Prospects of Domain Name Dispute Resolution under the UDRP in Ukraine
Olena A. Vardamatska
The e-commerce era creates not only online opportunities, but also online abuse, giving rise to money losses of the abused and illegitimate profit gained by the abusers. Domain names serve as a meeting point for consumers and business in the Internet, thus being a kind of electronic place of business. This quasi intangible e-asset of the company is the evident target for violation, e.g. cybersquatting. Usually, the known personal names and trademarks are the objects of abuse of a domain name. Besides, cybersquatters harm legitimate interests in commercial and trade names, geographical indications, international non-proprietary names of pharmaceutical substances as well as interests in the names of international organizations.
Luckily, the border-free Internet allows legal mechanisms to intervene and fight the abuses. The legal security for investments is one of the basic needs of further growth of e-commerce. The ICANN1 and WIPO are heavily engaged in perfecting existing procedures of domain names protection and elaborating new ones so as to ensure online protection for e-business.
On a menu, international instruments
One of the business attractions of e-commerce is the relatively low cost of establishing and conducting business activities. However, it is a pitfall when legal protection is required. Costly legal procedures fall out of the moderate cost business scheme and are not practical for small and medium e-businesses. Considering the “presence” of e-companies in multiple jurisdictions, the legal costs grow dramatically to get protection in all the relevant states. Thus, the focus of this publication is on the actual access to the legal protection and safety of e-projects rather than on the existence of the relevant legal mechanisms.
For e-commerce the natural legal solution would be the one fastest in terms of time and requiring the minimal efforts in terms of costs. The litigation in national courts does not meet these criteria, does it? The best mechanisms that currently exist for resolution of domain disputes are national or international arbitrages, which allow online application and consideration of cases without the presence of the parties.
ICANN’s main course
One of the most effective international mechanisms for trademark protection in domain names is the dispute resolution procedure elaborated by the ICANN (the ICANN DRP). It is currently applicable to all generic top level domains (the gTLDs), such as .asia, .nyc, about 70(!) country code top-level domains (the ccTLDs), including .pl, .fr, .au, and some legacy top level domains (often also referred to as generic ones), such as .com, .net, .org, etc... Notably, the Ukraine’s ccTLD .ua is not covered by the ICANN DRP.
The procedure of the ICANN DRP is regulated by a number of instruments, including Uniform Domain Name Dispute Resolution Policy2 and Rules for Uniform Domain Name Dispute Resolution Policy3 (the UDRP). The grounds for initiation of proceedings against a registered domain name are the following: the conflicting domain name is identical or confusingly similar to a trade or service mark of the complainant, (ii) the holder of the domain name registration (called the registrant) has no rights or legitimate interests to the disputed domain name, and (iii) the domain name has been registered and is being used by the registrant in bad faith. The complainant may request either the cancellation of the domain name or its transfer (to become its new registrant). No other remedies are available under the ICANN DRP. Besides, the ICANN enforces the decisions of national courts or administrative authorities taken upon consideration of domain name disputes.
Only five institutions are authorized by the ICANN to consider disputes under the UDRP: the Arbitration Center for Internet Disputes of the Czech Arbitration Court, WIPO Arbitration and Mediation Center, Asian Domain Name Dispute Resolution Centre, National Arbitration Forum and the Arab Center for Dispute Resolution4. In addition to the UDRP the rules of the relevant institution must be followed by the parties of the domain name dispute.
As a result of the adversary process, the dispute is resolved by the relevant institution with no physical presence of the parties. The decision on the dispute is normally issued within 19 days from the deadline for the submission of the response to the complaint by the registrant of the disputed domain name. As a rule, it is published in full online (in exceptional cases the decisions are publicly available only in part). Upon issuance of the decision, the waiting period of 10 days prior to the enforcement of this decision is granted for the initiation of the court proceeding, which will consider the dispute ab ovo. Importantly, the ICANN DRP does not provide for the possibility of appealing against the decision. Practically, only national court litigation may be used in order to have multi-instance consideration of the issue.
To sum up, the ICANN DRP is a well-elaborated, clear and prompt mechanism of international arbitrage allowing the trademark holder to effectively oppose the abuse of the trademark in domain names. The practice developed by applying this procedure and the challenges to the IP rights resulting from the informational technologies led to establishment by the WIPO of the new IPRs prevention and protection mechanisms for the TLDs newly assigned by the ICANN.
