Domain Spotlight:

Domain Name Arbitration

Gerald M. Levine is an attorney practicing in New York City. He began his career with a major New York law firm before founding his own firm in 1992. He represents clients in the areas of Intellectual Property rights and management, Internet and Cyberspace issues, and domain name disputes and cybersquatting. He is on the panel of neutral arbitrators for the American Arbitration Association for commercial and IP disputes; the Financial Industry Regulatory Authority (FINRA), and a mediator for the Commercial Division of the New York Supreme Court, New York County. He was formerly on the panel of mediators at the United States District Court for the Southern District of New York. He has published numerous articles on commercial and online arbitration, trademark and cybersquatting.

He is the author of a treatise Domain Name Arbitration, A Practical Guide to Asserting and Defending Claims of Cybersquatting Under the Uniform Domain Name Dispute Resolution Policy (2nd Edition 2019). The book is very detailed and covers the spectrum of domain name disputes in close to 700 pages. It’s actually written in a way that is quite readable by the average person (that person being me). It is a required tool with its place on the bookshelf of any serious domainer.

Mike: Gerald, you have a very impressive background. Was it your background in intellectual property that led you to Internet and domain name issues or was there another path or personal interest that brought you to cover this area?

Gerald: I have a litigation background, initially involving commercial real estate disputes before expanding into intellectual property issues in the early 2000s. The Practical Guide you mentioned began life around 2005 in the form of a brief memorandum to a colleague retained to advise on a trademark infringement issue involving several domain names. That experience triggered my interest in domain name disputes, and from that seed grew the First Edition of the treatise which was published in 2015. Along the way I represented some trademark and investor clients and one in particular who I have represented in a number of proceedings under the Uniform Domain Name Dispute Resolution Policy (UDRP).

Mike: As you see it, is the UDRP a fair and equitable process for parties on both sides of a domain dispute?

Gerald: The short answer is that it is, but this should be seen in the fuller picture of trademark infringement. The UDRP was designed to protect owners’ statutory rights to exclusive use of their trademarks from abusive registrations of domain names in the then new virtual marketplace of the Internet. The UDRP has become (really, always was since its implementation in 1999) the forum of choice to combat cybersquatting, but crafters also recognized that not all domain names identical or confusingly similar to marks are unlawful. So we saw that as the jurisprudence developed, it also codified space for domain name holders. The tension is generally resolved in a well-balanced decision. Where there are genuine issues the UDRP has proved to be a fair and equitable process; and where there has been overreaching of mark owners there has been a steady increase over the years in panelists’ willingness to sanction them for overreaching their statutory rights.

Mike: Are their inconsistencies in UDRP decisions? If so, why? Do any examples come to mind?

Gerald: We have seen some unfortunate decisions along the way which I suppose qualify as inconsistencies where panelists have either misapplied or ignored the law or have misinterpreted the facts. Of course, getting it wrong happens in courts also. But, there is not inconsistency on the larger scale, for good reason I think. The UDRP has been operating for twenty years and there has developed a mature jurisprudence which (like all law) is intended to protect against “inconsistencies” by fostering reliability and consistency in the application of agreed upon principles. The first UDRP case was filed in 1999 and decided in January 2000. Since then, there have been over 60,000 decisions and relatively few have truly been wrongly decided, but where they have the loser can challenge the award in a court of competent jurisdiction.

Mike: “Bad Faith” is a cornerstone of URDP and its decisions. The term seems as if it would be difficult to clearly define and apply universally. How is this challenge managed in the process?

Gerald: This is a big issue, obviously. Proof of “bad faith” registration and use is the ultimate evidentiary test of abusive conduct. I suppose, in a sense, you could call the term “spongy,” but in being so it is capable of describing a wide range of abusive acts applicable to either party, not just of respondents infringing complainant’s rights but also of complainants overreaching their rights in an attempt to deprive registered domain name holders of valuable property rights. The concept of bad faith is defined in by a party’s conduct. What is the respondent doing with the domain name. It can defend itself by offering rebuttal proof of rights or legitimate interests (Paragraph 4(c)(i-iii), or the complainant fails to proof abusive conduct described in Paragraph 4(b)(i-iv). In other words, the condemnation of bad faith is assessed on the facts alleged and proved. It exists as a logical conclusion drawn from the submitted facts; it cannot be based on surmise or conjecture, but depending on the trustworthiness of evidence it can be a logical inference from the facts. I should add one further thought which is that if there is a defense the domain name registrant should argue its case. While default is not automatically lethal, it does give complainant an advantage.

Mike: While a word or term may be considered trademarked in one country, it may not be in another country. Do country specific TLDs play into those decisions vs the more global dot com?

Gerald: I sense two different questions here. It is true that trademarks are territorial in nature and owner’s rights are limited to the jurisdiction which recognizes them as such. But the UDRP was crafted to transcend territoriality by granting standing and remedies to trademark owners—regardless of the origin of their rights, and regardless too of the strength or weakness of their marks. As long as they have a right anywhere owner can challenge the lawfulness of domain name registrations identical or confusingly similar to those marks. The question to be answered in these UDRP proceedings is whether the domain name was registered intentionally to take advantage of a trademark’s reputation, which may be difficult to prove if the mark owner is on a different continent than the domain name holder.

