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WHO SOLVES DOMAIN NAME DISPUTES?

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by Madeline C. Kimei[1]

Our approach on domain names dispute cannot continue and, it is a matter of time, before the domain name space becomes an exclusive territory, populated by trademarks. There is a need to embrace and take ownership of the African domain name space and to achieve this specifically for Tanzania is to increase the number of domains registered under .tz. The more domain names exist, the more disputes arise, but there is no .tz domain name disputes that have been resolved entirely. In most cases, the requested party always demands an unreasonable large fee for transferring the domain name in question during amicable settlement efforts. If he does not accept that proposal, the complainant is forced to either submit to the UDRP procedure or at most times seek relief in courts of law or let go of the domain, which is what we witness in the continent.

Kimei, Madeline, 3045156 (September 29, 2017). Available at SSRN: https://ssrn.com/abstract=3045156

The anatomy of a Domain Name

 A Domain Name is a quite user-friendly form of an Internet Protocol (IP) address; the technical IP address of this being invisible to the viewers. Addresses to the Internet Web Servers are assigned and managed through the Domain Name System (DNS), the globally distributed internet database administered by Internet Corporation for Assigned Names and Numbers (“ICANN”)[2]. A domain name identifies a website by using a unique name, which is usually the brand’s name or the trademark. For example www.resolutionexperts.co.tz.

Trademarks vs. Domain Names

There is a distinction between a trademark and a domain name, which is not relevant to the nature of the right of an owner in connection with the domain name, but is material to the ’scope of the protection’ available to the right. The distinction lies in the manner in which the two operate. A trademark is protected by the laws of a country where such trademark may be registered. Consequently, a trademark may have multiple registrations in many countries throughout the world. The Trademark and Service Marks Act[3] defines a trademark in the following words:

“Any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings”

A Trademark may be any sign that is distinctive. The distinctiveness of this mark is important as the main purpose of a trademark is to help the consumers in identifying the unique source of the product or services. In other words, a trademark portrays the authenticity of a business.

Firstly, unlike trademarks, the concept of “confusingly similar” does not exist in the domain names. Secondly, unlike domain names, the registration of trademarks is subjected to the classification system meaning identical trademarks that are used to identify different products and services can exist. On the other hand, since the internet allows for access without any geographical limitation, a domain name is potentially accessible irrespective of the geographical location of the consumers. The outcome of this potential for universal connectivity is not only that a domain name would require worldwide exclusivity but also that national laws might be inadequate to effectively protect a domain name. The lacuna necessitated international regulation of the domain name system (DNS).

It is also important to note that there are fewer formalities with the domain registration system than most trade mark systems and thus less inquiry into the validity of the registration. It should also be noted that even if a company has not formally registered a trade mark they may have common law rights based on actual use and which can be protected by the common law tort of passing off at common law.

Regulation of Domain Name Disputes

There are two important issues that of the institutional arrangements for governing the Domain Names System (DNS) and the use of trademarks as domain names. In 1999, ICANN adopted the UDRP in order to provide a uniform process and set of rules to protect trademark owners from abusive registrations. All gTLDs and many ccTLDs have a policy in place to regulate disputes regarding domain names within that TLD. ccTLDs may have specific policies that reflect the local laws of the specific territory or country covered by the ccTLD. For examples disputes under the .tz domains are governed by the Tanzania Information Network Centre (TzNIC) Uniform Domain Name Dispute Resolution Policy and Rules[4].

The UDRP provides a mechanism for resolving disputes between domain names owners and trademark holders who claim that a domain name infringes their trademark. Because of its time, cost and jurisdictional advantages, most domain names disputes are brought under the UDRP. The UDRP is privately –sponsored form of disputes resolution adopted by ICANN in 1999.  UDRP disputes are heard by carious accredited dispute resolution services, the largest of which is run by the World Intellectual Property Organization (WIPO) Arbitration and Mediation Center[5]. A growing number of registrars of country code top level domains have designated WIPO as a dispute resolution service provider. However, the costs and expenses involved in driving a case at the WIPO are too high. Additionally, our African market lacks the legal professionals who are specializing or experts in the procedures and legal framework governing domain names dispute resolution.

Registrants of domain names falling under the UDRP automatically consent to the terms and conditions of the UDRP policy as a condition of purchasing the domain name. Registrars that sell these domain names are required to agree to the terms of the UDRP. The mandatory consent to the UDRP by domain registrants and registrars ensures that the UDRP will be applicable and binding on domain disputes of TLDs that the policy is intended to govern[6]. The UDRP provides that an owner of a domain name that is governed by the UDRP is required to submit to an administrative proceeding conducted before an approved administrative dispute resolution service provider. The arbitration hearing prescribed by the UDRP is intended to provide cost-effective and quick resolution to domain name disputes.[7]

3-Criteria under the UDRP

UDRP decisions are generally based on commercial considerations that resemble the key features of trademark infringement and dilution actions. Para 4 (a) of the UDRP requires that in order to bring a successful complaint, the complainant must establish that;

  • the disputed domain name is identical or confusingly similar to a trademark or service mark in which she has rights[8];
  • (ii) the registrant has no rights or legitimate interests in the domain names[9], and
  • (iii) the domain name has been registered and is being used in bad faith.[10] These factors are cumulative.

The complainant must establish all three to support a complaint and where the domain name disputes do not satisfy each of these criteria, they are considered to be outside of the scope of the UDRP. Therefore, the UDRP will assist a trademark owner that has a valuable domain taken by a third party only when the registration is a bad-faith, abusive registration within the circumstances specified by the UDRP.

The UDRP also contains some non-exclusive guidelines for a registrant to establish a legitimate interest in a dispute domain name in order to rebut the complainant’s assertions. The legitimate interest[11] guidelines in the UDRP include the following:

 

  • Before any notice to the registrant of the dispute, the registrant had used or made demonstrable preparations to use the domain name or a name corresponding with the domain name in connection with a bona fide offering of goods and services.
  • The registrant (as an individual, business or other organization) has been commonly known by the domain name, even if she had acquired no trademark or service mark rights in the name;
  • The registrant is making legitimate non-commercial or fair use of the domain name without intent for commercial gain or to misleadingly divert customers, or to tarnish the trademark or service mark at issue.

 

Clearly, the above list has been drafted with trademark law in mind, although it is intended to be a nonexclusive list.  Arbitrators are entitled to look at other evidence of legitimate interest.

 

The UDRP is predominantly focused on protecting trademark rights. The complainant must establish a trademark interest that corresponds with the registrant’s domain name, and the registrant has the option of establishing a legitimate use of the domain name in distinctly trademark-like terms. In other words, the registrant effectively has to prove to the satisfaction of the arbitrator that she has a valid trademark or service mark in the domain name, or at least was known by that name as an individual or a business. Alternatively, she could establish that she is making a non-commercial use of the name with no intent to confuse consumers or to dilute the complainant’s mark. In practice, this third limb of legitimate use may be increasingly difficult to establish in an age where many domain name registrants utilize some form of online advertising.

 

The UDRP gives some guidance on the nature of a bad faith use of a domain name for the purpose of a complaint. Some of the UDRP bad faith factors relate more closely to cybersquatting, while others reflect more traditional trademark concerns, such as prevention of consumer confusion. The non-exclusive list of bad faith factors[12] in the UDRP comprises the following:

  • Circumstances indicating that the registrant registered or acquired the domain name primarily for purposes of selling, renting or otherwise transferring it to the complainant or to a competitor of the complainant for valuable consideration;
  • The registrant registered the domain name to prevent a trademark owner from reflecting the mark in a corresponding domain name, provided that the registrant has engaged in a pattern of such conduct;
  • The registrant registered the domain name primarily for the purpose of disrupting the business of a competitor;
  • By using the domain name, the registrant has intentionally attempted to attract, for commercial gain, internet users to her website by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation or endorsement of the registrant’s website or location or of a product or service available on that website or location.

 

Advantages of the UDRP

The advantages of the UDRP relate to time and cost savings, avoidance of jurisdictional concerns, and ease of use. The procedure is much less expensive than litigation. Arbitration decisions can be made more quickly and cheaply than judicial decisions. Jurisdictional problems are minimized under the UDRP. Arbitrators automatically have jurisdiction over relevant disputes, and enforcement of arbitral orders is an easy administrative matter. There are also clear and simple procedural rules for UDRP disputes, relating to things like appropriate language for the proceedings.[13]

Another feature of the UDRP worth mentioning is that it does not implement a policy of stare decisis. Arbitrators are not strictly bound to follow previous UDRP decisions. They are not technically even bound to treat previous decisions as persuasive authority. The advantage of not following the doctrine of stare decisis include the fact that panelists can be flexible in applying the procedure to different kinds of situations involving different disputants in different jurisdictions. Additionally, it makes sense as a policy matter to encourage greater flexibility of outcome in what is intended as an arbitral mechanism, rather than a judicial procedure. Arbitration can be more amenable to the parties’ individual needs without being too rigid in terms of outcomes.

However, the lack of a stare decisis doctrine can generate a lack of certainty. Additionally, one might argue that the inherent flexibility that comes with a lack of stare decisis is bad for the development of a body of principles about domain name disputes more generally if it leads to arbitrary and inconsistent decisions over time. This seems to be occurring in situations involving personal names. Rather than a clear set of principles emerging over time about the treatment of personal names in the domain space, the decisions are fragmented in their outcomes and difficult to reconcile. The same may be said about disputes involving geographical indications, such as names of countries, cities or regions.

Criticisms of the UDRP

The UDRP is limited to protecting trademark interests in the domain space, (UDRP para 4(i)). This includes both registered and unregistered marks. UDRP arbitrators have accepted the existence of secondary meaning in some questionable cases, which has led to some arbitrators to caution against the practice of too readily accepting trademarks in the names of famous people in particular. Decisions involving personal names have been somewhat arbitrary and inconsistent, suggesting that perhaps UDRP arbitrators are struggling with the fact that complainants who are attempting to protect their names in the domain space have few viable options outside the UDRP.

The implementation of UDRP by ICANN and its limitations to the protection of trademark interests, albeit on a global scale. Its practical benefits relate to time, cost and the avoidance of jurisdictional problems. Its disadvantages are mainly its limited focus to trademark-related cybersquatting while it protects trademark effectively in the domain space, it might be useful to adopt a broader policy at this point that protects other interests, including personal names, geographical and culturally significant terms.

Other criticism of the UDRP is that, despite its global reach, it is limited in practice to gTLDs and ccTLDs for which it has been specifically adopted[14].

The UDRP Proceedings

The steps described here are based on the UDRP rules and the supplemental rules of Resolution Experts for .tz dispute procedure is as follows;-

  1. Submission of a complaint to an ICANN approved dispute resolution service includes detailed information about the trademark on which the complaint is based and the goods or services with which it is used, the grounds on which the UDRP is being invoked, the remedies sought, the domain names at issue, and other information about the dispute and related supporting documentation.
  2. The dispute resolution service checks the Complaint for compliance with ICANNs procedural requirements and then forwards it to the relevant domain name registrant
  3. The registrant has 20 days from the commencement of the proceedings to submit a response to the complaint with similar information, documentation, and arguments supporting its claim that it is entitled to keep the registration.
  4. In certain circumstances, this time period may be extended by the dispute resolution service provider, if the time is not extended and the registrant has not submitted a response to the complaint, the arbitration service is entitled to proceed to a decision on the complaint in the absence of a response.
  5. A party may file a reply or an additional submission, provided it is filed within 5 days of the response and is accompanies by a fee.
  6. If the registrant does submit a response, the arbitrator or panel appointed to the dispute provides a decision based on the complaint and response.
  7. There are generally no in-person hearings, which is a significant advantage when disputants are located in different jurisdictions unless the arbitration panel decides that a hearing or additional information is required.
  8. If a complainant is confronted with new information or a radical twist on the facts in the alleged cybersquatter’s response, a complainant would be well advised to file a reply. The arbitration panel or sole arbitrator will render a decision within 14 days after receipt of the complaint and response from the dispute resolution provider.[15] All decisions are published on the internet.[16]

Remedies under the UDRP

UDRP decisions are rendered within 2 months from the institution of the proceedings. A complainant institutes the proceeding by filing a complaint along with the required fee. A respondent then has a specific period of time to file its response. Each party can then file one additional submission, which may cost an additional fee. The panel (composed of one or three members, depending on the request of the parties) then makes a decision based on the record before them.

The sole remedy for complainant in a UDRP proceeding is the cancellation of the domain name or transfer of the domain name to the complainant. After the panel has made a decision, if the decision was for transfer or cancellation of the domain name, the registrar will be notified and is obligated to transfer the domain name to the complainant or cancel the domain name registration unless the losing party provides notice within 10 days after the decision that a lawsuit challenging the decision has been commenced. Such a lawsuit would have to be instituted in a specified mutual jurisdiction, generally being either the location of the principal office of the registrar (provided the domain name holder has submitted to such jurisdiction in its registration agreement) or the domain name holder’s address as indicated in the registration of the domain name in the registrar’s whois database at the time the complaint is submitted to the provider.

More often than not, a complainant would opt for the domain name to be transferred. As long as the domain name remains registered, it will prevent third parties from misappropriating it again. Cancellation is not the preferred option because the domain name will be made available to the public for purchase.[17]If the domain name is registered again, a fresh UDRP complaint with the prescribed fee has to be submitted as there is no way of protecting an unregistered domain name.

It should be noted, panels’ decisions cannot be “appealed” within the UDRP procedure because such process does not exist; therefore, they cannot be “corrected” by a higher UDRP instance. The only option left open to losing registrants is to challenge panel decisions in court.

Opting out of the UDRP proceedings

The UDRP does not oust the jurisdiction of national courts. It is clear that all domain name registrants are contractually bound to submit to a mandatory arbitration under the UDRP if a complaint is made about the registration of one or more of the domain names. This is achieved by incorporating an agreement by the registrant to submit to the arbitration procedure in the initial domain name registration contract. Thus, while a dispute falling under the UDRP is usually resolved via an administrative proceeding, the UDRP specifically permits either party to commerce litigation in court before the UDRP proceedings is commenced or within 10 business days after a decision is rendered[18].

If a similar approach is taken in the UK, then odomain name dispute resolution will be treated as an alternative rather than a substitute for decisions in national courts. This means that a disputant who is unsatisfied with the progress of an administrative proceeding remains free to commence judicial proceedings at any time before a decision is handed down, and can thereby ‘opt –out’ of the UDRP framework in favour of the courts.

Emerging Types of Cases

The African space has witnessed the emergence of different types of cases described below and the pressing issue is how do we handle these cases in the African domain name space which is growing. The following cases have emerged-

  • 3rd party has purposefully chosen a domain name that is confusingly similar to a trademark clearly belonging to another party
  • it is not clear that the domain owner registered a particular name or mark to tradeoff a trademark owners’ goodwill
  • Cybersquatting is where someone registers a domain name in bad faith usually with an intention to profit from a trademark belonging to someone else cyber squatters then offer to sell the domain name at an inflated price. The evidence of cybersquatting was found in 91% of WIPO panel cases in 2012, another record high.
  • Brand names (for example Alibaba and Uhuru under .ke)
  • Generic names
  • Geographical/Cultural

Local Dispute Resolution Service Provider

Until recently, the only avenue that was available was for disputes to be submitted at the international level, WIPO where the filing fees alone is $1500. Ideally, one will also have to consult an international lawyer who is familiar with the procedures at the WIPO. In its aim to provide an alternative to the .tz registrants, the Tanzania Network Information Center (TzNIC) appointed a local dispute resolution provider, Resolution Experts Co. Ltd[19] who adopted localized Supplemental Rules aligned to the UDRP Policy and Rules for .tz domain names. The provider also extends the services on a web-based platform for online dispute resolution called iResolve™[20] which allows for complaints to be submitted, managed and resolved online.

Legal Issues in the African Domain Name Space

The African dilemma is that there is insufficient knowledge in this field for legal practitioners to be in a position to guide and advise clients in the domain space. There is also need for sensitization among the business societies, locals and other stakeholders on the use of the dispute resolution system currently afforded to them. Although, the main reason for the registrar appointing a local dispute resolution provider was towards efforts to reduce the costs of administering the cases, nonetheless, we still find that parties complain of fee structures and opt to resolve with a handshake with their counterparts to avoid the costs.

Another challenge is that the protection of IPR is weak and the enforcement capacity is too diffused and scattered. Piracy, infringement and violations has become so common place. In Tanzania, most of industrial property rights provide for civil rights and no criminal sanctions, furthermore plaintiffs would only be entitled to injunction, damages and compensations. This is enforced by commercial courts of law.  The country has ratified number of international conventions and although recent amendments of the Trademark and Service Marks Act[21] and the Merchandise Marks Act[22] and its Regulations 2008 have been improved but much has to be done to be at par with international standards. It is clear that for the best possible, efficient, and rigorous protection of domain names at the African level, close harmonization of the trademark laws of individual countries worldwide, is also highly desirable.

The way forward

Most lawyers have little knowledge about the UDRP system and as a result misadvise clients by leading them to litigation in the courts of law. Litigation is time consuming, the costs of running it are high and considering that by the time the litigation has ended the value of the domain is lost. There is need to educate and raise awareness among lawyers. With the increase in the value and importance of domain names, to every business, there is need for tech lawyers in Africa. The domain name space should be encouraged to use legal advisory services to minimize and assist in preventing disputes. The African lawyer therefore needs to grab this opportunity.

There is need to explore having an African version of the UDRP to address domain name disputes involving African domain names. This could be largely based on the UDRP with some variations to capture and reflect the African domain name space needs. The UDRP does not operate on a strict doctrine of precedent. There is need to consider changing this practice and that decisions should be consistent with prior panel decisions dealing with similar fact situations. This will ensure that the African UDRP system version operates in a fair, effective and predictable manner for all parties.

Due to the fact that no personal appearance is required under normal circumstances and the dispute is resolved based on written evidence submitted online or by email[23]. It is about time to embrace the online dispute resolution (ODR)[24] phenomenon for resolving disputes in an online environment. This can be great in administering a domain name complaint and managing the complaint until the decision is handed down. This works well considering that the parties usually do not meet in person. A platform such as iResolve™[25] could be supported and led by the African DNS players through an association to provide a cloud venue for African businesses or individuals to register their complaints. This will be cheaper, faster and more efficient. Being that most disputes are currently handled at the international level, in the case of Tanzania, the main concern is that it is too expensive and persons have little or no knowledge of the procedures involved that is why we witness a lot of these cases being settled out of the system.

Conclusion

The domain name space is growing exponentially in the African continent. It may now be time for additional thought to be given to robust policies underlying domain name registration and use in Africa domain space. The ICANN and its adoption of the UDRP has made great strides since its inception, panels have decided on thousands of domain name disputes, however, the domain name registration system and resultant disputes have continued to evolve which the dispute resolution machinery has not.

 

[1] © 2017, Madeline C. Kimei is the founder and CEO of Resolution Experts, an approved local dispute resolution provider for .tz domain names by the Tanzania Information Network Centre (TzNIC). Ms. Kimei is a practicing Advocate & Corporate Commercial Counsel, a member of the Governing Council of the Tanganyika Law Society, Vice – Chairman Tanzania Institute of Arbitrators, Commercial Mediator & Arbitrator (Chartered Institute of Arbitrators –UK) and ADR Consultant and holds an LLB (Coventry University), LLM (Law & Finance) with Hons. –Bournemouth University. She practices as a corporate and commercial lawyer and dispute resolution professional who specializes in providing corporate and commercial legal support, domestic and international arbitration, commercial mediation and dispute management. She has considerable knowledge of the ICC Rules, ICSID and UNCITRAL Rules on both Arbitration and Mediation. For helpful comments, sugges- tions, and criticisms, I thank Sarah Mhamilawa and Abibu Ntagihiye of the Tanzania Information Network Centre (TzNIC) and the participants in the 2017 Africa Domain Name System Forum

[2] www.icann.org

[3] [CHAPTER 326 R.E 2002].

[4] Available here https://www.tznic.or.tz/index.php/en/domains/dispute-resolutions

[5] Availabe at http://www.wipo.int/amc/en/

[6] Bryer, Scott and Asbell, Intellectual Property Strategies for the 21st Century Corporations: A shift in strategic and financial management, pg 86, Wiley Publishers, 17 March 2016

[7] Lipton, J, Internet Domain Names, Trademarks and Free Speech, pg 35 -36, Edward Elgar Publishing

[8] UDRP Policy para.4(a)(i)

[9] UDRP Policy para.4(a)(ii)

[10] UDRP Policy para.4(a)(iii)

[11] UDRP Policy para 4(c)

[12] UDRP Policy para. 4 (b)

[13] Rules for UDRP Policy, para. 11

[14] See notes on UDRP, available at www.icann.org (list of gTDLs and ccTLDs for which the UDRP is incorporated by registration)

[15] Rules of the UDRP Policy 15 (b)

[16] Rules of the UDRP Policy 16 (b)

[17] After two to three months. It depends on the procedures of the domain name registrar.

[18] UDRP Policy para 4 (k)

[19] A private dispute resolution service provider in Tanzania, www.resolutionexperts.co.tz

[20] An online dispute resolution platform available at www.iresolve.co.tz

[21] [CHAPTER 326 R.E 2002].

[22] [CHAPTER 85 R.E 2002]

[23] Unless the panel deems it necessary, the panel can exercise its discretion to request parties to appear in person for hearing, which is extremely rare

[24] ODR is a branch of dispute resolution which uses technology to facilitate the resolution of disputes between parties. It primarily involves negotiation, mediation or arbitration, or a combination of all three -https://en.wikipedia.org/wiki/Online_dispute_resolution

[25] www.iresolve.co.tz