ICA Counsel Philip Corwin recently traveled to San Francisco to present ICA’s views to the Implementation Recommendation Team (IRT) created by the ICANN Board to propose “solutions” addressing the concerns of trademark owners about new gTLDs. The IRT letter of invitation noted ICA’s filing of a request for investigation by ICANN’s ombudsman, alleging that the IRT is an ICANN “constituent body” and as such is failing to comply with key aspects of ICANN Bylaws; it stated that the decision to invite us had been made prior to that filing and that the invitation in no way conceded any agreement with the points raised in our complaint. The ICA Board considered the invitation and concluded that, notwithstanding our strong concerns about the IRT’s procedures and composition, we would be failing our members if we did not take the opportunity to bring our policy views directly to it and engage in dialogue with its members. Our acceptance letter noted that our presence at the meeting should not be construed as conceding any of the issues we raised with the Ombudsman.
The IRT’s second and final face-to-face meeting took place at the St Francis Hotel from May 11th-13th, and the entire first day was set aside for presentations by outside parties. Besides ICA, other entities providing input that day were AT&T, Verizon, Deloitte, Progress and Freedom Foundation, Demand Media/Enom, National Association of Manufacturers, eBay, Nominet, CSC, Mark Monitor, NetNames and Melbourne IT. The IRT is required to issue its final report on May 24th, and that report will in turn be a major focus of the Sydney ICANN meeting in June.
The ICA was provided a full 30 minutes and then some to present its views. IRT members accorded us courteous treatment, appeared quite interested in our views, and asked a number of thoughtful questions both during our presentation as well as during the final hour of the day when all presenters were invited to sit around the table and engage in open dialogue.
That said, the IRT is a creature of the Intellectual Property Constituency (IPC) and it is almost surely going to put trademark concerns first, regardless of the merits of the ICA’s arguments. Also, ICA made it politely clear that while we appreciated the invitation being present for one day was hardly the same as having a full-time seat at the table, especially when they went into closed session to write their final report.
The main focus of ICA’s presentation was our critique of the proposed Uniform Rapid Suspension (URS), to wit:
• Even according to WIPO, it would displace a “significant majority” of disputes that now go to the UDRP.
• Extreme low cost of filing per name ($1-2 in large batches) invites abuse and does not support adequate review of complaints
• Inadequate penalties to discourage complainant abuse
• Permits suspension of a domain absent any infringing use
• Likely to be made applicable to .com and other incumbent gTLDs within a few years after being adopted for new gTLDs, changing the fundamental rules of the game after major investments have been made in domain portfolios
• Procedurally, the IRT allows trademark interests to address their concerns with the operation of the current UDRP while registrant problems go unaddressed
Both during our presentation and at other points in the day various members of the IRT:
• Conceded it was their intent that the URS largely displace the UDRP, and hoped it would be made applicable to .com and other incumbent gTLDs ASAP
• Admitted that the URS was more “draconian” than the UDRP, in that suspension of a domain would immediately deprive the registrant of income
• Did not argue with the proposition that UDRP reform was needed but asserted that it would take too long to get agreement within the ICANN process.
ICA made clear that it was ready to constructively engage on UDRP reform and work with trademark holders to develop more expeditious and less expensive means of addressing the approximately one-third of UDRP complaints that now go to default judgment – so long as that occurs within a process where expert counsel can propose our own reforms to meet registrant concerns with the present UDRP.
The proposed URS is a very fundamental issue for domain registrants as it would deprive them of the procedural and substantive due process rights they are now afforded by the UDRP. It would also sever DNS policy from trademark law by permitting a domain name to be suspended even where there has been no infringing use of the domain – this is not legal rights protection in the DNS but creation of an entirely new right. Nonetheless, ICANN will likely want to satisfy the IRT to some extent because they don’t want further delay of the initial application period for new gTLDs, which has already been pushed back to the first quarter of 2010 – and they also don’t trademark interests raising loud protests while the U.S. considers the future of its ICANN oversight role under the soon expiring Joint project Agreement (JPA).
