One of the first tasks the Internet Corporation for Assigned Names and Numbers (ICANN) faced was how to deal with the dilemma of registering domain names to those that first claim them while respecting trademark law.^[1] This was known as the trademark dilemma and it occurred when a third party registered a trademark as a domain name without the consent of the trademark owner.^[2] The dilemma, to ICANN, was how to respect a trademark owner’s right to the mark even though the owner has no right to the domain name since the trademark owner did not claim the domain name first. The trademark owner’s rights include the right go after third parties who have registered the trademark as a domain name and are abusing the registration of the domain name by either cybersquatting or practicing trademark tarnishment. But, previously, the only method to protect a trademark against a domain name registration was to sue the registrant of the domain name in court. The process was lengthy, expensive, and could have jurisdiction issues, as many domain name holders are not located in the United States.

In December 1999, the World Intellectual Property Organization (WIPO) and ICANN tackled this dilemma by instituting the Uniform Domain-Name Dispute Resolution Policy (UDRP).^[3] The UDRP was designed as a quick and low-cost way for a trademark owner to gain control of a domain name when the domain name registrant is abusing registration of the domain name by either cybersquatting or practicing trademark tarnishment.^[4] It allows any person or company to file a complaint against a registrant of a generic top level domain (gTLD) (e.g., .biz, .com, .info, .name, .net, and .org) or a country code top level domain (ccTLD) associated with a country that has adopted the UDRP.^[5] Once a complaint is filed, a panel is formed and it then issues a ruling that is implemented by ICANN.^[6] The panel can cancel, transfer, or otherwise make changes to the domain name registration. ^[7] The registrant is bound by the decision of the UDRP system because, at the time of registering the domain name with an ICANN-accredited registrar, the registrant agreed to be subject to the UDRP system.^[8]

A UDRP complaint can be filed with a dispute-resolution service provider that is approved by ICANN. A provider is an organization that follows the Rules for UDRP, as well as its own supplemental rules, and is approved by ICANN.^[9] There are two organizations that handle the majority of UDRP complaints: WIPO and the National Arbitration Forum (NAF).^[10] While, both WIPO and NAF follow the UDRP Rules, these two organizations have their own sets of supplemental rules.^[11]

Timeline and Costs

The UDRP dispute process should be completed within sixty days from the date of the receipt of the complaint by the UDRP provider, unless the resulting decision is appealed within ten days of receiving the decision.^[12] As shown in Figures 1a and 1b, the cost of the dispute process depends on the number of domain names in dispute and the number of panelists appointed. For disputes involving a quantity of domain names greater than those shown, WIPO and NAF will determine the costs on a case-by-case basis.^[13] The parties in the dispute decide whether to have one or three panelists. The complainant, i.e., the trademark owner, is responsible for paying the fees unless the respondent, i.e., the registrant, elects to have three panelists and the complainant only chose one. In that case, the respondent has to share the cost.^[14]

Figure 1a. WIPO UDRP cost based on the number of domain names in dispute and the number of panelists deciding the case.^[15]

Figure 1b. NAF UDRP cost based on the number of domain names in dispute and the number of panelists deciding the case.^[16]

The number of panelists not only impacts the overall costs but may also makes a big difference with regards to the outcome of the dispute. A study in 2002 found that 83% of decisions by one-member panels were in favor of the complainant.^[17] In contrast, 60% of decisions by three-member panels were in favor of the complainant.^[18] Thus, three member panels may appear to make more balanced decisions. However, in practice, the tendency of one-member panels to decide for the complainant may be a result of complainants with the strongest cases choosing to avoid extra costs by selecting a one-member panel.

The UDRP Process

The UDRP process was designed to be simple and fast, resulting in a decision within a few months of filing the complaint. It can be broken down into eight high level steps, as shown in Figure 2.^[19] First, the complainant, i.e., the trademark owner, files a complaint with the UDRP provider against the respondent, i.e., the registrant of the domain name. Next, the provider will acknowledge receipt of the complaint, may request information about the domain name, and then reviews the complaint for formalities that must be remedied within five days or the complaint is withdrawn. The provider then notifies the respondent of the complaint. The respondent has twenty calendar days to respond to the complaint in order to avoid defaulting. Regardless of whether the respondent responds or defaults, the UDRP provider will appoint an administrative panel. If the respondent requested a three-member panel, then the provider will form such a panel. Otherwise, the provider will form the panel according to the size the complainant chose.

