ICANN Uniform Domain-Name Dispute-Resolution Policy

Internet domain names are valuable property, so it is unsurprising that disputes about them are becoming more common. The Internet Corporation for Assigned Names and Numbers ("ICANN"), the nonprofit organization currently overseeing many Internet management functions, has created a new streamlined procedure for resolving disputes about domain names within the .com, .net and .org top-level domains. The procedure is embodied in the Uniform Domain-Name Dispute-Resolution Policy ("UDRP" or "Policy"), which became effective on December 1, 1999.

The UDRP provides an inexpensive and efficient way to resolve domain-name disputes. Generally, decisions are made within five weeks of the filing of a complaint. The arbitration panel's fees are relatively modest - from $750 to $3,750, depending upon the number of domain names in dispute and the number of arbitrators the complainant requests - and because each side generally submits only one document (a pleading/brief combination), the legal fees are also generally lower than a court case.

Given the ease, low cost and speed of the process, it is not surprising that a wide variety of parties have already brought cases under the Policy. Complainants include major corporations such as Microsoft and Hewlett-Packard, individuals such as actor Brad Pitt and singer/songwriter Peter Gabriel, and educational and non-profit institutions such as Oxford University and Emory Hospital. As of August 14, 2000, over 1,400 cases involving more than 2,500 different domain names had been commenced. The procedures permit complainants to choose among a list of arbitration providers approved by ICANN. As of August 2000, there are four approved providers: the World Intellectual Property Organization (WIPO), the National Arbitration Forum (NAF), Disputes.org/eResolution Consortium (DeC), and CPR Institute for Dispute Resolution.

One key limitation on the Policy is that the only remedy the arbitrator(s) can order is a transfer or cancellation of the domain name registration. Other remedies, such as money damages, are not available. Moreover, the Policy permits either party to submit the dispute to a court for independent resolution before or after the mandatory administrative hearing is concluded. So, in the United States, a complainant who wanted damages would bring a civil suit under the new Anti-cybersquatting Consumer Protection Act. At this point, it remains an open question whether a losing party can relitigate issues decided by a UDRP arbitral panel, and, if so, how much deference courts will give panel decisions.

Under the Policy, a complainant must prove three things to obtain a transfer of a domain name:

1. the domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights;
2. the registrant has no rights or legitimate interests with respect to the domain name; and
3. the domain name has been registered and is being used in "bad faith."

The first requirement is a change from the pre-UDRP dispute-resolution policy administered by Network Solutions, the company that was initially the sole registrar of .com, .net, and .org domain names. Under the Network Solutions policy, the domain name had to be identical to the complainant's trademark or service mark. This precluded recovery against cybersquatters who had used punctuation or spelling variations to register domain names that were only slightly different from pre-existing trademarks. Under the UDRP, however, a "confusingly similar" domain name is enough. So, for example, General Electric brought a complaint and eventually prevailed against the registrant of general-electric.com.

A registrant can preclude the complainant from proving the second requirement by showing that it has "rights or legitimate interests" in the domain name. It can do this in one of several ways:

1. by using the domain name in connection with a bona fide offering of goods or services before having notice of the complaint;
2. by being commonly known by the domain name (whether or not this rises to the level of trademark or service mark rights); or
3. by making legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark of another.

As for the third requirement - "bad faith" on the part of the registrant - there are many ways the complainant can show this. For example, the complaining trademark owner may show that the registrant intended to sell the domain name to the complainant, to direct traffic to the registrant's site for commercial gain, or to otherwise create a likelihood of confusion as to the source, sponsorship, affiliation or endorsement of the registrant's web site. Or, the complainant can show that the registrant is a competitor trying to disrupt its business. As explained below, this "bad faith" requirement has generated much of the interesting debate about cases brought under the UDRP.

An example of a recent, successful ICANN complaint is the one brought by Guccione Media, LLC, the owner of Gear magazine. The complaint alleged that Charles Duncan and his company, CTC Entertainment, had registered the domain name "GEARMAGAZINE.COM" and created a "website preview" on the site consisting of photographs and text taken directly from Gear without authorization. Duncan had then written to Gear proposing, in essence, that Gear either purchase the website from him or hire him to run the website on Gear's behalf. After Guccione Media contacted Duncan and demanded that he promptly remove all content related to Gear from the website and transfer the domain name to Guccione Media, Duncan responded that his actions had been "misinterpreted," and he agreed to transfer the name - provided that Gear "reimburse [his] investment costs" of approximately $2,000. When Gear declined to pay the "investment costs," Duncan then changed his story, asserting in a subsequent letter that the web site "has nothing to do with Gear magazine" and making it clear that he intended to retain ownership of the domain name.

