How a Simple UDRP Rule Change Could Help Reduce Cyberflight

By Doug Isenberg As I've written before, "locking" a domain name during a UDRP proceeding is an important concept, and now a report from ICANN staff seems to agree -- and, fortunately, is even recommending that the UDRP rules be modified to help avoid cyberflight.

As the "Draft Initial Report on the Locking of a Domain Name Subject to UDRP Proceedings Policy Development Process" (46-page PDF) notes, "The 'locking' associated with UDRP proceedings is not something that is literally required by the UDRP as written, but is a practice that has developed around it, but as a result, there is no uniform approach, which has resulted in confusion and misunderstandings."

In addition to its recommendations that locking be defined and adopted, the report includes this important suggestion:

Modify the provision from the UDRP rules that specifies that upon submission of the complaint to the UDRP provider the complainant should also ‘state that a copy of the complaint […] has been sent or transmitted to the respondent’ (section 3, b – xii) and recommend that, as a best practice, complainants need not inform respondents that a complaint has been filed to avoid cyberflight. The UDRP Provider will be responsible for informing the respondent once the proceedings have officially commenced.

Because cyberflight -- that is, a cybersquatter's intentional transfer of a domain name to evade legal pursuit -- often occurs after a UDRP complaint has been filed but before the dispute resolution service provider has officially commenced the proceeding, this change certainly would be helpful in avoiding some shenanigans. Law-abiding domain name registrants would not be penalized, as they would still have the benefit of the full 20 days allowed for a response under the existing rules, which does not begin until "the date of commencement of the administrative proceeding."

ICANN is accepting comments on this important UDRP rule change until April 26, 2013.

The URS Gets Real: ICANN Picks NAF

In an important announcement for trademark rights and the new gTLDs, ICANN announced that it has appointed the National Arbitration Forum (NAF) as the first service provider for the forthcoming Uniform Rapid Suspension System (URS). NAF already provides services for the Uniform Domain Name Dispute Resolution Policy (UDRP) and has handled other domain dispute programs, so it should be well-equipped to deal with a flood of new complaints that surely will arise as the new gTLDs go live.

The URS, a potentially quicker and less-expensive alternative to the UDRP (but with limited remedies), has been criticized by trademark owners and domainers alike for a variety of reasons. But the biggest obstacle seemingly has been identifying a service provider that could meet ICANN's targeted filing fee of $300 to $500 per complaint, a challenge that ICANN acknowledged when the new gTLD applications were revealed in June 2012 and again later in the year.

Apparently, NAF intends to meet the targeted filing fee: ICANN said that NAF has "demonstrat[ed] how it would meet all requirements presented in the RFI" -- a document that set forth the $300 to $500 filing fee. However, the Memorandum of Understanding between ICANN and NAF says only that NAF will "provide URS services on a reasonable and cost effective basis," without setting a specific dollar figure.

Although the ultimate filing fee set by NAF will partly determine the popularity of the URS, at least it's finally clear that, like it or not, trademark owners soon will have a new domain name dispute policy at their disposal.

Disclosure: I am a panelist for the NAF.

What is the Independent Objector Doing?

By Doug Isenberg Created to act in "the best interests of the public who use the global Internet," ICANN's Independent Objector has remained very quiet since the announcement of the appointment of French professor Alain Pellet more than nine months ago.

Indeed, aside from launching a website with general information about his role and posting some "comments on controversial applications" in December, it's unclear exactly what Professor Pellet has done. This, despite an apparent obligation (according to ICANN's job description) that the Independent Objector satisfy some "reporting requirements to ICANN, as well as the public."

(Apparently, these requirements are set forth in ICANN's contract with the Independent Objector, but I have been unable to locate the contract, and ICANN has not responded to my request for a copy of it.)

So, as of this writing, all we really know is that the Independent Objector will not file objections against 11 of the more than 1,400 applied-for gTLD strings.

Apparently, Professor Pellet has been in contact with some of the other applicants, and we may hear from him shortly about those. But, he has made it clear that he will not disclose which, if any, applications will be the subject of objections filed by his office.

As a result, the public whose interests the Independent Objector were designed to serve is left in a quandary, not being able to benefit from his "limited public interest" or "community" objections until it is too late.

