a competing trademark,
and in other cases it arises from some other legitimate commercial or non-commercial
purpose, use, or competing intellectual property right or name.
The overwhelming majority of the cases that have actually
gone to trial in the US and elsewhere and resulted in a reported decision
have resulted in victory for a trademark holder over a non-trademark holder.
Every organized cyber-squatter who has been taken to court appears to have
There have also been some well-reported cases of attempted
reverse domain hijacking in which trademark holders retracted their threat
to sue the holders of domains that used the same string as their trademark.
A few of these cases involved commercial, but most involved non-commercial
uses of the domain name; the key elements seems to have been bad publicity
for the mark holder, combined with limited likelihood of success in the
Trials can be expensive, and trademark holders have
with some frequency found it cheaper or more expedient to offer out-of-court
settlement to registrants of domain names that the trademark holder covets.
Whether or not the sums involved have been large, firms managing large
numbers of trademarks fear the cumulative cost of these settlements.
Aggrieved trademark holders in some countries believe
that their national court systems are so slow as to provide no meaningful
relief for domain name registrations that they believe infringe their trademarks.
Although they have no current plans to use them, some
firms are warehousing domain names corresponding to their trademarks
in order to prevent competitors from registering them.
The marketplace now provides a service for firms to
register a name in every top-level gTLD and ccTLD which accepts such registrations
through a single process. The going rate for this service is apparently
less than US$10,000.
Some persons have registered domain names similar but
not identical to the domains held by high-profile individuals or companies.
Some of these have sought to capitalize on the similarity, or on the typing
errors that might unwittingly send a web browser to the site. Motives for
registering these "oops" names and creating web sites appear to vary and
Using the domains to host web sites that parody or criticize
the individual (often a politician) or company;
Taking advantage of the accidental traffic for relatively
harmless commercial gain, e.g. to show the user an advertisement before
redirecting the user to the site the user was probably looking for;.
Taking advantage of the traffic for commercial gain
that would arguably tarnish the reputation of the company. For example,
a representative of AT&T stated that someone registered attt.com and
placed pornographic materials on the site, resulting in frequent telephone
calls to AT&T from consumers unaware of their typing error who wanted
to know why AT&T was hosting pornography. [Currently, however, the
site www.attt.com appears to be down;
whois now shows that name to be registered to AT&T.]
Taking advantage of poor typists who were seeking a
competitor's web site.
The understandable fear of trademark owners that they
must assert their rights to their marks in every medium has also contributed
to litigation and something of a hair-trigger approach to domain names
that use the same terms as trademarks.
There have been some notorious cases of "reverse domain
name hijacking" in which the owner of a trademark has sought to intimidate
the holder of a coveted domain name to surrender it. Examples include pokey.org,
dci.com, ty.com, roadrunner.com, and veronica.org.
The Final Report
As in the Interim Report, WIPO's proposal depends on
a chain of contracts regarding the assignment of domain names. ICANN will
be at the base of the chain. It will select and contract with a small number
of registries who will maintain and manage the database of domain
names. The registries will in turn contract with a much larger number of
registrars who will actually deal with the registrant-the
customers seeking a domain name. The core of the WIPO proposal is to ask
ICANN to initiate a chain of contractual obligations such that:
The ICANN-registry/registrar contract would have terms
requiring that all registrants agree to be bound by the WIPO takedown policy
for incorrect contact details, and that all registrants agree to submit
to, and be bound by the administrative dispute policy (WIPO-ADR) unless
there is contrary judgment of a competent court. Final Report, paragraph
162, 196, 220(ii).
Furthermore, all registries would be required to
agree to adhere to decisions of the WIPO-ADR panels
unless these were contradicted by a competent court, and
agree not to register in any gTLD those domains identical
to trademarks found as famous by the WIPO famous names panels.
All registrants would
agree not to sue the various dispute service providers,
agree not to sue the registrar or the registries for
implementing the results of the ADR proceedings. (Final Report, para 220.)
As we will see, this last agreement turns out to be significant if the
registrant believes the arbitrators have erred.
WIPO proposes that these rules should apply to all open
gTLDs, that is to .com, .net, .org and to any and all new gTLDs that would
offer registrations to anyone for sale. WIPO is not proposing that ICANN
require that these rules apply to ccTLDs, although it recommends that ccTLDs
adopt them spontaneously. Being contractually based, the new rules will
be imposed on persons who already have contracts for domains in .com, .net.,
and .org as those agreements lapse. Existing registrants will be presented
with the revised contractual terms on a take-it-or-leave-the-Internet basis.
The Interim Report proposed that the WIPO-ADR cyber-arbitration
could be invoked by any third party who felt their intellectual property
rights of any sort (not just a trademark) had been affected by the domain
registration. In contrast, the Final Report limits the scope of the mandatory
arbitration clause to "abusive registrations" a.k.a. cybersquatting. Registrants
will, however, be given the option of agreeing to more sweeping arbitration
at the time of (re-)registration.
As in the Interim Report, WIPO also proposes the creation
of a parallel process in which a centralized tribunal would hear requests
by trademark owners that their marks be certified as globally famous or
well-known across a widespread geographical area and across different classes
of goods and services. Marks certified in this process would be entitled
to two special privileges:
Registries and registrars would agree to refuse to register
a domain name identical to the mark. However, this exclusion would "apply
only to new open gTLDs," and "would not have any retroactive effect, i.e.
if a party had registered a string as a domain name in relation to which
an exclusion is later granted to another party, the first party's domain
name would remain unaffected by the exclusion (but the other party could
seek to obtain its cancellation through the administrative dispute-resolution
procedure)." Final Report Para 276.
Marks certified in the procedure would also benefit
from an "evidentiary presumption" in WIPO-ADR proceedings. Any time the
holder of a certified mark could "show" "(i) that a domain name was identical
or misleadingly similar to the mark that is the subject of the exclusion;
and (ii) that the domain name was being used in a way that was likely to
damage the interests of the owner of the mark that was the subject of the
exclusion. The burden of proof in the procedure would shift to the domain
name registrant to justify that its registration of the domain name was
in good faith and to show why that registration should not be canceled.
If the domain name registrant were unable to make such a showing, the registration
would be canceled." Final Report, para. 289.
How one feels about the Final Report depends in significant
part on what one uses as a baseline for comparison.
Compared to the Interim Report, the Final Report looks
good, mostly because the Interim Report was--to be blunt--both one-sided
and overreaching. Although not without flaws, the Final Report is more
cautious, and more balanced, than its predecessor.
Compared to current practices, the Final Report also
represents potential progress: With the exception of the proposed special
privileges for famous marks (and assuming that some minor ambiguities can
be resolved), the system proposed improves on current practices. Current
practices are a combination of
The precedents being built up fairly rapidly in the
judicial systems of several countries; and
The actions of the NSI dispute policy in what appear
to be a declining number of cases per year; and
The practices of registrants and trademark holders.
On this baseline, the picture is generally positive.
Unlike the Interim Report, the Final Report seeks to reflect and build
on current law, rather than to replace it. The proposed definition of "abusive
registrations" and the means proposed for adjudicating claims of abuse
appear to be substantially superior to the NSI dispute policy, although
some practical issues may remain to be fleshed out, particularly regarding
the formal description of the policy in the Annexes, some transitional
issues, and the conduct of on-line arbitrations.
In one respect, however, the Final Report falls badly
short. For the reasons set out in more detail below, the proposals relating
to special privileges for famous marks are unjustified both in principle
and in practice.
Compared to my ideal, the Final Report leaves quite
a bit to be desired.
Privacy protections in the existing open .gTLDs (.com,
.org & .net) falls to zero. Combined with procedures designed to make
it much more difficult to submit false registration information, the net
effect is to reduce privacy in registration and acquisition of domain names
below their already low level.
The Final Report is at best lukewarm in its endorsement
of a privacy-enhanced global Top-Level Domain (gTLD) such as .per,.nom,
A party who loses an arbitration under the proposed
procedure, especially a person living in the USA, may find it difficult
to secure judicial review of the decision to take away his/her domain name.
The Report assumes a level of competence in online arbitration
that does not yet exist.
To the extent that the Interim Report fairly captured
the agenda of a segment of the Intellectual-property-owning corporate sector,
the Final Report may also appear to be something of a disappointment to
The (Relatively) Good News
Several of the most objectionable features of the Interim
Report have been removed or altered in the Final Report.
Excessive scope. The
proposals in the Interim Report tried to solve every imagined intellectual
property problem relating to domain names, instead of concentrating on
the trademark-related issues that most urgently need solution. The Interim
Report went far beyond the issues raised in the U.S. Government White Paper.
