The long-awaited GAC ‘scorecard’ on the protection of trademarks was released yesterday and, unfortunately, it did not come as much of a surprise. Following the direction that the USG ‘scorecard’ set in the beginning of the month, the recommendations of the GAC focus primarily on three rights protection mechanisms: the Trademark Clearinghouse (TMC), the Uniform Rapid Suspension System (URS) and the Post-Delegation Dispute Resolution Process (PDDRP). Although the recommendations for the TMC can objectively be negotiated as long as the official line remains that the creation of such a database will not confer any additional rights to right owners, it is the attempt of the GAC to change the substantive and procedural aspects of the URS that is of more concern.
The GAC’s advice in relation to the URS consists of the following elements:
· The complaint should be simplified by replacing the 5000 word free text limit + unlimited attachments with a simple pro forma standardised wording with the opportunity for not more than 500 words of freeform text and limit the attachments to copies of the offending website.
The idea of providing a standardised wording is not a good one, especially when it comes to disputes concerning two conflicting rights. Disputes vary both in nature and content and, despite the fact that the URS is meant to be used for those clear-cut cases of abuse, this recommendation is based on the arbitrary assumption that all types of disputes will inherently be the same. A standardised format will be detrimental in the delivery of justice. We need to bear in mind that a URS examination (in a similar manner to the UDRP) is based solely based on the documents submitted by the parties and panels make their determinations based on the content of these very submissions. How will a panel be allowed to make conclusive determinations if a standardised format is only permitted? I appreciate that the URS is meant to be used for those types of activities that on their face they appear egregious, but for the panel to determine the harmful activity parties should be permitted to produce their contentions, which will not be able to do if a standardised form is adopted.
· Decisions should be taken by a suitably qualified ‘Examiner’ and not require panel appointments.
Have we not learned anything from the UDRP and the potential bias that this recommendation will invite? If one thing is clear after ten years of UDRP adjudication is that the way panels are assigned to decide individual cases is highly problematic and that there is not a mechanism to hold panels accountable for the decisions they reach. When the same panellists are used, the possibility for bias becomes rife (http://www.dncrunch.com/?p=3199). But, at least the UDRP still operates on the basis that panels are assigned from a pool of panellists. Now, the GAC wants to make this rule redundant and suggests that a suitably qualified ‘Examiner’ will be deciding the case. This recommendation will make someone very rich and will allow the trademark community to ‘play’ and abuse the notion of adjudicators’ impartiality and independence.
· Where the complaint is based upon a valid registration, the requirement that the jurisdiction of registration incorporate substantive examination should be removed
This recommendation is reasonable to the extent that all trademark registrations, despite whether the jurisdiction granting them provides substantial review or not, can be subject to a URS process. This can prove to be disadvantageous for mark owners, whose jurisdiction requires a more substantive review, but at the same time respects the individuality of every trademark registration system. As long as mark owners that fail to get their trademarks in their own jurisdiction do not seek to play the system by attempting to register them in less-demanding jurisdictions, then this recommendation does not add much.
· If, as expected in the majority of cases, there is no response from the registrant, the default should be in favour of the complainant and the website locked. The examination of possible defences of default cases according to para. 8.4 (2) would otherwise give an unjustified privilege tot eh non-cooperating defendant.
This recommendation has two problems: first of all, it designs a system based on the presumption of default (“as expected in the majority of cases”). No one, including the GAC, can determine whether or how many defaults will take place; similarly, no one can possibly pre-determine the reasons for the default, which brings me to the second problem. Default does not always mean bad faith. Despite the efforts of UDRP panels to establish such a normative rule, the simple fact remains that default can be attributed to a variety of reasons and, unless they are exhausted, bad faith is not to be considered the main reason behind default. This provision will be highly problematic for those registrants that are located in remote and isolated areas, where Internet connections are neither as available nor as inexpensive. Especially, governments of developing countries should object to this provision, as their registrants might find it difficult to receive the complaint and respond in the limited time of 14 days, which is currently recommended.
· The standard of proof should be lowered from ‘clear and convincing evidence’ to a preponderance of evidence.
This recommendation makes me wonder whether the GAC has really considered its potential implications. A preponderance of evidence means that it is most likely that not that the fact that the complainant asserts is true. This means that even if there is an indication that a domain name might be infringing a trademark, then the URS can be activated; but, there also might be a possibility that this is not the case. Why then drag the registrant into this process based only on a possibility and not on a fact? This provision, coupled with the standardised form and the default, will ensure that a trademark owner will always prevail in the URS.
· The ‘bad faith’ requirement in paras 1.2(f), 1.2(g) and 8.1(c) is not acceptable. Complainants will in only rare cases prevail in URS proceedings if the standards to be fulfilled by registrants are lax. Correspondingly, the factors listed in paras 5.7(a) (‘bona fide’) and b) ‘been commonly known by the domain name’ can hardly allow a domain name owner to prevail over the holders of colliding trademarks.
What the GAC seems to be suggesting here is that no standards should apply for the determination of cybersquatting. If this is the case (and it appears to be so), then we are talking about a dispute resolution mechanism that will afford intolerable levels of discretion to the ‘Examiner’ to make final determinations. The GAC misunderstands the nature of the bad faith provisions. In the UDRP (and in similar proceedings) the complaining party carries the burden of proof, who has to prove that all three elements (identical or confusingly similar, no rights and legitimate interests and bad faith registration and use) are applicable. The list of bad faith factors is only indicative and is meant to provide the panel with some guidance as to how to determine bad faith. Now, the GAC wants to abandon this direction and give the freedom to the Examiner to make any determinations it wants without any guidance. This does not assist in the creation of a ‘Uniform’ system, but contributes to a system that will be based on arbitrary justifications and reasoning.
Similarly, the GAC wants to jettison the ‘fair use’ provisions within the URS, the only tool at the disposal of domain name holders to prove legitimate rights on the domain name. And, the justification offered by the GAC is simply nonsensical.
· A ‘loser pays’ mechanism should be added.
This recommendation is problematic for various reasons. First and foremost, the URS is a rapid review process. It is not a full and robust review of the underlying facts. Conclusions are rapid, thus mistakes will inevitably be made. Losing the domain name is bad, but the financial consequences of a URS action on the registrant can be disastrous.
The STI anticipates that a URS action will run about $500 — far cheaper than court, and about a third the price of a UDRP action. While this is considered a small amount of money for a large trademark owner, it is an enormous amount of money for a small businesses, an NGO, and an individual in any part of the world. A loss, even for a good faith registration, could be financial disastrous.
The 'Loser Pays' is inherently pro-complainant, and would especially favor big brand complainants who can outspend any individual legitimate registrant.
· There should be a clear rationale for appeal by the complainant. The time for filing an appeal in default cases must be reduced from 2 years to not more than 6 months. In addition, the examination of possible defences in default cases according to para 8.4 (2) means an unjustified privilege of the non-cooperative defendant.
There are three issues that the GAC addresses here and all three seek to work only to the advantage of the trademark owner.
a. The GAC suggests that the complainant should be given the right of an appeal: This would be fine, if both parties were subjected to the same deadlines and limitations. But, the truth is that complainants and domain name holders are asked to operate on completely different timeframes. The complainant, for instance, has all the time in the world to prepare the complaint before submitting it; the respondent has only 14 days to do what the complainant might have taken months to prepare. Moreover, the appeal process is meant to provide relief to the losing party and this is what the Applicant Guidebook suggests (12.1 Either party shall have a right to seek a de novo appeal of the Determination based on the existing record within the URS proceeding for a reasonable fee to cover the costs of the appeal). Why is it necessary to make such an explicit mention to the right of the Complainant to appeal?
b. The time for filing an appeal in default cases must be reduced from 2 years to not more than 6 months: This reduction is arbitrary and too short. A good compromise would suggest for the filing of an appeal in default cases to be reduced from 2 years to not more than 1 year.
c. In addition, the examination of possible defences in default cases according to para 8.4 (2) means an unjustified privilege of the non-cooperative defendant: Once again, the GAC here operates on the assumption that the reason for default is bad faith. Many respondents appear non-cooperative not because they are acting in bad faith, but because there are such provisions that indiscriminately equate default with bad faith, thus limiting the chances of a successful response. At the same time, what the GAC deems as non-cooperative, can be reasons for the respondent not being able to respond on time due to various technical or personal reasons.
· A successful complaint should have the right of first refusal for transfer of the disputed domain name after the suspension period so that the complainant is not forced to pursue a UDRP proceeding to secure a transfer.
The original justification of the URS as introduced by the IRT was that the distinct feature of the URS was its remedies. According to the IRT report:"The URS is intended to supplement and not replace the UDRP. They are separate proceedings with distinct remedies. The URS is designed to provide a faster means to stop the operation of an abusive site. The UDRP is designed to result in the transfer of the abusive domain name."
Seeking to allow the transfer of the domain name under the URS becomes problematic at various levels. First of all, the whole foundation of the URS's justification (and the way it was 'sold' to the Internet community) collapses. Secondly, by allowing transfer under the URS a variety of issues emerge: what will be the compatibility between the URS and the UDRP? What will the differences be between the two mechanisms?
If the URS is not meant to be a process that invites substantive evaluation but rather seeks to examine superficially the alleged infringement, then allowing a remedy that seeks transfer of the domain name is against due process and basic principles of justice.
Finally, transfer of the domain name under the URS was never part of the original IRT recommendation.