Mark Partridge |
What do Bill O'Reilly, Julia Roberts, and George Foreman have in common with Google, Wal-Mart and Porsche? Answer: they all have been victims of cybersquatting and have sidestepped traditional courts to seek relief online.
As the attraction of the internet for commerce and advertising grows, celebrities and businesses have become increasingly savvy about protecting their names and brands online. The Uniform Dispute Resolution Policy (UDRP), adopted in late 1999 by the Internet Corporation for Assigned Names and Numbers (ICANN), has become the choice of many for dealing with ubiquitous domain name disputes without the time and expense of courtroom litigation.
Since the first decision was issued under the ICANN UDRP in early 2000, more than 7,790 cases have been resolved by decision, involving more than 13,311 domain names. The complainant has prevailed in more than 6,262 cases - with split decisions in 60 additional cases - resulting in more than 10,779 domain names that have been transferred or cancelled.
As an ICANN UDRP panellist with more than 100 reported decisions for WIPO and the National Arbitration Forum (NAF), I have read many submissions over the past five years, some very good, many poor. The suggestions offered here for effective advocacy in ICANN UDRP proceedings are derived from that experience.
The domain name system
Domain name rules differ from traditional trade mark principles because domain names are assigned purely on a first-come-first-serve basis. Like a unique telephone number, it is impossible for two identical domain names to be assigned. Hence the land rush mentality we see as new domains open for business. As long as a domain name is not identical to another registered domain name, it will be available for registration.
Conflicts can arise between two parties with equally legitimate rights to the same brand. The domain name nissan.com was first registered by a company called Nissan Computer in Raleigh, North Carolina. Because Nissan Computers had a legitimate reason for choosing the domain name, Nissan Motor Company was unable to register its famous car brand in the popular .com domain. Similarly, who is entitled to the domain name ritz.com: RITZ Hotels, Nabisco RITZ crackers or RITZ cameras? Although each has a legitimate interest in the domain name, only one is able to hold the registration.
The real threat to brand equity, however, is bad faith registration and use of domain names. As the internet began to proliferate in the 1990s, forward-thinking teenagers and computer whizzes realized the value of registering domain names long before most companies did. By the mid-1990s, cybersquatting became widespread and sinister, as internet users snatched up domain names incorporating famous brands for resale to the owners at a premium.
"It is very simple," explained one cybersquatter on his website. "Purchase ONLY dot.com domains. Purchase them via an off-shore trust. Thus legally avoiding any tax liability, and also preventing any damages being awarded to anyone who may feel they have a right to ownership. It would cost anyone at least $3,000 to legally obtain a domain name from another, and without any possibility of damages or costs, most entities would pay up to $5,000 without a blink of an eye (or lawyer)."
Other cybersquatters earned linking fees by registering misspellings of well-known brands to redirect internet users to gambling or porno sites. John Zuccarini, the most notorious of the so-called typo-squatters, at one time reportedly operated more than 3,000 websites, earning up to $1 million a year using illegitimate domain names. The subject of many law suits, Zuccarini was eventually ordered to pay hundreds of thousands of dollars in damages and was sentenced to several years in prison for using misleading domain names to direct children looking for Disneyland sites to pornography.
Cybersquatting disputes also arose in the competitive arena. A company with a legitimate interest in the Harrods name for department stores in South America registered 60 domain names, hoping to divert business away from the famous UK department store. The South American company's bad faith intent to profit constituted cybersquatting despite its legitimate rights in some parts of the world.
When first confronted with such issues in the mid-1990s, courts struggled to fit cybersquatting problems within the traditional framework of trade mark law, with varying results. Many disputes were straightforward trade mark infringement cases familiar to bricks-and-mortar companies. Others presented new challenges not addressed by the existing statutes and case law.
The ICANN UDRP
The ICANN UDRP was one of several new tools created in the late 1990s in response to the cybersquatting challenge. The UDRP became effective on December 1 1999 after a consultative process led by WIPO at the request of the US government. Neither treaty nor statute, the UDRP instead arises from a private dispute resolution provision in the domain name registration agreement used for .com, .org, .net and other domains. The domain name registrant in these domains' contracts commits to participating in the process in the event of a dispute.
A UDRP action is initiated by filing a complaint and providing evidence online with one of the dispute resolution service providers, usually either WIPO located in Geneva, Switzerland, or NAF in Minneapolis, Minnesota. The domain name registrant is given an opportunity to answer and submit evidence, and when appropriate the complainant may reply. Both providers have panels of independent arbitrators (usually IP practitioners or retired judges) to whom the cases are assigned for decision. Most cases are heard by a single panellist, though either party may elect to have the case decided by a panel of three arbitrators.
The panel makes its decision based on the submissions of the parties. There is no discovery, live testimony or live hearing, though the panels may call upon the parties to submit additional evidence and argument. The panellists generally deliberate online via email.
Decisions are typically rendered within three months of the initial complaint, although extensions are possible for more complicated cases. Rulings may be appealed by filing a civil court action in an appropriate jurisdiction, although appeals have been relatively rare. The streamlined procedures afford the chance for faster relief at significantly less cost than would be expected in a civil court action.
Multiple names can be recovered in a single action: CNN recovered 325 domain names in one action in 2003, while last year Ticketmaster prevailed against 108 in a single action. Relief under the UDRP is limited to transfer or cancellation of the domain name. Damages, fee shifting and other monetary relief are not available.