So the ICA is likely to remain intensely engaged on the matter of the URS. We will certainly continue to direct attention toward the comment letter (http://forum.icann.org/lists/irt-draft-report/msg00033.html) filed with the IRT on May 6th by the National Arbitration Forum, the only U.S.-based URDP arbitrator. The NAF position is consistent with the ICA’s view that we need thoughtful UDRP reform that addresses the concerns of all parties, not a URS conceived by trademark interests that will substantially replace the UDRP. NAF’s letter states:
The URSS is supposed to deal with “abusive uses of trademarks where there is no genuine question as to the infringing or abusive use of a mark in a domain name.” However, this is exactly the purpose of the UDRP. If the IRT reads the comments from the drafters of the UDRP, and looks at the items listed in UDRP Paragraph 4(c), in particular, it’s clear that the UDRP was not designed to deal with any situation where a Respondent might possibly have a claim to the domain name. Complainants have pushed, and Panelists have taken the opportunity, over time, to broaden the scope of the UDRP, but it started out as a mechanism only for clear cut cases of cybersquatting.
It isn’t surprising that the URSS is appealing to many in that it purports to bring the UDRP back to its roots. The URSS has all the earmarks of what the UDRP stood for at its inception: quick, cheap dispute resolution of “easy” cases. If the UDRP has strayed so far from its roots that the IRT is proposing it be scrapped in favor of a more streamlined model (and there are easily places the UDRP could be streamlined), perhaps it’s time to take another look at the UDRP, rather than providing a new process that has not been vetted and discussed by the Internet community as a whole. The URSS, from the standpoint of an experienced Provider, is unlikely to meet the needs of the Internet community as a whole in any way that the URDP cannot.(Emphasis added)
While the URS is the most pressing IRT proposal for the ICA it is by no means the only one of concern or interest. We submitted a summary of our overall position to the IRT several days before the meeting (below). One item of particular note: It became clear during the IRT meeting that the operational aspects of the proposed IP Clearinghouse are in some flux. ICA made clear that our non-objection to the concept was based upon it being operated as an accurate, open and publicly accessible database that would assist registrants in avoiding unintentional infringement, but that would in no way have any conclusive determinative impact if a complaint was filed against a particular domain.
I. Starting Point: ICA position on Rights Protection submitted on V. 1 & 2 of Draft Applicant Guidebook – “Strong, cost-effective, and readily implemented protections for rights holders should be established but they must be limited to enforcing their rights under existing law and not be premised upon the creation of broader rights by ICANN fiat. It is for this reason that we object to creation of a reserve list of trademark names as this would provide rights protections beyond the geographic and relevant marketplace limitations of trademark law. We also object to the imposition of any new rights or procedures that would supplant or supplement the UDRP absent extensive consideration of such proposals in a process that ensures that registrant concerns about current UDRP enforcement trends are heard.”
II. Inadequate foundation for IRT premise that underlies second level recommendations: “Cybersquatting problem…is already insidious and enormous in scale…which will continue to spiral out of control with the introduction…of new gTLDs”. Just as ICANN has failed to provide comprehensive economic study by impartial experts to fully justify rollout of unlimited new gTLDs, we are not aware of comprehensive objective research that documents current extent of cybersquatting and attendant economic harm to trademark owners. Further, existing data indicates that problem is largely confined to .com and other major incumbent gTLDs and is negligible at newer gTLDs. Additional factors, such as lack of significant type-in traffic and declining PPC revenues, would also militate against actualization of substantial harm at new gTLDs.
III. ICA membership perspective on new GTLDs generally – Professional domain name investment and development community, while recognizing need for orderly DNS expansion as well as enhanced competition at the top level, has not pressed for unlimited new gTLDs; is skeptical about market demand for domains at general purpose new gTLDs (as opposed to community, corporate, and organization-specific) based upon recent experience with other recently introduced gTLDs; questions ICANN’s administrative capacity to adequately vet large volumes of simultaneous applications; and is concerned that significant problems/failure may impose new economic costs on registrants, divert ICANN resources and diminish its independence, and usher in new second level “solutions” that substantially diminish registrant due process rights. Our basic premise is that any new rights protection measures implemented for new gTLDs will migrate to incumbent gTLDs in short order, so we must evaluate second level proposals against legal risks they may retroactively impose on existing domain portfolios.
