EVICTING CYBERSQUATTERS:

A PRACTICAL GUIDE TO THE UNIFORM DOMAIN NAME DISPUTE RESOLUTION POLICY

by Rebekah Gay and David Stone, solicitors, Freehills

This paper attempts to provide a practical guide to use of the Uniform Domain Name Dispute Resolution Policy procedure.

Introduction

Internet domain names were originally designed to allow internet users to locate a web site using a people-friendly and easy to remember address.[2] However, with the explosion of commercial internet activity the structural limits of cyberspace domain names have become important and valuable[3] business and personal identifiers.

One of the results[4] has been "cybersquatting", the practice of registering as a domain name, a trade mark or name belonging to another entity, often in the hope of later "selling" the domain name registration to the trade mark or name owner at a profit.[5]

Many people now consider domain names to be important "intellectual property rights". However, whilst rights in contract arise on registration, there is no legislative regime in Australia which specifically establishes rights in domain names. Any rights with respect to a domain name must be cobbled together from traditional intellectual property rights, particularly those under the Trade Marks Act 1995 (Cth), the Trade Practices Act 1974 (C'th) and the law of passing off. Registration of a domain name results in a worldwide cyber presence: this has caused difficulties for trade mark owners, whose rights have limited geographic application, but whose concerns are international.

What, then, is the problem? The answer[6] runs something like this: consumers seeking a telephone number for a business will look it up in a telephone book. There is no "phone book" for the internet, so web surfers will often begin by hazarding a guess at the domain name. It is here that cybersquatting leads internet surfers into error: "companyname.com" or "trademark.com" will display the site of the first person to register that domain name, not necessarily the company or the trade mark owner.[7] That error may lead a customer to a competitor, may cost the trade mark owner business or may create income for wholly unrelated profiteers.[8]

On 24 October 1999, with a view to addressing the difficulties associated with the global protection of trade marks (and particularly in response to the ease of registration of top-level domain names), the Internet Corporation for Assigned Names and Numbers (ICANN)[9] adopted the Uniform Domain Name Dispute Resolution Policy (UDRP). Given the difficulties and costs of evicting cybersquatters through the courts,[10] the UDRP is a significant boon for trade mark holders around the world.

Previous articles in this journal have discussed the development of the internet[11] and the ICANN UDRP.[12] This paper attempts to provide a practical guide to use of the UDRP procedure.

UDRP Jurisdiction

All registrars of the .com, .net, and .org top-level domain names[13] have adopted the UDRP.[14] When a person registers a top‑level domain name, the UDRP is incorporated into the contract between the domain name holder and the registrar. The domain name holder agrees to submit to a mandatory administrative proceeding if a complaint is made of abusive domain name registration.[15] If the domain name holder refuses to submit to the procedure, the UDRP proceeding will still take its course, a determination will be made, and orders may be issued to the domain name registrar requiring transfer or cancellation of the domain name.

The UDRP applies to all .com, .org and .net domain names and to a small number of country code domain names: .ac (Ascension Island), .ag (Antigua and Barbuda), .as (American Samoa), .cy (Cyprus), .gt (Guatemala), .na (Namibia), .nu (Niue), .ph (Philippines), .sh (St Helena), .tv (Tuvalu), and .ws (Western Samoa).

There are separate dispute resolution policies for a number of country codes.

Australia has not to date ascribed to the UDRP[16]. Some argue that the Australian practice of requiring registrants to prove they own a business or company name from which the domain name is derived has prevented many of the difficulties of top-level domain name cybersquatting. However, the domain name registration requirement may not be as effective as initially thought because business name reigstrations are easily purchased: the practice has been a cash bonus for the Australian government, which has benefited from the fees of increased business name registrations.

Recent industry calls for competition in the domain name registration industry in Australia may indicate strict registration practices are unlikely to survive much longer.[17] Reform will be needed: the lack of an appropriate .com.au dispute resolution procedure at present is a significant failing of the Australian system.

For domain names other than the three registrable top-level domain names,[18] trade mark owners should check with the country code or other registrar to determine if any form of administrative or arbitral procedure applies. A list of country codes, hypertext-linking to country code registrars, is at <www.iana.org/cctld/cctld-whois.htm>.

UDRP Administrative Proceedings

1) the domain name is identical or confusingly similar to a trade mark or service mark in which the complainant has rights; and

2) the domain name holder has no rights or legitimate interests in respect of the domain name; and

3) the domain name has been registered and is being used in bad faith.

