The UDRP: a dispute resolution policy to stand the test of time?
This is an Insight article, written by a selected partner as part of WTR's co-published content. Read more on Insight
There is no doubt that the UDRP offers many benefits to trademark owners, with owners prevailing in approximately 90% of all cases; but does it go far enough in addressing the ever-pressing issue of cybersquatting? Is there a need for a complete overhaul of the UDRP or can we rely on the current consensus that has been established over the years? This chapter addresses some of these questions.
The Uniform Domain Name Dispute Resolution Policy (UDRP), which came into force in 1999, is still the preferred route for domain name dispute resolution. This inexpensive and expedited procedure permits parties to seek the transfer or cancellation of domain names which are not only identical or confusingly similar to a trademark, but which have been registered and used in bad faith.
The World Intellectual Property Organisation (WIPO), which administers UDRP proceedings, states that it has processed more than 30,000 cases since its inception, encompassing over 58,000 domain names. In 2015 alone WIPO administered 2,754 cases – a 5% increase on the previous year, which was partially triggered by the emergence of new generic top-level domains (gTLDs) in 2013.
There is no doubt that the UDRP offers many benefits to trademark owners, with owners prevailing in approximately 90% of all cases; but does it go far enough in addressing the ever-pressing issue of cybersquatting? Is there a need for a complete overhaul of the UDRP or can we rely on the current consensus that has been established over the years? This chapter addresses some of these questions, examines alternative rights protection mechanisms and considers whether lessons can be learned from other self-administered dispute providers.
Alternative rights protection mechanisms
The UDRP was designed to tackle the unique circumstances resulting from a rapidly growing domain name system, while focusing on a narrow class of cases: clear cases of abusive registration and use.
With the launch of new gTLDs in 2013, the Uniform Rapid Suspension (URS) procedure was introduced in order to provide rapid relief to rights holders for clear-cut cases of infringement. The mechanism, which is administered by the National Arbitration Forum (NAF) and the Asian Domain Name Dispute Resolution Centre, promised a lower cost ($375) and a faster resolution for trademark owners who could prove their cases with clear and convincing evidence. However, the URS was not designed to replace the UDRP, but rather to complement it by allowing rights holders to suspend the offending domain name for the remainder of the registration period, rather than seeking transfer of the domain.
The URS has better benefits than the UDRP when dealing with the most egregious forms of trademark infringement (eg, the online sale of counterfeit goods). Further, in such cases an affected rights holder will want the issue resolved quickly, so the URS – which can resolve issues quickly (within 12 to 18 days) – may be the more viable option. Moreover, the URS remedy of suspension rather than transfer or cancellation may be a better alternative for rights holders which are wrestling with the expense of ever-increasing domain portfolios. Although cancellation requests under the UDRP have seen a slight increase over the years, this has never been a popular remedy among rights holders, as it risks the domain name falling back into the wrong hands once it is released for general registration. On the other hand, suspension, which applies only to new gTLDs, allows rights holders to balance the cost between enforcement and monitoring. Trademark owners can limit the recovery of domain names which are desirable through the UDRP while using the cost-effective URS mechanism to suspend and monitor less desirable domain names.
Only time will tell whether the URS is a valuable mechanism for rights holders. At present, many still question whether it complements the UDRP. WIPO, which has not implemented the URS, has called it “relatively overburdened”, suggesting that the process is trying to do “too much for too little”. This raises the question of whether the UDRP itself could be adjusted to meet the demands of the expanding domain name system.
Can lessons be learned from self-administered dispute providers?
Although many countries which provide alternative dispute resolution services have adopted the UDRP, some administer their own policies. One example is the award-winning UK Dispute Resolution Service (DRS) administered by NOMINET, the UK internet registry that operates the ‘.uk’ extension.
The DRS not only allows for the informal mediation of a dispute before the appointment of an expert panel, but has also implemented a default-based model, allowing complainants to request a summary decision at a reduced cost in the absence of a filed response. The summary decision is composed of a simple tick box process to confirm whether the complainant has successfully established its case.
