To register or renew a domain name a registrant must utilize the services of an ICANN-accredited registrar, all of which must enter into a standard binding contract with ICANN known as the Registrar Accreditation Agreement (RAA). But, rather incredibly, that same domain can be extinguished or transferred by a UDRP provider that has been empowered by ICANN but which has no contractual restraints on its exercise of authority.
That’s why, in a recent comment regarding the application of the Arab Center for Domain Name Dispute Resolution (ACDR), ICA told ICANN that it “strongly opposes the accreditation of the ACDR or any other new UDRP arbitration provider until ICANN establishes a standard contract or other uniform and enforceable agreement with all providers of UDRP services”. ICA stressed that such a standard agreement is the only means of curbing forum shopping and assuring all registrants of procedural and substantive due process in UDRP arbitrations. ICA has long advocated that ICANN undertake meaningful UDRP reform to address the growing lack of consistency and predictability in the process, a trend that can only be exacerbated by the addition of more providers unrestrained by enforceable contracts. The “cart” of UDRP reform must be preceded by the “horse’ of a strong and enforceable standard agreement.
ICA is a member of ICANN’s Business Constituency and we are delighted that our fellow BC members responded to our urging by adopting and filing a similar position statement:
The Business Constituency (BC) cannot support approval of this or any other UDRP accreditation application at this time on the grounds that no new UDRP providers should be accredited until ICANN implements a standard mechanism for establishing uniform rules and procedures and flexible means of delineating and enforcing arbitration provider responsibilities… The BC strongly advocates that ICANN must first implement a standard mechanism with any and all UDRP arbitration providers that defines and constrains their authority and powers, and establishes regular and standardized review by ICANN with flexible and effective means of enforcement… In the future, business interests may well be investing substantial amounts in these new gTLDs, for both defensive, new branding, and other purposes. In this type of environment it is even more important that all UDRP providers be subject to uniform and enforceable responsibilities, as that is the only means of furthering the goal that UDRP decisions are consistent within and among UDRP providers, and that the UDRP remains an expedited and lower cost remediation for addressing cybersquatting.
ICANN’s Intellectual Property Constituency also filed a comment, but its main concern was that some of ACDR’s proposed fees were too high. (All comment letters can be found at http://forum.icann.org/lists/acdr-proposal/.)
Aside from ICA’s bottom line position that no new UDRP providers should be accredited until ICANN has developed and implemented a standard agreement, we also identified numerous material deficiencies in ACDR’s application which should require its rejection by ICANN. In light of those deficiencies, we were startled by ACDR’s request that it be permitted to handle up to 5,000 UDRP cases during its initial start-up period – as that figure is higher than the annual total of all UDRP cases handled by WIPO and NAF combined!
The full text of our letter follows —
Attorneys at Law
1301 Pennsylvania Avenue, N.W.
Washington, D.C. 20004-1701
202-347-6875
Philip S. Corwin, Partner
pcorwin@butera-andrews.com
October 28, 2010
By E-Mail to acdr-proposal@icann.org
Board of Directors
Internet Corporation for Assigned Names and Numbers (ICANN)
4676 Admiralty Way, Suite 330
Marina del Rey, CA 90292-6601
Re: Proposal of the Arab Center for Domain Name Dispute Resolution (ACDR) to be Recognized as an Official Dispute Resolution Provider Under the Uniform Domain Name Dispute Resolution Policy (UDRP)
Dear Members of the ICANN Board:
This comment letter is submitted by the Internet Commerce Association (ICA) in regard to ICANN’s September 28th notice establishing a period for public comments on the Proposal of the Arab Center for Domain Name Dispute Resolution (ACDR) to be Recognized as an Official Dispute Resolution Provider Under the Uniform Domain Name Dispute Resolution Policy (UDRP).
ICA is a not-for-profit trade association representing the domain name industry, including domain registrants, domain marketplaces, and direct search providers. Its membership is composed of domain name registrants who invest in domain names (DNs) and develop the associated websites, as well as the companies that serve them. Professional domain name registrants are a major source of the fees that support registrars, registries, and ICANN itself.
Executive Summary
• ICA strongly opposes the accreditation of the ACDR or any other new UDRP arbitration provider until ICANN establishes a standard contract or other uniform and enforceable agreement with all providers of UDRP services.
• Such a standard agreement is the only means of assuring all business entities that have made substantial investments in acquiring and developing domains of procedural and substantive due process when a UDRP action is initiated by or against them.