The complainant must prove that all of the three requisite elements are present.[19]

In all other circumstances, the UDRP provides that a domain-name dispute must be resolved through court action, arbitration or other proceedings.[20]

Some comments on each of the requirements are made below.

(1) Identical or confusingly similar

The requirement for a domain name to be "identical or confusingly similar" to the complainant's mark has not been a big issue in proceedings decided to date - the impugned domain name is unlikely to attract the trade mark owner's attention unless it is identical or confusingly similar.

A registered trade mark does not have to be registered in the jurisdiction of the respondent/domain name registrant: the intenet's reach is global.[21]

It is worth noting that unregistered marks such as a person's name may also give the owner rights under the UDRP. Actors Julia Roberts and Isabelle Adjani, author Jeanette Winterson and performer Madonna have all succeeded in ICANN proceedings.[22]

Well known but unregistered marks have also been successfully protected, such as The Times of India, for which the trade mark registration in India had lapsed.[23]

(2) No rights or legitimate interests

Whether or not the domain name holder has "rights or legitimate interests in respect of the domain name" will often be a matter, at least initially, of some conjecture.

The UDRP provides a non-exhaustive list of factors which "shall demonstrate the registrant's rights or legitimate interests to the domain name". These are:

1) before any notice to the registrant of the dispute, the registrant used or was demonstrably preparing to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or

2) the registrant (as an individual, business, or other organisation) has been commonly known by the domain name, even if the registrant has acquired no trade mark or service mark rights; or

3) the registrant is making a legitimate non-commercial or fair use of the domain name, without intent for commercial gain misleadingly to divert consumers or to tarnish the trade mark or service mark at issue.[24]

Some examples, such as the first case decided under the UDRP, worldwrestlingfederation.com[25] will be obvious: the mark could not readily or obviously belong to anyone else.[26]

In other cases, it will be necessary to investigate any website which appears at the domain name and perhaps any physical business or organisation it refers to. Domain names holders which appear to be illegitimate may, in fact, have legitimate interests in their domain name. Penguin Books lost its application in relation to penguin.org, because the domain name holder brought evidence that he was known by the nickname "Penguin" and his wife as "Mrs Penguin". The UDRP panel ruled he had a legitimate interest in the domain name.[27]

Legitimate rights or interests may also be established by registration of a trade mark from which the domain name is derived, although not if the registration is merely to protect the interests in the domain name.[28]

Change of name by deed poll will also not assist a domain name registrant to resist a complaint: Mr Oxford University failed because that wasn't his name at the time of registration.[29]

Whilst the UDRP and the reported cases do not put it in these terms, we have the impression that once the complainant has established its rights in a trade or service mark, the onus is on the defendant to prove it does have a legitimate interest rather than the complainant having to prove the registrant does not have legitimate rights.[30] Many respondents to UDRP complaints never respond, and so, in the absence of any evidence, fail to establish a legitimate interest.

(3) USE IN BAD FAITH

Where factual evidence may be hardest to compile is in relation to the requirement that the domain name has been registered and is being used in bad faith.

A decision under the UDRP has found that registration alone, without any further use (such as setting up a webpage at the address) can constitute "registration and use in bad faith".[31]

(a) circumstances indicating that the domain name has been registered or acquired primarily for the purpose of selling, renting or otherwise transferring it to the complainant (who is the owner of the trade mark or service mark) or a competitor of the complainant for valuable consideration in excess of the documented out-of-pocket expenses for registering of the domain name;

(b) the domain name has been registered to prevent the owner of the trade mark or service mark from reflecting the mark in a corresponding domain name, provided that the domain name holder has engaged in a pattern of such conduct;

(c) the domain name has been registered primarily for the purpose of disrupting the business of a competitor; or

(d) by using the domain name, the domain name holder has intentionally attempted to attract internet users for commercial gain by a creating a likelihood of confusion with the complainant's mark as to the source, sponsorship, affiliation or endorsement of the website or of a product or service on the website.

Each is discussed below.

(a) Intention to profit

Usually a complainant trade mark owner will have clear evidence of an intention to transfer the domain name at a profit only if the domain name holder has offered to sell the domain name. Trade mark owners and their advisers seeking to elicit such an offer from a domain name holder should exercise caution. An offer from the trade mark owner to purchase the domain name for a figure will not necessarily constitute evidence of the domain name holder's purpose.[32]

We are unaware of any decision which has expressly balanced the primary purpose of the domain name holder against any other purpose. The primary purpose appears to be reasonably readily inferred.

