For Your Attention January 2000: New Domain Name Dispute Resolution Policy

For Your Attention

In accordance with recent controversial recommendations from the World Intellectual Property Organization, the Internet Corporation for Assigned Names and Numbers ("ICANN") has adopted a new dispute resolution policy for handling certain types of trade-mark disputes over Internet domain names. As the organization charged by the U.S. government with responsibility for the Internet’s core technical functions, ICANN will require the new policy to be implemented by all new ICANN-accredited Registrars for the ".com", ".net", and ".org" generic top-level domains, including Network Solutions, the most prominent ICANN-accredited Registrar. The new policy, entitled the "Uniform Domain Name Dispute Resolution Policy", and its accompanying Rules, were specifically adopted in order to stifle the activities of "cybersquatters", who buy up domain names identical or similar to trade-marks and then attempt to resell them to the legitimate holder of the trade-mark for a profit.

While there are critics of the new policy, the new policy is an improvement over the relative ineffectiveness of the former Network Solutions Domain Name Dispute Policy against cybersquatters.

The former Network Solutions policy, which is scheduled to be replaced by the new policy as of midnight January 1, 2000, has been ineffective against the majority of cybersquatters for a number of reasons, including

Network Solutions’ response time to dispute initiation;

the relatively extended time line for the dispute resolution process; and, in particular,

the fact that the policy requires the offending domain name to be identical to the trade-mark as registered in order for Network Solutions to even begin the application of the dispute resolution process.

The new policy, which is incorporated by reference as part of the Registration Agreement between the Registrar and the domain name registrant, requires the registrant to submit to a mandatory administrative proceeding mediated by a neutral panel if a "complainant" initiates dispute resolution by asserting:

• that the domain name registrant has registered a domain name that is identical or confusingly similar to a trade-mark in which the complainant has rights; and
• that the registrant has no rights or legitimate interests in respect of the domain name; and
• that the domain has been registered and is being used in bad faith by the registrant.

Evidence of bad faith is to be determined by the particular facts of the case, including, but not limited to, the act of registering the domain name solely to extract valuable consideration from the owner of the trade-mark or service mark or use of the domain name so as to create a likelihood of confusion with the complainant’s mark with respect to source in order to intentionally attract traffic for commercial gain.

The administrative proceeding is to be conducted on the basis of written submissions before a single member panel or three-member panel. In order to succeed, the complainant must prove that each of the foregoing three elements are present. The entire dispute procedure has been designed to take less than 45 days, and is expected to be largely handled online at an approximate cost of U.S. $1000, which cost will be borne by the complainant except where the registrant elects for the three-member panel, in which case the costs will be borne equally by the parties. No in-person hearings will be held, unless the panel determines, in its sole discretion and as an exceptional matter, that such a hearing is necessary for deciding the complaint.

Given the three elements of the complaint that must each be asserted before the mandatory dispute procedure is invoked, it is clear that the dispute procedure has been designed to specifically address the problem of cybersquatting. It cannot be invoked by a complainant to facilitate resolution of competing claims to a domain name in which both the registrant and complainant claim rights or a legitimate interest in the domain name, or in cases in which the domain name is being used by the registrant to attract traffic for reasons other than commercial gain (including criticism of the complainant or its products or services). For such cases, the complainant will still have to resort to the courts. Furthermore, the dispute procedure is not intended to supercede recourse to the courts; the new policy explicitly states that it will not prevent either party from submitting the dispute to a court of competent jurisdiction before, during or after any mandatory administrative proceeding initiated in accordance with the policy. It is interesting to note that, parallelling ICANN’s new policy, the U.S. has recently passed legislation amending the U.S. Trade-marks Act that provides for statutory fines of not less than U.S. $1,000 to a maximum of U.S. $100,000 for each domain name registered with a "bad faith intent" by a cybersquatter.

The full text and implementation schedule of the new policy and the accompanying rules can be found online at http://www.icann.org.

Rajiv Arya is an Associate in the Toronto Gowlings office. He can be reached by e-mail at aryar@gowlings.com.

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