In so doing it threatened to create an unprecedented opportunity for trademark
holders to attempt reverse domain name hijacking at the expense of unrepresented
parties. WIPO instead offered a comprehensive scheme for alternate dispute
resolution of almost every conceivable intellectual property dispute that
might involve a domain name-including substantial non-trademark issues
For example, the Interim Report would have required
registrants to arbitrate claims that their domain name infringed another's
"right of personality". The right of personality is a controversial doctrine
by which some countries give persons, including politicians, actors, and
other famous people, special rights over the use of their names. In some
cases the right includes elements of privacy, reputation, protection against
defamation, and even "a right of informational self-determination," i.e.,
a right exclusively to determine whether and to what extent others might
be permitted to portray one's life story in general, or certain events
from one's life. The danger was that this expansive scope would have constrained
expressive activity if, for example, politicians could claim that their
critics were not allowed to register the politician's names, nor perhaps
even strings containing their names (e.g. contraPinochet) as domains. Indeed,
in RFC 3, para 115, WIPO suggested that "any dispute concerning the domain
name" could go before its proposed administrative tribunals-a phrase that
apparently included claims that a domain name is libelous, offensive, guilty
of lèse-majesté, contained a geographic identifier,
and even contract disputes involving a domain name.
In contrast, the Final Report restricts the proposed
ADR procedure to cases in which the complainant alleges an "abusive registration"
(cybersquatting) on the part of the registrant. The Final Report specifically
disclaims covering cases other than those relating to cybersquatting on
names protected by trademarks and service marks (paragraph 167). Thus,
cases where both sides have valid trademarks, and claims based on trade
names, geographical indications or personality rights are all explicitly
excluded from the procedure. Id.
One of the more common criticisms of the Interim Report
was that it failed to offer a definition of cybersquatting. The Final Report
offers such a definition for the first time. It defines a domain name registration
as "abusive" (para. 171(1)) if,
"(i) the domain name is identical or misleadingly similar
to a trade or service mark in which the complainant has rights;" and
"(ii) the holder of the domain name has no rights or
legitimate interests in respect of the domain name;" and
"(iii) the domain name has been registered and is used
in bad faith."
For the purposes of the third element of the definition
of "abusive registration," the Final Report states in paragraph 171(2)
that "the following, in particular, shall be evidence of the registration
and use of a domain name in bad faith:
"(a) an offer to sell, rent or otherwise transfer the
domain name to the owner of the trade or service mark, or to a competitor
of the owner of the trade or service mark, for valuable consideration;"
"(b) an attempt to attract, for financial gain, Internet
users to the domain name holder's website or other on-line location, by
creating confusion with the trade or service mark of the complainant;"
"(c) the registration of the domain name in order to
prevent the owner of the trade or service mark from reflecting the mark
in a corresponding domain name, provided that a pattern of such conduct
has been established on the part of the domain name holder;" or
"(d) the registration of the domain name in order to
disrupt the business of a competitor."
The Final Report emphasizes that "the behavior of innocent
or good faith domain name registrants is not to be considered abusive.
For example, a small business that had registered a domain name could show,
through business plans, correspondence, reports, or other forms of evidence,
that it had a bona fide intention to use the name in good faith. Domain
name registrations that are justified by legitimate free speech rights
or by legitimate non-commercial considerations would likewise not be considered
to be abusive." Para. 172.
Paragraph 171 is reproduced as Paragraph 15 of Annex
IV, the proposed policy document. But, paragraph 172 is inexplicably
absent from Annex IV. (The Annexes were not circulated to the Experts Panel
prior to publication). Nevertheless, one presumes that arbitrators will
understand that their primary task is to determine the good faith of a
registrant in the light of this important clarification.
Even in light of paragraph 172, the wording of paragraph
171 suggests a few issues that may arise:
Presumably, the complainant carries the burden of proof.
Although this is not explicitly stated anywhere, plaintiffs usually have
the burden of proof, and in the absence of anything to the contrary, it
seems right to assume it. Indeed, given that paragraph 291 suggests that
the owner of mark that has been certified as globally famous is entitled
to an "evidentiary presumption" that places a "burden of justifying the
registration" on the registrant, no other conclusion seems possible in
the ordinary case.
A related question is whether plaintiff must affirmatively
allege each of the three elements of an abusive registration, and in particular
whether plaintiff must affirmatively allege that registrant has no legitimate
rights or interests in the name at issue. This requirement seems to follow
from the plaintiff having the burden of proof. Rules of court do not apply
in arbitrations, but it is to be hoped that lawyers representing parties
in these cases will hold their submissions to the same high standards of
honesty and disclosure that would apply in a court proceeding.
A slightly more difficult question is whether the complainant
fully meets his burden of proof of bad faith by offering any of the types
of "evidence" listed in paragraph 171(2); a considerably more difficult
question is what might suffice to rebut that showing. It seems probable
that in the absence of any contrary evidence, persuasive evidence conforming
to any of the four categories in paragraph 171(2) would suffice to make
out a case (and indeed, the door is not closed to offering some other type
of evidence instead). Paragraph 171 should not be understood, however,
to suggest that even a persuasive prima facie showing of this kind is conclusive;
there is always room for rebuttal evidence. For example, if Plaintiff submits
evidence that complainant has a valid trademark in "companyname." alleges
that registrant does not, and submits evidence that registrant offered
to sell companyname.com to complainant for $1000, this is sufficient evidence
to make out a case of abusive registration. However, it remains open to
registrant to show either that he has a valid interest in companyname,
or that the offer to sell was in response to a request from the plaintiff.
Although paragraph 171(2)(a) is ambiguous on the issue,
it is hard to see how it could be bad faith to respond to a solicitation
of a bid, especially if there had been any sort of dispute in progress
between the parties and the offer to sell was part of a settlement. Any
other rule would create a trap for the unwary, but given the seemingly
absolute wording of paragraph 171(2)(a) the matter is not as free from
doubt as one would wish. There seems little danger that understanding paragraph
171(2)(a) in the manner proposed will create a large opening for passive
cybersquatting. Any party who makes a practice of registering other people's
trademarks and waiting for offers to roll in is likely to be caught under
paragraph 171(3), which deals with patterns of registering others' trademarks.
Ideally, paragraph 171(2)(a) would be clarified to make it abusive to "initiate"
an offer rather than merely "offer".
The abusive registrations policy will definitely classify
some name brokerages as cybersquatters. An issue is whether any domain
name brokers can remain in business. A name broker who registers a coined
trademark that belongs to only one firm is unlikely to be able to show
that he has rights or legitimate interests in the name. Thus, anyone other
than a owner or licensee of the mark who registers "coca-cola" in any gTLD
for the purpose of resale (as opposed to, say, inveighing against
the consumption of sugary drinks) is henceforth (and probably already)
a cybersquatter. The picture is slightly murkier with regard to generic
words. To the extent that generic terms such as "cars" or "fresh" or "united"
cannot be trademarked, a name broker might be able to defend a claim by
arguing that the complainant did not have the valid trade or service mark
needed to fulfill the first prong of the definition.
One thing seems very clear. Although some, perhaps many,
cases will lend themselves to easy determination on the papers, there will
inevitably be a class of cases in which the arbitrators will be called
upon to make credibility determinations. Suppose, for example, that registrant
explains that he registered companyname.com because he calls his cat "companyname".
People do call cats all sorts of strange things. Will the naked claim be
sufficient? Fortunately, in the absence of any offer to sell the domain
name, or the (alleged) ownership of a troupe of cats who happen to bear
trademarked names, the issue will not arise. But if it does, one hopes
that the arbitrators will, especially in the early cases, make clear what
sort of proof they expect, e.g. a sworn affidavit, a picture of the cat
on the web page, written testimony from neighbors or a vet, or whatever.
'Smorgasbord' approach to
law. I criticized the Interim Report
for taking what I characterized as a "smorgasbord" approach to choice of
law. Critique at
paragraphs 21, 155- 157. In particular, I criticized WIPO's suggestion
that arbitrators should be required to refer to a set of WIPO-defined "guiding
principles." In contrast, paragraph 176 of the Final Report notes that,
"In applying the definition of abusive registration given above in the
administrative procedure, the panel of decision-makers appointed in the
procedure shall, to the extent necessary, make reference to the law or
rules of law that it determines to be applicable in view of the circumstances
of the case. Thus, for example, if the parties to the procedure were resident
in one country, the domain name was registered through a registrar in that
country and the evidence of the bad faith registration and use of the domain
name related to activity in the same country, it would be appropriate for
the decision-maker to refer to the law of the country concerned in applying
the definition." Similarly, Paragraph 15 of
Annex IV, the proposed policy document, puts the same point but in
slightly less clear terms: "To the extent that the Panel makes reference
to any applicable law to reach a determination, it shall apply the law
or rules of law that it determines to be appropriate in light of all the
What constitute "rights and legitimate interests," Final
Report para. 171(1)(ii), is one area of potential ambiguity in the definition
of "abusive registration." Rights and legitimate interests are creatures
of law and, perhaps, custom. Solicitude for the rights of free expression
of citizens differs considerably around the globe, and choice of law may
be significant in a multi-jurisdictional case. The interests one can have
in a name differ in other ways from country to country (e.g. the latitude
given to startup companies, the nature of interests one can have in ones'
own name). Which law, and which customs, apply may be a complex question
if a party from Korea registers a domain with a registrar in Japan that
deposits the data in a registry located in the USA, only to have a Brazilian
claim that the registration infringes a trademark. It seems to me, however,
that such multi-jurisdictional problems can be unraveled using traditional
choice of law principles. In my view, paragraph 176 of the Final Report,
which states that "In applying the definition of abusive registration ...
the panel of decision-makers appointed in the procedure shall, to the extent
necessary, make reference to the law or rules of law that it determines
to be applicable in view of the circumstances of the case," should be understood
to require nothing less. While the text of that paragraph is perhaps not
as transparently clear on the issue as one might ideally wish, the rejection
of any attempt to create a lex mercatoria or a free-standing trans-national
law of domain names is clear from the overall thrust of the Final Report.