Dollar values need not be significant. The amount involved in the worldwrestlingfederation.com case involved an asking price of US$1000.[33] A demand for cash is also not essential, with UDRP panellists holding that requests for free university tuition[34] or shares[35] established registration and use in bad faith.

In The Wiggles Touring Pty Ltd v Thompson Media Pty Limited,[36] <www.wiggles.com> was offered for sale for "a quarter of the value of a small Australian car". The UDRP panellist also appeared to be influenced by the respondent's registration of 37 other domain names, including tooheys.com, kimbeazley.com and dairyfarmers.com. He ordered the domain name be transferred to the Wiggles.

(b) Preventative registration

This type of bad faith was designed to catch cybersquatters who register domain names but do not make an offer to sell them and do not use them in any other way.

For an example see Adobe Systems Incorporated v Domain Oz,[37] where 256 domain names had been registered, many including famous marks.

The requirement for a "pattern of such conduct" is also a matter on which a complainant can accumulate evidence. Domain name registrar Network Solutions Inc provides a search function[38] which enables users to identify the holder of any .com, .org or .net domain name. The search function can also locate all other domain names registered by that person. If the person has registered a number of well-known trade marks as domain names, a pattern of conduct will be established.[39]

(c) Disruptive registration

The reported UDRP decisions suggest that, by and large, major corporations are not engaging in cybersquatting to disrupt their competitors' businesses. Some smaller entities have. Because of the enhanced capacity for confusion, and the commercial benefits that flow from it, where appropriate, this "head" of bad faith will be readily made out.[40]

In The Chancellor, Masters and Scholars of the University of Oxford v DR Seagle,[41] the panellist found against Mr Seagle, although there was no evidence Mr Seagle was a competitor of the University. The panel ordered that oxford-university.com be transferred to the University.

(d) Intention to attract internet users by causing confusion

Many of the cases which have been decided under this example of bad faith involve misspellings of domain names (microsof.com,[42] guinnes.com[43]).

In Encyclopedia Britannica Inv. v John Zuccarini and the Cupcake Patrol,[44] Mr Zuccarini had registered 1,300 misspelled domain names, including opharahwinfrey.com and jeneferlopez.com, and relevantly, a misspelled version of the famous reference work. He was allegedly "earning" US$1 million a year from advertising revenue of 25˘ per hit on each site.

Dispute Resolution Service Providers

The Rules for UDRP provide that a complainant can initiate proceedings by submitting a complaint to any dispute resolution service provider approved by ICANN (Provider).[48] To date, ICANN has approved four Providers:

1.                   CPR Institute for Dispute Resolution (CPR), New York;[49]

2.                   Disputes.org/eResolution Consortium (DeC), Montreal;[50]

3.                   The National Arbitration Forum (NAF), Minneapolis;[51] and

4.                   World Intellectual Property Organisation (WIPO), Geneva.[52]

Each Provider must comply with the Rules for UDRP. Each Provider also has its own supplemental rules that govern, in greater detail, the conduct of administrative proceedings.[53]

Because complaints are dealt with almost entirely in "cyberspace" (face to face "hearings" are rare), it is not necessary to choose a Provider with local links. However, several providers have panellists resident in Australia,[54] which complainants may find useful in some circumstances (such as where reference will be made to reputation in Australia or to Australian law). Alternatively, the complainant may wish to choose a three member panel and nominate an Australian.

Filing a Complaint

A complaint must be filed with a Provider in both hard copy and electronic form. The complaint must, amongst other things:

1.                  specify the domain name(s) the subject of the complaint;

2.                  identify the respondent (the domain name holder) and provide contact details for the respondent;[55]

3.                  identify the registrar with whom the domain name is registered;[56]

4.                  specify the trade mark or service mark on which the complaint is based and describe the goods or services to which each mark relates;

5.                  describe the grounds on which the complaint is made including:

a. the manner in which the domain name is identical or confusingly similar to the complainant's mark;

b. why the respondent should be considered as having no legitimate interest in the domain name; and

c. why the domain name should be considered as being registered in bad faith;

6. designate whether the complainant elects to have the dispute decided by a single-member or three-member administrative panel;

7. specify the remedies sought; and

8. annex any documentary or other evidence on which the complainant relies.

In addition, the rules of each Provider contain further requirements in relation to the form and contents of complaints. Helpfully, model complaints are available at each Provider's website.