The panel is then required to forward its decision to the provider within fourteen days of its appointment. Within three days after receipt of the decision, the provider then notifies the parties, ICANN, and the registrar with which the domain name is registered. The registrar will then notify the parties, ICANN, and the provider of the date on which the decision will be implemented. The respondent can appeal the decision within ten business days of receiving the decision, as the registrar is required to implement the decision after such time. Under Paragraph 4(k) of the UDRP Rules, the respondent can appeal the decision by filing a lawsuit against the complainant in a proper jurisdiction.^[20] If the decision is appealed, then the registrar will take no action to implement the decision until the registrar receives evidence satisfactorily showing that the matter has been resolved, e.g., showing that the lawsuit was dismissed or withdrawn.^[21]

Figure 2. High level overview of the UDRP process

Proving Abusive Registration

In order to prevail at the UDRP, the complainant must show that the registration of the domain name is abusive.^[22] It must do so by meeting the following criteria. First, the domain name must be identical or confusingly similar to the trademark in which the complainant has rights.^[23] This means that the domain name must be the same as the trademark or similar enough for consumers to believe that the domain name is associated with the trademark.^[24] The addition of a generic term or a top level domain (e.g., .com) is not enough to avoid confusion.^[25]

Next, the complainant must prove that the person who registered the domain name has no right or legitimate interests in respect of the domain name.^[26] Panels consider a variety of factors in determining whether the registrant has rights or legitimate interests in the domain name. For example, if the registrant has a registered trademark in a specific country but does not use the mark in commerce, then she would not have a legitimate interest.^[27] Panels have also found that the respondent failing to own any trade or service marks reflecting a disputed domain name is strong evidence that the respondent does not have any rights or legitimate interests in the domain name.^[28] Another factor the panel may consider is whether the respondent is actually known by the domain name (or the trademarks at issue), such as using the domain name as a business name.^[29] Not being commonly known by the domain name is evidence of no rights or legitimate interests.^[30] In addition, when a disputed website hosts click-through advertising, panels have found that it is a reasonable presumption that the respondent receives payment each time an advertisement is clicked (pay-per-click advertising).^[31] Using a domain name in this way to misleadingly divert customers for commercial gain is not legitimate noncommercial or fair use.^[32] Also, the failure to use a domain name may be evidence of lack of rights and legitimate interests in a domain name.^[33]

Furthermore, without a bona fide offering of goods or services, a legitimate use is rarely found.^[34] For example, use of a confusingly similar domain name to operate a website featuring links to goods or services unrelated to the complainant is not a use of the domain name in connection with a bona fide offering of goods or services.^[35] In addition, use of disputed domain names without permission or authorization from the trademark owner weighs strongly against a bona fide offering of goods or services.^[36] Moreover, the failure to disclose the relationship, or lack thereof, between the domain name owner and the trademark owner is evidence that there is no bona fide offering of goods or services.^[37]

Lastly, the complainant must prove that the domain name has been registered and is being used in bad faith.^[38] Bad faith can be proven by showing that the registration was made to rent, sell, or otherwise transfer the domain name, to prevent the trademark owner from reflecting her trademark in a domain name, to disrupt a competitor’s business, or to attract internet users by creating a likelihood of confusion. For example, if the domain name is being used to sell or advertise a product that tarnishes a trademark and there is no evidence to justify the use of the specific domain name, then that would entail bad faith.^[39] Another example of bad faith would be using the domain name to sell or advertise a competing product.^[40] But if, for example, the registrant is using the domain name for non-commercial gain, is not misleading customers, and is not tarnishing the trademark, then such use would not be in bad faith.^[41]

Conclusion

ICANN solved the trademark dilemma with the UDRP. It allows registration of domain names based on first to claim method while respecting trademark law. The UDRP process is a quick and relatively low-cost way to gain control of a domain name when a registrant has registered a domain name associated with a trademark without the permission of the trademark owner and is abusing the registration. Without the UDRP, the trademark owner would have to sue the registrant in court to gain control of the domain name, which can be expensive and time consuming.^[42] Thus, the UDRP continues to be an effective tool for trademark owners.