Because the deadline for filing objections (apparently March 13) applies to the Independent Objector as well as to anyone else who satisfies ICANN's standing requirements, would-be objectors can't wait to see what the Independent Objector will do or they will miss the opportunity to object.

Similarly, the Independent Objector, who can file objections only against "applications to which no objection has been filed," must act (if at all) in a vacuum, since objections will not be publicly posted until after the filing deadline.

Consequently, the role of the Independent Objector appears to have been diminished.

Professor Pellet could resurrect the importance of his office by immediately announcing which applications will attract his objections. And, ICANN could create some legitimacy by publicly posting its contract with the Independent Objector and allowing objections to be filed after the public has had an opportunity to see what action, if any, the Independent Objector actually takes.

Dear ICANN: What is the Real Deadline for Filing New gTLD Objections?

By Doug Isenberg I've addressed this topic before, but the issue remains unclear while the urgency is growing and the clock is ticking: What is the real deadline for filing an objection to a new gTLD application?

Looking only at ICANN's microsite, the answer would seem obvious: March 13, 2013, as shown in the screenshot below:

But looking deeper, the answer gets more complicated. Because the Applicant Guidebook says that the objection period "will last for approximately 7 months," the deadline originally appeared to be January 13, 2013 (seven months after "reveal day" on June 13, 2012), though it is clear that ICANN has since extended this date by two months.

Still, the Guidebook also says that there will be "a two-week window of time between the posting of the Initial Evaluation results and the close of the objection filing period" -- an apparent indication that the true deadline is a relative, not fixed, date (because it is far from certain when the initial evaluation results will actually be posted, though it will clearly be after March 13).

This uncertainty has led to some interesting posturing. For example:

• In a letter (4-page PDF) on September 5, 2012, ICANN's Business Constituency wrote that a fixed deadline would require objectors "to file objections without knowing whether an application has even passed Initial Evaluation. This has cost and resource implications to those who may need to raise objections."

• The New gTLD Applicant Group wrote (3-page PDF) on December 21, 2012: "The community has had plenty of time to consider and prepare for objections. The March 13, 2013, deadline must be final, as any further delay would cause material harm to applicants."

• In a recent webinar, an ICANN slide (65-page PDF) stated that that the "Objection period [had been] extended to 13 March 2013" -- without any reference to the two-week window.

Although ICANN briefly addressed the issue of the "two-week window" at least once before, the answer from Kurt Pritz at a webinar on August 9, 2012, was incomplete and now seems dated. (Not to mention that it disregards the Applicant Guidebook's plain language.)

So, ICANN should immediately clear up the lingering confusion, especially as would-be objectors get close to filing complaints that could entail tens of thousands of dollars in filing fees, administrative fees and legal fees.

Hopefully, ICANN won't wait until the last possible date (as it did in extending the deadline for filing comments last year -- a move I called "woefully late") to definitively state, in writing, whether it will respect the two-week window.

Win a New gTLD Objection, Get Your Money Back (Some Restrictions Apply)

By Doug Isenberg The most popular process for resolving domain name disputes, the UDRP, operates like much of the U.S. legal system: Even if you win, you still have to pay for your own legal fees and expenses. But the formal objection process applicable to the new gTLDs operates on a very different system, where the prevailing party will be able to recover a substantial portion of its expenses.

As presenters from the dispute resolution service providers (DRSPs) reiterated at an ICANN webinar on the objection process, a winning objector or applicant will be entitled to a partial refund.

Specifically, the Applicant Guidebook clearly states (subsection 3.4.7):

After the hearing has taken place and the panel renders its expert determination, the DRSP will refund the advance payment of costs to the prevailing party.

This is applicable to all four types of objections: string confusion, legal rights, limited public interest and community.

Given that the costs associated with filing a complaint can be quite high, this refund is not insignificant. For example, WIPO's expert fee for a legal rights objection is $8,000, while the International Chamber of Commerce's International Centre for Expertise estimates that a three-member expert panel will cost 17,000 euros, or almost US$23,000.

Still, a number of important financial considerations remain. Among them:

• Each objection requires the parties to pay a filing fee (in addition to costs), which is not refundable.
• Each party must pay the DRSP's costs in advance, so even the party that ultimately prevails will be "out of pocket" for some period of time.
• Each party must bear its own legal fees.
• It's unclear how refunds will be handled in the event of a settlement or withdrawal (although, presumably, how to apportion whatever costs are actually refunded could be negotiated between the objector and applicant).

