ICA Urges ICANN to Undertake Independent Third Party Review of the Current State of Internet Trademark Law and the UDRP

On the eve of its Board retreat in Norway to consider final matters to be resolved before the opening of the application window for new GTLDs, the ICA communicated with the Chairman and the CEO of ICANN.

Our September 23rd letter reiterated two prior ICA positions:

• Refrain from reopening the trademark protections for new gTLDs that have been put in place following a long and arduous consensus process.

• Address any remaining concerns regarding trademark abuse at all gTLDs, both new and incumbent, through a comprehensive and balanced policy development process (PDP) for UDRP reform.

Added to them was this new suggestion:

• Solicit bids for an expert and impartial third party to undertake a review of the current state of Internet trademark protections in all major jurisdictions; as well as of the consistency of UDRP decisions within, and the uniformity of UDRP decisions among, all ICANN-accredited UDRP providers, with the aim of having such review completed in advance of the undertaking of a UDRP PDP.

At its Norway retreat the ICANN Board made only marginal changes in trademark protections for new gTLDs.

Its adopted September 25th resolution on this matter states:

2.6 Trademark Protection

Substantive Evaluation: The Applicant Guidebook will provide a clear description of "substantive evaluation" at registration, and retain the requirement for at least substantive review of marks to warrant protection under sunrise services and utilization of the URS, both of which provide a specific benefit to trademark holders. Specifically, evaluation, whether at registration or by a validation service provider, is required on absolute grounds AND use of the mark.

Substantive evaluation upon trademark registration has essentially three requirements: (i) evaluation on absolute grounds – to ensure that the applied for mark can in fact serve as a trademark; (ii) evaluation on relative grounds – to determine if previously filed marks preclude the registration; and (iii) evaluation of use – to ensure that the applied for mark is in current use.

Substantive review by Trademark Clearinghouse validation service provider shall require: (i) evaluation on absolute grounds; and (ii) evaluation of use.
URS timing: In response to public comment, change the time to respond to a complaint from 20 days to 14 days, with one opportunity for an extension of seven days if there is a good faith basis for such an extension.

The Board notes that the suggestion for a globally-protected marks list (GPML) was not adopted by the Board (in 2009), including for the following reasons: it is difficult to develop objective global standards for determining which marks would be included on such a GPML, such a list arguably would create new rights not based in law for those trademark holders, and it would create only marginal benefits because it would apply only to a small number of names and only for identical matches of those names.

The Board recognizes that additional policy development through the GNSO could lead to further mechanisms for enhanced protection for trademarks. (Emphasis added) (http://icann.org/en/minutes/resolutions-25sep10-en.htm)

The main decision of import for registrants is that the standard time period for responding to a Uniform Rapid Suspension (URS) proceeding has been shortened from 20 to 14 days – although an additional 7 day extension can be provided for good faith requests. While we would have strongly  preferred keeping the standard response time at 20 days, if URS providers honor reasonable good faith requests for a one-week extension this modification should not prove  unfairly disadvantageous to registrants.

The last sentence in the resolution refers to potential further GNSO action to enhance trademark protection. This could well occur in the context of comprehensive UDRP reform rather than just being targeted at new gTLDs.

ICA believes that the trademark policy for domains reflected in the UDRP must be consistent with overall Internet trademark law as it evolves through major jurisdiction court decisions. As the letter notes, we now live in a wired world where “Google‘s sale of trademarks as search keywords to competitors of the rights holder has been found to be a lawful on both sides of the Atlantic”. There cannot be an intelligent discussion of rights protections in the DNS without a thorough and impartial review of where Internet trademark rights now stand, nor can the UDRP be reformed without understanding how it is actually operating today within and among the separate UDRP providers.

ICA will continue to make these important points at the December ICANN meeting in Cartagena, and beyond.

The full text of our letter follows —

September 23, 2010

By E-Mail

Peter Dengate-Thrush, Chairman of the Board
Rod Beckstrom, President & CEO
Internet Corporation for Assigned Names and Numbers (ICANN)
4676 Admiralty Way, Suite 330 
Marina del Rey, CA 90292-6601

Dear Chairman Thrush and President Beckstrom:

I am writing on behalf of the domain name investors and developers of the Internet Commerce Association (ICA) in regard to matters that will be before the ICANN Board at its upcoming retreat on September 24-25. It is our understanding that the primary agenda item for this meeting will be a discussion of remaining issues in the Draft Applicant Guidebook (DAG) for new gTLDs, with an aim toward resolving these matters so that a proposed final Guidebook can be considered at the December ICANN meeting in Cartagena.

