The letter the World Intellectual Organization (WIPO) sent to ICANN prior to the UDRP Webinar in the beginning of May makes a very good (funny) reading. It is one of these cases when you read something and you can’t help but wonder: are we on the same planet? The major issue with WIPO’s letter is that it is based on the false premise that the UDRP is a fair system. This is inaccurate – and, in any case, we cannot possibly make such a certain assertion unless and until we actually review the UDRP.
The UDRP is 10 years old. It was created back in 1999 and, since then, it has never been amended. This is problematic because any system of adjudication, especially one that is flexible and vulnerable like the UDRP, cannot possibly evolve without making mistakes in the process. For this reason, most evolving systems include checks and balances and provide a solid mechanism that allows the evolution of the system to continue undisrupted. The UDRP does not have these checks and balances. This was the concession we made a decade ago, because, back then, cybersquatting was novel, unfamiliar and dangerous. Cybersquatting now is not something new, it certainly does not sound unfamiliar and the UDRP has managed to address it. But, during this process, the UDRP became a much larger system than anticipated: it became the vehicle for the incremental expansion of trademark law.
So, for a change, let’s start from the premise that the UDRP cannot be a purely fair system and that it requires a careful review; better yet, let’s try to see the WIPO arguments from this point of view.
“The UDRP has been offering an effective solution for trademark owners, domain name registrants, and registration authorities”.
This is only partly true: the UDRP provides an effective solution for trademark owners, it does not provide an effective solution for domain name registrants and, in the larger picture, registration authorities do not really care that much as long as the domain name stays alive and they collect the registration fees.
The benefits for registrants WIPO suggests, are that “the UDRP has provided an accessible framework for established legal norms. Their application benefits from non-exhaustive registrant safe harbors at a substantive level (rights and legitimate interests) […]”. Two issues with this statement. The first one has to do with the ‘established legal norms’, which was never part of the deal. Due to the administrative nature of the UDRP and its lack of checks and balances, the UDRP rules cannot be (and should not be) considered to produce normative authority. The second one is the idea that the UDRP has safe harbors; this is a big mistake, since the UDRP’s paragraph 4c is really a very narrow outline of basic rights a registrant has. Fundamental protections for free speech, fair use and criticism are missing from the UDRP.
“By accommodating evolving norms and practices, the UDRP has proven to be a flexible and fair dispute resolution system”.
Again this is not entirely accurate. The UDRP is flexible – but not fair. I have many issues with this part of the WIPO letter. It again talks about ‘evolving legal norms’, which I consider to be extremely problematic. If we are officially using this terminology, then the need for the review of the UDRP becomes even greater and more relevant. Rules are part of a process where they get challenged and debated before they acquire their normative legal status. This never occurred in the context of the UDRP. And, the letter doesn’t stop there. It asserts that “the UDRP has incrementally developed as a public system of jurisprudence”, yet the UDRP has not undergone nearly the required process. The UDRP is an administrative system that does not even match arbitration archetypes, so how can we consider it as a ‘public system of jurisprudence’?
“With exponential DNS growth around the corner and untested new RPMs in development, this is in any event the wrong time to revise the UDRP”
I think we need to ask ourselves another question: will there ever be a good time to revise the UDRP? The truth is that this is the perfect time to review the UDRP and we should not by any chance make this review contingent upon the new gTLD process. As we proceed to create new mechanisms that procedurally and substantively are based upon the UDRP, we need to make sure that we don’t repeat the same mistakes we did 10 years ago.
The WIPO letter asserts that “the URS is as yet unsettled and presents serious issues in terms of its workability; its procedural and jurisprudential interaction with the UDRP remains largely unaddressed. Even if such issues were satisfactorily resolved, this new RPM will need to settle in practice in a DNS expanded by hundreds of TLDs”. This is not a valid argument. Ten years ago, we went through the same degree of uncertainty and instability with the UDRP. And also, let’s not forget that ICANN is not here to create systems of adjudication, but to ensure that all rights are appropriately addressed. Whether this means having the UDRP or a similar system, it doesn’t matter. There shouldn’t be a long discussion about the nexus between the two systems: the UDRP will be for the URS just another mechanism. This should be simple and WIPO exacerbates an issue that doesn’t exist.
