Comments submitted by
the International Bureau of the World Intellectual Property Organization (WIPO)
in response to the Proposed Rule for the
Improvement of Technical Management of Internet Names and Addresses
Docket No. 980212036-8036-01
UNITED STATES DEPARTMENT OF COMMERCE
National Telecommunications and Information Administration
The International Bureau of the World Intellectual Property Organization (WIPO) appreciates the opportunity to submit comments on the United States Department of Commerceís Proposed Rule for the Improvement of Technical Management of Internet Names and Addresses (the "Green Paper").
WIPO is an intergovernmental organization with 168 member States, with its headquarters in Geneva, Switzerland. It is the specialized agency of the United Nations system of organizations responsible for the promotion of the protection of intellectual property at the international level. The International Bureau of WIPO submits these comments in its capacity as the Secretariat responsible for the implementation of this mandate and, in particular, for the administration of a series of multilateral treaties designed to facilitate the international protection of intellectual property. Those treaties include several dealing with the international protection of trademarks, notably the Paris Convention for the Protection of Industrial Property, which establishes a number of basic principles, including the obligation for contracting States to protect well-known marks; the Trademark Law Treaty, which is directed at the simplification of procedures for obtaining and maintaining trademark protection; and the Madrid Agreement for the International Registration of Marks, as well as the Protocol to the Madrid Agreement for the International Registration of Marks, which together establish a system for the international registration of marks in contracting States.
In addition, the International Bureau of WIPO has been mandated by its member States to provide technical assistance in relation to the implementation of the Agreement on Trade-Related Aspects of Intellectual Property Rights (the TRIPS Agreement), adopted as part of the Marrakesh Agreement Establishing the World Trade Organization.
The WIPO Arbitration and Mediation Center (the Center), established in 1994, is an administrative unit of WIPOís International Bureau, providing independent, neutral and cost-effective services for resolving intellectual property disputes among private parties. The Center does not itself decide cases, but instead administers dispute resolution procedures under which expert neutrals (arbitrators or mediators) decide or assist in the settlement of disputes. For this purpose, the Center has developed arbitration, expedited arbitration and mediation rules, and maintains a growing roster of over 750 intellectual property and dispute-resolution experts from over 70 countries. The Centerís dispute-resolution services are available on a neutral, non-discriminatory basis to all interested parties. Physical arrangements in respect of disputes administered by the Center (such as hearings) may take place anywhere in the world and do not necessarily have to take place in Geneva.
The Center has developed, in particular, an on-line, Internet-based facility for administering domain name disputes (see the Centerís web site at http://www.arbiter.wipo.int, which will also be undergoing further development work). The Centerís preparation of this facility was noted with approval by the WIPO General Assembly (the organ of the member States of WIPO) in October 1997.
Much of this work was initiated as a result of the advice on intellectual property and dispute-resolution issues provided by WIPO to the International Ad Hoc Committee (IAHC) and the Policy Oversight Committee (POC) in relation to the "Memorandum of Understanding on the Generic Top-Level Domain Name Space of the Internet Domain Name System" (gTLD-MoU). The Center has been designated to administer on-line mediation, expedited arbitration and an Administrative Domain Name Challenge Panel procedure for registrations in this system.
In making these comments on the Green Paper, WIPO restricts itself to its area of competence: the international protection of intellectual property. WIPO does not, therefore, make any comment on Internet governance, technical and economic policy issues on which WIPOís member States have not expressed a common position. WIPO limits its comments to those sections in the Green Paper dealing with "The Trademark Dilemma" and proposing "Minimum Dispute Resolution and Other Procedures Related to Trademarks."
The Green Paperís discussion of trademark and dispute-resolution issues focuses almost exclusively on generic top-level domains (gTLDs). It may be noted, however, that similar intellectual property issues present themselves in relation to the national top-level domains (nTLDs), where the same need for effective and coordinated dispute-resolution procedures exists.
