by Eliana Alcivar and Fred Wilf
If you have a business and have been marketing your goods or services under a trademark, and you’ve had your eyes on an incredible domain name that includes your trademark, you may want to force the domain name owner to transfer it to you. On the other side of the issue, if you get into the business of buying up domain names as an investment, then you may be worried that someone may take the domain names away from you without paying you a cent for them.
“UDRP” stands for Uniform Domain-Name Dispute-Resolution Policy. It is an alternative dispute resolution process promulgated by the Internet Corporation for Assigned Names and Numbers (ICANN), which means it’s not litigation, and it’s not arbitration. Instead, it’s an administrative proceeding that can be processed entirely by email. Anyone who has ever registered a domain name since the UDRP was first implemented in 1999 has agreed to be subject to the rules at the time of registration. There are several different organizations that offer UDRP services, including the World Intellectual Property Organization (WIPO) and the National Arbitration Forum. At bottom, it is a process for resolving quarrels over who has the superior right to use a domain name.
Whether your claim to a domain name is superior to another person’s claim is a complex legal issue in and of itself and should be evaluated with the help of your legal advisors. The answer depends on a balancing of factors, including whether either party owns a trademark registration to the word or words contained in the domain name, and which person first began using those words. If the domain name owner registered the domain name before the trademark owner began using the term as a trademark (for example, using the words to help sell goods or provide services), then the domain name owner may have superior rights. If the trademark owner began using the term as a trademark before the domain name was registered, the trademark owner may have superior rights. In some cases, neither party has superior rights to the words in the domain name, which often means the first person to register the domain name keeps the domain name. The bottom line as things stand is that a trademark owner does not have an automatic superior right even if she would use that domain name to change the world, and even if the domain name owner is not doing anything useful with the domain name.
Once a trademark owner is satisfied that she has a good faith argument to go after that choice domain name, that’s when it’s time to decide whether to file a claim under the UDRP. Now, the UDRP is an “alternative” dispute resolution process, in the sense that it is an alternative to filing a claim in federal or state court. So, why would a trademark owner choose to go through the UDRP instead of going to court?
The main benefits of handling a claim through the UDRP are that it is often a cheaper (if not always quicker) mechanism for resolving domain name disputes. If you have ever followed the news surrounding domain name litigation, you may be aware that it can be very expensive to handle a claim by these traditional means. You have to have lawyers, and you have to show up to court on occasion. There can be seemingly endless motions and appeals. These cases can cost thousands of dollars or hundreds of thousands of dollars (or more) to litigate, and you may end up paying even more to settle colorable counter-claims raised by the defendant in response. The fact is that if this were the only way to handle a domain name dispute, most people, particularly start-up or emerging growth companies with limited cash flow, would be left with no practical means to enforce their rights.
The UDRP offers an alternative to the expense and hassle of traditional methods of handling simple domain name disputes. The minute a claim filed, the domain name registrar with oversight over that particular domain name (e.g., GoDaddy) is required to lock down the domain name and prevent the domain name owner from selling or transferring it to another person until the claim is resolved. The claim is evaluated by a panel made up of one or three people knowledgeable in the areas of trademark and domain name law. The whole process, from start to finish, should be complete within a matter of months. No need to show up in court – the entire process is handled by e-mail. This does not mean that it is free or even cheap to handle a claim under the UDRP, but the savings in legal fees and costs can be huge.
Once a complaint is filed with a UDRP provider, the trademark owner or other complainant must prove (1) the domain name is identical or confusingly similar to the complainant’s trademark, (2) the domain name owner has no rights or legitimate interests in the domain name, and (3) the domain name has been registered and is being used in bad faith. Of course, bad faith goes both ways. If the panel decides that the complaint was filed in bad faith, for example because the complainant wanted to take a domain name it had no rights to (which is called Reverse Domain Name Hijacking), then the panel may issue a decision denying the complaint and stating to the entire world that the complaint was brought in bad faith.
Once the decision is issued, either party may “appeal” by filing litigation in a court. However, if there is no additional litigation, the decision becomes final, and the domain name registrar is bound to comply with any order by the UDRP panel to transfer or cancel the domain name. All decisions are a matter of public record. You can search a database of UDRP decisions by each UDRP provider at the UDRP provider’s web site. For example, you can search UDRP decisions by WIPO panelists.
For all its benefits, the UDRP is not always the way to go. For instance, the UDRP does not allow either party to sue for damages, so if you think you have a hefty claim for damages, then you should consider going through the courts. But, for a trademark owner who wants to get that incredible domain name, or for a domain name owner who wants to keep her domain name, then you should consider discussing with a legal advisor the possibility of availing yourself of the UDRP.
Eliana Alcivar is counsel and Fred Wilf is a partner at Baer Crossey. They both have iPods (the device, not the domain name).