• A standard agreement is also the only means by which to prevent forum shopping, by which newly accredited providers seek to influence complainants’ arbitrator choice by further tilting the system against registrants. We have already witnessed the CAC attempt this through their proposal to offer an unacceptably condensed version of the UDRP through amendment of their Supplement Rules. ACDR’s request that they be allowed to process up to 5,000 cases during their initial start-up period – an astronomical projection that is higher than the total combined number of annual case arbitrations administered by the two leading UDRP providers – can only raise questions about how they intend to attract many thousands of filings.
• Regardless of whether ICANN establishes and enters into such standard UDRP provider agreement, the ACDR’s Proposal contains numerous material deficiencies that require its rejection by ICANN.
The Overriding Need to Establish Binding and Enforceable Agreements with All UDRP Arbitration Providers
The ICA strongly opposes approval of this Proposal from the ACDR, or that of any other proposed UDRP accreditation application, until ICANN establishes a uniform, binding, and enforceable agreement with all providers of UDRP arbitration services. Our view is that no new UDRP providers should be accredited until ICANN implements a standard contract or other mechanism for establishing uniform rules and procedures and flexible means of delineating and enforcing UDRP arbitration provider responsibilities. Such a standard agreement also appears to be the only effective means of addressing potential provider bias that will exacerbate the problem of forum shopping, which will otherwise almost certainly grow worse as new entrants seek to gain market share from established providers.
Because ICANN is a non-profit corporation and not a government agency or intergovernmental authority, its only means of assuring acceptable and uniform performance by entities it accredits and delegates authority to is via enforceable agreements. This certainly holds true in regard to those entities that operate generic top level domains (gTLDs). All such registry operators have entered into contracts of limited duration with ICANN — and these agreements, while not entirely uniform, have become much more similar in recent years. Further, while gTLD registry operators have been granted a presumption of contract renewal, that renewal is by no means assured and can be denied for substantial and uncured breaches of material contract provisions. Likewise, all operators of new gTLDs will be required to enter into a standard and uniform contract with ICANN, with the current text of that proposed agreement contained in Version 4 of the Draft Applicant Guidebook (DAG).
Likewise, the voluntary registration or renewal of a gTLD and many ccTLD domains must be undertaken via an ICANN-accredited registrar. All registrars are subject to a uniform contractual agreement with ICANN, the Registrar Accreditation Agreement (RAA). ICANN recently strengthened the RAA with additional amendments and the addition of flexible enforcement options, and a Final Report proposing additional RAA amendments has just been delivered to the Generic Names Supporting Organization (GNSO) for its consideration.
Thus, the authority granted by ICANN to registries to operate gTLDs, and the authority granted to registrars to register and renew domain names, are subject to binding and enforceable contracts. In stark contrast, the involuntary termination or transfer of a domain can be ordered under the authority of a UDRP provider that has been accredited by ICANN but which is not bound by any clear constraints on, or requirements pertaining to, the exercise of that delegated authority. This has led to increasing concerns about the lack of adequate procedural and substantive consistency in the UDRP process. Such concerns are likely to grow if additional providers are accredited in the absence of the uniform framework of a standard contract or other enforceable mechanism.
The ICA strongly believes that ICANN must first implement a standard contract or other mechanism with any and all UDRP arbitration providers that defines and constrains their authority and powers, and establishes regular and standardized review by ICANN with flexible and effective means of enforcement. Under the current regime, ICANN can only express dissatisfaction with the performance of a UDRP provider by terminating its accreditation, and there is no standard to trigger such an action or any intermediate means of compelling acceptable performance. This ultimate sanction of cancelling accreditation is an extreme sanction that ICANN has demonstrated a reluctance to initiate in other context; this is precisely why the amended RAA provides for intermediate sanctions.
The problems presented by the absence of such a uniform agreement were noted in the Initial Report (IR) of the Registration Abuse Policies Working Group (RAPWG) earlier this year. The IR observed (at 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.” (Emphasis added)
ICANN appears to be transitioning from an environment in which the vast majority of UDRP cases (approximately 98%) are handled by two arbitration providers (WIPO and NAF) and in which significant gTLDs were based in a limited number of national jurisdictions, to one in which the majority of gTLDs and UDRP providers may well be headquartered in a widely distributed group of jurisdictions. In the future, all business interests may well be investing substantial amounts in these new gTLDs, for both defensive, new branding, and other purposes. In this type of environment it is even more important that all UDRP providers be subject to uniform and enforceable responsibilities, as that is the only means of furthering the goal that UDRP decisions are consistent within and among UDRP providers, and that the UDRP remains an expedited and lower cost remediation for addressing cybersquatting.
