by Richard Keyt, Domain Name Law attorney

ICANN is an acronym for the Internet Corporation for Assigned Names and Numbers, a private-sector nonprofit organization.  It is an internet technical coordination body that was formed in October of 1998 by a coalition of internet business, technical, academic, and user communities.  ICANN is responsible for the management of the Internet domain name system.  It coordinates the assignment of internet domain names, IP address numbers and protocol parameter and port numbers.  ICANN also is responsible for the stable operation of the internet’s root server system.
The Uniform Domain Name Dispute Resolution Policy (UDRP) is a policy adopted by ICANN that provides a mechanism for trademark owners to obtain domain names from “cybersquatters.”  All domain name registrars that have the power to grant .com, .net, and .org generic top-level domains must follow the UDRP.  The UDRP provides that before a domain name registrar will cancel, suspend, or transfer a domain name that is the subject of a trademark-based dispute, it must have an agreement signed by the parties, a court order, or an arbitration award.  The UDRP created a streamlined “cyber arbitration” procedure to quickly resolve domain name ownership disputes that involve trademarks.
All owners/registrants of all .com, .net and .org domain names are subject to the UDRP by virtue of: (i) the registration agreements agreed to with their registrars at the time of acquiring their domain names, or (ii) asking ICANN to maintain or renew a domain name registration.
If the party that files the complaint wins the arbitration, the winner will get an award from an administrative panel instructing the registrar of the domain name to cancel, transfer or otherwise make changes to domain name registration.  If the domain name owner wins the arbitration, nothing happens.  Note:  Only the party that brings a UDRP action can benefit from it.
Maybe.  The party that filed the UDRP complaint and lost may bring any other legal action against the domain name owner.  In fact, if the trademark owner believes it has a strong case, it may sue the domain name owner under the Anticybersquatting Consumer Protection Act seeking a court order to transfer the domain name to the trademark owner and monetary damages for trademark infringement.  The result of the UDRP is that trademark owners have two chances to obtain a disputed domain name.

A trademark owner that believes it can prove a case of cybersquatting initiates a UDRP arbitration by filing a UDRP complaint with one of the following four organizations called a dispute-resolution service provider:

  1. Asian Domain Name Dispute Resolution Centre
  2. The National Arbitration Forum
  3. World Intellectual Property Organization

Each Provider has forms and supplemental rules that apply to UDRP proceedings under its jurisdiction.

Each Provider sets a fee for filing the complaint based on the number of panelists and the number of domain names subject to the UDRP.  The fees as of April 24, 2001, ranged from as low as $1,250 for a single panel single domain name to $6,000 for a three panel dispute involving five domain names.  When the dispute involves a large number of domain names, the fee must be determined by consulting with the provider before filing the complaint.  See the Comparison of UDRP Provider Fees as of April 24, 2001.  The Provider’s fees paid by the party that files the complaint unless the domain name owner requests a three member panel, in which case the two parties are each responsible for one half of the fee.  Attorney’s fees and costs are in addition to the complaint filing fees payable to the Provider.
An administrative panel of one or three members acts as judge and jury in all UDRP actions.  The trademark owner (called the “complainant”) that files the UDRP complaint designates in the complaint a one or three member arbitration panel.  If the complainant designates a single-member panel, the domain name owner (the “respondent”) may elect to have the dispute heard by a three-member panel.
The respondent has twenty days from the date the Provider forwards the complaint to the respondent to submit a written response to the Provider selected by the complainant.
If the respondent does not submit a timely response, in the absence of exceptional circumstances, the administrative panel will decide the dispute based upon the complaint.  If the respondent fails to respond timely, the administrative panel has the discretion to grant the relief requested in the complaint.  In the vast majority of UDRP arbitrations as of April 24, 2001, the panels have ruled for the complainant when the respondent failed to file a response.

A complainant must prove each of the following elements to win a UDRP arbitration:

  1. The domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights;
  2. The domain name owner does not have any rights or legitimate interests in respect of the domain name; and
  3. The domain name owner registered the domain name and is using it in “bad faith.”

The UDRP lists the following nonexclusive circumstances as evidence of bad faith in the registration and use of a domain name:

  1. Circumstances indicating that the domain name owner registered the domain name or acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or
  2. The domain name owner registered the domain name to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that the domain name owner has engaged in a pattern of such conduct; or
  3. The domain  name owner registered the domain name primarily for the purpose of disrupting the business of a competitor; or
  4. By using the domain name, the domain name owner has intentionally attempted to attract, for commercial gain, internet users to the domain name owner’s web site or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of the domain name owner’s web site or location or of a product or service on the domain name owner’s web site or location.