“Institutionally stacked, an ICANN revision process would likely end up overburdening and diluting the UDRP”.
Here are also some interesting inaccuracies.
“If interests under the ICANN umbrella do not share the wide recognition of the UDRP as an overall success and rather believe it warrants revision, it would seem incumbent upon those interests to advance a transparent rationale for their views and articulate a coherent alternative model”. This actually has been done and there happens to be extensive literature on this by Froomkin, Mueller, Geist and myself, amongst others.
And, of course, if you think that the trademark community will not be pushing for more, here is what they would like to see get in the UDRP. – “Of course, from an IP rights holders’ perspective, there are numerous ways in which the UDRP might be amended. It could operate on condensed timelines and default decisions. Its scope could extend beyond trademark rights, and more recent bad-faith scenarios recorded. Calls have been made for damages options and ‘loser pays’ models. The UDRP could also be expanded to address certain forms of intermediary behavior. Other interests are on record with wish-lists that apparently include the UDRP definition of cybersquatting itself.” Expansion, expansion, expansion.
And, here is my favourite: “The anticipated ICANN process does not inspire confidence that it would meet these standards. Even when it comes to trademark policies, IP institutionally appears to occupy only a minor ICANN role. Indeed, the more vocal advocacy observed thus far does not suggest a desire to enhance the UDRP’s effectiveness as a rights protection vehicle. The present state of the URS illustrates the risks of subjecting an RPM to recycled committee processes, open-microphone lobbying and line-item horse-trading.” Here is the funny part of the letter, I mentioned in the beginning: first, trademark issues in the context of ICANN do not occupy a minor role; really? how is it then that we are discussing trademark protection since the creation of ICANN and trademark owners even have the ability to block an entire process? And, more importantly, is WIPO really serious when it suggests that open-microphone lobbying (I personally find an unsuccessful choice of words) is more dangerous or less transparent than the lobbying that is occurring behind closed doors between trademark owners and governments? Really?
“Fundamental questions about the business and DNS beneficiaries of cybersquatting must be addressed before targeting the very mechanism intended to address this practice”.
Because I don't want to repeat myself, I will add one issue in WIPO's to-do list to ICANN:
"[…]ICANN should first fairly address the following issues:
· the relationship between cybersquatting and the activities, revenues and budgets of DNS actors;
· the incidence of UDRP cybersquatting findings in relation to wider trademark abuse in the DNS overall, with filed UDRP cases merely representing the tip of the iceberg; and
· the degree of proportionality between trademark rights enforcement and domain name registration opportunities in the DNS."
... and let's not forget:
· The degree of trademark bullying and the procedural and substantive deficiencies of the UDRP.
There is really one word that can characterize the WIPO letter: F.U.D – fear, uncertainty, denial.
A significant independent report emerged recently in the UK that can certainly be used as a signal of how intellectual property protection is being construed in the 21st century – through lobbying and persuasion initiated by intellectual property rights holders.
Offline but mainly online, intellectual property is certainly going through a strange wave of change. Whereas intellectual property rights existed as tools of communication between producers and consumers, on the Internet they appear to be weapons against consumers. Copyrights and trademarks have become exclusive, untouchable monopolies that now prevent us from exercising our free speech; fair use is blurred with tarnishment and, more worryingly, law is now driven by unsubstantiated economic rationalizations that serve specific intellectual property interest. And, I say specific because most of these rationales are based on a dozen (if not less) rights holders who seek to implement and enforce protections that see their rights secured even at the expense of their peers – small and medium-sized rights holders, innovators and entrepreneurs.