The Problem with Litigation
The Green Paper recognizes the potential for disputes to arise as result of domain name registrations, noting that "where a trademark is unlawfully used as a domain name, consumers may be misled about the source of the product or service offered on the Internet." In its identification of factors suggesting the need for reorganizing the DNS, the Paper observes that "[m]echanisms for resolving conflict between trademark holders and domain name holders are expensive and cumbersome," and "[w]ithout changes, a proliferation of lawsuits could lead to chaos as tribunals around the world apply the antitrust law and intellectual property law of their jurisdictions to the Internet."
The difficulties alluded to in the passages quoted in the preceding paragraph derive from the global character of the Internet and the consequence that the legal effects of Internet activity are generally not restricted to any particular national jurisdiction. This fact manifests itself in the registration and use of domain names. A domain name may be accessed from any part of the world. If its registration or use is in violation of a third partyís rights, the resulting damage may occur in many different countries and may require litigation in those different countries in order for an effective remedy to be achieved. It would seem to follow, therefore, that, for any resolution of domain name disputes to be effective, it should be international in scope: it should take into account rights and obligations that exist in different jurisdictions and be enforceable across those jurisdictions.
Reflecting the historic origins of trademark protection, however, disputes involving trademarks have largely been left to the national courts. The Green Paper observes that trademark infringements involving domain names might take place with no convenient jurisdiction available in which the trademark owner can file suit to protect its rights. Indeed, the goal of resolving these disputes in an efficient manner is not served by forum shopping and its attendant uncertainties and potentially conflicting determinations.
At the same time, a domain name system that would tie registrants to a particular fixed and potentially remote jurisdiction might not achieve the desired balancing of international rights and interests. The Green Paper proposes that, at the time of registration, registrants would agree that, in the event of a dispute, jurisdiction would lie where the registry is domiciled, where the registry database is maintained, or where the "A" root server is maintained. This approach could be broadened to include jurisdiction in the country in which the registrar resides, given that the applicant may prefer to do business with a registrar in its locality sharing the same language, business culture and local laws. This non-exclusive approach would be without prejudice to allowing a third party to seek to obtain jurisdiction over that applicant anywhere else where there may be an independent and sufficient nexus to support local jurisdictional requirements.
Case statistics on the number of disputes that have resulted in full-scale litigation in the United States do not appear to take account of those disputes that have actually arisen, both in the United States and elsewhere, but have been resolved by means other than litigation, such as the purchase of a registration by the third party that feels aggrieved by the registration. When confronted by a cybersquatter, trademarks holders have often been forced to choose between two unsatisfactory choices: expensive and time-consuming litigation, or negotiating with the cybersquatter to buy back the domain name corresponding to their intellectual property right. In fact, the very cost of the potential litigation may influence the price that a cybersquatter can demand.
Rather than relying exclusively on litigation in the courts, what seems to be needed as an alternative is a simple, inexpensive and multi-jurisdictional procedure -- adequate to the realities of the volume and scale of domain name registrations -- for addressing these disputes.
Desirable Features of Alternative Dispute Resolution
Alternative dispute resolution procedures have been developed to address the kinds of concerns mentioned in the previous section. Indeed, the Green Paper proposes alternative dispute resolution (ADR) procedures as an inexpensive and efficient alternative to litigation for resolving disputes between trademark owners and domain name registrants. ADR procedures can be simple and expeditious, and can be applied uniformly across gTLDs.
Further definition, however, would seem to be required, since the expression ADR encompasses a broad range of procedures. Unless there is uniformity in the type of procedures that are to be made available by registries/registrars, some may limit themselves to providing ADR procedures that do not afford effective remedies, with the consequence that some domains may provide a more hospitable environment to cybersquatters than others.
The three ADR procedures that have been frequently considered in relation to domain name disputes are:
Mediation is a relatively informal, non-binding procedure in which a neutral facilitates negotiations between the parties with a view to achieving the resolution of their dispute. While mediation may have useful application in a dispute between two good faith parties, enabling creative forms of settlement, its limits may be exposed when the domain name dispute involves a non-cooperative cybersquatter, who, by virtue of the non-binding nature of mediation, may withdraw from the procedure at any stage.