It is doubly clear when one notes the absence in the Final Report of anything
comparable to the "guiding principles" that appeared in paragraphs 198-200
of the Interim Report and that apparently might have trumped national law.
Enabling censorship. Many
argued that the Interim Report failed to protect fundamental free-speech
interests including parody, and criticism of famous persons and corporations.
So long as it is understood that these expressive activities constitute
"rights and legitimate interests" in a registration - and paragraph 172
of the Final Report seems to make that clear - then the Final Report can
be regarded as an unqualified improvement in this regard.
Potential for intimidation.
The Interim Report created an expensive loser-pays
arbitration process with uncertain rules that I argued would intimidate
persons who have registered into surrendering valid registrations thus
enabling increased "reverse domain name hijacking". The Final Report substantially
solves this problem by providing for much clearer rules, at least outside
the context of famous names. The loser may still have to pay in many cases
(the arbitrators get to decide who pays), but since a finding of "bad faith"
is required before the registrant pays this seems acceptable. It may be
more unfair to make loser pay in a proceeding involving a famous name,
however, since the complainant gets to have an "evidentiary presumption"
that they win even if the name is merely "misleading similar" (whatever
that means) - and it seems invidious to presume bad faith by means of an
evidentiary presumption in cases where the similarity is an issue.
Relied on potentially unenforceable
Because the contracts of adhesion
proposed by WIPO were so one-sided, there was reason to believe they would
not be enforceable in court and that the entire proposal was therefore
unworkable as the contracts were arguably unconscionable, and doubly adhesive.
The Final Report solves the first part of this problem by making the contract
much fairer. The equities are now in favor of enforcement, or at least
not against it, and in my opinion the contract cannot therefore be called
unconscionable. However, contracts which come as part of a standard form
that is not subject to bargaining are called "contracts of adhesion"; online
contracts of adhesion are enforceable in some parts of the U.S., see, e.g.,
Hill v. Gateway 2000, Inc., 105 F.3d 1147 (7th Cir. 1997), cert.
denied, 118 S. Ct. 47 (1997), and there are (somewhat controversial)
proposals to make this the uniform rule. The standard policy argument in
favor of enforcing adhesive contracts is that consumers have a choice in
the marketplace and can always switch suppliers; if it happens that all
the suppliers use the same term, this is considered to be evidence that
the term is efficient or, at least, that there is insufficient consumer
demand for an alternate term. This policy justification does not fit well
when the party offering the adhesive contract, the registrar, is doing
so because of an adhesive contract it signed with the registry. If the
justification for enforcing adhesive contracts turns on the fundamentally
competitive nature of the market, and the idea of sovereign consumers choosing
among alternatives, then it would not be appropriate to allow the adhesive
contract proposed by WIPO to shelter behind this rationale, as it is proposed
that ICANN require that all gTLD registries/registrars to force
the identical terms from all their customers. Thus, unlike
the ordinary contract of adhesion, the terms will neither be bargained-for
(since the registrar cannot bargain on this issue, being contractually
required to use the arbitration clause), nor even potentially subject to
competition. The good news here, perhaps, is that so long as the arbitrators
do their jobs properly there will be few if any parties willing to mount
the legal challenge. Furthermore, any party that attempts such a challenge
risks arriving in court with the equities against them.
Matters for ICANN
The Final Report essentially leaves two important matters
to ICANN's sound discretion. While all should welcome WIPO's conclusion
that there are no insurmountable intellectual property barriers to the
creation of privacy-enhanced gTLD and to new differentiated and even undifferentiated
gTLDs in general, some comments about strategy and timing seem appropriate.
WIPO concludes that, "on condition that the proposed
improved practices for domain name registrations, the proposed administrative
dispute-resolution procedure and the proposed measures for the protection
of famous and well-known marks and for the suppression of abusive registrations
of domain names are all adopted, new gTLDs can be introduced, provided
that they are introduced in a slow and controlled manner which takes account
of the efficacy of the proposed new practices and procedures in reducing
existing problems." Final Report, paragraph 343. This conclusion is welcome
and even enlightened compared to some of the views that one hears. I think,
however, it understates the urgent need for one or more privacy-enhanced
gTLDs. In general, it seems plausible that a "controlled manner" can contribute
to minimizing disputes in the new gTLDs. Controlled, however, does not
necessarily mean "slow"-rather, it means "orderly." Indeed, I believe that
one of most important things that ICANN could do to reduce speculation
in domain names, and thus reduce the conflicts that are most likely to
harm trademark owners, is to clearly state an upgrade path for the introduction
of new gTLDs as soon as possible.
The issue of new gTLD's provides a classic example of
the economics of scarcity, of network effects, and the problem of path
dependence. Competition for attractive names in the .com, and to a lesser
extent .net and .org domains is driven by a combination of the following
Second-Level Scarcity: There currently are only three
open gTLDs, causing a scarcity of available common English words, a perception
of an over-all shortage, and a hoarding mentality. This accounts for the
gold-rush approach to registrations.
Network effect: To a significant extent, .com has achieved
a small priority of place in the English-speaking Internet-using world
as the TLD of choice for commercial undertakings (although, interestingly,
it does not appear to have this priority in the non-English-speaking world).
If there were a substantial number of competitors for .com, and it became
widely understood that any Internet address was substantially arbitrary,
then the understandable fears of trademark owners that consumers might
naturally gravitate to .com in search of their product will be greatly
TLD Scarcity. If TLDs were managed on free-market principles,
the pent-up demand for additional attractive second-level domains would
surely have resulted in the creation of many new gTLDs already. The move
by some ccTLDs to brand themselves as de-facto gTLDs (e.g. .tm, .md, .io,
.to) demonstrates the existence of a market.
Furthermore, any proposal for creating a small number
of new gTLDs, slowly, that does not make it clear that many more will be
created in a predictable fashion according to a fairly predictable schedule
risks repeating the scarcity problem at least, and perhaps the network
effect problem as well. This is the problem of path-dependence. Perhaps
counter-intuitively, opening only a small number of domains in some ways
may be more harmful to trademark owners in the long run than opening so
many that the market for domains becomes flooded (and the value of cyberpiracy/cybersquatting
becomes greatly reduced as the number of equally attractive TLDs grows).
A world with many, differentiated, gTLDs will help further educate users
to the reality that the presence of a particular word in a domain name
does not necessarily map to a company whose product may share that name.
A substantial increase in the number of gTLDs would also make it easier
to provide attractive second-level names to each of several parties with
an interest in the same character string (e.g., multiple holders of sectoral
or national trademark interests in the same name).
A fair solution requires some creativity. Although there
may be some technical constraints on the rate at which new TLDs safely
can be proliferated, and also on the absolute number that can comfortably
be established under the current architecture, I understand that there
is no technical reason why at least a hundred new TLDs could not be created
over a year at a rate of, say, two per week. While I do not necessarily
advocate that many, one should not assume that a solution with many gTLDs
will be worse than one with very few and the attendant scarcity mentality
that shortages breed. Indeed, Jon Postel proposed creating up to 150 more
TLDs. See Final Report, para. 305.
In my opinion, the issue of gTLDs open to all comers
should not be separated from the very closely related issue of restricted,
or structured/chartered, gTLDs. A restricted gTLD is a domain with a defined
and limited purpose. There have been a plethora of proposals for restricted
gTLDs, including suggestions of .biz (for firms only), .nom (for personal
names only), .per (ditto), .museum, .law, .fun, .xxx (a domain which might
make content filtering more easy for those who choose that option), and
One can imagine at least two kinds of restricted gTLD:
An open restricted gTLD, where the purpose of the domain
is announced but registrations are taken in the same manner as .com, i.e.
first-come-first-served, with no policing of bona fides of registrant nor
of intended use prior to registration. What policing exists is driven by
third-party complaints after the fact; and both registry and registrar
seek to avoid participation in those disputes. This was the original design
of .net (for ISPs and related providers), and .org (for non-profits); it
is fair to say that as regards those domains the structure has broken down.
A closed (or moderated) restricted gTLD, where not only
is the purpose of the domain announced, but the task of approving registrations
by policing the bona fides of registrant and/or the intended use prior
to registration is delegated to an Approval Authority. The Approval Authority
for each moderated gTLD would be an appropriate body, with relevant expertise
regarding the purposes of that domain. Policing would exist would in the
first instance be the gate-keeper function of the Approval Authority, but
there could also be scope for third party complaints to the Approval Authority.
The Authority would have the authority to de-list registrants or transfer
registrations if it upheld complaints. There might also be scope for meta-policing
via complaints (to ICANN?) that the Approval Authority was doing a bad
Specialized gTLDs should be created, with a mixture
of open and moderated structures. A variety of procedures for helping ICANN
to select the new gTLDs to be created might be used. In addition to top-down
planning of the sort advocated above, some gTLDs might be allocated according
to popular demand, expressed and measured in some fashion akin to the procedures
used by the Usenet Volunteer Vote-Takers,
or the procedures currently being developed for membership in ICANN. In
at least some of these there would be no need for the sort of administrative
dispute procedures advocated by WIPO because the uses were purely non-commercial
(with, perhaps, some sort of policing or challenge mechanism to prevent
abuse) or because access was carefully controlled by a responsible body.
The Interim Report provided zero privacy protections
for the name, address and phone number of individual registrants. Under
current practices, a registrant can achieve privacy by giving inaccurate
contact details, but this will become riskier under the plan proposed in
the Final Report since inaccurate contact details will be grounds for rescinding
It is widely albeit not universally agreed that commercial
users do not have a strong claim to privacy-enhanced domain names. Many,
however, believe as I do that individual registrants who are not engaged
in a profit-making endeavor do have a right to keep their identity and
contact information private. One day everyone on the planet may have their
own domain. Data collection and publication requirements suited to businesses
are not appropriate for ordinary people who register a domain and who understandably
do not wish their name, telephone number, and address published on the
world wide web. It is even less suited to social, ethnic, religious, and
political groups who have reason to fear retaliation if the information
were disclosed. Every collector and keeper of this personal data should
be held to the highest standards of protecting individual privacy.
Given that it will become more difficult to camouflage
identity in the DNS, the absolute minimum that is required to ensure that
the emerging Internet architecture retains a modicum of personal privacy
is to create a privacy-enhanced zone on the Internet. There needs to be
a domain where individuals can register for non-commercial purposes without
having their personal contact details visible for the world to see. Unlisted/unpublished
telephone numbers are commonly available in many countries, and it is difficult
to see what harm a similar system would cause in the DNS.
That said, I accept that WIPO is correct that a privacy-enhanced
non-commercial gTLD cannot be implemented without at least some further
discussion. There remain some issues to be decided, notably what precisely
constitutes the "non-commercial" use of a domain name. (Is a religious
group's solicitation of funds non-commercial? The sale of sacred candles?
And so on.) My difference with WIPO on this subject is as much one of tone
as substance, as I have a very different sense of the urgency with which
the remaining issues need to be tackled.
Some will say, with some justice, that all this is too
kind, that the absence of any privacy protections in the existing gTLDs
is a scandal whose ill effects should not be replicated, much less exacerbated
by the WIPO proposals. There are two replies to this critique. First, privacy
as such has not traditionally been seen as an intellectual property issue,
but rather as a matter of human rights. As such, the WIPO process was not
the place to look for improvements in this area. That is ICANN's responsibility
and ICANN's duty. The WIPO report represents merely a sort of lower bound,
not a statement of optima. It remains open to ICANN to convene a process
that discusses the human rights issues implicated by its work; indeed,
there are issues in the world even more important than the protection of
intellectual property. (Furthermore, to the extent that one believes in
rights of personality, one's interest in one's personal data may in fact
be an intellectual property right.) Second, one should not forget that
the DNS, like every electronic data collection and dissemination project,
remains subject to various national laws. The trend is towards increasing
protection for personal data, and it may be that these laws and directives
are the arena in which privacy rights ultimately will be vindicated.
The Bad News
The most significant bad news concerns the treatment
of famous marks. Certain other matters, particularly the procedural details
also raise substantial concerns in their current form.
Treatment of Famous Trademarks
The Interim Report proposed new, cumbersome, unwarranted,
and potentially limitless procedures to protect "famous" trademarks.
These proposals are repeated essentially unchanged in the Final Report,
although some of their malign effects are reduced due to the more limited
scope of the proposed ADR system. Both the ad hoc procedure for certifying
which marks are sufficiently globally famous to qualify for the special
advantages WIPO proposes and, the consequences of achieving that status
are unsatisfactory at both theoretical and practical levels.
WIPO proposes that a centralized tribunal be impaneled
that would rule on ex parte applications by trademark owners that their
mark was sufficiently famous to be declared globally famous. This entire
project described in Chapter Four of the Final Report is at best premature.
While many nations have, consistent with their treaty obligations and national
law, developed standards for identifying nationally famous and/or
sectorally well-known marks there is no consensus procedure for identifying
globally famous or globally well-known marks. Furthermore,
any mark which is globally famous or well-known will also be nationally
famous or well-known in most nations. As such it already benefits from
existing, substantial, protections under national law and is therefore
already quite well protected, by the courts-and by the WIPO-ADR procedures
when they follow national law.
World-wide there probably are already at least tens
of thousands of identified nationally or regionally famous and well-known
marks. As the procedures for identifying these marks become more routinized
and widespread there are potentially hundreds of thousands, or even millions,
on a world-wide basis. WIPO does not (as indeed it should not) propose
to give special gTLD protection to each of the many nationally famous and
well-known marks, but rather to create a new category of globally
famous and well-known marks. However, it appears that no one-WIPO included-has
any idea how many marks this would be. In the Interim Report WIPO suggested
that only "a small number of names is involved...it is likely that famous
and well-known marks that may qualify ... number in the hundreds, rather
than the thousands." RFC 3, para. 216. Interestingly, no estimate is provided
in the Final Report.
The job of trying to find appropriate and definite criteria
is a thankless one, as the inability of the Committee to come up with something
better demonstrates. WIPO rightly rejected mechanistic criteria such as
the number of countries in which a mark is registered, as these too are
manipulable, and they also fail to measure whether a mark has the global
fame of exceedingly common names such as "Coca-cola." Unfortunately, rather
than recognize that the task is perhaps impossible, but certainly not yet
possible, WIPO pressed on.
There are several conceptual problems with WIPO's proposal:
The "exclusion" protection for certified famous marks
provides marks owners with rights not currently found in law, notably the
right to block non-infringing uses of the name they have trademarked;
The criteria WIPO proposes be used for identifying which
marks are sufficiently famous to enjoy enhanced protection are vague, and
in one appears to require evidence whose prejudicial effect will outweigh
any probative value (as WIPO argues ADR is needed because cybersquatting
affects many trademark holders, making being the subject of cybersquatting
an indication of global famousness seems especially odd.);
No one has any idea how many marks will qualify. Not
only is there no upper limit, WIPO has now retreated from its low estimate
in the Interim Report;
The proposed "evidentiary presumption" applies far too
broadly, and is in any case an inappropriate remedy.
Problem: Provides rights
not found at law. The protections proposed
for famous marks exceed those currently available at law, thus violating
the fundamental aim stated in the Final Report that "the goal of this WIPO
Process is not to create new rights of intellectual property, nor to accord
greater protection to intellectual property in cyberspace than that which
exists elsewhere." Final Report, paragraph 34. As WIPO itself notes, "the
provisions of the Paris Conventions and the TRIPS Agreement are directed
at the protection of famous and well-known marks against the registration
or use of other infringing marks. Domain names, of course, are not the
same thing as marks and are used for many purposes other than the identification
of a producer or seller of goods or services." Final Report, paragraph
258. WIPO is to be commended for its honesty in noting that these international
treaties do not create a right to prevent registration of domain names.
This, however, leaves the question of where that right comes from.
Once a mark is identified as famous, the proposed remedies
and benefits are over-broad, as they block non-commercial uses of the same
name, and hard to understand (and, it appears, over-broad), as applied
to the multiplicity of similar names.
WIPO proposes two types of benefits to globally famous
marks. The "exclusion" would automatically block the registration of a
domain identical to the trademark in any new gTLD. This exclusion fails
to reflect the fact that the international consensus on the protection
of famous and well-known marks extends only to protection against commercial
use of those marks. Whatever protection these marks are entitled to under
treaty extends only to protection against others making commercial use
of the mark.
Similarly, although the laws of many nations provide
protection against dilution of a trademark this too can require commercial
use, albeit not necessarily a showing of likely customer confusion. For
example, the U.S. federal Trademark Dilution Act specifically excludes
non-commercial use of a mark from its coverage. 15 U.S.C. § 1125(c)(4)(B).
Thus, in Lockheed Martin Corporation v. Network Solutions, the court
"in Panavision and Intermatic, the
fact that the defendant's conduct impeded plaintiff's use of its trademark
as a domain name was not the determining factor in finding that the defendant's
use was diluting. If impeding use of the trademark as a domain name were
the only factor, the court in Panavision would not have asserted
that registration of a trademark 'as a domain name, without more, is not
a commercial use of the trademark and therefore not within the prohibitions
of the Act.'
