Why Cancel a Domain Name in a UDRP Case?

While the most common results of a UDRP proceeding are either transfer of a disputed domain name to a complainant or denial (that is, allowing the respondent to retain it), there is another possible outcome: cancellation. I'm always surprised to see a UDRP decision in which a domain name is cancelled. True, many trademark owners don't really want to obtain control of a disputed domain name (and, instead, they simply want to get it taken away from a cybersquatter). Plus, maintaining a domain name incurs an ongoing expense as the result of renewal fees, and many trademark owners already have large (and, therefore, costly) domain name portfolios.

But, the cancellation remedy means that a UDRP victory may be short-lived, because cancelled domain names become available for registration by anyone, including another (or even the same) cybersquatter.

A trademark owner that files a UDRP complaint incurs real expense (through filing fees and legal fees) -- payments that rightly could be seen as an investment. Allowing a domain name to be cancelled instead of transferred seems like a wasted investment.

Here's one way of looking at the math:

  • The least amount of money that a trademark owner could expend on a UDRP complaint is about $500 -- if it files at the Czech Arbitration Court (the least expensive UDRP service provider) and prepares the complaint itself, without outside counsel. (In reality, most UDRP complaints incur total expenses of thousands of dollars.)
  • A popular registrar such as GoDaddy charges about $15 per year to renew a .com domain name.
  • Therefore, a trademark owner could maintain a transferred domain name for more than 30 years for less than the cost of filing the cheapest possible UDRP complaint.

Under this scenario, why would a trademark owner risk having a domain name fall into the hands of another cybersquatter if it could keep the domain name for itself and avoid having to file a second UDRP complaint?

The risk is real, as domain names cancelled in UDRP proceedings don't necessarily remain cancelled for long. For example, although the pharmaceutical company Sanofi won a UDRP complaint last year for 21 domain names, 20 were quickly re-registered (by multiple registrants) after they were cancelled and are being used in connection with websites that most trademark owners would consider problematic.

True, not many trademark owners request the cancellation remedy. At WIPO (the most popular UDRP service provider), only 1.69% of all cases have resulted in cancellations. But, the number of cancellations is on the rise, reaching 2.16% in 2015 and 2.09% in 2016.

What explains this (slight) increase in cancellations? One reason could be the arrival of cybersquatting in the "new" gTLDs. For example, some recent UDRP decisions that resulted in cancellations involved the top-level domains .support, .xin, .engineer, .istanbul, .host, .accountant and .bid. Perhaps the prevailing trademark owners felt that these domain names would not be attractive to other cybersquatters after they were cancelled.

Whatever the reason, trademark owners should think long and hard about whether to request the cancellation, rather than transfer, of a disputed domain name in a UDRP proceeding. It would seem that a domain name worth pursuing is worth keeping.

 

How to Get a Domain Name Transferred Under the URS

The Uniform Rapid Suspension System (URS) is designed to get a domain name suspended, but in some cases this dispute policy can be used to help get a domain name transferred. It's an uncommon result but one that trademark owners may want to keep in mind. The suspension remedy is often viewed as the greatest limitation of the URS. Trademark owners that want to have a domain name transferred typically file a complaint under the Uniform Domain Name Dispute Resolution Policy (UDRP) instead of the URS -- but, the UDRP is more expensive and time-consuming.

Still, in some cases, trademark owners have been able to obtain the transfer of a domain name as the result of a URS proceeding. While the URS itself doesn't provide for a transfer remedy, the issue can arise if a trademark owner and domain name registrant agree to a transfer after a URS complaint has been filed but before a determination has been issued.

In other words, a settlement under the URS can result in the transfer of a disputed domain name.

Settlements under the UDRP are not uncommon, but doing so under the URS is much more unusual and challenging, largely because of the expedited nature of URS proceedings.

While URS case files are not made public, it's interesting to note that a number of URS complaints have been withdrawn and the disputed domain names are now registered by obvious trademark owners -- a likely indication that the parties settled their disputes.

Indeed, at the Forum (the largest provider of URS services), 37 of 685 complaints -- about 5.4% -- have been withdrawn. In two cases withdrawn earlier this year, for <interbrand.design> and <astonmartin.forsale>, the current registrants are, respectively, Interbrand Group and Aston Martin Lagonda, which own the respective trademarks.

A trademark owner that wants to use the URS to encourage a transfer needs to act quickly, given that URS proceedings typically result in a determination within about three weeks of filing a complaint.

The URS rules anticipate the possibility of a settlement between the parties. Rule 16 of the URS states: "If, before the Examiner's Determination, the Parties agree on a settlement, the Examiner shall terminate the URS proceeding." And the Forum's Supplemental Rule 7 outlines a process where the parties can request a one-time stay of up to 45 days -- a pause in the URS proceeding that the parties can use to negotiate or perhaps even implement a settlement such as a transfer of the disputed domain name.

Of course, if a trademark owner can obtain the transfer of a disputed domain name as the result of filing a URS complaint, then it likely will have done so less expensively and more quickly than if it had filed a UDRP complaint.

But, given the relatively low number of URS proceedings that have been withdrawn (and not all withdrawals have been accompanied by transfers), the URS is primarily most effective only for its intended purpose, that is, domain name suspensions. Still, a URS-related transfer is an intriguing exception to the rule.

[Webinar Replay] How to Dispute a .us Domain Name: Transferring and Suspending Domains Under the usDRP and the usRS

Click above for a replay of the GigaLaw webinar, “How to Dispute a .us Domain Name: Transferring and Suspending Domains Under the usDRP and the usRS.” The webinar was originally presented on March 29, 2017.

In this webinar, Doug Isenberg of GigaLaw and Renee Fossen of FORUM provide information about the two dispute policies that are available to trademark owners under the .us country-code top-level domain (ccTLD): the usTLD Dispute Resolution Policy (“usDRP”) and the usTLD Rapid Suspension Dispute Policy (“usRS”).

The webinar provides an overview of the usDRP (which allows a trademark owner to seek the transfer or cancellation of a .us domain name) and the usRS (which allows a trademark owner to seek the temporary suspension of a .us domain name). The webinar discusses the substantive elements of these two policies and how they differ from the larger and more well-known Uniform Domain Name Dispute Resolution Policy (UDRP) and Uniform Rapid Suspension System (URS). The webinar also explains how to file a usDRP or usRS complaint and explore some important decisions under these two policies.

Playing time is approximately one hour.

Related links:

How Long Does a URS Case Take?

The Uniform Rapid Suspension System (URS) -- which allows a trademark owner to suspend certain domain names, especially those in the "new" gTLDs -- was designed as a quicker and less-expensive alternative to the Uniform Domain Name Dispute Resolution Policy (UDRP). As I've written frequently before, there are significant differences between the URS and the UDRP. One of those differences is how long a typical proceeding lasts. Like the UDRP, the URS procedure and rules provide strict timelines for various stages of a case. But, unlike the UDRP, URS cases are usually resolved much more quickly -- often in less than three weeks (although reviews and appeals may prolong the life of a URS proceeding).

Here’s how a common URS case proceeds:

Step 1 (Filing of Complaint):

As with a UDRP complaint, a trademark owner has discretion in deciding when it wants to file a URS complaint. Nothing in the URS procedure or rules requires that a complaint be filed within a specified period of time, and -- to my knowledge as of the date of this writing -- no URS decision has addressed the issue of laches, that is, whether a URS complaint would be barred by a undue lapse of time between the trademark owner's discovery of the disputed domain name and the date on which it files a complaint.

Step 2 (Administrative Review):

The URS procedure requires that a dispute service provider conduct an "Administrative Review" within two business days of the date on which the complaint was submitted to the provider. (Currently, there are three URS service providers: the Forum, the Asian Domain Name Dispute Resolution Centre and MFSD.) The procedure makes clear that this review is simply "to determine that the Complaint contains all of the necessary information."

Step 3 (Notice and Locking of Domain):

The URS service provider must immediately notify the registry operator after the service provider has completed the administrative review, and the registry operator is required to lock the disputed domain name within 24 hours. Then, within another 24 hours, the service provider must notify the registrant of the disputed domain name of the complaint, providing both electronic and hard copy notices.

Step 4 (Response):

A registrant has 14 days after notification to submit a response to a URS complaint. The URS provider may grant "a limited extension of time to respond... if there is a good faith basis for doing so." If the registrant does not submit a response, the proceeding is considered to be a "Default," which is relevant for purposes of a later possible "de novo review" or appeal (see below) and does not automatically result in a determination in favor of the complainant.

Step 5 (Determination):

Although supplemental filings are not uncommon in UDRP cases, a URS examiner "may not request further statements or documents from either of the Parties," and -- to my knowledge as of the date of this writing -- no URS examiner has consider a supplemental filing from any party, because doing so would complicate and delay what is supposed to be a simple and rapid process.

The examiner appointed to decide a URS case (and all URS cases have only a single examiner) is expected to issue his or her determination "on an expedited basis, with the stated goal that it be rendered within three (3) Business Days from when Examination began." Under "extraordinary circumstances," an examiner may not issue a determination until five days after the response was filed. If the determination was an order to suspend the disputed domain name, the the registry operator is required to do so "[i]mmediately upon receipt of the Determination" from the URS service provider.

Complications:

The process outlined above may seem very straightforward and quick -- and, in most cases, it is -- but the URS provides multiple opportunities to extend the course of a URS proceeding. For example, among other things, a losing domain name registrant that did not submit a response during the 14-day period may "seek relief from Default via de novo review by filing a Response at any time up to six months after the date of the Notice of Default" -- and is even "entitled to request an extension of an additional six months if the extension is requested before the expiration of the initial six-month period." Plus, either party can file an appeal within 14 days of a default or final determination.