IV. Process concern about IRT second level recommendations – UDRP is approaching 10th anniversary; WIPO program in October ‘09 will review. Any new rights or procedures that supplant or supplement the UDRP should be considered through an open, transparent, deliberative and balanced ICANN process that includes all stakeholders. They should not be implemented on a hurried basis within new gTLD rollout process, particularly since opening of initial application period now appears unlikely prior to first quarter 2010 and actual launch of any new gTLD appears more than a year away, or longer.
V. Specific concerns about Uniform Rapid Suspension (URS) proposal –
• Would appear to largely displace UDRP – WIPO April 3rd letter to ICANN noted that for its quite similar Expedited Suspension Mechanism (ESM) the narrower variable, limited to domain names that were identical (excluding confusingly similar, typo-squatted names) to trademarks would nonetheless capture “a significant majority of UDRP disputed domain names”. WIPO also questioned whether an ESM service provider could decide a “confusingly similar” claim on an expedited basis
• Extreme low cost of complaint ($1-2 per domain in large batches) could encourage abuse and provides grossly inadequate resources for even cursory review by examiner
• Penalty for complainant abuse (one year bar from URS use) is wholly inadequate to discourage excesses. Sanctions should include compensation (assured by an adequate bond requirement) to registrant for lost income, plus stiff punitive fines. Further, there appears to be no objective criteria for what would constitute an “abusive complaint”.
• We question whether difference between “preponderance of the evidence” and “clear and convincing evidence” will be meaningful in practice, especially within an expedited system.
• The bad faith registration or use standard raises the possibility that an inactive domain can be suspended despite lack of any actual harm, or that an active domain can be suspended without any meaningful examination of its actual use.
• A registrant who lacks constant access to e-mail or is otherwise out of communication (e.g., extended travel) may not receive timely notice prior to domain suspension.
• If not an incumbent UDRP arbitrator, then what entity will provide credible URS examination service? And will it publish URS determinations for community review?
• Despite concerns about URS, we are willing to work with trademark community to explore development of an expedited, strictly objective means for addressing the one-third of UDRP cases that now go to default judgment. There also may be a possibility of including “confusingly similar” names within an expedited approach if a carefully circumscribed and strictly objective test can be established for determining the scope of that category. Any such measures should be developed within the context of broader UDRP review.
VI. Globally Protected Marks List (GPML) – While we are appreciative of IRT efforts to carefully circumscribe eligibility for trademark inclusion, we are concerned that restrictions that primarily benefit Western multinationals will prove politically unsustainable, especially if U.S. oversight is replaced post-current JPA by the “Internet G-12” concept advocated by European Commission, or if the ITU exerts greater influence. If the GPML list expands per lobbying pressure, and the GAC achieves its goal of achieving trademark-like protections for geo and “names of national significance” at the second level, the scope of prohibited or at-risk second level names at new gTLDs may be so broad as to render them commercially non-viable, fiscally unstable, and generally noncompetitive. It is also unclear how the GPML would function in regard to vast numbers of generic words and terms used as trademarks.
VII. Other IRT Proposals and Concepts
• No objection to IP Clearinghouse and associated Watch and IP Claims Services; these provide potential benefits to both trademark owners and registrants
• No objection to proposed Standard Sunrise Registration Process
• No objection to post-delegation dispute mechanism, but criteria based upon domain name registrations should focus on actual use and associated, documented harm
• Given the long and controversial history of WHOIS policy initiatives within ICANN, we need much more information as to the potential effects, including registrant liability and legitimate privacy expectations (including protection of registrant data against misuse by spammers, phishers, identity thieves, and other bad actors), of any ICANN mandate that comprehensive WHOIS data be stored at the registry rather than the registrar level. A comprehensive analysis of the functioning of the Thick WHOIS model at .info and .biz should be part of any further development work on this concept.
• While we appreciate the IRT’s view that its separate proposals are an integrated “tapestry”, most would be effective on stand-alone basis. We urge the IRT to focus on achieving top level protections in the near-term while transferring second level issues to a more transparent and inclusive process that begins with a comprehensive review of the UDRP’s evolution and present functioning; and is based upon well-documented, neutral party analysis of the present extent of trademark infringement and associated economic and consumer harms in incumbent gTLDs and ccTLDs as well as whether such problems would likely arise in much newer and smaller gTLDs. ICA stands ready to participate in and make a cooperative and constructive contribution to any such effort at balanced UDRP reform.