Panavision, 945 F. Supp. at 1303. All prior domain
name registrations corresponding to words in a trademark impede the trademark
owner's use of the same words for use as a domain name. The Internet, however,
is not exclusively a medium of commerce. The non-commercial use of a domain
name that impedes a trademark owner's use of that domain name does not
985 F. Supp. 949, 959-60 (C.D. Cal. 1997). As the
court noted, "Internet users may also have a free speech interest in non-infringing
uses of domain names that are similar or identical to trademarks." Id.
at 964 n. 9.176. Since a registration of even a famous mark is not, without
some commercial use, necessarily infringing, it is unreasonable to give
even globally famous marks a blank pre-emptive right blocking registrations
in all gTLDs
WIPO makes two arguments for extending the protection
of famous marks beyond what is currently available in law. The first argument
need not detain us long. Famous marks, WIPO argues, deserve something extra
in the DNS because they have extra rights in national law, "The administrative
procedure is, however, rightly available to all and does not give expression
to the separate international protection that already exists for famous
and well-known marks", Final Report, paragraph 262; an exclusion mechanism
is justified because "it seems correct in principle that famous and well-known
marks are recognized in international law as being subject to special protection,"
id., paragraph 263. Rather than "extend such protection," the exclusion
will "give expression to it in the DNS". Since it is already conceded that
this extra protection does not derive from the Paris Convention or TRIPS,
it can only derive from national law; as such the appropriate level of
protection will be applied when judges and arbitrators decide specific
cases. In any event, WIPO's argument misses the point. The issue is not
how to replicate the relative degrees of protection given to different
types of trademarks. The issue is how to craft processes that provide trademark
owners who have legal rights that are cheap to violate in the DNS, but
expensive to vindicate in the courts, with a cheap, fast, fair means of
enforcing their rights-without going overboard and violating some other
rights in the process. The WIPO-ADR already does this.
WIPO's second argument is more practical than legal:
"We also consider that it could be highly economically wasteful, in view
of the experience in the existing open gTLDs over the past five years,
to add new open gTLDs without any safeguard against the grabbing or the
squatting of famous and well-known marks by unauthorized parties in those
new open gTLDs." This argument is not persuasive, either on its own terms,
or in light of WIPO's consistently-repeated promise that its objective
was to replicate existing legal relations, not expand the rights of intellectual
property owners. It is not the law, in the US at least, that one commits
an actionable wrong against even a famous trademark by making many non-commercial
use of it. Thus, an exclusion which works to prevent critics of a corporation
from registering its name in a new gTLD for the purpose of critiquing it
gives that company an advantage not justified by law (and thus violating
WIPO's own terms of reference for itself).
That said, there is clearly a good argument for some
transitional rule to cover the first micro-seconds or days when certain
new gTLDs are opened up. Such a rule would address the competing interests
of the multiple possible trademark holders as well as non-trademark holders
with a legitimate interest in a given domain name. But the need for a rule
to prevent (or mediate) a short-lived stampede should not be leveraged
into a rule that creates a permanent preference of unlimited scope. Nor
is it clear why the same rule would apply to, say, a non-commercial gTLD.
WIPO itself has had an international working group seeking
to identify criteria for world-famous marks for several years. See Final
Report, para. 284. This group has failed to produce either a list of world-famous
marks or a set of definitive criteria for identifying such a mark. See
id. As WIPO accepts the general principle that "the goal of this WIPO Process
is not to create new rights of intellectual property, nor to accord greater
protection to intellectual property in cyberspace than that which exists
elsewhere," Final Report, paragraph 34, it seems most in keeping with this
principle to wait until the bodies already charged with finding definitive
criteria for all purposes do so.
Problem: No Upper Limit
The ad hoc procedures WIPO proposes to create
have no structural incentive for keeping the number of specially privileged
marks within reasonable bounds. Put simply, the participants in WIPO's
proposed process have no incentive to say "no" to anyone claiming that
his mark is famous or well-known. The consequence for the DNS could be
a substantial erosion of the available namespace as an increasing number
of names, including common words, are reserved and made unavailable in
every gTLD. WIPO responds that the "best safeguard" against this fear is
"discipline and rigor in relation to the criteria for assessment of entitlement
to an exclusion," Final Report, paragraph 274, but it offers no explanation
of how this is to be achieved.
If it cannot scrap the entire idea, ICANN needs to set
an upper bound for the number of marks that could benefit from the process.
Once such a ceiling was in place, the decision-makers would have an incentive
to be cautious about whether marks are sufficiently famous to qualify,
for fear that over-liberality in the initial decisions would leave out
more deserving marks whose owners were slower to request certification.
An initial ceiling could be 500, 1000, or even more, trademarks. Since
any initial number is arbitrary, the ceiling could be subject to review
(up or down) by ICANN or some other neutral body every five or ten years.
WIPO explains its opposition to an upper limit in terms
that reveal just how necessary a limit will be: "We consider that a quota
could operate in an entirely arbitrary manner. The selection of the level
of the quota would, for a start, be arbitrary. The level could work arbitrarily
against marks which become suddenly famous, whose owners might be prejudiced
by the previous filling of the quota." Final Report, paragraph 269. With
these words, WIPO admits that there is no quota it can propose that would
be large enough, and that whatever the quota is agreed, WIPO fears that
the process it proposes would fill it. This alone should be conclusive
evidence that the proposal for certifying globally famous names is fatally
flawed. (Recall that in the Interim Report WIPO suggested only "hundreds"
of trademarks would qualify; now it makes no estimate.)
The claim that a quota would be arbitrary is persuasive
only if the quota is set so low that it gets used up. If it is the case
that WIPO's criteria will be applied with 'discipline and rigor' then it
should be possible to find a quota high enough not to cause arbitrary results
and yet low enough to reassure the Internet community that the mechanism
will not be abused.. The suggestion that a quota would work to unfairly
disadvantage a suddenly famous mark like Viagra that was a late arrival
on the scene, see Final Report paragraph 269, can be met either by setting
the right quota, or by setting a quota with a warning zone. Suppose, for
example, that the quota were set at 1000 trademarks, with the understanding
that if the panels actually allocate the entire quota, they can have another
100 so long as the criteria for granting certifications of sufficient famousness
were officially revised to make granting certification more difficult.
In this scenario there would never be a moment in which there were literally
not more certifications available. The disadvantages would be that were
the criteria ever tightened this would in effect give a windfall to successful
early applicants who would not have met the tightened criteria. As a result
a "flexible" ceiling system (and indeed, a low and inflexible ceiling also)
might lead to a flood of applications at an early stage. Encouraging early
applications may not be all bad, however, as it will give the decision-makers
a better sense of the marks against which they should weigh each applicant.
If the entire proposal for special privileges is not
abandoned, ICANN could, and should, in any event review the quota every
Problem: Vague & Prejudicial
Criteria. The fear that 'discipline and rigor'
would be short-lived at best is strengthened not only by WIPO's inability
to make an estimate of the total number of marks likely to qualify, but
also by the vague and in one case prejudicial criteria that WIPO proposes
be used to rule on applications for global famousness. To begin with, WIPO
offers the six vague and manipulable considerations for determining if
a mark is famous or well-known issued by WIPO Standing Committee on Trademarks,
Industrial Designs and Geographical Indications and set out in Para. 282
of the Final Report.
WIPO then added a seventh "non-exhaustive" criterion
not approved by the committee: "Evidence of the mark being the subject
of attempts by non-authorized third parties to register the same or confusingly
similar names as domain names." Final Report, Paragraph. 283. No justification
was offered for this suggestion in the Interim Report other than it would
serve "to accommodate the specificities of the protection of famous and
well-known marks in relation to domain names" and, again, no further justification
for this seventh factor is offered in the Final Report. Why precisely a
mark should be more likely to be considered globally famous because
it happens to attract the attention of a single enthusiastic domain name
speculator, numerous parody sites, or nettlesome critics, is unclear. Indeed,
if a firm is attracting the attention of many critics who register names
similar to it as a form of protest, this seems to be the weakest case for
special protection. Indeed, as WIPO argues ADR is needed because cybersquatting
affects so many trademark holders, making being the subject of cybersquatting
an indication of global famousness seems especially odd.
Furthermore, the experience of the United States with
the federal Anti-Dilution Act suggests that when faced with a blameless
trademark holder, a predatory domain name registrant, and a set of rules
that allows the decision maker to do equity, even federal judges cannot
resist declaring that trademarks one never heard of are famous. Adding
the seventh criterion ensures that the decks will be stacked before the
special tribunals as well, with predictable results.
Problem: Inappropriate Additional
Remedies and Benefits-"Evidentiary Presumption".
WIPO also proposes that the owners of certified globally famous trademarks
benefit from an "evidentiary presumption". The "evidentiary presumption"
is in fact a shifting of the burden of proof. The mechanism is not explained
as clearly as one would like, but it appears that after having a mark certified
as globally famous, a mark-holder would begin an ADR proceeding against
a registrant in the ordinary manner. Instead of having to allege and carry
the burden of proof that the registrant had no right to use the domain
name, and the registrant was acting in bad faith, the extra-famous mark
holder would only have to persuade the arbitrators that the domain is "misleading
similar" to his mark and that it is being used in a manner which damages
his interests. Upon that lesser showing (and apparently without the benefit
of knowing how the arbitrators have ruled on the complainant's suggestion
that the burden of proof be reversed), the registrant will then have the
burden of proving "justification" for her use of the domain name. Final
Report, Paragraph 289.