The report, entitled “Digital Opportunity: A Review of Intellectual Property and Growth” – commonly knows as the Hargreaves report – tells the horror story of how lobbying exercised by intellectual property owners has the capacity to direct governments, their ministers and departments. Three quotes encapsulate the essence of the report:
"We urge Government to ensure that in future, policy on Intellectual Property issues is constructed on the basis of evidence, rather than weight of lobbying."
"On copyright issues, lobbying on behalf of rights owners has been more persuasive to Ministers than economic impact assessments."
"Much of the data needed to develop empirical evidence on copyright and designs is privately held. It enters the public domain chiefly in the form of 'evidence' supporting the arguments of lobbyists ('lobbynomics') rather than as independently verified research conclusions."
The report, despite its limitation to the UK intellectual property regime, addresses an issue that represents that current status of intellectual property: trademark and copyright laws are subject to lobbying to the extent that evidence becomes redundant. Take, for example, the ICANN context and the great push towards stronger forms of intellectual property protection. Here we saw the trademark constituency lobbying to their governments and achieving to upset a process that is meant to create jobs, encourage innovation and assist competition. The creation of the new gTLDs became contingent upon trademark rights, discussions about protection and debates about the extent of it. Economics, inclusiveness and societal aspects received none or little attention, even though they actually constitute the most important aspects for a successful Internet.
But, here is the question that no one seems to be able to answer. We all expect (and at some level even understand) where the greed of intellectual property owners is coming from – but, what is it exactly that makes governments willing to contravene traditional understandings of law and to jeopardize the traditional fractions of law making? What is the bargaining chip that the trademark community held upon the US and the UK governments that made them so eagerly support trademark owners in the new gTLD process?
The simple answer appears to be lobbying – a strong amount of political and economic pressure that finds governments willing to risk justice. This lobbying is one-layered: it reaches the top directly and positions itself as the master pulling the strings. It is control – control over the information, control over the ideas and control over the consumers (users).
So, the report is very accurate when it requests evidence, because lack of evidence leads to lack of process.
A brand new piece of Internet legislation has emerged recently and seeks to address – what else – the protection of intellectual property rights. The ‘Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act of 2011’ – or more accurately ‘The PROTECT Act of 2011’ is the latest legislative attempt to combat illegal Internet activity related to intellectual property and marks a new step in the United States to ensure the elimination of any activity that facilitates trademark and copyright infringement and the sale and distribution of counterfeit goods and rogue pharmacies.
The PROTECT Act should certainly be considered the legislative extension of COICA. Principally, the Act follows the same logic of the Combating Online Infringement and Counterfeits Act (COICA) but extends its rational basis by targeting domain names and registrants located outside the United States. In so doing, the PROTECT Act uses the procedural devices of in personam and in rem jurisdiction, found in both the Anticybersquatting Consumer Protection Act (ACPA) and in COICA.
The proposal for this Act should not come as a surprise and follows the pattern of creating stronger forms of protection for intellectual property holders. It is a great addition to the attempts by the United States government to create an impenetrable shield around intellectual property owners and to build a multi-layered model of security for the various types of intellectual property. The Act is based on rationalizations emanating from a high degree of legal relativism concerning the boundaries and scope of intellectual property rights and, although the threats that it seeks to address are real and tangible, the lack of robust provisions for the protection of free speech and due process will dilute further our understanding in the Internet’s law making process.
The mere fact that in the space of a year the United States government has proceeded to such expansive legislation can only mean two things: first, since the United States government appears to be so prone to the demands of intellectual property owners, the democratic deficit in the shaping of Internet law grows bigger; and, second, intellectual property law changes drastically and through the interpretations of small, but very powerful, brand owners – a small fraction of rights holders within the intellectual property pool.
This exact pattern has been seen in the context of ICANN’s intellectual property debate. The alliance between rights’ holders and governments and the raising role of the governments in Internet Governance has placed obstacles and has disturbed a lengthy and consuming multistakeholder process and has remanded the Internet community to intellectual property wishes.
