Nominet consults on proposed dispute resolution service reform

United Kingdom

Nominet, the registry for the '.uk' country-code top-level domain, is running a consultation on proposed changes to its Dispute Resolution Service (DRS) - the formal complaints process that handles disputes about the registration or use of '.uk' domain names.

Currently, a complainant must show that it has "rights in a name or mark which is identical or similar to the domain name and that the registration, in the hands of the respondent, is abusive". The definition of 'rights' is broad and, as Nominet concedes, unclear - although the threshold is low. Nevertheless, a complainant cannot rely on rights in a name or term which is wholly descriptive of its business. This appears to have led to a situation where disputes involving allegedly generic terms now form a significant minority of DRS cases, while Nominet recognizes that there is a legitimate secondary market in the sale of generic domain names.

Nominet concedes that there are a number of terms which could be argued to be "wholly descriptive", but which may be protected by registered trademarks or common law rights. By way of example, the consultation paper refers to terms such as 'British Petroleum' and, somewhat confusingly, for mobile telephony, 'Orange'. Nominet therefore proposes to clarify the boundaries and recognize domain names comprising words that have acquired distinctiveness through use, such as 'British Gas'. Additionally, Nominet proposes to clarify that the DRS recognizes rights in dictionary words which are protected by registered trademarks or goodwill.

The objective therefore is to clarify that a complainant may be able to claim rights in terms that have acquired distinctive characters, even though they are descriptive, dictionary words or could be argued to be generic. To succeed under the DRS, complainants must still demonstrate that the registration is abusive.

More specifically, in relation to domainers (ie, sellers in the secondary market for generic '.uk' domain names), but also in relation to so-called 'click-through' traffic, Nominet proposes to clarify what sort of activities tend to show legitimate use as well as abusive use. Nominet notes that the findings of abusive use are often supported by a finding that the respondent's actions specifically target the complainant. For example, in what Nominet regards as the classic cybersquatting scenario, the respondent offers to sell the domain name to the trademark holder. In the consultation, however, Nominet stresses that this is qualitatively different from a general offer to sell on a parking page (while this, of course, should not be allowed to be a cover for cybersquatting). Nominet also notes that there is an argument that pay-per-click revenue on a website to which a disputed domain name resolves potentially takes unfair advantage of the complainant's rights because it is the complainant's reputation that generates that revenue.

Nominet therefore proposes to clarify what is and what is not an abusive registration by extending the examples of things that are not necessarily evidence of abuse to include resale of domain names, sale of traffic (for example, by pay-per-click) or having a large portfolio of domain name registrations. It does concede, however, that such cases can be finely balanced and will depend on their particular facts. Thus, the intention is to clarify that the weaker the rights the complainant has, the less likely an abusive registration or use will be inferred if the evidence is finely balanced.

In summary, to safeguard the secondary market in generic domain names, Nominet intends that the DRS should include as examples of things that are not necessarily evidence of abuse:

  • the general offer to resell a domain name;

  • sale of traffic; and

  • registering many domain names.

Additionally, it seeks feedback on a further proposal that the DRS should include a statement that where the evidence is finely balanced, the weaker the rights that the complainant has, the less likely it is that the abusive registration or use will be inferred.

In relation to fees, the consultation essentially responds to suggestions that the fact that there is currently no charge to file a DRS complaint encourages poor quality complaints. Money only comes into it when a case fails to settle at mediation or if no response is made to the complaint. Then the complainant can pay £750 to bring the case before an appointed expert who considers the arguments, issues a binding decision and pockets the fee. Nominet does not actually charge for any administration for mediation. The plan is to charge an upfront fee of between £50 and £100, while reducing the expert decision fee in order to "keep the change cash-flow neutral". Apart from keeping the system free, another option would be to introduce a system where the losing party pays for the decision.

As well as reviewing the issue of fees, the consultation posits a number of further proposals, some procedural. For example, it is pondering whether to:

  • rename "abusive registration" as "unfair registration";

  • shorten appeal time lines; and

  • clarify:

    • how experts review evidence;

    • how they rate evidence; and

    • how to deal with issues raised by the experts performing their own research.

Most significantly, however, Nominet intends to include a likelihood of confusion as evidence of abusive registration, as opposed to requiring confusion. It also intends to state that the abusive use does not have to be ongoing; it will be enough that the abusive use has occurred in the past. It will also clarify that a long delay in bringing a DRS complaint, where there is no adequate explanation, is likely to damage a complainant's chance of success. Additionally, it will clarify when rights have to exist to complain and to prove abuse.

If you register domain names for yourself or your business, trade in domain names, or are concerned about protecting your online identity or that of your customers, then Nominet wants to hear from you. The consultation closes on February 16 2007. Once Nominet has digested the responses, it will publish a formal proposal setting out a revised DRS policy and procedure.

Chris McLeod, Hammonds, London

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