WIPO’s varieties
Starting from the 1990’s WIPO has produced a number of studies on domain name conflicts with IP rights. It has been called upon to assist rights holders to prevent adverse effect on their IP rights by the new TLDs. It succeeded to promptly elaborate a number of solutions, which are quite balanced taking into account the inherent conflict between security and freedom of the Internet and the economic impact of this conflict. Among the new solutions are the legal rights objection (the LRO), trademark clearinghouse, uniform rapid suspension system and post-delegation dispute resolution procedure.
The LRO allows trade holders and intergovernmental organizations to object to a third party’s application for a new TLD. It is a dispute resolution procedure through which it is decided if an applicant’s contemplated use of the disputed TLD may infringe the existing trademark (as well as IGO name or acronym). The WIPO Arbitration and Mediation Center is the only authorized institution performing the LRO dispute resolution, which has already resolved about 70 LROs.
The trademark clearinghouse is a centralized repository (having ICANN credentials) of data on trade and ser- vice marks registered or otherwise protected. Considering that the trade or service mark holders submit the registration information to the trademark clearinghouse on a paid basis, the registry is not comprehensive. It is a natural result for an innovative activity not known by all and every rights holder. We believe that its popularity and, respectively, submitted data would increase the pro rata awareness of trademark holders.
The domain name registrars can use this registry as a source of information on protected IP rights. The open online IP rights state registries as well as the WIPO register of the international trade and service mark registrations shall be consulted as well. Besides, it is one of the tools to be used by registrars to verify domain name applications of the sunrise registration periods5. The ICANN DRP can be an over-complicated procedure for certain cases. Thus, a lighter version has been developed to cover such disputes. The uniform rapid suspension system (the RSS) is a useful tool for more evident and “simple” violations of the IP rights in the domain names, than those submitted to the ICANN DPR. At the same time, the complainants should put more efforts on substantiation of their position. The registrants are also vested with a wider range of defense tools under the RSS. There is only one remedy for the complainant, namely the temporary suspension of a domain name for the rest of its registration period. A novation lies in the self-protection of the RSS against undue complainants: if the complaint is found to be “abusive”, the complainant may be prohibited to use RSS for some time.
The ICANN DRP and RSS are used against registrants, while the registrar’s liability may be applicable in extremely rare occasions. However, the registrants’ illegal actions can result from the undue operations of the registrars. The post-delegation dispute resolution procedure (the PDDRP) has been inaugurated to punish such commercial actions. The aim of this procedure is aimed to allow trademark holder to address certain cases when a registrar’s operations or use of a domain name results in or supports IP rights infringement.
There are several types of PDDRP: the Trademark PDDRP, the Registration Restrictions PDDRP, and the Public Interest Commitments PDDRP. Trademark holders will have to prove the registrar’s conduct reflecting its bad-faith intent to profit from the sale of domain names that infringe IP rights. The PDDRP clearly defines the exclusions of registrars from liability. For example, a registrar is not liable only because the infringing domain names are in its registry. The WIPO Arbitration and Mediation Center has been mandated to consider the Trademark PDDRP.
Thus, the WIPO and ICANN demonstrate a truly attentive and sophisticated approach to online protection of the IP rights. The challenges of the new technologies are carefully confronted. Besides, the existing mechanisms of IP rights protection will be constantly modified based on the practice of their application and due to technological progress.
National plates
On a national level domain name disputes are often considered by state courts or sometimes by national arbitration. For instance, in Belgium and Italy the administrators of ccTLDs have mandated the Chamber of National and International Arbitration of Milan and Belgian Center for Mediation and Arbitration to resolve domain name disputes. The disputes are considered without the physical presence of the parties.
The most telling example of protection against cybersquatters are US statutes. The world’s biggest IT hub and economically huge IT sector requires strong legal protection. US federal laws are adopted quite promptly to defend IP rights against domain registration abuse. Initially, the Federal Trademark Dilution Act was enacted in 1995 and introduced the legal framework for the judicial protection against domain name abuses by registrants. However, it appeared that several types of abuse were not covered by this act. Thus, in 1999 the Anti-cybersquatting Consumer Protection Act (ACPA) came into force.
It established grounds for action against bad faith registering, trafficking in, or using a domain name, which is either confusingly similar to or dilutive of a trademark or personal name. Trafficking is defined broadly by the ACPA to include sales, purchases, loans, pledges, licenses, exchanges of currency, and any other transfer for consideration or receipt in exchange for consideration
It lists examples of bad faith intent on the part of a registrant, including (i) submission of misleading false contact information by registrants when applying for the domain name registration; or (ii) registration or acquisition of multiple domain names that are identical or confusingly similar to marks of others. The fair use exception from the IP rights protection is equally applicable to the domain name registration, thus, a bona fide noncommercial use of the trade or service mark is allowed. The defendant is not only the registrant, but also its authorized licensee.