NOMINET’s stats reveal that of the 728 cases filed in 2015, 169 were summary decisions.
The lack of written analysis of procedural matters, party contentions and findings addresses WIPO’s initial concerns regarding the URS, whereby expert lawyers – many of whom work in law firms – must review complaints and provide comprehensive decisions for a relatively small fee.
A large number of UDRP cases go undefended. According to the NAF, of the 1,836 cases filed with it in 2014, the respondent failed to submit a formal response in 56.9% of cases. Therefore, rights holders which file large numbers of complaints would undoubtedly benefit from such a model.
Call for mediation
The call for online mediation as part of the UDRP process is seen as a commercially sensible solution for both parties. The statistics of dispute resolution providers which provide informal mediation as part of their procedures demonstrate that online UDRP mediation should be given serious consideration. Again, NOMINET offers a period of informal mediation after the parties’ submissions have been made under the DRS. In 2014, of the 728 cases filed under the DRS, 160 were settled through mediation. This reduced the length of time that it took to manage the disputes by an average of 44 days, as the amount of complaints which proceeded to the appointment of an expert decreased.
The free mediation process is confidential and conducted on a without-prejudice basis with the assistance of a trained mediator, allowing the parties to explore all options freely and even to reason on the strengths and weaknesses of each other’s cases.
With the limited remedies and narrow class of cases which fall under the UDRP, mediation could also allow for the sort of relief that would not normally be available, such as the resolution of domain name disputes involving parties with existing or past business relationships.
Multiple complainant class complaints
UDRP cases such as those involving infamous registrant Yoyo Email Limited illustrate the need for multiple complainant disputes. To date Yoyo, which attracted controversy over the registration of more than 4,000 domain names comprising third-party trademarks together with the ‘.email’ gTLD, has been involved in over 50 UDRP and URS cases, with all but one URS case being decided in favour of the complainant. In all cases the alleged abuse and conduct of the respondent were the same; in this type of case, where rights holders have a common grievance against a particular respondent, an express provision for consolidated complaints would be highly beneficial.
The existing UDRP rules make no express provision for multiple complainants to bring proceedings under a single complaint, although for some time UDRP case law has provided principles governing the question of multiple complainant disputes. However, regarding proceedings brought in the Czech Arbitration Court (CAC), Article 4 of the CAC’s UDRP Supplemental Rules expressly provides for proceedings to be brought by multiple complainants. Article 4 designates such proceedings as a class complaint, provided that:
- the class complaint is based on legal arguments applicable equally, or substantially in the same manner, to all the disputed domain names;
- the person representing several different complainants joined in the class complaint is authorised to act on behalf of each of the complainants; and
- the panel orders the transfer of any disputed domain name only to the individual complainant on whose behalf such transfer was requested in the class complaint.
Complainants have repeatedly shown that they are willing to unite their resources and efforts to tackle the issue of cybersquatting (see Fulham Football Club (1987) Limited v Domains by Proxy, Inc, WIPO Case D2009-0331). Giving rights holders the ability to file or join class complaints where the respondent has engaged in common conduct which affected their trademark rights could lead to the more streamlined version of the UDRP for which many trademark owners have called.
Revisiting the UDRP’s conjunctive requirement – ‘and’ or ‘or’?
The UDRP’s conjunctive requirement of demonstrating both bad-faith registration and bad-faith use has been the subject of debate for many years among panellists. Where the majority have interpreted this element of the policy as having two requirements, further limiting the UDRP’s already narrow scope, a number of panellists believe this interpretation to be incompatible with the UDRP objective of tackling cybersquatting.
Cases such as Guru Denim Inc v Abu-Harb (Case D2013-1324, ‘truereligion.com’) highlight the split rules for this element of the policy and provide some justification for adopting a non-conjunctive interpretation.
In Guru Denim Inc the complainant filed against the respondent for the domain name ‘truereligion.com’. The respondent registered the domain in 1998 to promote Islam, four years before the complainant created its True Religion brand.
