The long-awaited interaction between the Governmental Advisory Committee (GAC) and ICANN’s Board of Directors wrapped up its proceedings today in Brussels, one day after the originally scheduled two day meeting. Trademark issues were once again at the forefront of the discussions with the ICANN Board providing some preliminary – and not final – answers to the GAC’s scorecard. For those who have not read or heard the trademark issues raised before the Board, the GAC scorecard focused on three issues relating to the protection of trademarks on the Internet: the Trademark Clearinghouse, the Uniform Rapid Suspension System (URS) and the Post Delegation Dispute Resolution Process (PDDRP). In my previous blog post, I identified the issues that I thought were problematic with the GAC scorecard, focusing mainly on the URS and the way it sought to provide a mechanism that would be beneficial for the trademark community and for no one else.
ICANN, in submitting its preliminary answers, got many things right, but also got some things wrong, whilst it referred some questions back to the GAC for more clarification. The ICANN Board emphasised that its inclination was not final and that further discussions with the GAC would be necessary to clarify and resolve the various outstanding issues. A further call between the GAC and the ICANN Board will be scheduled in the next few days (and before ICANN’s San Francisco meeting) to further discuss and deliberate on these issues with the hope that both entities will reach some agreement.
Regarding the GAC’s recommendation for all types of IP rights to be included in the Trademark Clearinghouse, the Board accepted in principle this proposal asserting, however, that further discussions were necessary to ensure that the implementation of this recommendation would not leave any rightful mark owners outside this framework. The Board accepted the recommendation that both sunrise services and IP claims should be mandatory and raised its objections on the issue of whether ‘IP claims services and sunrise services should go beyond exact matches to include exact match plus key terms associated with goods and services identified by the mark and typographical variations identified by the rights holder’. In relation to this, the Board expressed its difficulty in understanding and setting criteria as to how far the notion of these exact matches could go. One of the things that the Board focused on (and appeared to be quite adamant about it) is that only genuine trademark owners should be given the right to be listed in the Clearinghouse. By ‘genuine’ the Board asserted that proof of use on behalf of trademark owners should be required, expressing fears that various mark owners can potentially approach jurisdictions where no substantive review is conducted and, therefore, receive protection when it is debatable whether such protection should exist in the first place. Finally, in relation to who should bear the costs of sustaining the Clearinghouse, the Board asserted that trademark owners should pay a fee for registration, Registry operators should be required to pay a fee for using the services provided by the Clearinghouse and left open the idea that potentially registrants might bear some of the costs, since they will be using the Clearinghouse as a point of reference when registering a domain name.
In their majority, these preliminary answers seem to be fine. The fact that the ICANN Board was not willing to straightforward accept the ‘exact match plus key word’ issue is a very positive step in limiting the rights that mark owners should enjoy in the Internet, just like in traditional trademark law. The Board was actually very reasonable in expressing its difficulty in understanding how such a provision would work, what criteria would apply and what would be boundaries be.
Uniform Rapid Suspension System (URS)
Regarding the URS, the Board’s preliminary answers were far more contentious. The Board accepted the GAC’s recommendation to reduce the timescales but did not deliberate on which specific ones this reduction would apply (the URS includes various timescales ranging from the time of response to the time of appeal). However, the Board did indicate that the system is meant to be ‘rapid’, indirectly indicating that there might be a reduction in the time for the response. The Board also accepted that there should be a standardised format for the submission of the complaint, which, from the GAC proposal, appears not to apply in the case of the response. The Board further accepted that a qualified ‘Examiner’ should adjudicate URS disputes, instead of panel appointments. The Board was once again adamant that proof of use of the trademark should also apply in the case for a successful URS proceeding and, further, asserted that even in default the Examiner should have to go through the process in delivering his/her decision. The Board, however, rejected GAC’s recommendation for lowing the standard of proof from ‘clear and convincing evidence’ to a ‘preponderance of evidence’, stating that the first lays somewhere in between the notions of ‘preponderance of evidence’ and ‘beyond reasonable doubt’ and, thus, it is only fair. The Board took also a negative view on the recommendation that the bad faith element should be abandoned (an issue that I personally felt should not have made it to the scorecard) and rejected the ‘loser pays’ model, which was controversial and would act as a deterrent for registering new gTLDs. The time for filing an appeal in default cases, which was originally set in 2 years, was accepted by the Board as appropriate and as complying with the wishes of the wider community. The Board also accepted that the fee for a URS proceeding should not exceed the amount of $300 and indicated its wish to allow transfer of the domain name after a successful URS. Finally, the Board rejected again the notion of extending exact matches to keywords.
