Some of Domain Times readers have said they would like a general introduction to the process of the arbitration of disputes. So we now present this short introduction as another service for our readers. Let us know if you find it helpful and if you would like to see articles on other aspects of the process. The internet now controls so much of peoples’ lives that it is not surprising that it has thrown up a vast range of issues – legal, financial, marketing, public relations and, many others.
One of them is the arbitration of disputes about domain names: who owns them, whether they have been registered improperly or in bad faith to do damage to another party, or whether they have just been stolen or plagiarised. It is of course trite to say that domain names are important in the use of the internet. They are necessary to set up a website and email addresses have to be supported by a website.
Domain names are also becoming more important as commercial and social contact between people is increasingly concentrated on the internet and as domain names, as a form of personal property, become more valuable. Thus, there is a steady flow of disputes over domain names and they are being fought with increased enthusiasm as the value of good domain names increases.
Litigation v. Arbitration
Lawyers should therefore be familiar with the processes that are available to resolve domain name disputes, in particular, by arbitration. This is also important for in-house counsel because their organisations, especially those with prominent names, are plagued by cybersquatters.
Traditional litigation has always been, and still is, available when parties want to make a claim regarding a domain name. Parties are not obliged to use arbitration and may sue in the courts for trademark infringement, trade practices law, contract, passing off and any other area of the law.
The Advantages of Arbitration.
There are, however, many advantages in using arbitration instead of litigation. First, as many cases concerning domain names are international in character, litigation over domain names has all of the pitfalls and obstacles of international litigation: deciding who the defendant should be, locating it, serving it with documents, determining the governing law and enforcing a judgment, not to mention the delays and excessive costs involved in litigation.
Accordingly, it became evident during the 1990s that a separate arbitration process was needed to match the unique nature of domain names. This led in 1999 to the Uniform Domain Name Dispute Resolution Policy (UDRP), a system of compulsory arbitration of disputes over the most prominent categories of domain names, such as ( .com, .info and .biz. At the same time, there developed similar dispute resolution processes for the domain names issued under the auspices of various countries, such as Canada and Australia.
Resort to the law in national courts rather than arbitration still remains, but the UDRP quickly became the principal means of resolving domain name disputes. If all that a party wants is to obtain the domain name quickly and economically, it should arbitrate - but transfer of the domain name is all that such parties can obtain through arbitration. If, however, the claimant wants damages, specific injunctions and orders, other remedies, costs and interest, then proceedings in the appropriate courts is the avenue that must be followed.
What is the UDRP?
The UDRP (or ‘the Policy’) is an online system for arbitration that is solely concerned with disputes about domain names, i.e., names that are used to identify a site or address on the internet and which enable the internet to function and people to communicate with each other.
A Complainant who initiates dispute resolution under the UDRP is a trademark owner who claims that the person who responds to the claim (the ‘respondent’) has registered a domain name, had no right to do so and has acted in bad faith in registering and using it.
The UDRP has been remarkably successful and has become the pre-eminent method for resolving a domain name disputes. There have been very few court cases over domain names, but about 50,000 decided arbitrations, all of which are posted on the internet, so a large body of knowledge and experience has been built up. The success of the UDRP has been due to the fact that it is comparatively free of legal complexity, is conducted online, kept within strict time limits, and produces a result quickly and economically that is automatically enforceable and one that produces finality and closure. The process results in an order for one of the following:
The transfer of the domain name to the complainant, if that party wins;
The cancellation of the domain name if the successful complainant is content to have the domain name cancelled rather than have it transferred to it; or
An order that the claim be dismissed, which means the respondent/domain name registrant has won and the domain name remains in the ownership of the respondent.
How is the UDRP a form of compulsory arbitration?
This is an important question because it answers another question: how do arbitrators obtain their jurisdiction? The answer lies in contract law. When someone buys a domain name through a registrar like Go Daddy and presses the ‘Submit’ button, that person becomes bound to an agreement with the registrar that includes the compulsory arbitration process - the UDRP – which is mandated by the Internet Corporation for Assigned Names and Numbers (ICANN), the non-profit company that runs the domain name system from Los Angeles.
How does the system work?
By way of example, a trademark owner - let us call it Ford - has a trademark for FORD that it uses to sell its motor vehicles. Ford claims that someone has registered the domain name <fordspareparts.com>, which is being used to sell counterfeit, second hand and illegally obtained Ford spare parts, all without permission. It decides not to sue in the courts, but makes a claim under the UDRP which it sends by email to its choice of one of the five providers of UDRP arbitration services. The claimant may bring its claim in any one of those providers. The provider serves the claim by email on the registered owner, waits to see if it files a response and then chooses an arbitrator from its list or panel of arbitrators. The arbitrator considers the evidence and submissions, writes a decision and returns it to the provider, who then issues the order and sends it to the registrar, who takes steps to comply with the order, unless the claim is dismissed, in which case the registrant of the domain name keeps the domain name. If the order is for transfer or cancellation of the domain name, there is a period of grace of 10 days before the domain name is transferred or cancelled, so that the unsuccessful respondent may institute court proceedings to have the order set aside if it wants to.