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The UDRP: An International Regulator or Suggested Policy?

[This article has been authored by Aditya Joby, a fifth-year law student from JGLS]


Keywords: Arbitration, Trademark, Internet Domain, Cybersquatting, Mediation.


Introduction

The Uniform Domain-Name Dispute-Resolution Policy (“UDRP”) as a dispute resolution method, created by the Internet Corporation for Assigned Names and Numbers (“ICANN”) has not only been the singular form of dispute resolution over domain names but is also assisted by other methods such as the WIPO Mediation Center, which has helped resolve a myriad of cases. The creation of the UDRP as a response to the burdensome task of litigation or arbitration has not only allowed domain name owners to protect their valuable assets but also allowed speedy resolution of disputes over trademark infringement. Its inception as an easier dispute resolution forum was propagated and confirmed through its 30-day period, which includes the constitution of a Panel, which is done by the WIPO, as opposed to the decision of the parties.


However, there have been allegations as to the bias of trademark owners, as opposed to domain name owners, since over eighty per cent of all UDRP disputes are resolved in favour of domain name owners, despite the fact that several domains are registered as a response to the demand for a particular domain name.


The main criticism stems from the structure of the UDRP, which precludes domestic jurisdiction over a domain name issue and does not allow for appeals. Its jurisdiction is granted by the ICANN – a multi-stakeholder organization which regulates the assignment of domain names on the internet. This grants it the de facto status of a ‘Court of the Internet’ if you will.


However, its jurisdiction is still limited to generic Top-Level Domains (“gTLDs”), which are relatively unrestricted and are available for purchase. The use of “.com” and “.org” domains are now widespread and used by popular brands that are utilizing them for centralized control, while also registering their domains under country-specific country-code Top-level Domain names (“ccTLDs”) to prevent the use of their domain names by cybersquatting – “a bad faith registration of a trademark owners domain name”. For example, Netflix has regional ccTLDs, as well as a gTLD registration, which prevents cybersquatters from impersonating Netflix in domestic ccTLDs, as a method of trademark enforcement. This oversight by the ICANN in ensuring domain name protection for gTLDs, even among ccTLDs requires a revision of the UDRP, which has now been accused of being part of “forum shopping” for trademark owners that would want to register their domain names.


This leaves trademark owners with lesser effective alternatives, such as adjudication in local courts on trademark law, to procure domain names that are held by cybersquatters, or arbitration, which is mutually agreed upon. However, this has its drawbacks. For example, trademark law is based on the country of origin and is applied only to companies. If a non-profit organisation was to be prevented from registering a ccTLD within the domestic domain naming system, it would require domestic dispute resolution, as opposed to the UDRP framework. Furthermore, Section 4 of the UDRP Policy restricts the jurisdiction of the UDRP in cases of cybersquatters, since the standards established for determining domain name rights, are ‘bad faith’, and the absence of ‘legitimate right of interest’, which is sometimes inconsistent with domestic trade law. This is illustrated in Limited v. Nuclear Marshmallows, where it was unclear if Australian law permitted the ‘legitimate right of interest’, and led to the conflict between domestic law and the policy under the UDRP. The Panel had to decide if the domain was inactive as a result of bad faith and if the inaction by the Respondent was a form of bad faith. This led to the creation of the “passive holding doctrine”, which includes inaction as a form of bad faith uses regardless of explanations from domain name holders. This broadening definition of “bad faith” signifies the conversion of the UDRP into a form of Tribunal that grants rights that may be available only in cyberspace because of the UDRP’s jurisdiction over the internet.


Effective Alternatives

Considering these issues with the applicability of the UDRP, alternative dispute resolution methods have arisen, such as the Uniform Rapid Suspension (URS), which provides rapid relief for clear cases of infringement with gTLDs. The application fee is a significant amount lower than the $1,500 required for an application at the UDRP, with a quicker resolution within 12-18 days, and also holds the domain name in escrow till complete resolution. It prevents cancellation of domains and opts for suspension or transferral, which is required as domain names could be re-registered after dispute resolution, making trademark owners despondent in their need to recover the domain name they lost.


However, this process is still exclusive to gTLDs. Although it was created to aid the UDRP by resolving simpler cases, critics call it an overreaching legislation that requires implementation by the WIPO. Although this makes it an important alternative to the UDRP mechanism, it is still a relatively untested mechanism. However, URS is now becoming a much more popular method of resolution as seen in the 80% rise in cases filed from the last year, with an increase of over 69.1% of cases ruled in favour of trademark owners due to its higher standard of proof and stricter requirements for filing.


Alternatively, state-owned forums such as the INDRP in India, which resolves disputes on “.in” ending domain names and is governed by the National Internet Exchange of India (“NIXI”) could be considered. The INDRP has now had a record of neutrality, with decisions that are against the Complainant, and also rules on the use of cybersquatting or Reverse Domain Name Hijacking (“RDNH”), as under Paragraph 1 of the UNDR Rules. The same has been observed in cases such as Tickets Worldwide LLP v. India Portals, INDRP/1187, where it was held that a case of RDNH had taken place, and the standard of ‘bad faith’ was utilized to hold the domain name holder accountable for the harm caused. However, the opposite is observed in the UDRP, wherein decisions have been observed to side with the Complainant, opening the possibility of fallacious claims succeeding, exploiting existing businesses that rely on these domain names to conduct day-to-day activities, since the Complainants are responsible for the selection of the Arbitration Panel, creating an implicit bias.


Furthermore, the Arbitrator took into account principles such as ‘widespread recognition’ to establish that the mark was weak. This is an effective alternative for trademark dispute resolution regarding domain names and offers resolution for ccTLDs in India through an established process. However, the use of the INDRP restricts parties from using arbitration, with the appointment of an Arbitrator by the INDRP, and the Rules being as under the Arbitration and Conciliation Act, 1996. It also requires complete payment by the Complainant, as opposed to the UDRP, which splits the cost between the Registrar and the Complainant.


Conclusion

The implementation of the UDRP as a dispute resolution mechanism is touted as largely successful, with the UDRP registering over 2,030 cases in the last quarter alone, and over 80,000 cases of domain name dispute resolutions. The UDRP is also becoming more adept at resolving cases with RDNH, with over 500 cases resolved in favour of the trademark owner. There are different classifications for RDNH depending on previous fact scenarios, such as the one created by TOBAM v. M. Thestrup / Best Identity where a trademark was acquired after the acquisition of the domain name, wherein a Complainant sought to use the UDRP to cancel the domain name and acquire it once it is put up for re-registration by the ICANN. Each RDNH case only reaffirms the UDRP’s role as a deterrent to cybersquatters. However, with the rise of alternative methods of resolution for gTLDs and ccTLD domains, it is important to reconsider its position as a dispute resolution platform, when contenders such as the URS are offering stricter standards of approval and favour trademark holders. This provides an effective deterrent to cybersquatters using the “Policy” to advance their interests. Furthermore, the shift towards WIPO-adjudicated methods such as mediation or Arbitration could provide a better alternative. Several methods of improvement have been suggested, such as the introduction of an appeals process, or the elimination of single-member Arbitral Panels, in favour of a tribunal with three members. Despite these measures, the UDRP still serves as an effective dispute resolution method for the moment, as it has implemented the policy to the best extent, but requires amendment for the modern era.


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