The key word in UDRP is “Uniform”. Yet any review of UDRP decisions reveals that there is inadequate predictability, consistency, and uniformity in how individual panelists or three member panels treat identical or similar issues that arise repeatedly in UDRP arbitration proceedings. This situation exists in a regime in which the vast majority of UDRP decisions are rendered by two major providers, and can only be expected to grow worse as the number of UDRP providers is expanded and such providers are located in regions that have different legal systems and cultures as well as divergent views regarding intellectual property. Such increasing lack of uniformity is not acceptable to both registrants and complainants and will render the UDRP a less viable means of dispute resolution. A standardized agreement between ICANN and all UDRP providers provides the best potential means of creating a system to assure that similar issues that arise repeatedly in UDRP cases are treated in a predictable manner by all UDRP providers.
Likewise, as more UDRP providers are accredited, there is a danger that some newly accredited providers will seek to grow their market share by selecting panelists who have a strong bias toward complainants, or by tweaking their Supplemental Rules, or their confidential internal procedures, to favor complainants. Such practices meant to encourage complainant forum shopping are completely inconsistent with uniform and unbiased decision making and should have no place in an acceptable UDRP regime. The issue of provider encouragement of forum shopping to expand their market share of filings is hardly a new one in the UDRP context. In December 2001 one of the originally accredited providers, eResolution, withdrew from the system after charging that “a perception of bias” had resulted in disputes being channeled away from it by complainants’ counsel (see http://www.theregister.co.uk/2001/12/04/eresolution_quits_domain_arbitration/ ). There is clearly a danger now that new providers located in new jurisdictions may seek to tilt the system in their own favor.
Our concerns in this regard are hardly unwarranted. The Czech Arbitration Court (CAC) for example, shortly after receiving its ICANN accreditation, proposed to alter its Supplemental Rules to establish an Expedited Decision Case (EDC) variant of the UDRP through amendment of its Supplemental Rules. While ICA has no objection to the consideration of a lower cost and expedited form of UDRP for those cases in which the registrant files no response – provided that such consideration takes place in the context of comprehensive substantive UDRP reform — the establishment of such a policy is clearly a matter that should be undertaken through ICANN’s standard Policy Development Process (PDP) and not through the unilateral actions of a single new provider seeking to attract additional filings. The CAC’s proposal was a blatant abuse of the very limited clerical scope of matters properly encompassed by Supplemental Rules, and would have deprived registrants of the full and reasoned decision that is to be expected under the UDRP and its implementing Rules.
ICA’s full brief against the CAC proposal, as well as our dissatisfaction with how this matter was handled by ICANN in the current no-contract environment, is contained in our July 14, 2010 comment letter regarding ICANN’s Accountability and Transparency (available at http://forum.icann.org/lists/atrt-questions-2010/msg00016.html). Further, on September 23, 2010 ICA sent a letter to ICANN’s Chairman and CEO in which we suggested that UDRP reform be preceded by an expert study of critical legal issues. That letter stated (full text available at https://www.internetcommerce.org/Independent_Third_Party_Review_of_the_Internet_Trademark_Law_and_the_UDRP):
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.
The issue of whether UDRP providers should be bound by a standard contract or other enforceable mechanism with ICANN is almost entirely separable from the question of whether the UDRP evaluation standards for determining the existence of cybersquatting should be reformed. While ICA would support such substantive reform, there is no need to debate the substantive elements of the UDRP in order to address the fundamental issue of whether UDRP providers should be under a standard mechanism, or to determine the matters that should be addressed by such an agreement. We recognize that once ICANN initiates a process to draft a standard agreement with UDRP providers, questions may arise as to whether a subject is properly viewed as procedural and administrative, and therefore a valid subject to be addressed in such a document — or whether it involves a substantive change to the UDRP decision-making standards and should therefore be addressed by a PDP. Nonetheless, certain matters would seem to clearly be within the scope of such an agreement, including:
• Means of assuring consistent and predictable treatment of recurring issues within and among all accredited providers, as well as the consistency of UDRP decisions and principles with evolving Internet trademark law.
• Assurance of random selection of qualified and unbiased panelists, as well as for permanent removal of panelists who demonstrate inadequate expertise or clear bias.