All of these financial issues should be weighed as the objection filing deadline (March 13, 2013) approaches.

Another Record Year for Domain Name Disputes

By Doug Isenberg

Total Number of Cases (Source: WIPO)

The numbers tell the story: The World Intellectual Property Organization (WIPO) received 2,884 domain name disputes in 2012, its most ever. As shown in WIPO's chart above, the number of cases has risen ever year since 2003, with one exception in 2009 (the year following the global recession).

In addition, as the chart below shows, the total number of domain names in dispute (because one case can include multiple domain names) also hit a record level last year, reaching 5,081 domain names.

 Total Number of Domain Names (Source: WIPO)

WIPO, the largest of the UDRP service providers, has not yet offered any explanations for the increase in domain name disputes, but it said last year that the "UDRP remains an attractive alternative to taking cybersquatting disputes to court." Given the increase in total domain name registrations (246 million as of the end of the third quarter of 2012 -- representing a 12% annual growth rate, according to Verisign) and the ongoing threats posed by cybersquatters, this statement surely remains true.

Ultimately, the launch of the new Uniform Rapid Suspension System (URS) later this year -- an alternative to the UDRP for the new gTLDs, designed for "clear cases of trademark abuse" -- may slow the rise in UDRP filings. But, the URS actually may lead to an even greater number of domain name dispute filings, given its simplified process and the certain spike in cybersquatting that will accompany the new gTLDs once registrations begin.

New Year's Resolution: Renew Your Domain Name! (And Other Best Practices for Domain Name Management)

By Doug Isenberg As The Wall Street Journal reminded us during the holidays, even big companies make easy (but damaging) mistakes online: FreshDirect failed to renew its domain name, <freshdirect.com>.

The grocery delivery company, which the Journal said was founded in 1999 and has sales close to $400 million annually, blamed "a renewal issue with our domain name" for an outage that reportedly left customers seeing a parking page for more than a day.

The domain name has now been renewed for 10 years, a service that the company's registrar, Network Solutions, offers for only $179.90 -- a small price to pay considering the business that FreshDirect may have lost as a result of its apparent oversight.

As I've written before, many big companies, including even Microsoft, have inadvertently failed to renew their domain names.

The obvious lesson: Don't neglect your domain names. Specifically, here are a few best practices:

• Be certain that more than one person at your company is responsible for registering and renewing domain names.
• Confirm your "whois" domain name registration details regularly.  (The new year is certainly a good time to do so -- but, given that domain names can be registered for as little as one year, this check should be performed more frequently.)
• Renew critical domain names for lengthy periods of time, not just year-to-year.
• Use a reputable domain name registrar.
• Take advantage of your registrar's auto-renewal options.
• Be sure that the e-mail contacts for your registration are valid and don't use only addresses associated with the domain name itself.

Dot-Brands Join Growing List of Withdrawn gTLD Applications

By Doug Isenberg Although far from a rush, the number of gTLD applications being withdrawn is growing. Three months after the first four applications were withdrawn, the list has now grown to 13. The newest additions (or rather, perhaps, subtractions) are:

• .ansons
• .caremore
• .chatr
• .cialis
• .glean
• .gmbh
• .hilton
• .skolkovo
• .swiss

Because applicants are not required to provide a reason for withdrawing, it's impossible to know what motivated these decisions. Still, there are a few interesting insights available. For example:

• This list includes the first "dot brands" to withdraw, including .caremore, .cialis and .hilton. In its application for .cialis, Eli Lilly had confessed that it "does not believe that there has been enough time or information available to fully analyze and evaluate all potential use case options."
• The withdrawn .swiss application was one of two for the same string and had received an "early warning" notice from ICANN's Governmental Advisory Committee (GAC), which said that the Swiss Confederation (the other .swiss applicant) "will build upon existing relationships to set up an effective and transparent governance process for the gTLD '.swiss'."
• The withdrawn application for .gmbh (German for "company with limited liability") was one of six for the same string, an obviously contentious field.

What GAC's 'Early Warning' Notices Really Mean

By Doug Isenberg ICANN’s Governmental Advisory Committee (GAC) has just issued "Early Warning" notices on nearly 250 gTLD applications, from .accountant to .zulu. Although the notices do not prevent the applications from moving forward, they could have a significant impact on the gTLD program.