One of the UDRP's most remarkable features is its ability to resolve disputes without regard to the limits of national jurisdictions. National boundaries do not limit the registration of generic top-level domain names, so a registrant subject to the UDRP can be located virtually anywhere in the world. Indeed, in many instances, where false registration information is given, the registrant cannot even be located. Yet the UDRP remains available for dealing quickly and cheaply with domain name disputes, often between nationals of different countries. I participated in one case from my office in Chicago involving a registrant in the United Arab Emirates, a trade mark owner in India, and my co-panellists in Australia and the United Kingdom.
Obtaining relief
The complainant is required to prove three elements to obtain a decision that a domain name should be either cancelled or transferred.
First, the complainant must show that the domain name at issue is identical or confusingly similar to a trade or service mark in which the complainant has rights. The question of similarity is normally established by direct comparison of the domain name and mark at issue, without regard to the manner in which they may be used on the offending website. The complainant's rights in the mark are typically shown by evidence of valid trade mark registration or by evidence of use sufficient to establish common law rights. Personal names are only protectable if used commercially to establish trade mark rights. Thus, celebrities such as Madonna, Julia Roberts, Spike Lee and soccer star Freddy Adu have obtained relief under the UDRP.
The second element is that the respondent has no rights or legitimate interest with respect to the domain name. The respondent may have a legitimate interest, for example, if it made bona fide use of the name before there was an objection, was previously known by the name, or is making non-commercial or fair use of the domain name.
The final element is proof that the domain name was registered and used in bad faith. This element is typically satisfied if the domain name is offered for sale at an unjustified premium, if the registrant engages in a pattern of abusive domain name registration, if the domain name is used to disrupt the business of a competitor, or if the domain name is deliberately used to obtain commercial gain by misdirecting internet traffic due to confusion with another's mark.
Given how cheap and easy it is for cybersquatters to obtain and profit from conflicting domain names, perhaps it is not surprising that many cases are not contested and more than 80% of the cases filed have been resolved in favour of the trade mark owner.
What can go wrong
The decisions that deny relief illustrate some of the key pitfalls to avoid when using the UDRP.
Not a cure-all |
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The UDRP is used to best advantage by recognizing its limits. Adverse decisions are often the result of claims that obviously stretch beyond the scope of the policy. Designed to address cases of cybersquatting involving protectable trade marks, the policy was not intended for contractual disputes, garden-variety infringement cases, defamation claims, or personal names that are not entitled to commercial protection. Thus, professional golfer Skip Kendall was out-of-bounds when he brought a UDRP action to stop his sister from using his name as the URL for a site posting derogatory reports about his failure to repay a personal loan. While such matters may or may not present valid claims under other legal theories, matters outside the scope of the UDRP are certainly better directed to the appropriate civil courts. |
Some cases are lost for lack of proof of trade mark rights in the dispute name: Keystone Publishing in Utah was denied relief because it failed to prove common law rights in Utah Weddings as a trade mark for wedding services in Utah; a well-known Danish businessman failed to establish trade mark rights in his name; the Mexico Tourism Board lost its bid to claim the domain name mexico.com.
Other cases failed when the registrant showed a legitimate reason for using the domain name. Boxer George Foreman was knocked out of the ring when he tried to recover georgeforeman.com from a licensee. Porsche was unable to recover porschebuy.com where the name was used in good faith for the online resale of Porsche cars. Google lost a claim where froogles.com had been used for four years to sell goods online.
Complainants also fail to recover if they do not establish both bad faith use and bad faith registration. Overreaching can even result in complainants being branded as a reverse domain name hijacker. Such was the fate of Nestlé when asserting rights in the Maggi mark, well-known in Europe for food products, against a Swiss businessman who successfully demonstrated that Maggi had been his family's name longer that it had been Nestlé's mark.
Tips for effective advocacy
Here are five recommendations for effective UDRP advocacy based on my experience as a presiding panellist:
1) The complaint (or answer) should be a brief
Because there is no live hearing, the complaint or answer is usually a party's only chance to argue its position. Effective advocates treat the complaint or answer like a memorandum in support of a motion for preliminary injunction or for summary judgment by presenting the specific facts and legal principles that support their position. A mere notice pleading as allowed in the US federal system is not effective for the circumstances.
2) The pleadings should be brief
Although the limitations on length imposed in the UDRP rules are often ignored and exceeded, remember that effective legal writing is brief and to the point.
3) The pleadings should follow the policy
Follow the elements of the policy when stating your position. The panel will address each of the elements in rendering its decision. Make it easy for the panel to decide in your favour by organizing your argument around each element of the claim or defence. Tie your arguments to the provisions of the policy. Specifically state what facts lead to the conclusion that the domain name was registered and used in bad faith, or not.
4) Support your position with proof
You need more than bald allegations to prove rights and bad faith. In my experience, there have been a growing number of cases in which parties have been required to make additional submissions or have lost their claim due to lack of proof. Strong submissions present evidence by way of exhibits and short affidavits. But do not merely shovel in piles of documents. Remember point 2. Also, when relying on registration to prove rights, be sure that the title resides with the complainant, or be sure to explain the gap.
5) Make good use of supporting authority
Support your argument with relevant cases and show why they apply. Avoid merely citing cases. There have been more than 7,800 reported UDRP decisions. Don't assume the panel knows the result and reasoning of each case you cite. Help the panel by providing at least an explanatory parenthetical on the cases you cite. At the same time, be sure to state the results of cases properly. Don't misuse authority. Assume that the panel will review the cases you cite.
By recognizing its limits and by employing good advocacy practices, both trade mark owners and domain name holders can make effective use of the UDRP to protect valuable rights on the internet, joining the celebrities and corporations that have embraced this innovative dispute resolution tool.
© Mark Partridge 2005. The author is a partner in the Chicago office of Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP
