New UDRP study shows signs of unreliable procedures.

I just happened to come across an article that shows what appears to be another hit in the process that ICANN has placed much of its future on - that is the Uniform Domain Name Dispute Resolution System (UDRP) of course. It all started when attorney Zak Muscovitch released a study concerning the way one of ICANN's accredited UDRP providers - the National Arbitration Forum - is distributing its case load to its various employees. His results show that some of the panelists receive a substantial amount of cases with the majority of these cases being decided in favor of the complaining party (trademark owner). This prompted DomainNameWire to conduct its own study of WIPO panelists and its conclusions were that many of the top 10 panelists have recorded the lowest complainant win.

What does this all mean? Well it means that we are exactly in the same place we were when professor Geist released his study almost 10 years ago. He introduced us to the possibility of forum shopping the same way he introduced us to the fact that we really have no knowledge as to how the centers appoint their UDRP panelists. And, when asked, we always seem to receive abstract and non-satisfying answers. What a great inconsistency for a system that is supposed to be uniform.

So, these results are not really something new and they should not come as a surprise to anyone. Even though it is really the responsibility of each one of the centers to appoint its panels equitably and to the best interests of both parties, the fact that ICANN has left the UDRP on its own and without proper review or control has resulted in a system that demonstrates signs of disintegration (look WIPO's attempt to sidetrack ICANN's Uniform Rapid Suspension System though the initiation of a 'fast-track' process). Needless to say that, at this point, it really makes no difference which center is more bias - the fact remains that the UDRP is disproportionally biased in favor of trademark interests whether this is done through forum shopping or through the intentional appointment of certain panelists.

However, the effect of this study is much more profound. ICANN is currently in the process of using the UDRP as the prototype to suggest the creation of two separate policies - the Uniform Rapid Suspension System URS) and the Post-Delegation Dispute Resolution Procedure (PDDRP). Both processes are conceived, structured and drafted with the whole skeleton of the UDRP in mind - everything, its rules, its procedures, its substance, everything - and have both been justified on the success of the UDRP. Now, what does that tell us about the fairness and justice of these systems?

It actually tells us a lot. It tells us that both systems are about to fail, are about to become biased and are about to create a highly competitive market for the ICANN-accredited centers that will seek to please their trademark customers. Now, if that is done through forum shopping or intentional panel appointments, again it does not really make that much difference. Complainants will still win and both systems will stagnate just like the UDRP.

The UDRP needs an immediate review, especially if it is to be used as the basis for other systems. The fact that the UDRP is so bankable explains why so far none of its stakeholders has initiated any process to review its body both substantially and procedurally; UDRP decisions bring a lot of money and reputation to both the centers and many of their panelists. This is the price of not having in place proper checks and balances that will ensure the proper application of justice.

The Czech Arbitration Court is suggesting what in essence is a UDRP amendment

Following the really bad precedent set by the World Intellectual Property Organization (WIPO) on the proposal for a fast-track UDRP process, the Czech Arbitration Court (CAC) has proposed changes that in essence amend the substantive and procedural rules of the UDRP. The Non-Commercial Users Constituency has submitted the following comments:

December 11, 2009

Dear ICANN Staff,

The undersigned members of the NCSG STI Drafting Team submit that the request from the Czech Arbitration Court (CAC) cannot be granted at this time for the strongest of procedural and substantive reasons.

1. The ICANN public notice for comments has misled the ICANN community and the public. This is not a mere change to supplemental rules for a mere alternative page limit. This is the adoption of an “Expedited Decision” analogous to the URS system, recently created by the STI. In October, the ICANN Board sent the URS back to the GNSO because **expedited decision making processes involve substantive rights and must be subject to the procedures and policy-making processes of the GNSO and its Council.*** The same concepts, and requirements, apply here.

2. There is nothing supplemental or merely procedural about these proposals. These proposals involve substantive change which will limit the rights of domain name registrants. As the just-completed STI URS recommendations show, expedited decision-making processes bring to bear serious and important issues of fairness and due process. The URS drafting team found that defining the elements of the UDRP claim precisely – and with the clear inclusion of safe harbors (the URS’ modelled on the Nominet example) constitute critically important factors in a rapid decision-making process.

Further, as the STI agreed, rapid reviews, especially in the case of defaults, should include additional procedures to protect and benefit the domain name registrants who may not even know the UDRP or URS proceedings are taking place. Such protections were placed into the STI’s just-completed URS -- but could not have been seen by the CAC which requested its recommendations (modeled on the IRT Report alone) prior to the results of the Board-requested STI work).

3. The UDRP is meant to be a uniform system and CAC’s amendment will operate against that uniformity. CAC is suggesting changes to create new substantive language that is not in conformity with the original scope of the UDRP. The uniformity of the UDRP is based on all UDRP providers conducting the same type of substantive review. The CAC new process breaks this uniformity seeking to create a whole new mechanism.

Thus, the CAC proposal raises serious competition concerns. It is unfair that one UDRP service provider should move forward with an advantageous new process that may lure complainants away from other forums. The UDRP was meant to be a uniform system, and accordingly, rapid decision rules, as they apply to existing gTLDs, must take place through the GNSO and apply equally to all providers.

4. The CAC proposal certainly will impact non-commercial and free speech domain names. As the CAC proposal does not include safe harbors for domain name registrants, its proposals do not include the balance of fair use and due process which constitute the basis of the newly-formulated and newly-recommended URS.