In a mediation, the parties may choose their own reference points for deciding on a settlement of their dispute. Those reference points commonly include the commercial interests of the parties, the legal merits of the partiesí respective positions and the cost of alternative means of resolving the dispute. Since it is the parties who must agree on any settlement (the mediator not being a decision-maker), there is no "applicable law" by reference to which the dispute is decided.
Arbitration is a procedure providing a private and binding adjudication which respects party autonomy, while operating within a well-established and publicly enforceable international legal framework. Arbitration can offer a single solution for multi-jurisdictional domain name disputes; allow parties to participate in the choice of the expert neutral to hear their case; and lead to a speedy dispute-settlement process. At the same time, an arbitration award, unless otherwise agreed by the parties, is final and not subject to appeal.
In arbitration, the parties may choose the applicable law by reference to which the dispute will be decided. Their choice of law may be limited by certain mandatory laws that they cannot exclude (for example, parties cannot exclude the application of the criminal law that properly applies to a dispute). If the parties do not themselves choose the applicable law, the arbitral tribunal applies the appropriate applicable law. It is possible, even common, for several applicable laws to be taken into account depending on the circumstances of the dispute.
A form of administrative procedure, designed specifically for domain name disputes, can build in many of the same advantages offered by arbitration, such as expeditious procedures and the provision of a single solution enforceable across gTLDs. A perceived potential drawback of such an approach may be simply the attendant uncertainties associated with creating and implementing the new procedure itself.
In the case of an administrative procedure, it would be necessary to decide which law is to be applied by the administrative panels in making their decisions. In this regard, under the gTLD-MoU, the "Substantive Guidelines" were drawn up by POC as principles by which the Administrative Challenge Panels would take decisions. Further reference to those Guidelines is made below.
Factors to be Considered
In endorsing ADR, the Green Paper raises the question of how it can most usefully support the DNS. The Green Paper "do[es] not propose to establish a monolithic trademark dispute resolution process at this time, because it is unclear what system would work best." The Paper proposes that each domain name registry establish its own "minimum dispute resolution and other procedures related to trademark considerations," and that, in the meantime, a study be conducted on the impact of an expanded DNS in relation to such questions. WIPO would be prepared to undertake or to contribute to such a study. While a monolithic approach may be neither achievable nor advisable, domain name holders and trademark owners should not be left with the other extreme, that is, multiple and uncoordinated dispute resolution procedures. In the interest of preserving stability, WIPO suggests the following factors for consideration:
Coordination: The Green Paper expresses the concern that the Internet not be fragmented; a similar concern is warranted regarding dispute resolution. As an institution that serves the needs of the private sector and that is largely funded by that sector, WIPO understands the potential benefits of competition and consumer freedom. Attempts to monopolize procedures and restrict growth might be considered presumptuous, if not futile. At the same time, however, care must be taken to ensure that any approach taken to dispute resolution is not undermined by confusion and contradictory decisions.
Taking into account international public input, POC, with assistance from WIPO, developed an innovative administrative procedure addressing only the partiesí rights with respect to a domain name and excluding any possibility of obtaining monetary damages. This coherent dispute resolution system is set forth in the draft Substantive Guidelines Concerning Administrative Domain Name Challenge Panels, which have now undergone their third revision. While this system has achieved a fair measure of consensus, arriving at a set of procedures and criteria broadly acceptable to an international and diverse community of stakeholders is difficult.
If a uniform approach is to be abandoned, the dispute resolution mechanisms should be made available in a coordinated fashion. Clauses in registration agreements may have to offer a choice among a standard, internationally representative list of dispute resolution institutions, and registries may have to agree to adhere to the determinations under the procedures maintained by each such institution. Consideration may also have to be given to the establishment of a uniform appeal mechanism.
Scope: One way to introduce efficiency in the domain name dispute-resolution process is to restrict the scope of jurisdiction and remedies. If the principal issue is which party has superior rights with respect to a particular domain name, time and cost savings may be realized if the scope of the procedure is so limited. In such a system, any monetary damages and similar complex issues would be left to other fora.
This underscores that such a streamlined procedure should be complemented by the availability of other mechanisms, whether arbitration or court procedures. In this regard, the Green Paper states that any adopted system must be "compatible with any available judicial or administrative remedies."
Enforcement: The dispute settlement process should be supported by a direct enforcement mechanism. Applicants should be bound to abide by any determination through the terms and conditions of registration. As to registries and registrars, the Green Paperís proposal that they "abide by the decisions resulting from an agreed upon dispute resolution process or by the decision of a court of competent jurisdiction," would provide an effective enforcement measure.
Outsourcing Dispute Resolution: The Green Paper recommends, as one of its minimum procedures, that the dispute-resolution process minimize involvement by registrars. WIPO observes that this goal has been almost universally echoed by users and stakeholders in the DNS. WIPO believes this goal may best be met when registrars operate within a framework of clear domain name registration procedures and policies, and use external, specialized and neutral dispute-resolution procedures that provide equality of treatment and expeditious determinations to all parties.
On-Line Facility: The expansion of electronic commerce on the Internet may soon lead parties to prefer to settle disputes arising out of such commerce in the same manner as the commerce is conducted. The Green Paper recognizes that on-line procedures may contribute to a swift dispute resolution process.
As mentioned above, WIPO has developed an on-line system for administering commercial disputes involving intellectual property. It is expected that this mechanism will increase speed in the procedures while reducing costs. Initially, the system will be available for disputes involving Internet domain names, where certain assumptions can be made about the technical sophistication of the parties. The system will include such functions as forms for filing cases, automatic notifications, an electronic fee system, secure facilities for the on-line exchange and reading of documents, back-end databases to support the logging and archiving of documents, and eventually real-time communication tools.
Famous Marks: The Green Paper notes that trademark holders have raised questions as to whether famous marks should be accorded special protection through a "clearing" mechanism across the range of gTLDs. Although no definitive criteria may yet exist allowing for a precise international identification of "well-known" marks, the Paris Convention for the Protection of Industrial Property, to which 145 States are party, requires contracting States to protect well-known marks. Indeed, their wide recognition makes them especially vulnerable to infringement practices on the Internet. WIPO believes that the swift correction of such practices would enhance the credibility of the DNS.
The gTLD-MoU system foresees the establishment of a general exclusion, to be determined in individual cases by neutral Panelists, that would block the registration of domain names corresponding to the intellectual property rights of third parties. The decision whether or not to grant this exceptional remedy would be based on the international significance and market presence of the claimantís intellectual property.
To maximize the effective protection of well-known marks, such a mechanism would need to be coordinated and implemented across all gTLDs. Moreover, such an approach could be applied to the nTLDs as well.
Suspension: WIPO believes that, in addition to the elements discussed above, dispute resolution procedures might usefully include a mechanism for suspensions. Such suspensions should not necessarily be automatic, but should be subject to a swift process for assessing the interests involved. The procedures developed by WIPO in support of the gTLD-MoU system, which allow for securing relief similar to a temporary injunction, may provide guidance in this respect.
Dispute Prevention: Dispute prevention is preferable to dispute resolution. Options that may contribute to the development and accessibility of the DNS include the use of shared domain name indexing systems and other forms of trademark and domain name databases and search tools. Moreover, dispute resolution systems can be organized so as to increase the chances of settlement through such recommended solutions as site linking.
The Green Paper stresses the importance of requiring applicants to certify their intention to use the domain name and their lack of knowledge of any superior third party rights. It also notes that applicants should be required to supply, for public posting, full and up-to-date information in relation to themselves and the requested domain name. Subject to appropriate privacy concerns, such information would improve transparency and accountability in the DNS.
Disputes involving domain names represent only one manifestation of the intellectual property issues generated by the growth of the Internet, and in particular, the commercial and non-commercial content and use of web-sites. Not all domain name registrations necessarily implicate trademark issues, and Internet trademark concerns do not end with an efficient domain name system. Likewise, it is impossible to overlook the emerging copyright issues associated with Internet activity.
The above comments reflect WIPOís belief that the protection of intellectual property rights on the Internet is vital not only to trademark holders, but to all users of this remarkable medium. The accessibility, credibility and secure development of the Internet are served by a system that gives appropriate weight to intellectual property rights across jurisdictions.
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