• Assuring that a provider’s Supplemental Rules do not address substantive matters in an attempt to expand its market share of UDRP filings through the encouragement of forum shopping.
• Guidelines for the admissibility and disclosure of supplemental filings and responses.
• Flexible and effective means of enforcement.
The above list is but our initial suggestion for matters that should be addressed by a uniform agreement. The ICA intends to fully participate in any procedure established by ICANN to solicit suggestions for and review of drafts of any standard agreement to be established between itself and UDRP providers, and we will likely make additional suggestions in that context.
Deficiencies in ACDR’s Submission
As stated above, ICA opposes any accreditation of additional UDRP providers until ICANN establishes a standard and enforceable agreement and enters into it with all UDRP providers.
However, in addition to that overall policy objection, there are significant material deficiencies in the ACDR Proposal that should result in ICANN advising them to withdraw and supplement it prior to resubmission lest it be rejected outright.
The approval process for Dispute-Resolution Service Providers is clearly set forth at http://www.icann.org/en/dndr/udrp/provider-approval-process.htm. Those requirements, and ACDR’s compliance with them, is as follows:
Applications should contain:
a. An overview of the applicant’s capabilities and background in providing alternative dispute-resolution (ADR) services, including a description of the applicant’s track record of handling the clerical aspects of expedited ADR proceedings. – ACDR appears to be an entirely new entity and hence has no “track record” in regard to handling such proceedings. While ACDR is a joint undertaking by the Arab Society for Intellectual Property (ASIP) and the Arab Intellectual Property, Mediation, and Arbitration Society (AIPMAS), the Proposal contains no meaningful information regarding the number and types of arbitration cases they have administered or their “track record” for handling associated clerical aspects. The Proposal contains no information indicating that ASIP has engaged in any ADR activities; while it states that AIPMAS “manages conflict resolution by following its own mediation and arbitration rules” it provides no information as to what these rules are or how they may differ in material degrees from the Rules governing UDRP arbitration, nor does it provide any data regarding the number and types of cases it has arbitrated.
b. A list of the names and qualifications of the panelists the applicant proposes to include on its published list and a description of the screening requirements applicant has used in selecting panelists to be included on its list. – The proposal appears to be in compliance with this evaluation factor.
c. A description of training and educational measures the applicant proposes to employ for listed panelists with respect to domain-name disputes, the UDRP Policy, and the UDRP Rules. – The Proposal contains some information regarding ACDR’s plans for panelist training and education. This consists of proposed online e-training, an online discussion forum accessible only by panelists, and an annual meeting. However, there is no information regarding who will prepare the e-training materials, what they shall consist of, and whether panelists will be required to undertake a minimum number of hours of continuing UDRP education on a regular basis or whether participation will be strictly voluntary. Given that 17 of the 35 individuals listed by ACDR as Initial Neutrals have no prior UDRP panelist experience, this training and education requirement must be far better documented and made mandatory for a minimum number of hours annually.
d. A commitment by the applicant not to prevent or discourage any of its listed panelists from serving as panelists for domain-name disputes administered by other approved providers. — The proposal appears to be in compliance with this evaluation factor.
e. A copy of the applicant’s proposed supplemental rules (including fee schedule). — The proposal appears to be in compliance with this evaluation factor.
f. Documentation of applicant’s proposed internal operating procedures. If requested, ICANN will hold this documentation in confidence. – This document has apparently been provided to ICANN as Annex 4, but as ACDR has asserted confidentiality there is no means by which commentators can evaluate this very important factor.
g. A proposed schedule for applicant’s implementation of its program for administering proceedings under the policy, including a statement of applicant’s administrative capacity in terms of number of proceedings initiated on a monthly basis. – ACDR’s proposal states only that it expects to begin accepting UDRP cases within 6-8 months following its accreditation by ICANN, but contains no representations regarding its monthly administrative case handling capability.
h. A statement of any requested limitations on the number of proceedings that applicant handles, either during a start-up period or on a permanent basis. — The Proposal’s assertion in this regard is so high as to be utterly meaningless. ACDR has requested limitation to 5,000 proceedings during its “start-up period”, without in any way defining that term; and further requests that there be no limitations on the number of proceedings it be allowed to handle on a permanent basis. We note that WIPO has handled approximately 2,070 UDRP proceedings so far during calendar year 2010, and that NAF handled a total of 1,759 cases in all of 2009 – so that ACDR’s “limitation” is in fact higher than the combined total number of UDRP cases handled by WIPO and NAF annually. ACDR’s “limitation” is also wildly out of sync with the number of cases handled so far in 2010 by the Asian Domain Name Dispute Resolution Center (59) and the Czech Arbitration Court (11). In our view, should ACDR submit a supplemented and otherwise satisfactory proposal and be eventually accredited by ICANN, it should be significantly limited as to the total number of proceedings it be allowed to accept during a clearly defined start-up period, and be subject to rigorous qualitative review by ICANN before any such limitation is lifted.
