Comment

[David Post <Postd@erols.com>]

October 10, 1999

To:		ICANN Staff and Counsel
From:		David G. Post
			Temple University Law School
			Postd@erols.com
Subject:	Uniform Domain Name Dispute Resolution Policy (Sept. 29, 1999) 
		<<http://www.icann.org/udrp/udrp-policy-29sept99.htm>> 
		and
		Rules for Uniform Domain Name Dispute Resolution Policy (Sept. 29, 1999)
		<<http://www.icann.org/udrp/udrp-rules-29sept99.htm>>

	I would like to submit the following comments regarding the
above-referenced documents.  Please note, in the interest of full
disclosure, that I have been involved in the creation of disputes.org,
a dispute resolution service provider seeking to participate in the
dispute resolution process set forth in these documents.

GENERAL COMMENTS

1.  Given ICANN’s stated intention to engage in “consensus-based”
decision-making (as memorialized most recently in the NSI-ICANN
Agreement), it was unfortunate that these documents were produced in a
closed drafting process.  And now it appears that even the Drafting
Committee did not have the final say over these documents.  The Sept.
29, 1999 “Staff Report on Implementation Documents for the Uniform
Dispute Resolution Policy” <<http://www.icann.org/udrp/udrp.htm>> notes
that while the members of the drafting committee “provided valuable and
insightful advice” in regard to these documents, the “responsibility
for selecting the language” in the documents belongs to ICANN staff and
counsel, and that “the implementation language differs from that which
individual committee members would have selected.”  

	This might be an acceptable procedure if ICANN’s role is to put
together a document to help generate a consensus that has not yet been
reached.  But that requires giving the affected parties and the public
a substantial amount of time to review and comment upon the language
that ICANN staff have chosen after the document is prepared.  Instead,
however, we have been given a mere two weeks in which to express any
concerns that we might have.  I would hope that ICANN would take no
specific action on these documents until there has been a far longer
comment period.

2.  Anticompetitive concerns.  

	I am no expert in antitrust law in the U.S., let alone in other
jurisdictions.  I am seriously concerned, however, with the
anticompetitive implications of these documents, which appears to put
ICANN in the position of “cartel manager” enforcing an agreement among
registrars not to compete on certain items. ICANN is, by its charter,
supposed to be fostering competition among registrars, not providing a
mechanism for them to avoid that competition.
	For example, Paragraph 9 of the Policy contemplates that *all
registrars* must agree, presumably as a condition of being accredited
by ICANN, that they will not provide refunds to a registrant in the
event of a transfer or cancellation of a domain name. Perhaps that is
not unlawful price-fixing, but it certainly looks like it to me; will
ICANN deny accreditation to any registrar that tries to offer refunds
to customers?  

	Similarly, Paragraph 2 of the Policy sets forth a series of
representations and warranties that all registrants must provide.  Why
does this document have to include the representations that are to be
made by the registrant?  What does the representation that a registrant
is not “registering the domain name for an unlawful purpose,” or
“infring[ing] upon or otherwise violat[ing] the rights of any third
party,” or registering the domain name for an “unlawful purpose,” have
to do with dispute resolution policy?  Why aren’t the registrars free
to obtain whatever representations they feel are appropriate from registrants? 

	Paragraph 2 goes on to state:  “We [i.e., the registrars] do not check
to verify, and it is your responsibility to determine, whether your
domain name registration infringes or violates someone else’s rights.”
I take it that registrars are, by virtue of this document, forbidden
from (a) checking to verify whether a domain name infringes someone
else’s rights, and (b) taking on the responsibility, via a contract
with a registrant, of making that determination.  Why forbid registrars
from competing on these tasks?  Why shouldn’t registrars be allowed to
offer “verification services” (and, perhaps, insurance against
infringement suits)?  Indeed, in a truly competitive environment, those
kinds of services are precisely what one would expect some registrars
to offer; why, in the name of “dispute resolution policy,” is ICANN
prohibiting them from doing so?  Why is this anything other than
ICANN’s promise to enforce a restraint on competition among registrars?