Pursuant to the ICANN Policy and Rules, Guccione Media filed its complaint on April 11, 2000. Approximately four weeks later, the arbitrator ruled in Guccione Media's favor, finding that Duncan had "no rights or legitimate interests" in the domain name, and that the domain name had been "registered and [was] being used in bad faith." Accordingly, the arbitrator ordered that the domain name be transferred to Guccione Media. Under the ICANN rules, Duncan had ten days to file a federal lawsuit to stop the domain name transfer. He did not do so, and Network Solutions proceeded to transfer the domain name.

The Gear Magazine case is hardly unique, and trademark holders have been successful in ousting cybersquatters in many other cases. For example, the World Wrestling Federation successfully wrested worldwrestlingfederation.com from a cybersquatter in the very first case decided under the Policy. Julia Roberts won juliaroberts.com from a fan, who responded to the complaint by stating that, "If Julia Roberts had picked up a phone and said, 'Hi Russ, Can we talk about the domain name juliaroberts.com?' she would own it by now." 7 These cases, like the Gear Magazine case, present some of the easier cases for panels.

Some commentators have argued, though, that the ICANN panels have unfairly favored trademark holders. For example, in one recent case, Hearst Publications, the owner of Esquire Magazine and numerous trademark registrations for the word "Esquire," brought a complaint against the owner of esquire.com. Based on Hearst's trademark registrations and the fact that the word "Esquire" is widely associated with the magazine in many people's minds, the panel ordered esquire.com transferred to Hearst. Yet, the person who originally registered it did so in 1994, years before anyone had even heard of cybersquatting as an offense, and he did so thinking of the word "esquire" as the lawyers' courtesy title. The only "bad faith" that the panel found was that the registrant had a business selling domain names and tried to sell esquire.com. Yet, there was no evidence he had ever tried to sell it to Hearst, and he was in fact under contract to sell it to mail.com, a company that provides "vanity" e-mail services through domain names like accountant.com, doctor.com and lawyer.com.

Another questionable decision involved the transfer of crew.com to the retail clothing store, J. Crew. As with the esquire.com case, the "bad faith" found in the crew.com case was based on the fact that the registrant had made the domain name available for sale. Criticism of the panel's decision was likewise based on the fact that "crew" is an ordinary word found in the dictionary and there was no evidence that the registrant specifically aimed the sale at the complainant trademark holder.

In another criticized case, a Canadian company called eResolution.ca (one of the UDRP's approved dispute-resolution service providers) sought the domain name eresolution.com. The panel ordered the name be transferred despite the fact that the registrant had obtained the domain name several months before eResolution.ca had even come into existence and thus before having any reason to know that anyone had trademark rights in "eresolution."

While trademark holders have prevailed in the great majority of circumstances, there are exceptions. Some panels have effectively disagreed with the esquire.com and crew.com decisions by holding that the mere offering of a domain name broadly for sale to the public is not "bad faith" when the registrant is unaware of the trademark holder's rights. Panels can easily find a lack of bad faith when the trademark holder's rights are based on an arbitrary or descriptive mark. So, for example, General Machine Products Company, Inc., the owner of a trademark in "craftwork," was unable to obtain a transfer of the domain name craftwork.com from a respondent whose business was selling domain names. In another case, the Western Hay Company sought the domain names westernhay.com and westernhay.net from the spouse of a former jockey who was using the site as a discussion group to educate people on how to care for horses, including the nutritive merits of feeding them western hay. The panel refused to find evidence of "bad faith" because, when approached by Western Hay Company to sell the domain name, the registrant asked only for the costs of registration plus an apology to his wife, a former customer of Western Hay Company, who had allegedly been verbally mistreated by one of the company's employees. These cases suggest that, in general, it will be more difficult for those whose trademarks are arbitrary or descriptive to prevail because of the wide range of uses for many ordinary words.

Finally, in a case of some note because of the worldwide trademark registrations and significant international presence of the complainant, the Japanese photo film company, Fuji Photo Film Co Ltd., and its U.S. subsidiary sought the domain name fuji.com from a Tacoma, Washington business software and web design company, Fuji Publishing Group LLC. Holding that Fuji Publishing had both rights and a legitimate interest in the fuji.com domain name because it was a legitimate business offering goods and services different from those of Fuji Film, the panel refused to order the transfer of the name.

In sum, the new ICANN Uniform Dispute-Resolution Policy has already made a significant contribution towards the fast and efficient resolution of domain-name disputes. As with any new process, there will be growing pains and important questions, not only about the substance of the decisions made by the arbitrators but also about the intersection of UDRP proceedings, which involve only the possibility of domain-name transfers and are limited to applying the UDRP's three-pronged standard, and U.S. courts that must apply the Anti-Cybersquatting Consumer Protection Act and have the full panoply of remedies. But the relatively modest cost of the proceedings and the speed with which decisions are made suggest that more parties will seek relief under the UDRP despite the Policy's limitation.