There are four problems with this idea. First, the term
"misleadingly similar" is vague and likely to be interpreted in an over-broad
manner. Second, the suggestion that any use of a domain name that might
"damage the interests of the owner of the mark" sweeps far too broad, and
will invite harassment of many legitimate domain name registrants. Third,
reversing the burden of proof-requiring someone to prove their good faith-is
inherently unfair. Fourth, the procedure proposed for the ADRs in Annex
V of the Final Report is designed in a manner that fails to ensure
that the respondent will given sufficient notice as to the case which he
has to answer.
What is "misleadingly similar"? WIPO's Final
Report does not define the term "misleading similar". While one could profitably
attach some sort of definition to the name (it sound as if it has some
relationship to the US idea of "likelihood of confusion" except that in
the context of a famous mark one would expect more a dilution than a confusion
test), thus perhaps lessening the ill effects of this proposal, I think
it a fundamentally unprofitable exercise because the entire idea is founded
on a misconception. In the US, and I suspect elsewhere as well, it is not
seriously disputed that a domain name is not a trademark. Therefore, what
determines whether the registrant of a domain name is infringing the rights
of any mark-holder, whether or not the mark is famous, is how the domain
name is being used. The issue therefore is not whether the domain is the
same as, or close to, or very close to a trademark, but whether the name
plus the uses made of that name dilute the mark.
What will "damage the interests of the owner of the
mark"? The suggestion that the owner of a certified famous mark need
only allege that the registrant's use of the domain name somehow damages
the "interests" of the owner of the mark requires too gentle a showing
and risks inviting frivolous and harassing claims. If Bob is running a
site parodying Alice's product, or a site that seeks to gather potential
litigants to sue for an alleged product defect in Alice's product, or an
"anti-Alice" site with a confusing name such as A1ice, or a site in which
Bob's protest group is coordinating a boycott against Alice for her labor
or environmental policies, it is quite likely that Bob is "damaging" Alice's
"interests"--yet each of these uses of a domain name similar to or even
identical to Alice's trademark is legal, and some are commendable. At the
very least, and as a deterrent to harassing applications, Alice, the applicant,
should be required to affirmatively allege that she believes there is no
reasonable case to be made that Bob is engaged in non-commercial activities.
Is burden-shifting fair and appropriate? The
suggestion that an person should be considered a presumptive cybersquatter
merely because they register a domain name similar to a well-known trademark
is a novel one. One rarely if ever finds cases in the law of civilized
countries where a person must prove their innocence of an offence by a
preponderance of the evidence. This may seem a trivial point, but one must
recall that the critical issue is likely to be whether the registrant has"rights
and legitimate interests" in the name. The remaining uncertainty about
what law will be applied to determine this question, and precisely what
the terms mean, is worrying. Combined with the likelihood that many respondents
will be unrepresented consumers with no experience in arbitration, much
less the on-line variety, while the famous mark holders are likely to the
parties with the greatest experience at both and the finest representation,
and the issue of the burden of proof becomes more significant.
WIPO argues that since the ADR is now more limited than
in the Interim Report, this evidentiary presumption can no longer be used
in a way that is likely to damage recognized rights of free speech. Alas,
WIPO's sanguine description of the likely uses of its proposal likely will
prove optimistic. Furthermore, WIPO suggests at several places in the Final
Report that the ADR procedure proposed is only a first careful step towards
the more ambitious plan it outlined in the Interim Report. One should thus
think carefully about the potential long-term consequences of Chapter 4
in this context.
The nature of available judicial
As in the Interim Report, challengers to domain names
registrations who lose at the ADR stage may appeal to any competent court
(including the jurisdiction where the registrar is located). And, as in
the Interim Report, a party who loses a WIPO-ADR could face very substantial
difficulties in securing judicial review of the decision. Challengers who
lose an arbitration can bring a de novo action in any court with jurisdiction
over the registrant, but in many cases the registrant will have only an
inconvenient forum, and sometimes no forum at all, if he loses the ADR
proceeding. The Final Report does not solve this problem. Instead it
ameliorates it by reducing the volume of cases that potentially are covered
under the policy. While welcome, this is not an actual solution: As
further explained below, in so doing this raises question of which
court and which law will be available after the WIPO-ADR is concluded.
WIPO's suggestions that registrants who improperly lose their domain names
will have a judicial remedy does not address the nature of the cause of
action (if any) that may be available to a registrant who has lost his
domain, especially if the registrant was not a trademark holder. Indeed,
in some cases there may be no way to bring suit against the successful
complainant. The only recourse will be to sue the registry itself, a right
that WIPO suggests should be waived in the domain name registration contract.
A complainant who wishes avoid the WIPO-ADR can bring
the action in any court that has jurisdiction over the registrant. Suppose
that Alice, the complainant, lives in New York, and Bob, the registrant,
lives in Prague. If Alice can persuade a New York court to assert jurisdiction
over Bob because he is using the domain in an infringing manner with effects
in New York, then she can bring suit where she lives. On the other hand
if Bob has merely registered the domain but made no infringing use of it,
Alice probably must go to Prague to bring the action. (Alice may have waived
her ability to in rem complaint against the registry once in enforces the
ADR decision by virtue of the terms proposed for her contract in paragraph
220(iii) of the Final Report.) The WIPO-ADR offers Alice a potentially
attractive means of avoiding the expense and uncertainty of hiring foreign
counsel and risking the vagaries of a foreign legal system. If Alice loses,
and she wishes to bring suit anyway, she has the same options she had before
Suppose, however, that the WIPO-ADR rules that Bob,
the registrant, should surrender his domain name but that Bob wishes to
challenge the outcome, perhaps because he believes that under Czech law
he has a valid right to the name that the arbitrators failed to recognize.
Under the WIPO policy the decision goes into effect within seven days,
Final Report paragraph 216, so Bob has a week to find a court with jurisdiction
over the Alice to hear his request for a stay. Without the WIPO-ADR Bob
probably would have defended the action in a court in Prague, giving him
the benefits we traditionally accord defendants, and especially defendants
who are ordinary individuals and small businesses: a convenient venue,
familiar law, local language and local counsel, and the choice of law principles
of the local court. Instead, unless Alice has sufficient contacts with
Prague for the court there to assert jurisdiction over her, now Bob must
shoulder the burden of being the plaintiff in a New York court, with potentially
unfamiliar and more expensive procedures, a different local language, and
what to Bob will be foreign counsel. The New York court may use different
choice of law and different substantive principles than the Czech court.
And, Bob will now be the plaintiff instead of a defendant and must shoulder
the burden of proof. Indeed, if Bob seeks injunctive relief to prevent
the WIPO-ADR decision from going into effect immediately, Bob will have
to shoulder a heavy burden of proof indeed.
A significant fraction of these problems could be avoided
if, as a condition of allowing Alice to invoke the WIPO-ADR procedures,
Alice was required to consent to in advance to jurisdiction in Prague,
the jurisdiction where the Bob resides, in the event that Bob wished to
stay or to overturn the WIPO-ADR decision. The consent could be limited
so as to exclude nations that are parties to neither of the relevant international
agreements on intellectual property, e.g. the Paris Convention for the
Protection of Industrial Property or bound by the Agreement on Trade-Related
Aspects of Intellectual Property Rights (TRIPS Agreement).
As noted above, WIPO recommends that, as a condition
of being allowed to (re)register a domain name, a registrant be required
to waive his ability to bring suit against either the registry or the registrar
once any ADR decision has been enforced against him. See Final Report paragraph
220(iii). As a result, the Final Report creates a perhaps unintentional
incentive for registrants to commence litigation before the ADR result
is announced. This may work to defeat the purpose of enterprise to the
extent that the purpose is the swift and inexpensive resolution of disputes,
although it also forces the registrant to become the plaintiff thus taking
on the burdens of finding a forum and carrying the burden of proof.
As noted in my critique of the Interim Report, there
may be a more fundamental problem also. WIPO has not been able to meet
its own design goal that "the right to litigate a domain name dispute should
be preserved," Final Report, paragraph 148, and "the availability of the
administrative procedure should not preclude resort to court litigation
by a party. In particular, a party should be free to initiate litigation
by filing a claim in a competent national court instead of initiating the
administrative procedure, if this is the preferred course of action, and
should be able to seek a de novo review of a dispute that has been the
subject of the administrative procedure." Final Report, 150(iii). The question
remains: what exactly does Bob tell the court if he loses the WIPO-ADR?
Recall that the "administrative" decision goes into effect in seven days
and remains in effect until countermanded by a competent court. Although
some nations provide procedures for the review of "arbitration" it is unclear
if this "administrative" procedure would necessarily qualify. If it is
an "arbitration" then some cause of action other than an action to review
the arbitration is required.
The difficulty of finding such a cause of action is
illustrated by US law, which does not provide for general review of arbitrations.
