New book on the Regulation of Domain Names

Abstract from my book: "The Current State of Domain Name Regulation: domain names as second-class citizens in a mark-dominated world", available now by Routledge - http://www.routledge.com/books/details/9780415477765/

Questions concerning the legality of domain names have never received the kind of attention they deserved; in all truth, the attention has perpetually focused on the harm trademark owners are enduring through the use of domain names. Early domain name regulation indicates that Internet policies highlighted the threat – potential and actual – domain names were posing to trademarks and any amendments on such policies proceeded on the basis that trademark protection should be more robust and rigorous. The promulgation of ICANN’s UDRP is one such example; it was justified on the face of lack of trademark protection on the Internet and was substantiated on the way domain names impair the value of trademarks. To the present day, domain name policies and trademark regulations are still developed, structured and arranged using justifications of trademark protection.

I strongly refute this assertion. Trademark protection on the Internet is vital; it is equally vital, however, to rationalize the pragmatic considerations of this protection. We have spent time and resources debating and streamlining on the impact of cybersquatting on trademark law, completely disregarding how trademark lobbying has manipulated the authority of Internet institutions (ICANN) and has pressured for policies (UDRP and IRT) seeking to expand the conceptual basis of trademark law. Ten years ago we missed the window of opportunity to formalize the legal nature of domain names and, consequently, strike a balance between the competing interests of trademark owners and domain name registrants.

My forthcoming book – “The Current State of Domain Name Regulation: Domain Names as Second Class Citizens in a Mark-Dominated World” – re-opens the discussion on the state of domain name regulation, questioning the legitimacy of its intellectual, institutional and moral structure. The timing for this kind of discussion could not have been more appropriate as ICANN is venturing into new policy with the launch of its new gTLDs programme and intellectual property lobbying is – once again – seeking to direct policy-makers into areas that stretch the philosophical basis of trademark law.

In the book I promote the thesis that the determination and recognition of domain names as autonomous, sui generis, rights is intellectually imperative, because it is through this intellectual conjecture that we will end in modifying the current status quo. Using the theory of property as my starting point, I discuss issues of ownership (dominium) and sovereignty (imperium). My argument centres on the concept of the ‘bundle of rights’ and how it has evolved to denote ownership over tangible and intangible assets; it does not seek to dispute the theory of the ‘bundle of rights’, rather I accept it as property’s contemporary variant. For me, the metamorphosis of property law is occurring at regular intervals and, currently, it encompasses both tangible and intangible assets that can be associated with such a ‘bundle’. This description, however, can have a negative impact on property – the clearest example being trademark rights - one that Morris Cohen identified in his visionary 1927 article when discussing the dangers of the concepts of dominium and imperium being conceptually blurred.

With this understanding of property in mind, I then proceed to display trademarks and domain names. I discuss the systematic effort of the trademark community to canonize trademark protection (Progressives movement) and demonstrate the importance of trademarks as property commodities. However, I also acknowledge that attributing property characteristics does not grant immunity to trademarks, the same way that property does not grant immunity to any right. Trademark law operates under limitations and restrictions (for instance, territoriality, genericness and free speech), which ensure the smooth function of the market and allow entrepreneurship to flourish.

On the contrary, such needs are not preserved through the presence of trademarks on the Internet. There is a great amount of conceptual vagueness and legal presupposition on the kind of protection trademarks should receive in the domain name space. Such an attitude ignores emerging questions concerning the nature of domain names, their relationship with trademarks and their online importance. The truth is that these questions are so complex that American courts are split and seem unwilling to create a blanket rule on how law should treat domain names.

In such a vague environment, the UDRP plays a major role and contributes significantly to this legal cul de sac. Although politics within ICANN have compromised attempts to produce a fair process, the UDRP was meant to be a harmless policy, with a specific subject matter and limited to cover only a very small fraction of trademark infringement. At the time, no one anticipated the UDRP to transcend traditional trademark law and become an online establishment. Nowadays and with a massive body of case law, which shows signs of exponential growth, ICANN’s policy is considered as the dominant platform for trademark vs. domain name resolution.

The UDRP, however, is far from an authoritative statute; its genesis was based on illegitimate grounds, its procedures are substantially flawed and unfair, it restricts the rights of domain name registrants and it is crowded with examples of inconsistent and biased decisions. Its subject matter has been extended to cover almost every trademark issue that occurs on the Internet, disrespecting the traditional and long-standing principles of trademark law, often granting unsanctioned international protection to trademark owners, suppressing free speech and disintegrating the legal rights of domain name registrants. in short, trademark interests have managed to excommunicate domain name registrants and entrepreneurs.

This degree of substantial and procedural unfairness poses an ethical problem for domain name regulation. My thesis is to build a framework for domain names– the “domain name polis” as I call it – where fundamental principles of justice, like fairness, equality and lawfulness, hold a prominent position and direct any amendments on the Policy towards respecting and reflecting these ethical ideals.

The latest proposal by ICANN’s Implementation Recommendation Team (IRT) makes the creation of this framework even more important. Suggesting policy that re-defines the conceptual parameters of trademark law, the IRT advocates the success of the UDRP, does not recognize any of the intellectual legal issues and consciously dismisses the unfairness that is taking place.

It is, therefore, important for scholars and intellectuals to reopen the discussion on the conceptual boundaries of trademark law, revisit its limitations and parameters and refine the state of domain name regulation.

WIPO initiates individual fast-track UDRP process.

In the midst of ICANN's decision to ask the GNSO to create proposals on trademark protection mechanisms, the World Intellectual Property Organization (WIPO) announced that it will launch a fast-track UDRP process (http://www.managingip.com/Article.aspx?ArticleID=2328845&LS=EMS332232).

At the Seoul meeting last week, the GNSO authorized the creation of a Special Trademark Interest (STI) team to come up with answers on the ICANN's staff recommendations on the Trademark Clearinghouse and the Uniform Rapid Suspension System (URS).

Today WIPO announced its intention to create a fast-track system, similar to the one the STI is working for the URS. “We are not proposing to change the UDRP policy or rules at all. Instead, using the existing framework, WIPO expects to offer a new and more efficient fast-track option based on adjustment to WIPO case practice under the UDRP", Erik Wilbers stated.

The WIPO move is flawed and creates various problems. Here is an account:

1. It is illegitimate: WIPO is acting on its own. It is not acting in its capacity as an inter-governmental organization nor as an ICANN-accredited center. It creates and suggests policy contrary to its role as a service provider. (Would we accept the same by the other ICANN-accredited centers?)

2. Non-transparent: What is the process WIPO followed to create this fast-track system? Which cases will the system cover? What are the parameters of the new system and how will it fit within the UDRP? These are legitimate questions that WIPO has not disclosed.

3. WIPO is justifying the system on loose and arbitrary conclusions: WIPO's process and the conclusions and justifications that lead the organization to create this policy are not evident. Center Director, Erik Wilbers stated: "The domain name system has evolved. We have seen automated registrations, parking and pay-per-click and privacy issues. In addition, we have seen vast increases in domain name registrations. The language rules have also been abused in some cases.”

4. It is non-accountable: WIPO has not consulted all the interested parties. While ICANN should be applauded for following its buttom-up process by creating the STI, WIPO is not seeking the views of the Internet and trademark community.

5. It sets a dangerous precedent: WIPO wants through this fast-track process to deal with the 75% of cases that are not defended. This creates a dangerous precedent and considers all defaults bad faith, continuing the dialectic of the UDRP.

6. It will have a negative impact on registrants: Despite what WIPO states, the new process will negatively impact the already fragile rights of respondents. What about 'trademark lawyer abuse' issues and due process?

7. It will encourage bias: WIPO is known for its bias and the wide discretion of its panels. This process will magnify these problems as trademark owners will use and abuse the system to their advantage.

8. It will suppress free speech: The new process will encourage the creation of a solely commercial DNS. Free speech will be in danger.

9. The system will be gamed: Trademark owners will use the fast-track process and if they lose they will proceed to the standard UDRP.

10. It is anti-competitive: The WIPO process will place the other centers out of the competition. Trademark owners will prefer the new, fast WIPO process - we should anticipate a significant decline in their case law.

ICANN should send an immediate, urgent cease and desist letter to WIPO to withdraw from this process, and wait for the GNSO to submit its recommendations to the ICANN board. If WIPO does not comply, ICANN should proceed to revoke WIPO's UDRP accreditation.

IRT Recommendation and ICANN's Inconsistencies

It has been a very interesting experiment: the way ICANN has, so far, approached the addition of new gTLDs and the subsequent expansion of the Root. Where almost a year ago the new gTLDs were the contested issue, over the past three months (basically after the ICANN meeting in Sydney and up till now) the debate has shifted to ICANN's proposal on the Rights Protection Mechanisms - basically, the always controversial issue of trademark protection in the DNS. In all truth, it is not really ICANN's proposal per se; the IRT was an initiative of the Intellectual Property Constituency (IPC) and after today (August 4, 2009) it is officially dismantled.