Much of the legal basis of the PROTECT Act is based on ambiguous terms whilst its procedural design continues to challenge due process and justice (a good analysis is provided by TechDirt). So, in effect, this Act continues to feed to the emerging hostile environment in the DNS and provides more means for capture of the whole domain name system by certain, non-representative intellectual property interests.
New entrants, entrepreneurs and innovators are expected to suffer from yet another attempt by America’s brand owners to expand intellectual property on the Internet.
A recent report on the contestable issue of trademark ‘bullying’ has been released by the US Department of Commerce but, unfortunately, its substance and conclusion fail to identify the exact extent of the problem. The report acknowledges that in some cases trademark owners seek to enforce their rights through channels of intimidation and bullying, but it declares that “after careful review of the available information regarding trademark litigation tactics and comments received from concerned intellectual property stakeholders, it is unclear whether small businesses are disproportionately harmed by enforcement tactics that are based on an unreasonable interpretation of the scope of an owner’s rights”. So, is the report worthless?
Sort of. The fact that the US Department of Commerce instigated such a report, in the first place, is certainly a positive step towards accepting that there might be a problem to begin with. But, the fact that the report considers ‘trademark bullying’ as an issue that does not even warrant the willingness of the US DoC to continue to identify ways to combat it, negates the whole idea behind this initiative. But for a moment, let’s go along with the conclusions of the report and let’s say that trademark bullying only occurs periodically and in a small scale. Does this make it better or justifies it better? The problem exists and it is the responsibility of the organs that shape trademark law to terminate it. It would have been much better if the report where to at least suggest an effort to this end.
However, more importantly the report suffers from two major flaws – one procedural and one substantive.
The report was instigated by the US Department of Commerce, which has a vested interest in reaching the results that it did. The US DoC is the umbrella for trademarks and the place big trademark firms turn to when they want additional forms of protection. It has the ears of the trademark community and one should not really look as back as 6 months ago, when the same trademark community that presumably this report is referring to, went to the US DoC demanding that the ICANN trademark policies for new gTLDs are amended and expanded to protect their interests. The DoC complied. So a case can be easily made here relating to the true willingness of the US DoC to produce a report that accurately reflects the extent of the problem.
On the substantive side, the report makes a very interesting reading. It often repeats that idea that a trademark constitutes a property right and affirms the right of trademark owners to police their trademarks. Although many could question the association of trademarks with dominium characteristics, currently trademarks are regarded as limited property rights, making the right to police more subjective than it generally is. In any event, the right to police a trademark is, as Eric Goldman says, “massively overstated”. But, for me, the main substantive flaw in the report is the lack of considering trademark bullying also in the context of domain name disputes. I think that it is specifically in the context of domain names that trademark intimidation exceeds the permissible boundaries of sending a simple ‘cease and desist’ letter and becomes bullying. And, it is most certainly in this same context that trademark owners often overstate their rights and seek to expand them much beyond what trademark law allows them to. It is, finally, in this context that the party subjected to the trademark bullying most often does not have the means, the resources or often the understanding of the processes. It is really unfortunate that the report does not suggest ways to address the way trademark owners view their rights on domain names and the great lengths they are willing to go into securing what they perceive as their right. In this context, the report should have sought to include, in addition to Small and Medium Enterprises (SMEs) legitimate registrants, entrepreneurs and innovators and should have considered the data in the ChillingEffects Clearinghouse as nothing less than evidence of an ongoing problem.
But, this report can be of great use. Its doubtful conclusions can and will be used as justification within ICANN not to address the problem. The UDRP is currently undergoing its first ever review in ten years. The process has been set in motion and it moving towards its various procedural steps. When we eventually reach the stage of talking about the experience of trademark owners, domain name registrants and the whole constitution of the UDRP, we cannot do that without mentioning the problem of trademark bullying. I fear that the conclusions of this report will prevent us from even putting it on the table.
Views are my own and my own only!