ICA urges the Board to take the following actions at its retreat:

• Refrain from reopening the trademark protections for new gTLDs that have been put in place following a long and arduous consensus process.

• Address any remaining concerns regarding trademark abuse at all gTLDs, both new and incumbent, through a comprehensive and balanced policy development process (PDP) for UDRP reform.

• Solicit bids for an expert and impartial third party to undertake a review of the current state of Internet trademark protections in all major jurisdictions; as well as of the consistency of UDRP decisions within, and the uniformity of UDRP decisions among, all ICANN-accredited UDRP providers, with the aim of having such review completed in advance of the undertaking of a UDRP PDP.

The remainder of this letter discusses each of these recommendations in more detail.

Trademark Protections Incorporated in DAGv4

As the Board is well aware, the additional trademark protections included in DAGv4 resulted from an extended process that included the IRT, STI-RT, and GNSO. The current protections were unanimously adopted by the GNSO and subsequently approved by the Board.

As we stated in our July 21st comment letter on Dagv4 (http://forum.icann.org/lists/4gtld-guide/msg00070.html):

The incorporation of the STI-RT recommendations in this DAG is a welcome conclusion to a divisive year-long debate over rights protections. Other than the addition of clearly incorporating the unanimous STI-RT recommendation that URS providers be placed under contract, these provisions should remain unchanged. Any further consideration of rights protections across the gTLD space should occur in the context of a balanced and comprehensive UDRP PDP.

We are not aware of any new information or developments since submitting that comment which would alter our view.

UDRP PDP

Throughout the debate on trademark protections for new gTLDs ICA has taken the position that rights holders, as well as both registrants and complainants, would be best served by a comprehensive and balanced review of the UDRP based upon ten years of experience, followed by consideration of potential reforms. We know of many other active participants within the ICANN community across a variety of constituencies who would support initiation of a UDRP PDP. We also note that the issue of addressing the UDRP has been on the Board’s agenda at several recent meetings but that time constraints have delayed its consideration, and we would urge the Board to initiate discussions of this matter as soon as possible..

In this regard, we would also note that the February 12, 2010 Initial Report of the Registration Abuse Policies Working group (RAPWG – available at http://icann.org/en/announcements/announcement-12feb10-en.htm ) made this recommendation:

The RAPWG recommends the initiation of a Policy Development Process by requesting an Issues Report to investigate the current state of the UDRP, and consider revisions to address cybersquatting if appropriate. This effort should consider:
• How the UDRP has addressed the problem of cybersquatting to date, and any insufficiencies/inequalities associated with the process.
• Whether the definition of cybersquatting inherent within the existing UDRP language needs to be reviewed or updated.

Our comment letter on this Report (http://forum.icann.org/lists/rap-initial-report/msg00007.html ) stated in part:

The IR recommends initiation of a Policy Development Process (PDP) and has requested an Issues Report on the current state of the UDRP, in order to consider appropriate revisions to address cybersquatting.

The ICA heartily agrees with the concept of initiating a PDP as regards the current state of the UDRP, but believes that the scope of the requested action is far too narrow. Throughout the past year, since the initiation of the debate regarding proper rights protections at new generic top level domains (gTLDs), ICA has consistently called for the initiation of a UDRP PDP to comprehensively review the state of the UDRP and to make recommendations based on the perspectives of both registrants and rights holders. We are extremely concerned that a PDP focusing only on cybersquatting from the perspective of complainants, and neglecting the other myriad problems afflicting the UDRP as currently administered, will result in one-sided policy recommendations.

We therefore call upon ICANN to initiate an Issues Report as predicate to a fully comprehensive PDP on reform of the UDRP that reviews and makes recommendations in regard to all aspects of its operation.

We believe that a comprehensive UDRP review should focus on such issues as:

• The need for clarity and consistency in UDRP decisions to best guide UDRP examiners regardless of which dispute provider they are associated with. There is a crying need for better consistency in the application of UDRP guidelines
to certain factual situations.  Ten years of allowing panelists to
reinterpret the UDRP at will has led to many panelists adopting
contradictory interpretations.  The unfortunate result is that the UDRP is now anything but uniform, and the clarity and certainty that a uniform set of guidelines is supposed to offer is missing.  The UDRP should not be allowed to continue as a lottery where the decision depends on which panelist is drawn.  The current
environment makes it very difficult for business people to determine
which uses of domains are permitted and which are not, as findings on
legitimate use vary widely between panelists.