The US Federal Arbitration Act does not provide a means of review, since
that act limits the court's review to
"(1) Where the award was procured by corruption,
fraud, or undue means.
"(2) Where there was evident partiality or corruption
in the arbitrators, or either of them.
"(3) Where the arbitrators were guilty of misconduct
in refusing to postpone the hearing, upon sufficient cause shown, or in
refusing to hear evidence pertinent and material to the controversy; or
of any other misbehavior by which the rights of any party have been prejudiced.
"(4) Where the arbitrators exceeded their powers,
or so imperfectly executed them that a mutual, final, and definite award
upon the subject matter submitted was not made."
9 U.S.C. § 10.
None of these four factors will ordinarily apply.
U.S. Courts do not ordinarily review "administrative"
decisions of private parties (as opposed to government agencies),
unless there is some claim of tort, breach of contract, or violation of
some other legal right. Having lost the domain name, Bob must now frame
a cause of action, relying on a legal right, that will get a court's attention.
Bob thinks the arbitrators improperly ignored a legal basis for his claim
of right to the name, or incorrectly decided that Bob was a liar.
Several possible-sounding claims are probably hopeless:
Bob might be able to frame some sort of claim of "tortious
interference with contractual relations" against Alice, based on his contract
with his registrar, but that seems a poor bet when he specifically agreed
to the ADR procedure in his contract.
If Bob is a non-commercial user and there is no claim
of bad faith or fraud on the part of the arbitrator. Bob will not be able
to claim a violation of his right of free expression because the damage
was caused by a private party, not the government. He has little actual
damages, and it is in any case unclear who has been negligent or behaved
tortiously. There is no statutory right at issue; Bob's right to an injunctive
relief requires a claim of right under law and it is not at all clear where
this would be found.
Under RFC 3, there is no contract between Bob and Alice
for the court to adjudicate, and Bob has no claim against Alice under his
contract with the registry. Even if there were a contract between Bob and
Alice entered into at the start of the WIPO-ADR, I am unsure that they
could by contract manufacture a cause of action that a U.S. court would
accept gave Bob standing. (Other jurisdictions have procedures for judicial
review of arbitration, but that is not how the U.S. arbitration act works.)
Nor, absent a trademark of his own, is Bob likely to
have a claim against Alice under Alice's subsequent contract with her registry.
Incidentally, if Bob has a trademark identical
to his domain name, and the arbitrators just ignored it for some strange
reason, he can claim that Alice is violating his trademark. But the strength
of that claim will turn in substantial part on how Alice is using the mark,
not on what Bob was doing which would have been the subject of the case
but for the WIPO-ADR. It is not difficult to imagine a case where the two
parties are not in fact infringing each other, and a court applying national
law would have found for Bob if he were the defendant. But as Alice is
no more guilty of trademark infringement under the relevant national law
than is Bob, she will win the court case-and keep the domain Bob would
have had but for the WIPO-ADR.
A slightly less hopeless argument would be "tortious
interference with a prospective business advantage" against Alice. The
Restatement (Second) of Torts § 766B, states, "One who intentionally
and improperly interferes with another's prospective contractual relation
(except a contract to marry) is subject to liability to the other for the
pecuniary harm resulting from loss of the benefits of the relation, whether
the interference consists of (a) inducing or otherwise causing a third
person not to enter into or continue the prospective relation or (b) preventing
the other from acquiring or continuing the prospective relation." However,
US courts have frequently imposed more stringent limiting conditions on
this tort than the Restatement (Second) formulation might suggest. For
example, "In order successfully to assert a claim of tortious interference
with prospective business advantage, plaintiff must show that 'the defendant's
interference with business relations existing between the plaintiff and
a third party, either with the sole purpose of harming the plaintiff or
by means that are dishonest, unfair, or in any other way improper.' PPX
Enters., Inc. v. Audiofidelity Enters., Inc., 818 F.2d 266, 269 (2d
Cir.1987)." Similarly, "In order to state a claim for tortious interference
with prospective economic advantage, a plaintiff must show (1) business
relations with a third party; (2) defendants' interference with those business
relations; (3) defendants acted with the sole purpose of harming the plaintiff
or used dishonest, unfair, or improper means; and (4) injury to the relationship."
Purgess v. Sharrock, 33 F.3d 134, 141 (2nd Cir.1994). This will
usually be difficult to prove, or even to allege in good faith: any Alice
will be able to argue convincingly that harm to Bob was not the sole purpose
of the ADR in that Alice sincerely wanted the domain name for herself.
Furthermore, assuming that it was the arbitrators who erred, and there
was no fraud by Alice, Bob cannot in good faith claim that she used "dishonest,
unfair, or improper means" to win the ADR.
If the above analysis is correct, then for many-perhaps
most or all-registrants who lose an ADR, their dispossession is the whole
of the law. On the other hand, challengers who lose an ADR lose nothing
more than their costs as they retain whatever right to litigate they may
have had previously.
A few other issues deserve mention, some relating to
material added in the Final Report and thus not exposed to public comment.
Nature of ADRs. The entire
WIPO edifice is predicated on the ability of dispute resolution services
to provide relatively quick and inexpensive on-line arbitrations. If the
arbitrations are not quick, trademark owners will be unhappy. As the arbitrations
become more expensive, the potential for abuse of registrants grows as
they will be increasingly wary of an expensive loser-pays system. Indeed,
at some point the increased expense will make the system unattractive to
It bears noting that the world has almost no experience
with online arbitration. It has even less with international online arbitration.
Similarly, there is considerable experience with commercial arbitration,
and even with domestic business-to-consumer arbitration, but no significant
experience with international business-to-consumer arbitration. Implementing
this system will thus take us deep into uncharted waters. Arbitrators are
going to have to make credibility determinations based on paper records,
generated by people who may in many cases be arguing in a language other
than their native tongue. Standards of proof are not clearly spelled out,
and these will matter.
The novelty of the ADR procedure is not necessarily
a reason to avoid it, although it explains why many fear it. If nothing
else, it requires that ICANN proceed cautiously, and that it schedule the
procedure for regular and frequent review.
Transitional Issues. The
Final Report glosses over substantial transitional issues regarding consent
to jurisdiction. Making the whole world agree to suit where the registrar
is located, see Final Report, paragraphs 111 & 147(ii), will be fair
once there are lots of registrars. But not until then. Even after there
are many registrars distributed over the world, the rules for changing
registrars will be particularly significant in this context, since the
registrar one selects will affect the location in which one can be sued.
If, as seems likely, we swiftly move to a world where
there are many gTLD registrars distributed around the world, then it will
be increasingly less problematic to ask registrants to agree to jurisdiction
in the country where the registrar they deal with is located--although
I wonder whether the consumer laws of some countries will allow this in
a consumer sales contract if it means agreeing to foreign jurisdiction.
Until that point, however, even to require an agreement to be sued where
the registrar is located is to require contractual agreement to a trial
in foreign forum that may be far away, in a foreign language, with foreign
WIPO proposes that every registrant in a gTLD be required to make "a representation
that, to the best of the applicant's knowledge and belief, neither the
registration of the domain name nor the manner in which it is to be directly
or indirectly used infringes the intellectual property rights of another
party." Final Report, paragraph 109(i). This requirement is inappropriate
One might argue that this requirement is pointless since
it is not at all clear whether a mere registration of a domain name can,
without use, infringe the intellectual property of another. Indeed, in
the US, a person cannot violate the Lanham Act or the Dilution Act without
commercial use of another's mark. The requirement may seem even more innocuous
when one considers that many lawyers I have spoken to take the view that
in all but the most obvious cases of unfair competition the only way to
know whether a proposed trademark, much less a domain name registration,
is an infringement is to see what a competent court says. Whatever one
may think of this type of legal realism, it demonstrates that many lawyers
will have no fear advising people to register whatever they want and let
the courts sort it out later; the rule will therefore stop only the highly
scrupulous (and those without legal advice) without in any way daunting
the ethically dubious.
I am concerned, nonetheless, that this requires too
broad a representation by the registrant. If Alice and Bob both have registered
the same trademark in different sectors and/or jurisdictions, and Alice
is aware of Bob's registration, how can Alice give a representation in
good faith that her registration, which prevents Bob from registering his
mark in that gTLD, does not "indirectly" infringe "the intellectual property
rights of another party."? By registering the trademark in a gTLD Alice
indirectly interferes with Bob's rights, as but for Alice he could register
Furthermore If Bob is ignorant of Alice's registration
(the proposal creates no duty to investigate), he can make the representation,
but there seems no sound reason to reward Bob's ignorance at the expense
of an Alice too honest to make the representation.
Proposed Procedures. None
of the procedures proposed in Annex
V have had any public comment. They were not sent to the Panel of Experts
for review or comment prior to publication. [Indeed, none of the Annexes
were shown to the Panel of Experts prior to public issuance.] The procedural
proposals thus should be treated as the very rough draft they are. They
cannot be adopted in their current form without working severe injustice.
The proposed procedures contained in Annex
V impose several unfair
time limits on registrants and invite various forms of abuse.
First, the date of commencement of the proceedings is
the date that Complaint is received by the Arbitration Service Provider,
not the date that the registrant has actual (or even constructive) notice
of the complaint. The idea that time begins to run before a defendant is
notified of a complaint against him violates all established notions of
due process in the civilized world. Admittedly, there are difficult issues
regarding what constitutes sufficient notice in an online-proceeding. Given
the different ways in which e-mail is used, however, WIPO however proposes
the most unfair rule available.
WIPO's proposed rule could easily be abused.
The proposed rules contemplate e-mailed notice by the
Provider to the registrant;
Time starts to run when this notice is e-mailed, not
when it is read: "a notice or other communication shall be deemed to have
been received on the day it is delivered or, in the case of telecommunications
or Internet modalities, transmitted," Final Report, Annex V, Art. 3;
Nothing in the rules requires that the complainant make
any effort to contact the registrant prior to filing the request for arbitration,
nor is there a requirement that such contact be alleged by the complainant.
A registrant thus may have no reason at all to expect to be subject to
an arbitration, and will not be on notice that they should check their
Thus, a person who fails to check his email for ten
days can lose by default.
I presume this is a drafting error, but it is a serious
one. It cannot be WIPO's intention to have a more solicitous procedure
for canceling a registration due to unreliable contact details (Final Report,
paragraphs 122,-123), than for taking away the domain name of a person
who may be reachable, acting in good faith, and away from email for a week
and half. As an initial matter, the rules must be re-written to require
evidence of receipt of a letter before action, and the submission of evidence
that such a letter was received or served should be a condition precedent
for the commencement of the arbitration. If such evidence cannot be offered
the complaint should be dismissed, and the complainant directed to the
takedown procedures for allegedly unreliable contact details.
The ten day period is in any case too short. A
complainant gets as much time as he wishes to prepare a complaint. In the
ten days allotted to the registrant he must not only receive the notice,
but prepare his entire defense. For a person who may be an unrepresented
consumer, with no familiarity with the relevant arbitral or legal rules,
this is not a very long time. And in that period he must
Decide whether to seek representation;
Write and submit his sole statement in his defense,
Annex V, Art. 8;
Collect and submit any relevant documents and a schedule
of such documents, Annex V, Art. 8; and
Have the defense, and possibly the documents translated
into the language of the arbitration, which will ordinarily be the language
of the registration agreement, Annex V, Art. 22.
Ten days (minus the time it takes to get actual notice!)
is simply inadequate for this, especially in the absence of any warning
that the arbitration is imminent.
Furthermore, in cases where the complainant benefits
from a certified globally famous mark, there appears to be no provision
for putting the registrant on notice as to the burden of proof he may have
to shoulder. If there is a dispute as to whether the domain name is "misleadingly
similar" (and given that the term is not defined, such disputes are inevitable),
it seems only fair to require the arbitrators to first decide whether they
accept this allegation (after hearing from the registrant), in order to
then put the registrant on notice as to the burden of proof he faces.
Five Proposals for ICANN
The special privileges for famous
marks Chapter Four should be abandoned. The proposal to set up a tribunal
to determine in an ad hoc and potentially biased fashion whether certain
marks rate special privileges on the Internet is fundamentally mistaken.
It is mistaken because:
It is unnecessary: the ADR system proposed in chapter
2 should provide fully adequate protection for famous or well-known marks.
It is premature: there is a process in place to determine
the criteria by which globally famous and well known marks should be identified.
It has yet to come up with specific criteria.
It is biased: In addition to relying on the vague criteria
in existence, WIPO has added a seventh criterion of its own whose sole
effect will be to prejudice decision-making.
It is potentially unlimited: In the Interim Report,
WIPO suggested that hundreds rather than thousands of marks would qualify
for special privileges. That estimate never seemed credible. Now, WIPO
chooses to make no estimate. Furthermore, WIPO in effect admits that is
unable to suggest any upper limit to the number of marks that might
It gives privileges beyond what the law would provide:
The remedy of an exclusion is broader than would exist
in law (at least in the US) since it extends to legally valid uses of the
The remedy of reversing the burden of proof in an ADR
means that some people will be presumptive cybersquatters - which is also
contrary to how the law works.
All of chapter 4 should be scrapped. If it cannot be
scrapped, then some serious tinkering is required:
A ceiling on the number of marks must be imposed
A fair process must be put in place to select the institution
that will administer the tribunals (maybe it should be WIPO, but this needs
Much more thought needs to given as to what flows from
a determination that a mark is globally famous. In particular the procedural
consequences of reversing the burden of proof much more careful consideration
than they appear to have received to date. Until this can be done, that
benefit cannot reasonably become part of the package.
Clarify the burdens and defenses
in an ADR. For the avoidance of doubt, and keeping in mind the potentially
international nature of the arbitrations, a few things should be made clearer
in paragraph 171, and the cognate sections of Annexes IV
Exactly what needs to be alleged and proved, and the
standard of proof;
That political comment, parody, consumer complaints,
and other similar expressive activities are a legitimate use of a domain
name. Also, more thought needs to be given to the position of a start-up
company: since it is common in Internet-related businesses to register
a name early in the process, and the business may not have a trademark
or many of the traditional indicia of permanence at that stage.
At an absolute minimum, the text of paragraph 172 or
something very much like it should be inserted into the formal policy adopted
by ICANN. Paragraph 172 is inexplicably absent from Annex
IV, the proposed policy document. Without this critical clarification,
the policy is potentially inimical to freedom of expression.
Similarly, the text of Paragraph 15 of Annex
IV at least should be harmonized with paragraph 176 of the Final Report.
Ideally, the final text would make it clearer than do either of those paragraphs
that the arbitrators have a duty to figure out what law applies and then
to use it. The alternative approach, which invites the arbitrators to make
up their own rules, not only leaves an openings for decisions by the arbitrators
inconsistent with the relevant national law, but also would create greater
incentives for defendants to rush to court as soon as an ADR began.
Establish a privacy-enhanced
gTLD as a high priority. The quid pro quo for worsening the effective
privacy available in the existing gTLDs should be to establish a non-commercial
privacy-enhanced gTLD as soon as possible.
Fix the glitches. Annex
V needs extensive work. The most serious drafting errors concerns the
procedural timetable. The procedural document will need to be revised to
make the timetable fair, and in particular to ensure that registrants have
notice of the ADR, and an appropriate interval to prepare their defense.
Public comment may reveal other problems.
There are also some substantial issues regarding the
transitional period to a world of many registrars, especially regarding
consent to jurisdiction. Similarly, the extent to which the required consent
is fair will depend on the ease with which existing NSI customers can change
registrars. It should be recognized that none of the Annexes have been
subjected to the same level of non-WIPO review as the text, and that large
parts of the text (including the proposed definition of cybersquatting)
are themselves new and have never been exposed to public comment.
The way forward. Whatever
ICANN does, it should recognize two things:
Several key parts of the Final Report are new or substantially
different from the Interim Report. In particular, the definition of cybersquatting
is wholly new, and the Annexes are so new they were never even shown to
the advisory Experts group. As a result, key concepts and suggestions have
yet to be exposed to public comment and debate.
Much of the WIPO proposal requires a leap into relatively
uncharted territory. For example we have almost no experience with the
type of online international business-to-business and especially business-to-consumer
arbitration proposed in the Final Report. As a result, ICANN's ultimate
adoption of any of these proposals should be hedged with some type of "sunset"
clause which would force a regular review of the outcome of its decisions.
About the author
A. Michael Froomkin is a Professor at the University
of Miami School of Law in Coral Gables, Florida, specializing in Internet
Law and Administrative Law.
Professor Froomkin is a Foreign Associate of the
Royal Institute of International Affairs and a Fellow of the Cyberspace
Law Institute. He is on the Editorial Board of Information, Communication
& Society and Lex Electronica (Cybernews), and a Consultant Editor
of Amicus Curia, the journal of the Institute of Advanced Studies (London,
England). He is also on the Advisory Boards of BNA Electronic Information
Policy & Law Report, the Cyberlaw Abstracts of the Legal Scholarship
Network, the Privacy Exchange, and the Journal of Online Law.
Before entering teaching, Professor Froomkin practiced
international arbitration law in the London office of Wilmer, Cutler &
Pickering. He clerked for Judge Stephen F. Williams of the U.S. Court of
Appeals, D.C. Circuit, and Chief Judge John F. Grady of the U.S. District
Court, Northern District of Illinois. Professor Froomkin received his J.D.
from Yale Law School, where he served as Articles Editor of both the Yale
Law Journal and the Yale Journal of International Law. He has an M.Phil
in History of International Relations from Cambridge University in England,
which he obtained while on a Mellon Fellowship. His B.A. from Yale was
in Economics and History, summa cum laude, phi beta kappa,
with Distinction in History.
Professor Froomkin is a U.S. citizen. He is married,
and has two children. His publications are available on the world-wide-web
at http://www.law.tm .
1.0a corrected typo in paragraphs 71, 154(2).
Note: This essay was first published at http://www.law.miami.edu/~amf/commentary.htm