	Para 4(h) states that “We (i.e., the registrars) do not, and will not,
participate in the administration or conduct of any proceeding before
an Administrative Panel.”  I can understand why registrars might not
want to participate in the conduct of the dispute resolution
proceeding.  I cannot understand why ICANN would make it a violation of
this policy if they did so, except as a means by which registrars agree
in advance not to make certain expenditures that some of them might be
tempted to bundle with other services offered to the public.  See also
paragraph 6 (stating that registrars “will not participate in any way
in any dispute between you and any party other than us regarding the
registration and use of your domain name.”).  Why shouldn’t registrars
be permitted to participate?

3.  Selection of Provider.  The Staff Report spelled out four
alternative ways in which the Provider can be selected after initiation
of a dispute (see also Para. 4(d) of the Policy (Selection of
Provider)).  They are:

	a. Allow the complainant to select the Provider by filing the
complaint with that Provider. Allow the Provider to select the Panelists.

	b. Allow the domainname holder to select the Provider and allow the
Provider to select the Panelists.
	c. Allow the registrar to select the Provider and allow the Provider
to select the Panelists.

	d. Allow the complainant to select the Provider by filing the
complaint with that Provider. Allow the parties jointly to select the
Panelists (if three Panelists are elected) by giving each party the
ability to select one Panelist from the universe of  Panelists
presented by all providers and having the third Panelist selected by
agreement of the first two Panelists or, failing agreement, by the Provider. 

	As noted in the Report, it is imperative that Providers be allowed and
encouraged, to compete among themselves on price, timeliness,
responsiveness, service, and the like.  That would seem to require
allowing Complainant, who will be paying the Provider’s fee in most
instances, to choose the Provider (alternative (a)).  That, however,
gives Providers an irresistible incentive to position themselves as
“complainant-friendly,” i.e., to develop a reputation for deciding
cases in favor of complainants (trademark holders).  Unfortunately, the
obverse is likely to be true if the domain name holder selects the
Provider (alternative (b)).

	The Staff Report appears to favor alternative (d), for it notes that
“this approach avoids many of the pitfalls of the [other] approaches.”
This alternative is, however, an administrative and logistical
nightmare for Providers, and probably completely unworkable.
Individual panelists are generally going to be working under contracts
with particular Providers — but under alternative (d), they would be
working from time to time under the direction of other Providers with
whom they have no pre-existing relationship.  How would Panelists be
paid?  How much, and by whom?  Each Provider is likely to have its own
system for communicating with individual Panelists; under this scheme,
however, communication would have to take place between Providers and
Panelists working for other Providers, something that may be very
difficult in many circumstances.  

	As for alternative (c), the Staff Report suggests that it “thwarts
effective price competition among Providers by depriving the
complainant, which pays the Provider’s fee, of any influence over
choosing the Provider; (ii) it creates administrative burdens for
registrars and involves them in domainname disputes, contrary to the
overall design of the policy; and (iii) it creates a (perhaps
irresistible) potential for registrars to seek to differentiate
themselves in the marketplace by the outcomes under Providers they
select, thereby undercutting uniformity among registrars.”  

	It strikes me that both the administrative burden for registrars, and
their “involvement” in the disputes, are relatively insignificant, as
both can easily be kept to a minimum under this scheme.  The
registrar’s role can simply be to forward Complaints to individual
Providers as they are received, which does not strike me as terribly
burdensome.  

	As to the other objections, I do not believe that alternative (c) is
problematic because it “undercut[s] the uniformity among registrars.”
The need for “uniformity” among registrars has been greatly overstated
throughout this process (particularly given ICANN’s responsibility to
induce competition among registrars, which is valuable precisely
because it produces a diversity of offerings).  The potential for bias
is, however, a problem; that is, under this scheme registrars may
compete on the basis of the outcomes preferred by their customers, the
domain name holders.  The absence of price competition is also a
serious concern.  