The domain name registrar, administrator or other domain name authority is liable for injunctive or monetary relief in the exceptional cases (bad faith or reckless disregard).
If the claimant fails to find out information about the registrant, the former can file an in rem civil action against a domain name in the judicial district where the domain name registrar, domain name registry, or other domain name authority that registered or assigned the domain name is located. This option is rarely used, because the ICANN DRP gives the same possibility for trade or service mark holders.
We find the option of the in rem jurisdiction to be an extremely effective legal mechanism to assure cooperation by the registrars and administrators of domains. It allows the rights holder to receive from the registrar or administrator accurate information about the registrant of the domain name, whose contact information is not available in the Whois database. We support the use of this approach by the Ukrainian legislator in future laws regulating domain name registration disputes, considering that cybersquatters of Ukrainian domain names usually hide their contact information from the Whois database.
US rights holders can choose between international arbitration and national litigation. The mentioned ICANN DRP and WIPO mechanisms are less costly and time consuming. However, national claims may be chosen because they offer more remedies than the cancellation or transfer of the disputed domain name. Besides, a court ruling will result in a final resolution of the matter, while the decision of the international arbitrage may be amended at virtually any time by a national court or other competent authority. Additionally, the monetary liability of the abusers has a prevention impact on potential cybersquatters.
From the lawyers’ perspective the national arbitration of domain name registration disputes is a less attractive exercise than court action under well-developed national law. However, for e-commerce actors its only weakness is the possibility of initiation of court proceedings by another party after the national arbitrage body has issued its decision.
House favorites, long awaited Ukrainian solutions
The potential of Ukraine’s IT industry is a widely known fact. The rapid growth of IT business in Ukraine over the past decade is an impressive success story. Nevertheless, e-commerce lacks an effective procedure for resolving domain name registration disputes in Ukraine. This is one of many factors preventing from boosting R&D centers at international companies and development of an innovative economy in Ukraine. The years spent by Google fighting for the “google.ua” domain name is a vivid demonstration for foreign e-companies of how things really are here.
As of 15 January 2015, 633,805 private domain names were registered in Ukraine, including 17,918 .ua domains. The only way legally protect domain name registration disputes is national litigation, except for “.Óêð” domains, where national arbitration has become available recently. Neither the ICANN DRP nor RSS are applicable to Ukraine's ccTLD ”.ua” and, respective Ukrainian registrants.
Nevertheless, Ukrainian companies do participate in ICANN DRP disputes. For example, in 2010 the WIPO Arbitration and Mediation Center considered 2 disputes with Ukrainian complainants and 34 with Ukrainian respondents. By comparison, in the same year Poland had 0 complainants (7 respondents) and France had 320 complainants (94 respondents).6
As to non-judicial forms of dispute resolution, we believe that mediation and negotiations could be a due solution. However, from the practical standpoint it is not likely that they would be used widely in Ukraine. The consideration of domain name disputes by a state body within the framework of an administrative procedure is unlikely to be a good option either. It is most likely to create conflicts about the competence and membership of such a state body and fail to ensure the expected results. For example, cybersquatting is a form of unfair competition violating the consumers’ rights. However, Ukrainian anntitrust law is too outdated if compared to US or EU regulations, so it does not include possibilities for up-to-date consumer protection. Thus, there is no use to give powers to the AMCU on domain name registration disputes before the relevant Ukrainian laws are substantially modified.
The ICANN DRP can be applied to Ukrainian domain names if the administrator of the .ua domain, on its own initiative, follows the relevant procedure established by the ICANN (Principles for the Delegation and Administration of the Country Code Top Level Domains7). As a result, the .ua and its second-level domain names (e.g. com.ua, kyiv.ua) will be subject to the ICANN DRP.
Another option is to have the UDRP incorporated into the rules of procedure of Ukrainian national arbitration mandated to consider domain name disputes where Ukrainian residents are respondents. The second option has, in fact, been already applied for “.Óêð” domains. However, none of the proposed options will work properly without changes to current Ukrainian legislation. In particular, domain name registration disputes must be expressly submitted to the jurisdiction of national arbitrations.