Here is the weird thing, however. Although the meetings in London and New York focused on the trademark protection and the IRT report, the agenda of the similar meetings in Hong Kong and Abu Dhabi does not list any members of the IRT team (http://www.icann.org/en/topics/new-gtlds/consultation-outreach-en.htm). Why is that?

To be honest with you - I am not sure. The panel in both meetings (Abu Dhabi and Hong Kong) as well as the presentations were dominated by the ICANN staff. Does this mean that trademark protection was not so much discussed? This is also unclear. People have twitted and re-tweeted (http://twitter.com/kkomaitis) about remote participation not being available in Abu Dhabi and I know for a fact that remote participation was difficult in all previous meetings.

I really have many legitimate questions here: why was it so difficult for ICANN to ensure public participation? If the four meetings were meant to be the on the same issues, why the change of agenda and speakers in the last two meetings? Is ICANN seeing the western hemisphere's issues (NY and London meetings) different than the ones of the other part of the world? Why this inconsistency?

I find it surprising that this process has not stopped and the more I am engaged the more I understand the real power of ICANN. Especially, with the issue of trademark protection and the IRT recommendation, the whole process is purely and simply: ILLEGITIMATE.

Let's boycott the IRT report

So what is the case with trademark protection on the Internet? Is it some big conspiracy or are we really facing an overt expansion of trademark law? Let's see where we were and where we are now.

Ten years ago a big problem was presented by the massive use of the Internet. Along with P2P technology threatening copyrighted creations, domain names and their use by cybersquatters threatened trademarks. Cybersquatting occurred almost at the same time the Clinton Administration decided to privatize the Internet and create ICANN. The White Paper instructed ICANN to create the UDRP as a means to resolve these abusive domain name registrations that really harmed trademark rights. The UDRP was supposed to be the result of a legitimization process that equally took into account the rights of registrants, whilst acknowledging the unique nature of domain names.

In reality, the UDRP was a political game. Trademark owners gave a united front and exercised their political influence to create a system they would be able to control as much as possible. Non-commercial interests were squeezed in a subparagraph and were not given due attention. No one paused to think that, unless the system was scrutinized and properly administered, it would easily span out of control. That is where we are now. The UDRP is a biased system, controlled entirely by trademark owners.

And, it is not enough. It was never really enough for the trademark community. The IRT report is a perfect example. They want more-it is not enough. The report covers three major issues - the IP Clearinghouse, the Globally Protected Marks List, and the Uniform Rapid Suspension System - all of which seek to expand their rights and interests. It is really an issue of arrogance as trademark owners try to make all registrants look bad. Not all of them are bad and not all of them are cybersquatters. There are so many legitimate domain names that are so vital for the evolution of the Internet. They exist because registrants fight for them; we have to show them our solidarity and reject this report.

The full IRT report can be found at: http://www.icann.org/en/topics/new-gtlds/irt-final-report-trademark-protection-29may09-en.pdf

Find also the NCUC comments on the report at: http://icann-ncuc.ning.com/

Because some things never change...

It has been a very long time since we have heard any news on ICANN's Uniform Domain Name Dispute Resolution Policy (UDRP). It has actually been even longer, since the first study on domain name disputes - Fair.com? (http://aix1.uottawa.ca/~geist/geistudrp.pdf) - by Michael Geist was publised and showed a rather concerning pattern of trademark owners winning in most of the cases. The results of Geist's study were quite revealing: the success rate for complainants of all the cases brought before WIPO panels was, at the time, 82.2%. This relevation brought to light the inadequecies of the system and raised concerns over various issues such as forum shopping.
However, almost seven years after the study, a new report comes to light and shows ICANN's incapacity, inability or indiference to address issues that have constituted procedural flaws within the UDRP ever since its inception.
In a very recent article, the Wall Street Journal has reported that in 2007 domain name disputes have reached an all-time high (http://blogs.wsj.com/law/2008/01/11/domain-name-disputes-at-an-all-time-high/). According to data from the World Intellectual Property Organisation (WIPO), in 2007 domain name disputes have reached a 2,156 fraction, making it its most successful year yet. Of all these cases, 85% of trademark owners have prevailed.
Even though we can not safely argue that this high percentage is unsubstantiated, still this number is rather alarming.
With the number of dispute resolution providers dropping (since the creation of the UDRP ICANN has lost two of its service providers and has only added one), WIPO is still receiving the majority of the disputes and for obvious reasons. So what is the conclusion? Just because the criticism against the UDRP has gone quite, it doesn't mean that the system is functioning properly. The UDRP obviously still suffers from procedural and substantive issues; and, since businesses and entrepreneurs are depending on domain names to build their businesses online, it is about time we start addressing and answering some very crucial questions - what is - in reality - the legal nature of domain names?