The domain name owner/alleged cybersquatter should win the UDRP proceeding if the domain name owner can show that the domain name owner has rights or legitimate interests to the domain name.  If any of the following circumstances can be shown by the domain name owner to exist, the domain name owner should win the UDRP arbitration:

  1. Before any notice to the domain name owner of the dispute, the domain name owner’s use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or
  2. The domain name owner (as an individual, business, or other organization) has been commonly known by the domain name, even if the domain name owner has not acquired any trademark or service mark rights; or
  3. The domain name owner is making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.
After the complaint is filed, the respondent has twenty days to file a written response.  If the respondent files a timely response, the Provider must submit the matter to an administrative panel within five days.  In-person hearings (including hearings by teleconference, videoconference, and web conference) are not permitted, unless the panel determines, in its sole discretion and as an exceptional matter, that a hearing is necessary.  Thus, most decisions will be based solely on the contents of the complaint and the response and supporting documents attached thereto.  The panel must submit its decision to the Provider within fourteen days of being appointed to hear the dispute.  Within three days of receiving a decision from the panel, the Provider must deliver the decision to the parties and ICANN.  The date of filing the complaint to the date the UDRP decision is rendered will be approximately 40 – 45 days or less.
[/toggleIf an administrative panel decides that a domain name registration should be canceled or transferred, ICANN will wait ten business days after being informed by the Provider of the Administrative Panel’s decision before ICANN implements the decision.  If, during this ten day period, ICANN receives from the domain name owner official documentation (such as a copy of a complaint, file-stamped by the clerk of the court) that the domain name owner filed a lawsuit against the complainant, ICANN will not implement the decision.  ICANN will then not take any further action, until it receives: (i) evidence satisfactory that the parties resolved the dispute; (ii) evidence satisfactory to it that the lawsuit has been dismissed or withdrawn; or (iii) a copy of an order from such court dismissing the lawsuit or ordering that the domain name owner does not have the right to continue to use the domain name.] If a domain name owner loses a UDRP arbitration, ICANN will implement the decision (which is usually that the domain name be transferred to the complainant) unless the domain name owner provides evidence of a settlement agreement signed by the parties or the domain name owner files a lawsuit against the complainant seeking to establish that the domain name owner has rights to the domain name.
Absolutely.  Any domain name owner who waits until receiving notice of an adverse UDRP decision will be hard pressed to find an attorney to who will file a lawsuit to prevent the loss of the domain name with a deadline of ten days or less.

Whenever a domain name owner is first challenged or threatened by a trademark owner who alleges trademark infringement and/or cybersquatting, and if the domain name owner wants to keep the domain name, the domain name owner should immediately hire an experienced domain name lawyer.  It is a fundamental principal of law that statements made by a domain name owner can and will be used against the domain name owner in court and/or in a UDRP arbitration. This is one important reason why the domain name owner needs an attorney to act as an intermediary rather than the domain name owner attempting to negotiate with the trademark owner’s attorney.

With the right facts, it is possible to defeat a claim of cybersquatting.  There is a concept known as “reverse domain name hijacking,” which means using the Uniform Domain Name Dispute Resolution Policy in bad faith to attempt to deprive a registered domain-name holder of a domain name.  If you have good facts, you need an attorney to prepare your response and simultaneously prepare to file a lawsuit to challenge a possible adverse UDRP decision.

The surest way to lose a UDRP arbitration is to offer to sell or transfer to any person at any time the domain name for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name.  If you get a cease and desist letter alleging that you are a cybersquatter, never offer to sell the domain name for more than your out-of-pocket costs for the domain name because you will give the trademark owner the evidence it may lack to prove you hold the domain name in bad faith.
If you get an inquiry out of the blue asking if you want to sell your domain name, think twice before responding.  The inquiry may be from a trademark owner, the trademark owner’s attorney or their agent seeking evidence to use against you in a UDRP arbitration or a lawsuit under the Anticybersquatting Consumer Protection Act.  If you respond and ask for more than your out-of-pocket costs to acquire the domain name, your response could be used as evidence of bad faith and you may supply the evidence the trademark owner needs to prove you are a cybersquatter.  If you want to respond to an inquiry to purchase your domain name, have your lawyer first contact the person who asked about purchasing the domain name and ask that the prospective purchaser sign a confidentiality and nondisclosure agreement under which the prospective purchaser covenants not to disclose the substance of any discussions about selling the domain name to any party and covenants that any statements, agreements or drafts of agreements relating to the discussions cannot be used or submitted as evidence in any lawsuit or proceeding in any court or other forum, including, but not limited to an ICANN UDRP arbitration.  If you do not get a signed agreement, then do not offer to sell your domain name unless you are sure you can defeat a UDRP arbitration and an ACPA lawsuit.

Domain Name Dispute Attorney

If you have a dispute involving a domain name, call me, Thomas W. Galvani, a patent, trademark and domain name dispute attorney, at 602-281-6481.  Because domain names can be very valuable assets, you should not be penny wise and pound foolish when it comes to protecting a domain name.