New domain name dispute resolution procedure launched

Netherlands

SIDN, the registry responsible for the organization of the Dutch country-code top-level domain (ccTLD), '.nl', has announced the launch of a new alternative dispute resolution procedure for '.nl' domain names. The World Intellectual Property Organization (WIPO) Arbitration and Mediation Centre will continue to provide dispute resolution services under the new procedure.

The new procedure is a variation of the Uniform Dispute Resolution Policy (UDRP) and will replace the arbitration mechanism put in place in 2003. Starting out with three cases in 2003, the arbitration mechanism became increasingly popular (with 28 cases in 2007), but remained somewhat costly and unwieldy.

Under the former procedure, when signing the registration agreement, registrants agreed to submit to arbitration in the event of a dispute concerning the domain name. In practice, many registrants did not read the agreement at length and, as a consequence, did not realize that they had agreed to submit to arbitration in the event of a dispute. Some regarded this as a breach of the principle that arbitration is a choice of both parties.

Roelof Meijer, the Chief Executive Officer of SIDN, explained the change of procedure as follows:

"By introducing the dispute resolution rules, we are complying with an advice given by the local internet community at the Domain Name Debate 2006. The dispute resolution rules have a number of advantages over the current arbitration process… We are convinced that the dispute resolution rules will contribute to the quality of the '.nl' domain."

While the arbitration procedure applied to domain name registrations or renewals from 2003 onwards, the new '.nl' rules apply retroactively to all '.nl' domain names irrespective of their registration date.

Under the former procedure, complainants could base their claim on:

  • Benelux trademark rights (including Community trademark rights); and/or

  • Dutch trade name rights.

The new procedure covers a much wider array of rights. In addition to trademarks and trade names, the new procedure protects the following names, provided that they are commonly and publicly used:

  • personal names registered in one of the key Dutch municipal administrations;

  • names of Dutch public legal entities; and

  • names of foundations or associations located in the Netherlands.

Another difference is that in order to succeed under the UDRP, a complainant had to prove that both registration and use were in bad faith. Such accumulation of factors is not required under the new procedure, where either registration or use in bad faith must be established. This makes it easier to succeed under the new '.nl' procedure than under the UDRP.

Both under the old and the new regime, filing parties have the choice between initiating court proceedings and taking the alternative dispute resolution route. Under the new procedure, parties can go to court at any time, and any court judgment will prevail under the new rules. Under the arbitration procedure, court proceedings were not possible once an arbitration proceeding had been commenced. The arbitration procedure included an appeal before the WIPO Arbitration and Mediation Centre, which has never been used.

The arbitration procedure was quite comprehensive and far reaching in respect of the remedies available. An arbitrator could:

  • order the transfer of a domain name;

  • award damages; and

  • prohibit (subject to a penalty) the domain name holder from registering future domain names similar to a third party's trademark.

By way of comparison, only the transfer or cancellation of a domain name can be requested under the UDRP. Therefore, a complainant will have to commence separate court proceedings if it wishes to seek compensation for its damages.

The costs of the new procedure are considerably lower than those of the arbitration procedure. While the costs of arbitration amounted to €2,250 for disputes concerning up to five domain names decided by a single panel, the same action costs €1,500 under the new procedure.

Other countries that use arbitration as a means of domain name dispute resolution include Ascension Island ('.ac'), Poland ('.pl'), Portugal ('.pt') and Italy ('.it'). The Dutch arbitration, which featured monetary compensation, was regarded as a rather heavy tool for tackling cases of cybersquatting.

To date, 46 ccTLDs have adopted (a variation of) the UDRP and have formalized the implementation thereof with the WIPO Arbitration and Mediation Centre. Several other countries have not yet finalized such implementation, but appear to intend to adopt (a variation of) the UDRP. This seems to validate the success of the UDRP as a tool for providing the resolution of domain name disputes.

David Taylor and Brechtje Lindeboom, Lovells LLP, Paris

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