Each Provider charges a fee for a complaint. The fees vary according to whether a single-member panel or three-member panel is to determine the dispute and according to the number of domain names in dispute. Fees range from US$750 to US$6,000. Generally the fee is payable by the complainant. Where the respondent requests the matter be determined by a three-member panel, the fees are shared equally by the parties.

Importantly, once a complaint is filed, the domain name cannot be transferred to another owner.[57]

The Process for Determining a Complaint

Once a complaint is filed, the Provider must send a copy of the complaint to the domain name holder. The domain name holder has 20 days from the date of the complaint within which to respond. The Rules for UDRP and the supplementary rules of each Provider set out what information must be included in the response. The complainant does not have an automatic right of reply to the domain nameholder's response: all information, and evidentiary exhibits, should therefore be included in the initial complaint.[58] One of the providers now provides an express right of reply in its supplementary rules. This divergence in practice between providers is unfortunate.[59]

Once a response has been filed, the Provider will appoint a panel. The panel, except in extraordinary circumstances, has 14 days in which to reach its decision. Unless the panel determines otherwise, there are no in-person hearings and the matter is determined on the basis of the written evidence submitted by the parties.

Available Remedies

The UDRP aims to provide a decision within 45 days of the complaint being filed. If the panel decides in favour of the complainant, the panel can order:

1.                   that registration of the domain name be cancelled; or

2.                   the domain name registration be transferred to the complainant.

The UDRP provides no power to award damages or costs.

The panel's decision is enforced by the relevant registrar, which is notified of the decision by the Provider. The Provider notifies the domain name holder of the decision 10 days prior to notifying the registrar, in order to give the domain name holder sufficient time to commence legal proceedings against the complainant, should it wish to do so. If legal proceedings are commenced, the decision of the UDRP panel is stayed pending resolution of the proceedings.

Decisions Under the UDRP

As at 20 October 2000, 2082 domain name dispute proceedings had been filed under the UDRP relating to 3771 domain names. Of those proceedings, 1327 had been determined, with 1037 decisions (78%) being in favour of the complainant. In the proceedings decided in favour of the complainant, the relevant domain names were transferred (99%) or cancelled (1%).[60]

Sufficient determinations have been made under the UDRP for a jurisprudence to begin to emerge. This provides a fruitful, if still somewhat informal, source of precedent.[61]

The developing body of case law has clarified a number of issues, but also raised a series of further questions. Some of these are discussed below.

(4) COURT PROCEEDINGS

The circumstances in which administrative proceedings under the UDRP are available are limited.[74] There are likely to be many cases in which a complainant will not be able to satisfy each of the elements which must be established to fall within the scope of the UDRP.

While countries such as the United States have passed specific legislation designed at addressing cybersquatting,[75] there are currently no such laws in Australia. Accordingly, trade mark law, the common law of passing off and statutory misleading and deceptive conduct provisions must be called upon to resolve domain name disputes.

The UDRP anticipates the availability of court proceedings, before, during or after a determination. If a court's jurisdiction is involved during UDRP proceedings, the panel may, in its discretion, stay its determination.[76] Alternatively, the court where the claim is made may stay its proceedings until the UDRP decision is available.[77]

Damages will only be available if court proceedings are commenced. In some circumstances, it may therefore be appropriate to commence both UDRP and court proceedings. If there is a risk the domain name will be transferred out of the court's jurisdiction, the UDRP proceedings will be an inexpensive way of obtaining, in effect, an urgent interlocutory injunction to prevent transfer.[78] Difficulties will arise if the UDRP panel and the court reach different decisions.

In cases where the UDRP is not available (such as .com.au domain names), court proceedings may be the only realistically available option.

(5) APPEALS FROM ICANN

Other than approaching a court, there is, at present, no avenue for "appeal" from a decision of an ICANN panel. This creates two disadvantages:

(a) dissatisfied parties may have to litigate rather than pursue further arbitration proceedings; and

(b) there is no method of encouraging consistency between panellist and their approaches to some of the issues raised above. Many panellists are now citing earlier UDRP decisions to support their reasoning. No clear precedence is being given to three member panels (we say appropriately), and no clear statements are being made by panellists to the effect that they are "bound by an earlier decision". Many cite their own earlier decisions, with approval.

We hope that these issues might be shortly resolved with, perhaps, five member panels being constituted to decide some of the issues arising and to set guiding precedent on matters such as burden of proof and when there will be "rights or legitimate interests". Alternatively, similar ends could be achieved by administrative changes to the rules.

Conclusions