• The overwhelming need to place all UDRP providers under binding contract with ICANN to better define the scope of their activities, to firmly limit the subject matter subject to individual providers’ Supplemental Rules, and to provide ICANN with effective enforcement mechanisms that include but are not limited to deaccreditation for defined contract breaches. As the IR observes (p.27), “ICANN apparently does not enter into contracts with its Approved UDRP Providers. This may present a number of issues. For example, in the absence of such contracts, it is unclear whether ICANN has the ability to review or assure general uniformity or procedural compliance.”

• Establishment of a “cure period” for minor, transient, and unintentional infringement caused by third party placement of PPC advertising links.

• More effective sanctions to deter reverse domain name hijacking.

• Establishment of an effective appeals process within the UDRP system.

• Means to better assure lack of bias and random selection of well qualified UDRP panelists.

While cybersquatting should definitely be included within the scope of a UDRP PDP, calling for a PDP that addresses cybersquatting is of little guidance as the entirety of the UDRP exists to address cybersquatting and to provide a low-cost administrative procedure for those who believe that their rights are being infringed or that a domain has been registered for an unlawful purpose or is being used in violation of applicable law or regulation. We do not believe it is possible to have a PDP that considers UDRP revisions that does not take into account the entire operation of the UDRP and its effect upon and treatment of registrants, as well as its impact on registries and registrars and its interface with existing relevant laws. A UDRP PDP that only proceeds from the perspective of complainants, and that does not adequately consider the rights of registrants and the need for a proper balancing of interests, is not acceptable and would be actively opposed by the ICA.

Expert and Impartial Review of the State of Internet Trademark Law and the Operation of the UDRP

In a recent article (http://www.circleid.com/posts/google_ebay_keywords_domains_icann/) I discussed ongoing trends in major trademark law court decisions in both the EU and US, and in particular that Google‘s sale of trademarks as search keywords to competitors of the rights holder has been found to be a lawful on both sides of the Atlantic.

That analysis made the following observation regarding the relationship between such judicial decisions, rights protections for new gTLDs, and the UDRP:

ICANN has a duty to keep contemporary judicial trends in mind as it considers rights protections for new gTLDs. The UDRP imposes far tougher rules on trademarks used for direct search domains than what’s in place for the exact same word employed by the identical consumer as a keyword for directed search. And the STI-RT recommendations adopted as rights protections for new gTLDs in DAGv4 go beyond the UDRP. Domain investors and developers have learned to abide with the UDRP and related laws and build profitable websites based on generic words and other non-infringing terms. But given that just about every dictionary word is trademarked for something, they also need a UDRP regime that is predictable and reasonably in sync with general trademark rules for e-commerce. Brand owners and their advocates, including WIPO, contend these tougher DAGv4 provisions are insufficient and are urging ICANN to reopen the trademark debate and adopt rights protections even more draconian than those recommended by the IRT last year. Their arguments and legal theories are joined at the hip with those recently rejected by European and American courts.

ICANN has a responsibility to uphold established trademark law in the DNS. But ICANN also has a responsibility to see that rights protections in the DNS are informed by and are consistent with an evolving legal landscape. Indeed, ICANN lacks any authority to establish DNS rights protections that are not firmly grounded in established law as ICANN has no legislative powers to promulgate new trademark policy. ICANN should also consider that draconian rights protections for the DNS would surely detract from the prospects that new gTLDs can deliver on innovative new models that benefit consumers.

The ICA therefore calls upon ICANN to consider retaining an impartial and expert third party to review the current state of trademark law on the Internet and the operation of the UDRP.

The undertaking of such an expert study is consistent with past ICANN practice, including two separate studies on the economic demand for new gTLDs as well as the recently announced retention of an Independent Expert to assist the Accountability and Transparency Review Team (ATRT).

At a minimum, such an expert third party should review and report on:

• Recent judicial trends in major jurisdictions regarding key Internet trademark issues, and the extent to which such decisions are or are not consistent with UDRP policy and practice.

• Key issues arising in UDRP decisions and the extent to which such decisions are consistent within and between UDRP providers, as well as between UDRP providers and courts in major jurisdictions.

• What steps can be taken to better assure consistency, uniformity, and impartiality among UDRP providers.

Any UDRP reform PDP will be far more productive if it is informed by such a neutral and expert review of the state of Internet trademark law and UDRP practice. We do hope that the Board finds this recommendation to have sufficient merit for serious further exploration.

Conclusion

We wish the Board well at its upcoming Retreat and look forward to learning of its results, and to reviewing a near-final version of the Applicant Guidebook in advance of the Cartagena meeting.

Sincerely,
Philip S, Corwin
Counsel, Internet Commerce Association