i. A description of how the applicant proposes to administer proceedings, including its interactions with parties, registrars, ICANN, and other approved providers. – Other than stating its hope to eventually do away with any paper pleadings (a goal that ICA shares) the proposal mostly restates information contained in its Supplemental Rules – and contains no assertions regarding its interactions with other approved providers. In fact, the proposal states that it will develop its own system/search tool for researching its own decisions in UDRP proceedings, but in no way indicates that this data base will contain information about cases handled by other UDRP providers. This omission buttresses our concern that, absent a standard agreement with all UDRP providers that requires a mechanism for assuring consistency in decisions, the accreditation of additional providers will lead to an increasing divergence in decision-making among them.
j. Description of how the applicant intends to publish decisions of panels in proceedings it administers and a commitment to provide ICANN with copies of all portions of decisions of panels not published. — The proposal appears to be in compliance with this evaluation factor.
Given the above identified deficiencies in ACDR’s Proposal, we cannot see how ICANN could possibly reach a conclusion that ACDR possesses the “attributes that are especially important” for accreditation. The relevant portion of the Approval Process document states:
In general, ICANN examines the applications to determine whether the applicant has demonstrated its ability to handle proceedings in an expedited, global, online context in an orderly and fair manner. Attributes that are especially important include:
A. Applicant should have a track record in competently handling the clerical aspects of ADR proceedings. ICANN considers proper review of pleadings for administrative compliance and reliable and well-documented distribution of documents to the parties and panels to be essential capabilities for providers. In the absence of a well-established track record in handling the clerical function, a detailed plan for providing those abilities ordinarily must be submitted.
B. Applicant should propose a list of highly qualified neutrals who have agreed to serve as panelists. Applicant’s list should include at least twenty persons. Applicants are expected thoroughly to train the listed neutrals concerning the policy, the uniform rules, the technology of domain names, and the basic legal principles applicable to domain-name disputes. Accordingly, excessively long lists of neutrals are discouraged. The applicant should either present a list of panelists from multiple countries or, if the applicant initially presents a single-country list, propose a plan to expand its list to become multinational.
C. Applicant’s supplemental rules and internal procedures should demonstrate that applicant understands the workings of the policy and uniform rules. (Emphasis added)
In regard to these “especially important” evaluation criteria:
• ACDR has no track record in competently handling ADR proceedings, has provided no detailed information regarding the experience and record of its founding organizations in handling such proceedings, and has submitted no detailed plan for providing those abilities.
• ACDR has provided inadequate information regarding its plans for thoroughly training its listed neutrals in all aspects of UDRP practice.
• While ACDR has submitted its proposed Supplemental Rules, it has chosen to assert confidentiality in regard to its internal procedures. Hence, there is no way for the community to evaluate those procedures to assure that they are fair and comprehensive.
Due to the many identified deficiencies in ACDR’s Proposal, we believe that ICANN has no choice but to reject their request for accreditation – regardless of whether ICANN proceeds to establish standard agreements with UDRP providers.
Conclusion
The issue of UDRP review has been on the agenda of several recent ICANN Board meetings. We note with approval that the minutes of the August 5, 2010 meeting state: “The Board noted the work proposed by staff regarding tighter controls over provider supplemental rules and noted anticipation of a more formal staff report.” (http://www.icann.org/en/minutes/prelim-report-05aug10-en.htm)
While such inquiry is a good start, a far more comprehensive review of ICANN’s relationship with UDRP providers is required. For example, regardless of the ultimate contents of that staff report regarding tighter controls over supplemental rules, the only means of establishing uniform and enforceable controls would be via a standard agreement.
We would urge ICANN to initiate a process for developing such a standard agreement as soon as practicable. In the interim, the application of the ACDR and that of any other entity seeking to be accredited as a UDRP provider should be put on hold. In the case of the ACDR, this suspension will allow it to address the material deficiencies in its present application.
Thank you for your consideration of our views on this matter.
Sincerely,
Philip S. Corwin
Counsel, Internet Commerce Association