Resolving Internet Domain Name Disputes: UDRP and the Role of Inference
By Richard Levin, Esq., FCIArb.
(Originally published in the November 2022 issue of The Advocate)
Vancouver International Arbitration Centre (“VanIAC”) subsidiary organization, the Canadian International Internet Dispute Resolution Centre (“CIIDRC”), was approved in late 2019 by ICANN to become the 6th global provider of domain name dispute resolution services. It is only the second such provider in the Western Hemisphere and the only one in Canada.
ICANN, the Internet Corporation for Assigned Names and Numbers, was formed in the mid 1990s by the World Intellectual Property Organization (“WIPO”) essentially to establish rules of procedure and protocols for stakeholders for their conflicts in the incredible new invention called the internet, the key stakeholders for any putative conflict being trademark owners and domain name registrants. The procedure developed by ICANN in 1999 was The Uniform Domain Name Dispute Resolution Policy (“UDRP”). As the internet history has unfolded, the UDRP applies to disputes involving all generic top-level domains (“gTLDs”), (such as dot com, dot org, dot edu, dot net, and dot gov) which are the great majority of domain names and domain name disputes. Some country code specific top-level domains, like dot ca domains in Canada, have adopted their own dispute resolution procedure, which are not very dissimilar to the UDRP.[1]
Without question, the issues presented by these disputes are central to the integrity of the internet. Trademarks, as online identifiers, are vitally important with the growth of e-commerce transactions. Protection of marks is critical against cybersquatters and abusive or bad faith registrants of domain names. That said, abuse of trademarks is not uncommon, unlawfully overreaching trademark protection can present substantial injury to an innocent domain name holder.
This important dispute resolution procedure has its mechanics first in bilateral contracts between all stakeholders, including between the registrar and the registrant which acquires the domain name. That contract requires that the domain name registrant submit any third-party challenge to its domain name to a UDRP arbitration.[2] The UDRP and other domain name proceedings are not traditional “arbitrations” as there is not a contract between the disputing parties; rather, the obligation to submit to the proceeding is imposed on the domain name registrant by contract with the registrar.
In most jurisdictions, an entity which is injured by an abusive domain name registration does indeed have a choice between filing a court proceeding such as trademark infringement or a domain name arbitration such as a UDRP proceeding. Most of the time, however, the choice is not too difficult as the UDRP type arbitration is extremely fast, streamlined, relatively inexpensive, and if the claimant prevails, the proceeding results in what is essentially a mandatory injunction transferring the domain name back to claimant. This most innovative process was designed to provide a quick, inexpensive, and simple alternative to court litigation to protect the integrity of the internet.
The process is summary and streamlined, with relatively straightforward submissions by the parties (the trademark holder and the domain name registrant) and a fast turnaround by the UDRP panelists or arbitrator. The rules attendant to the UDRP call for only one round of submissions for each party with evidence attached, unless the panel orders otherwise, and no in-person hearing except in extraordinary cases. Thus, there is a heavy burden on both the parties to make a strong submission (“fire your best shot”) with no benefit of discovery and a heavy burden on the panelist/arbitrator to make the best decision on a relatively limited record in a very short period of time.
The trademark itself, registered or common law, establishes a complainant’s standing under the UDRP. The trademark need not be famous or distinctive; a weak mark, however, will be more difficult to assert superior rights and an unregistered mark must have accompanied evidence of reputation or secondary meaning. The trademark will not establish relief under the UDRP; irrespective of its trademark, complainant must then establish each of the next three prongs of the UDRP, namely a) the domain name of registrant is confusingly similar to the trademark, b) registrant respondent has no legitimate rights in the domain name, and c) registrant respondent has engaged in both abusive registration and bad faith use.[3] The registrant respondent can keep its domain name if it satisfies one of the defenses in 4 (c) of the UDRP (to rebut the second prong relating to its rights and legitimate interests), essentially showing it is operating in commerce in good faith.