In addition, a settlement could shorten or lengthen the course of a URS proceeding. For example, the Forum's supplemental rules allow the parties to "jointly request a stay for a one-time period of forty-five Calendar Days."

How Long Does a UDRP Case Take?

The Uniform Domain Name Dispute Resolution Policy (UDRP) was designed as a quicker and less-expensive alternative to litigation. Although the UDRP policy and rules provide strict timelines for various stages of a UDRP case, how quickly a dispute is actually resolved can vary based on numerous factors. A typical UDRP case results in a decision in about two months, but the facts of each case -- including actions both within and outside the control of the parties -- may shorten or extend that timing.

Here's how a common UDRP case proceeds:

Step 1 (Filing of Complaint):

A trademark owner has discretion to file a UDRP complaint at any time. While some panels have considered a "doctrine of laches," the WIPO Overview notes that "delay (by reference to the time of the relevant registration of the disputed domain name) in bringing a complaint does not of itself prevent a complainant from filing under the UDRP, or from being able to succeed under the UDRP, where a complainant can establish a case on the merits under the requisite three elements."

Step 2 (Compliance check):

The UDRP service provider (WIPO, the Forum, the Czech Arbitration Court and the Asian Domain Name Dispute Resolution Centre) acknowledges receipt of a complaint within about one day of filing; submits a "verification request" to the registrar to confirm the accuracy of information about the domain name and the registrant; and reviews the complaint for "administrative compliance" with the UDRP policy and rules. Rules, paragraph 4(b). If the provider finds the complaint "administratively deficient," it "shall promptly notify the Complainant and the Respondent of the nature of the deficiencies identified." Rules, paragraph 4(d). The complainant will then have five calendar days to correct any deficiencies. If the disputed domain name was protected by a privacy service and the underlying registrant's identity disclosed after filing, the provider may invite the complainant to amend the complaint within the same five-day time period allowed for curing deficiencies.

Step 3 (Commencement):

Within three calendar days of the provider's receipt of the filing fee from the complainant, the provider "shall forward the complaint, including any annexes, electronically to the Respondent and Registrar and shall send Written Notice of the complaint (together with the explanatory cover sheet prescribed by the Provider's Supplemental Rules) to the Respondent." Rules, paragraph 4(c). This is commonly referred to as "commencement."

Step 4 (Filing of Response):

A respondent is required to submit its response within 20 days of commencement. Rules, paragraph 5(a). (Many respondents choose not to submit a response -- but, failure to do so does not automatically result in a decision in favor of the complainant, because there is no default judgment available under the UDRP.) A respondent is automatically entitled to a four-day extension upon request. Rules, paragraph 5(b). And, "in exceptional cases," the service provider may grant additional extensions. Rules, paragraph 5(e).

Step 5 (Panel appointment):

The service provider is required to appoint a panel within five calendar days of receiving a response (if one is filed) or the deadline for a response (if one is not filed), if neither party has requested a three-member panel. Rules, paragraph 6(b). If a three-member panel is required, then the deadline for appointment may take 10 calendar days. Rules, paragraphs 6(c)-(e).

Step 6 (Decision):

The panel is required to ensure that a UDRP proceeding "takes place with due expedition," Rules, paragraph 10(c), and, unless there are "exceptional circumstances," it "shall forward its decision on the complaint to the Provider within fourteen (14) days of its appointment." Rules, paragraph 15(b). However, "exceptional circumstances" (which are not typically explained to the parties) are not uncommon. The provider is then required to notify the parties of the decision within three business days. Rules, paragraph 16(a).

Step 7 (Implementation):

If the panel's decision is an order to transfer the disputed domain name to the complainant, then the registrar is required to implement the decision after 10 business days. Policy, paragraph 4(k). In the rare event that a losing registrant notifies the registrar during the waiting period that it has "commenced a lawsuit against the complainant in a jurisdiction to which the complainant has submitted" under the Rules, then the registrar will not implement the decision unless it receives evidence of "a resolution between the parties"; evidence that the "lawsuit has been dismissed or withdrawn"; or a court order dismissing the lawsuit or ordering that the registrant "do[es] not have the right to continue to use" the disputed domain name.

Complications:

While all of the UDRP service providers must abide by the same deadlines set forth in the UDRP policy and rules described above, their supplemental rules and practices may result in slightly different timing over the course of a proceeding.

Plus, there are many factors that can alter the timing of a UDRP proceeding, such as supplemental filings from the parties, challenges in appointing panels, complicated cases (including, sometimes, disputes with a large number of domain names), panel orders and panel delays. Also, if the parties want to pursue a settlement, a case may be resolved without a decision -- sometimes as soon as shortly after the filing of a complaint, sometimes longer than a decision would have taken.