The question about country specific TLDs raises a different issue. If by “country specific TLDs” you mean country code extensions, they of course are regulated by a set of requirements different from the UDRP, most particularly in their disjunctive requirement for proving bad faith, but also some dispute resolution policies can also extend the protection to names and symbols that are not strictly trademarks, such as trade names. With the UDRP, complainants have to prove they have trademark rights and beyond that that the domain names was registered in bad faith AND is being used in bad faith. The Anticybersquatting Consumer Protection Act (ACPA), incidentally is disjunctive.

Mike: As far as a legal action, is a UDRP decision final? Can a losing party appeal or take the case to court?

Gerald: My reference to the ACPA is apropos because losers can take their challenge to a district court in the U.S. (assuming personal jurisdiction). So the answer is that the UDRP decision is “appealable”, although it is rare. Actually, challenging a UDRP award is not framed as an appeal but as a de novo action in which the plaintiff (either complainant or respondent) is seeking a declaratory judgment that the domain name was either lawfully registered or that it was not. Unfortunately, the cost of such an action can be discouragingly expensive, although depending on the facts and proof the prevailing party may be entitled to statutory damages and attorney’s fees for reverse domain name hijacking.

Mike: I’ve read about several celebrity names that have been awarded to the celebrity if the names were intended to be sold for profit, but not if a fan page was planned for the use. Are there any other types of famous or noteworthy cases to speak of?

Gerald: In the celebrity area, the most noteworthy case of a celebrity losing a UDRP came in a 2-1 decision (holding a view criticized by later panelists, Bruce Springsteen v. Jeff Burgar and Bruce Springsteen Club, D2000-1532 (WIPO January 25, 2001)) and subsequently repudiated. Where the site is active the question turns on whether the intent to honor the celebrity is genuine. Registrants allegedly acquiring domain names in good faith for future use can only succeed on evidence of demonstrable preparations for its noninfringing use. Sports and cultural celebrities (writers, performers, etc.) own unregistered marks and will generally prevail on their claims of cybersquatting. As to the question of other noteworthy decisions, there are many that are frequently cited not only for bad versus good faith registration, but also for reverse domain name hijacking, that have precedential weight in assessing and determining later cases.

Mike: Does a trademark guarantee a win in a decision or are there other factors to consider?

Gerald: The short answer is, as I’ve already indicated, many factors that go into deciding the merits of claims. Keep in mind that 90% of cybersquatting claims are truly indefensible and rarely defended. Your question is more important for the 10% of claims that raise genuine issues of disputed facts. A good percentage of complaints are actually denied. The 10% comprises of two groups: genuine issues of material facts that Panels have to assess and claims that have absolutely no merit and are generally sanctioned for reverse domain name hijacking. So the answer is that there are many factors Panels consider in assessing conduct. Some of these factors are built into the UDRP as circumstances of defense (Paragraph 4(c)) and circumstances of abusive conduct in Paragraph 4(b). Some factors Panels take into account to determine cybersquatting include the strength or weakness of the mark, the composition and commonness of words, the use of letters, dictionary words, and descriptive phrases, the timing of the respective rights, the reputation of the mark at the time the domain name was registered, the location of the parties (to assess whether the respondent can plausibly deny knowledge of the mark), and so on for an extended menu of factors.

Mike: What advice do you have for domain investors to avoid falling into any issues with UDRP? And what do you recommend an individual do if they are served with a complaint?

Gerald: I should emphasize for reassurance of your readers that investing in, creating an inventory of, and reselling domain names is a lawful category of economic activity recognized in the jurisprudence as distinct from cybersquatting. This has been consistently affirmed. In both tight and obvious cases, respondents should prevail if complainant fails to satisfy its burden of proof. Respondent does not have to disprove allegations of bad faith. If a domain name holder is served with a complaint for cybersquatting and the complaint lacks merit he/she/it should certainly defend itself, and preferably seek out able counsel versed in UDRP jurisprudence with the skill to marshal the facts and evidence in support of an award denying the complaint. This does not mean that default in responding is an automatic win for complainant; it is not, but the stronger the mark the more likely cybersquatting will be found absent persuasive evidence of good faith. The weaker the mark the more likely rights/legitimate interests or insufficiency of evidence of bad faith will be found, absent persuasive evidence that supports the claim for abusive registration.

Mike: Is there anything you expect to change in the future with decisions or complexities that will be introduced?

Gerald: An ICANN Working Group is currently examining rights protection mechanisms implemented in 2013 in connection with the introduction of over a thousand new TLDs. The Working Group is not scheduled to begin examining the UDRP until later this year. When proposals start coming in there will undoubtedly be one from the trademark constituency for replacement of the “and” for an “or” in the phrase “bad faith registration and [bad faith] use.” ICANN rejected this proposal to change the DNA of the UDRP in 1999. The likelihood of its succeeding this time is remote (in my opinion). I don’t expect other “complexities” or radical changes to the UDRP. It is generally agreed among contesting parties that the UDRP has performed well and is a fair and balanced process and it should not be disturbed.

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