In 2009 the site began receiving over 1,000 hits a day due to the popularity of the complainant’s True Religion brand, prompting the respondent to take unfair advantage and monetise the traffic through Google’s Adsense programme. It later emerged that the respondent had offered to sell the domain name for $380,000.
The majority panel held that while there could be evidence of bad-faith use in these circumstances, the complainant could not demonstrate that the domain name had been registered in bad faith as it had been acquired years before the brand came into existence. However, the dissenting panellist stated: “I defy any panellist to show me evidence from any portion of the legislative history or from any other provision of the Policy that would indicate that the drafts persons or the provisions of the Policy as drafted intended that a registrant could use a domain name to target a trademark and profit from its goodwill, so long as the time that the domain name was registered, the registrant had no intention of doing so.”
The case emphasises the limitations of the UDRP and the possible loopholes that can be exploited. Domain owners would argue that the conjunctive requirement offers a vital level of protection in an already biased process in favour of rights holders. On the other hand, rights holders might question whether changes to the bad-faith element would unfairly undermine a domain name owner’s interests. After all, a legitimate domain owner would usually be able to defend the legitimacy of its registration and use under the second element of the UDRP, which discusses rights and legitimate interests.
The majority of national dispute resolution procedures which provide their own variations of the UDRP (eg, Australia’s ‘.au’ Dispute Resolution Policy (aUDRP)) have abandoned a conjunctive requirement in favour of the either/or model – namely, that the respondent either registered or subsequently used the domain name in bad faith. The UK DRS Policy has gone one step further in addressing this controversial subject by instead adopting the term ‘abusive registration’. As defined in Paragraph 1 of the DRS, ‘abusive registration’ covers situations where a domain name:
- was registered or otherwise acquired in a manner which, at the time when the registration or acquisition took place, took unfair advantage of or was unfairly detrimental to the complainant’s rights; or
- has been, or is likely to be, used in a manner which takes unfair advantage of or is unfairly detrimental to the complainant’s rights.
This language gives expert panels broad discretion as to what constitutes abuse and allows the complainant to show that the abuse occurred at any time during the life of the domain name.
This scope covers domains that are inherently abusive and is further emphasised in the DRS, which recognises and allows the presumption of abusive registration if the complainant proves that the respondent has been found to have made an abusive registration in three or more DRS cases in the two years before the complaint was filed, irrespective of how the domain name is being used. Although this does not result in the automatic loss of the domain name for the respondent, it weakens its position quite significantly.
Many have questioned the morality element of the DRS’s automatic assumption of guilt or the ‘three strikes’ rule. Nevertheless, it places an ongoing responsibility on domain owners to ensure that their registrations are all legitimate and that, where possible, issues are settled before proceedings. A domain owner with a large portfolio of domain names is less likely to risk proceeding to a DRS where there is a high probability of losing if it knows that decision will count against it in the near future. The provision not only encourages communication between parties, but also attempts to provide a clear distinction between legitimate domain owners and cybersquatters by labelling those who continually show blatant disregard for the rights of trademark owners.
The DRS has successfully provided an alternative approach to the much-debated bad-faith schools of thought. Rather than a conjunctive or disjunctive view, as debated under the UDRP, perhaps the DRS’s all-encompassing concept of abusive registration requirement better addresses the range of circumstances that arise in disputes.
Comment
As discussed here, rather than relying on the creation of new rights protection mechanisms, lessons can be learned from self-administered dispute providers. The adoption of a default model and a consolidated complaint provision may provide the type of streamlined process that the URS was intended to provide, without the complexity. Voluntary mediation could reduce costs and encourage broader types of resolution, while clear language to reflect an evolving domain name system may provide the consistency that the UDRP needs.
While it is safe to say that the UDRP is an imperfect administrative process which would benefit from some fine-tuning in certain areas, the volume of cases filed since its inception demonstrates that it is functioning as the drafters intended. The UDRP will remain in effect for the foreseeable future, but minor changes to the process could further improve its effectiveness as a protection mechanism for rights holders.
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