As stated in the Applicant Guidebook, an Early Warning Notice is an indication that an application "is seen as potentially sensitive or problematic by one or more governments," but:

It is not a formal objection, nor does it directly lead to a process that can result in rejection of the application. However, a GAC Early Warning should be taken seriously as it raises the likelihood that the application could be the subject of GAC Advice on New gTLDs... or of a formal objection... at a later stage in the process.

The notices, filed by numerous countries, address various concerns. For example:

• The United States government filed notices on applications for .army, .airforce and .navy, stating for each: "The string is confusingly similar to the name of a specific government agency."
• India filed a notice for an application on .bible, in which it said, "There is no plan in the application to address the specific needs of the approximately 27 million Christians in India."
• And 21 notices were filed on the various applications for .hotel (and variations thereof), including by France, which touted its role as "the first world tourism destination" and said that "[e]ach hotel business should have the right, guaranteed by ICANN, to use the term 'hotel' as generic top level domain... for promoting its commercial market strategy, and this right should be only reserved to the suppliers of hotel services."

(Disclosure: I represent the Hotel Consumer Protection Coalition, which filed public comments on the .hotel applications and variations.)

So, what now?

Any applicant that has received an Early Warning notice may elect to withdraw its application within 21 days of the date of the notice and, if it does so, would be entitled to a refund of 80% of the filing fee, that is, US$148,000. This would not be unprecedented, especially given that six applications already have been withdrawn (for reasons unrelated to the GAC Early Warning notices).

Or, applicants may respond to the Early Warning notices and proceed with their applications, although applicants would face the possibility of "GAC Advice" later (that is, notice to the ICANN board that could result in disapproval of an application) or a formal objection.  (Interestingly, both GAC Advice and formal objections are possible with respect to all of the applications, not just those that received Early Warning notices.)

Thus, in the short term, the GAC Early Warning notices could result in some applications being withdrawn; and, in the long term, they could indirectly lead to fewer approved applications. And, for anyone considering filing a formal objection of their own, the notices may provide additional support for their arguments.

WIPO's Proposal for a 'Workable' URS

Amid an ongoing debate about the practicality and usefulness of ICANN's proposed Uniform Rapid Suspension System ("URS") for the new gTLDs, the World Intellectual Property Organization ("WIPO") has proposed a revised version of this new domain name dispute policy -- "URS 2.0" -- which it says will address many of the criticisms of URS. In a discussion paper (3-page PDF) presented at the recent ICANN meeting in Toronto, WIPO says URS 2.0 would create a "simple and cost-sustainable suspension mechanism" -- something that URS critics have said is lacking in the current model.

Among other problems with the original URS (as set forth in the Applicant Guidebook), ICANN has admitted that the "model does not meet the cost targets," as Kurt Pritz confessed in a recent webinar intended to address some of the concerns. The Guidebook suggests that the filing fee for a URS complaint would be about $300 -- although, interestingly, Pritz and others have fallen to fee creep and now often cite a figure of $500.

While the webinar explored ways to keep the fee down (including by automating or subsidizing the process), WIPO's proposal notes that the original URS "warrant[s] panel appointment in all cases" and that the fee target is "neither realistic nor optimal."

Instead, WIPO's alternative URS 2.0 model would keep costs low by creating a default suspension, without the need for a panel appointment, in cases where no response is filed. The default could be appealed by a losing registrant merely by submitting a "form-based response" (without a fee). In cases where a response is filed before default, the URS 2.0 proceeding would be dismissed, giving the complainant an opportunity pay an additional fee for an appeal or proceed to a complaint under the time-tested Uniform Domain Name Dispute Resolution Policy ("UDRP") instead.

URS 2.0, WIPO says, would create a "workable balance" among competing interests and "would be the cleaner way to significantly reduce costs for the majority of URS cases, preserving important registrant safeguards, while underwriting cost sustainability of the system in the longer term."

The WIPO model doesn't solve every issue -- for example, should a cybersquatter really be able to avoid a suspension by submitting a free form at no cost; and is a suspension even an appropriate remedy? But WIPO's paper should at least renew discussion about the viability of this important new dispute mechanism rather than force the current model to work in potentially impractical ways.