Resolution system is unfair: study

The current arbitration system for resolving ownership disputes over dot-com Internet domain names appears biased in favour of the trademark owners, calling into question the legitimacy of the process, says a new study.

The study, by Michael Geist, a law professor and Internet specialist at the University of Ottawa Law School, has identified several key problems with the Uniform Domain Name Dispute Resolution Policy (UDRP) implemented 18 months ago by the Internet Corporation for Assigned Names and Numbers (ICANN). Of concern to Geist is firstly, a feature of the system that essentially allows complainants to shop around for a favourable arbitration company and secondly, the prevalence of decisions made by a single arbitrator rather than a three-member panel.

Since the party who believes its copyright has been violated is allowed to pick which of the four ICANN-sanctioned arbitration-provider firms adjudicates the case, and results of past cases are public record, it is possible for complainants to choose a provider whose decision records favour the trademark holder, Geist said.

Additionally, since the main concern of complainants is a win, a visibly large number of favourable decisions attract more cases to the arbitration firm, giving it a financial incentive to decide in favour of trademark-holders, Geist said.

“I would agrees with Michael Geist on one issue – that there is ‘forum-shopping’ going on for the UDRP,” said Rob Hall, Ottawa-based president of, a domain name registry firm.

“I’ve been involved in ICANN from day one and my personal opinion is that they need to change the system. They need to make it so that the complainant suggests three or four possible forums, and the respondent gets to pick one of those,” Hall said.

This “forum shopping” is evident in Geist’s numbers, which show that the World Intellectual Property Organization (WIPO), and the National Arbitration Forum – where complainants are successful over 82 per cent of the time – share 92 per cent of the domain name arbitration market. By contrast, eResolution Inc., where complainants are successful only 63 per cent of the time, has captured only seven per cent of the market.

Not Property

“I question whether WIPO should even be in this business – are they truly independent?” said Hall, noting that as an intellectual property body they would seem to have a strong reason to “always favour the trademark holders.”

Hall was also careful to point out a common misperception people have about Web sites – that legally speaking, Internet domains are not considered property.

“The courts in the U.S. have always found domains to be a contract or a service. It’s not a piece of property that someone owns; it’s a service that is provided under contract. That seems like a nitpicky thing, but property and property rights have a whole different set of laws that contract law, and domain names operate under contract law,” he explained.

Since ICANN manages about 30 million domains, compared to the 240,000 names managed by the Canadian Internet Registration Authority (CIRA), there do not appear to be that many dot-ca disputes waiting to be resolved, said Gabriel Ahad, the group’s director of communications. However, in anticipation of future problems, CIRA will soon post draft dispute resolution rules and policies on its Web site, he said.

“For a variety of legal reasons I am not at liberty to discuss the contents yet (at press time they were scheduled for a Sept. 10 release), but I can tell you that the rules will definitely include a process for identifying how a dispute resolution provider is selected,” Ahad said.

On the additional question of one-member versus three-member panels Geist found that “almost all of the really bad decisions that have been rendered have been rendered by a single panel, when you get three people together, you get better decisions – and that impacts both sides.”

One of the finding that surprised Geist was the that complainants actually asked for three-person panel more often than respondents, even though statistically that made a win 20 per cent less likely.

“The reason, I suspect, is that if you are a complainant with a good case you don’t want to gamble with that case. With the single-panel situation there is a risk involved that you might end up with a particular panellist that just doesn’t render a good decision. For complainants with strong cases it’s in their interest to ensure that only the best decisions are rendered because they also face the risk that a bad decision will mean they lose a case that they shouldn’t,” Geist explained.

Since the current ICANN system favours the trademark holder, a group that is skewed toward wealthy and powerful corporations, both Hall and Geist anticipate an uphill battle changing the 18-month-old UDRP.

“I think there will be some serious resistance from the intellectual property quarters because [the UDRP] seems to be benefiting their trademark clients. The proper thing to do is to evaluate where it could be improved and make those improvements – to do otherwise is like sticking your head in the sand,” Hall said.

Geist agreed, noting that, like other aspects of the law, domain name dispute resolution needs to be both fair, and perceived to be fair, or the legitimacy of the whole system will be called into question, which begins to cast a shadow over larger e-commerce issues.