The worst aspect of the Board’s preliminary answer is the idea of allowing transfer of the domain name through a successful URS. As far as I am concerned, this recommendation stands no merit or justification and could in principle be the reason for the collapse of the whole URS. The initial justification of the URS was that it would be distinct from the UDRP as far as its remedies are concerned. Two distinct mechanisms with two distinct remedies: the UDRP would retain its remedial focus on transfer or cancellation of the domain name, whilst the URS would simply ‘lock’ the domain name. By allowing transfer of the domain name through a system intentionally not designed to proceed to substantive evaluation of facts, the need for the UDRP will slowly decrease. It should be anticipated that over time the URS will be used for every contentious issue, making the UDRP redundant. And, why shouldn’t it? If you are a trademark owner, of course you will opt for the cheaper (max. $300) and faster (the whole process will last substantially less than a UDRP process) system. And, if as I fear, the time of response is minimised to just 14 days, then ‘adios’ due process, procedural justice and balance.
The way the Board decided to treat default is also quite problematic. The Board appeared to share the GAC’s (negative) view that default means bad faith and, thus, the defaulting party (the language used is ‘the non-cooperative party’) should not be given any privileges. Again, both the GAC and the Board misunderstand the idea behind default and take into consideration only the very narrow view. Not acknowledging that default might occur for various reasons and within various context will create problems for registrants residing in developing nations, for registrants with limited Internet access and for registrants who are not familiar with the ICANN administrative proceedings and need to find a lawyer to assist them. And, if the time for the response gets to 14 days, then all URS default cases (and they will be many but not for the reasons the trademark community suggests) will be automatically deemed as in bad faith.
The Post Delegation Dispute Resolution System (PDDRP)
This has been a great victory for Registries, which, in any case, they were not particularly thrilled with the concept of the PDDRP. The Board did not seem to agree with most of the GAC’s recommendations regarding the PDDRP, and asked for further clarification in some particular issues.
In its August Board Meeting, ICANN indicated its willingness to proceed to a more streamlined process regarding the supplemental rules that are in place by the various UDRP dispute resolution providers. This is great news and, if ICANN approaches this issue with the willingness to monitor the way UDRP providers offer their services, we might actually be in the process of fixing one of the main flaws of the UDRP.
Within the UDRP framework, “Supplemental Rules” refer to the ability of dispute resolution providers to structure certain aspects of the UDRP’s procedural process independently of ICANN and one another and to design procedures that allow a more competitive dispute resolution regime. Historically, ICANN has only insisted that the centres follow the same rules for the resolution of domain name disputes – the Uniform Domain Name Dispute Resolution Policy and especially its paragraph 4 – as well as some default guidelines that deal with the general structure of the system, e.g. composition of panels, deadlines, language of the proceedings, etc. At the outset, this provided UDRP centres with a certain degree of freedom and flexibility and was intended to provide incentives for both parties, flourishing competition, whilst allowing UDRP providers to distinguish themselves from one another.
However, a lack of proper monitoring on behalf of ICANN combined with the business and financial aspirations of these centres has resulted in centres putting in place and enforcing supplemental rules that have contributed greatly to forum shopping, aiming to please only one of the parties to the detriment of procedural justice.
In my book, “The Current State of Domain Name Regulation: domain names as second-class citizens in a mark-dominated world”, I have argued that the way Supplemental Rules have been integrated within the UDRP system have resulted in a great amount of inconsistency, especially when the UDRP model is meant to be uniform. This is highly problematic as UDRP centres use their supplemental rules to provide false incentives and take advantage of the limited rights the UDRP affords the Respondent. For example, various centers have realized the tight deadlines respondents have to answer to the complaint and have addressed it in a way that places them in an even more obvious disadvantage. The NAF Supplemental Rules, for instance, allow respondents to submit their response after the required twenty days deadline, only if the latter request so in writing and pay a $100 fee, within, however, the twenty day deadline. (Extension for Filing a Response: (a) Paragraph 5(d) of the Rules provides that the Respondent may request additional time to submit a Response, or may be given additional time if the parties stipulate to an extension and NAF approves. Any request by the Respondent for an extension or any joint request by the parties for an extension shall: […](v) be accompanied by an extension fee of $100.)
On another level, this inconsistency in the Supplemental Rules of UDRP providers has an impact on how centers interpret issues concerning the impartiality and independence of their panelists. Each of the centers is allowed to produce its own rules and set its own individual parameters of panelist independence. For instance, WIPO has not produced any substantive rules for party challenges; NAF accepts challenges only after the panelist has been appointed and only within a small time frame; The Asian Domain Name Dispute Resolution Centre allows challenges any time during the procedure but before the rendering of the decision, whilst the newly appointed Czech Arbitration Court does not provide to the parties any guidelines concerning the challenge of panels.
These are just two manifestations of the detrimental effect Supplemental Rules have upon the UDRP. We need to accept that affording the UDRP providers such amount of freedom has produced problematic results and has contributed to the general procedural unfairness the UDRP is currently facing. So, it is indeed a welcoming step to see that the ICANN Board is willing to discuss the role of Supplemental Rules in the UDRP and to see the ICANN staff wanting to impose tighter controls over these rules and their presence in the UDRP.
I can only hope that this is the first step towards slowing down the freedom of the UDRP providers, addressing the issues of inconsistency, eliminating forum shopping and opening the road for a substantive review of the UDRP.
Konstantinos Komaitis, the individual!