5. Further, the new CAC proposal is premised on inaccurate assumptions about default and domain names – to the substantive detriment of good faith domain name registrants. The CAC proposal presumes bad faith at default – despite the very short timeframe for notice and response that have characterized the UDRP since its outset (a timeframe far faster than court, and even than most administrative proceedings). The CAC proposals undercut the basic fairness of the UDRP, and the fairness and balance of the newly-introduced URS.

Overall, CAC is an accredited ICANN UDRP provider and should comply within a specific mandate. Despite CAC’s effort to present these changes as part of its supplemental rules, in reality they are substantive and will affect the future of the UDRP.

Such a submission, particularly by a UDRP provider so new to the UDRP process (in operation for only a year) and taking place while the URS was under serious consideration and substantive re-evaluation, will be viewed by all as unauthorized, unfair and seriously flawed.

Going Forward:
At a minimum, ICANN must reissue the comment period with a public notice that puts the public on notice that real rights – registrant rights – are being impacted under the UDRP pursuant to the change of policy being proposed by CAC.

The far better answer is for ICANN to strongly urge CAC to return to ICANN after a full review of the new URS. As the URS Drafting Committee, the STI, found and the UDRP Final Drafting Team before it, Registrants are entitled to the protections, fairness and due process. The STI 's URS came through a GNSO policy-making process. In addition, the URS proposal offers a heavily researched, carefully written and painstakingly edited rapid decision process from an expert and diverse group of trademark attorneys and technical experts representing Trademark Owners, Registrants, Registrars, Registries and individuals. It is a balance that adds to and rounds out the IRT recommendations, on which the CAC proposal was narrowly based.

The URS text, and its process of creation, should help inform and guide the CAC rapid decision process.

Overall, the procedural and substantive proposals suggested by the CAC must be legitimate revisions to the UDRP. These changes, and all major changes in the UDRP procedures, must be a part of ICANN’s bottom-up policy process undertaken through ICANN’s Policy Development Process (PDP).

Whatever happens next, this proceeding, as designated, must not continue. Suspending this proceeding for further work will benefit the entire ICANN community -- trademark owners, registrants, individual, registrars and registries, and CAC.

It also will serve the integrity of the ICANN process, and the UDRP, with a full and fair process.


Very sincerely yours,




Kathryn Kleiman, Esq.
NCUC Co-Founder, US Trademark Attorney, UDRP Drafter & URS Drafter

Dr. Konstantinos Komaitis,

URS Drafter and author of the book “The Current State of Domain Name Regulation” (University of Strathclyde)

Robin D. Gross, Esq.

Chair of NCUC, IP Justice Executive Director, and URS D

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.

ICANN in Paris (part deux)

Dear 'What Else is There' Bloggers,

in what can only be characterised as a turning point for trademarks law, the ICANN Board has announced that they have approved, despite serious objections and concnerns, the biggest-ever expansion of the gTLD space. Under this new scheme, ICANN potentially permits everyone to become a registry and run a gTLD.

Under the new draft proposal, which is anticipated to be materialised within the next six to nine months, applicants will have to successfully pass a number of tests and meet a set of criteria before they can be considered eligible to acquire a registry status. These criteria are substantive in nature and will focus on the following issues: string confusion; existing legal rights; morality and public order; and, finally, community objection. ICANN itself will not be the authority assigned to evaluate and examine the applications, but instead, according to Karla Valente, gTLD Program Director at ICANN, disputes will be handled by "an international organisation with experience in IP". After the consultation process, which most likely will take place within the next six months, it is anticipated that the first wave of applications will come in early to mid 2009. The fees involved for a company to become a registry can be as high as $100,000, an amount that, according to ICANN, can be justified in the effort to prevent cybersquatters and other individuals who might wish to abuse domain name registrations from becoming part of this new scheme.

There you have it dear bloggers. Just when you thought that we would not really have to deal again with ICANN, the corporation is in the eye of the storm. First of all, once again ICANN is getting involved in decision-making processes, irrespective of its mandate as a technical organisation. This is old news. However, this time the decision of the Board to allow individuals to register new gTLDs will have serious implications that no one can really forsee. The new scheme opposes the traditional, territorial nature of trademark law and will automatically create an international 'Treaty' regime, something that has consciously been avoided in the past. It will allow trademark owners and especially the ones who hold 'strong' trademarks to automatically acquire international protection over their marks without the necessity of following the long-standing rules of the Paris Convention.

At the same time, if Mrs. Valente's comment proves to be correct, the World Intellectual Property Organisation (WIPO) will most likely act as the dispute resolution provider that will evaluate the applications (it is afterall the main body with experience in IP). WIPO is an UN-body assigned the task to promote intellectual property issues - so once again domain name holders will found themselves trapped in the interests of trademark owners and their constituencies.

Finally, such a decision will also re-shape the face of trademark law. First of all, generic terms will be allowed to be registered as gTLD - something that is forbidden by trademark regimes. ICANN is no longer promoting the 'first-come, first served' rule, which apart from its disadvantages, at least it was offering a certain amount of procedural justice. The new proposal seems to be promoting an elitistic model - whoever can afford $100,000 will end up having a gTLD.

The scheme has a lot of gaps as it does not answer the crucial question of what will happen in case two applications conerning identical or confusingly similar gTLD extensions come before these panels. Which criteria will then be used for choosing who should become the registry?

These issues open Pandora's Box and create a series of affairs that will certainly have implications upon all users, small and medium sized enterprises as well as entrepreneurs and start-up business ventures. The addressing system is encouraging the creation of an "exclusive club" that seems to be securing and protecting only certain interests.

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?