Providers like CIIDRC provide templates for the two submissions, following rules of the URDP, specifying what should be alleged and supported with annexes to support the truth of what is alleged and allow for favorable inferences. Allegations must be supported by evidence. The UDRP process is not intended to reach innocent behavior; a registrant respondent, however, should demonstrate its benign behavior via documents such as business plans showing an intention to use the domain name in good faith; or legitimate free speech rights which does not cross the line of playing unfairly in a commercial way. While the burden is high on both parties in this summary proceeding to provide proof of the touchstones in the UDRP, registrant respondents appear infrequently, such that UDRP rules provide that if a registrant respondent does not appear, “in the absence of exceptional circumstances, the panel shall decide the dispute based upon the complaint.”[4] Failure to respond, does not relieve complainant of its burden of proof and is not a default as in court litigation, but failure to respond or deny facts asserted will allow the panel to make all reasonable inferences from the complaint’s alleged facts. Thus, if complainant is the only party filing submissions, it will have a huge advantage. But when respondent does indeed respond, its chances improve dramatically by reason of the fact that complainant bears a significant burden of proof. Indeed, if a complainant asserts merely bald legal conclusions, its case will fail.
The process becomes not only very interesting, but extremely innovative as well when looked at closely. Inference is at the heart of UDRP proceedings. Although inference is mentioned only in UDRP rule 14 (b) to apply to “defaults” (a failure to perform according to the rules–to provide evidence for example as specified in the rules–then a panel is allowed to make such inference as it deems “appropriate”), inference seems to pervade decision making as the process is so speedy, streamlined, and without any discovery or information exchange. One example is the above-mentioned failure to respond, and the inferences allowed in complainant’s favor provided it has supported its complaint with evidence.
Another common example relates to the proving the third prong of the UDRP, the requirement to show bad faith registration and use of the domain name. A key area on which panels focus may be the very content of the website resolving from the disputed domain name and whether that content targets complainant, such as the use of hyperlinks to a competitive product. In that case, an inference of bad faith can be made that registrant respondent used complainant’s mark as leverage to play unfairly in the competitive marketplace. An inference of bad faith against respondent is proper if it is plausible to infer that the domain name targets the complainant. The inference is all the more proper if complainant’s mark is strong and if, for example, the registrant respondent does not respond in the case or fails to provide its contact details in response to a demand letter.[5] However if complainant is asserting a weak mark or if there is no competition between the parties and no evidence of targeting, all of which leads to divergent or competing circumstances on making bad faith inferences (i.e. a flip of a coin), the case should fall in the registrant respondent’s favor and complainant’s case would fail.
It is logical that inference is central in these proceedings as there is no discovery, the submissions are not voluminous, and the proceedings are quick. The burden is that much higher on counsel not only to distill the facts and the documents and to come up with a short, but powerful punch as their only salvo. As noted in the above cited treatise regarding this process: “[t]he record from which inferences can be drawn can be thought of as a combination of statements and silences. … Credibility is a significant factor in weighing statements. What a party omits [if in its control] can be equally as important as what it includes. …The party with the burden either bares its hand or fails to persuade the Panel that it should prevail.”[6]
To an arbitration practitioner, it is fascinating that this process was developed to provide a speedy and streamlined procedure given the importance of maintaining an internet on which we can rely. The alternative of filing a trademark complaint in court seems less attractive given the time and expense, as well as jurisdictional and discovery issues involved in that. Thus, because the complainant’s burden is significant to make a showing on each element, and because in at least the majority of cases there is no response, the procedure boils down to a quick, relatively inexpensive process to “flush out” bad actors or cybersquatters. But if registrant respondent is bona fide in its behavior, it needs to show up.
[1] Canada Internet Registration Authority (“CIRA”) has adopted its dispute resolution policy called the CDRP. As it happens CIIDRC is a designated dispute providing authority both for UDRP as well as CDRP cases.
[2] Registrars (such as Go Daddy) are bound by contract with ICANN to require its registrants to adhere to UDRP dispute resolution and in country code TLDs, the registrar’s contract is with self-administering authorities in each country. ICANN approves and contracts with providers, such as CIIDRC, for domain name dispute resolution services.
[3] Interestingly, the Canadian CDRP only requires a showing of bad faith registration for the third prong.
[4] Rule 5(f). A respected treatise reports that registrant respondents appear in only 15% of the cases. G Levine, Domain Name Arbitration, (2d ed. 2019), p 551 (“Levine”).
[5] Telstra Corp. v Nuclear Marshmallows, (WIPO 2000, Case No D2000-0003).
[6] Levine, p 562-63.