	One way to obtain a degree of price competition under this alternative
is to have registrars paying a fixed percentage of the Provider’s fee;
even if that were only, say, 5%, there would at least be some incentive
for registrars to choose lower-cost Providers.  I do not imagine that
this idea will garner significant support among registrars.

	Another alternative is as follows.  Let the Complainant choose a
Provider, but require that he/she obtain the Respondent’s agreement to
use that Provider.  In the event that the two parties are unable to
agree on a Provider, the registrar (or ICANN?) would assign the dispute
to a Provider at random. [This random assignment could be “weighted” by
the fees charged by the individual Providers; that is, a Provider
charging $1000 per dispute would be given twice the chance of being
chosen as one charging $2000, one-half the chance of one charging $500,
etc.]   This is administratively more cumbersome, to be sure.  It does
address, however, both of alternative (c)’s problems.  Each party
possesses a veto over the choice of Provider, but the exercise of that
veto is constrained by the knowledge that the alternative to reaching
an agreement is a completely random assignment.  Providers will compete
to become attractive to *both* parties — to gain a reputation for fair
deliberation at low cost so as to be agreeable to both sides.  

SPECIFIC COMMENTS: Uniform Domain Name Dispute Resolution Policy

	Para. 4(a).  The Policy states that dispute resolution proceedings
“will be conducted before one of the administrative dispute resolution
service providers listed at <URL>.”  It is not clear whether this means
that there will be a *single* list of providers, maintained
(presumably) by ICANN, at a single website, or that each registrar will
be permitted to maintain its own list of approved providers.  

	This ambiguity is, to put it mildly, quite significant, and it is
difficult to comment intelligently on the overall scheme without some
indication how it is to be resolved.  In particular, if ICANN maintains
a single list of dispute resolution providers, one needs to know how
ICANN intends to maintain that list; how will dispute resolution
providers be chosen?  What criteria will be used, and what process will
be in place to assure fairness and transparency in the choice of
providers?  I don’t think it is reasonable to expect members of the
public to determine whether or not they think this is a viable scheme
until this is clarified.
		
SPECIFIC COMMENTS:  Rules for Uniform Domain Name Dispute Resolution Policy

	Para. 2(a).  These requirements for discharging the responsibility of
providing notice to a respondent seem unnecessarily cumbersome.  In
order to discharge that responsibility, the Provider must send the
complaint to all addresses listed in the Whois database for the
respondent, *and* send the complaint via electronic mail, *and* send
the complaint to any address the Respondent has notified the Provider
it prefers, *and* send the complaint to all other addresses provided by
the Complainant, *and* send an electronic copy of the complaint to any
address on the respondent’s web page.  These will necessarily raise the
price of the proceedings, perhaps by a considerable amount.  Perhaps
registrants could, at the time of registration, be
asked/encouraged/required to provide an “electronic agent” who would be
authorized to accept service of process for them in case of a dispute
of this kind.

	Para. 2(b).  Similarly, this paragraph requires that all written
communication “shall be made by the preferred means stated by the
Complainant or Respondent, respectively (see Paragraphs 3(b)(iii) and
5(b)(iii)).”  Those latter paragraphs require the parties to indicate a
preferred method for communications . . . *for each of * (A)
electronic-only material and (B) material including hard-copy.”  Taken
together, it appears that all communication with the parties must be
both in hard copy and electronic form — an unnecessary complication and
an unnecessary expense for Providers.  Surely if the parties choose to
communicate via email, there should be no need for further hard copy
communication?

	Para 3(b) and para. 5(b).  Why is submission of the Complaint and the
Response in hard copy required?  The Providers will — indeed, must —
have the capability of handling these disputes in electronic form.  

	Para. 3(b)(viii) This paragraph requires the Complainant to “describe
the goods or services with which the mark is used.”  That may be
appropriate under U.S. law, where trademark protection requires actual
use in commerce, but under other trademark regimes there may be no such
requirement; that is, individuals may have trademark rights in symbols
that are not currently used with goods and services.

	Para. 3(b)(xiv) By this paragraph the Complainant will be required to
waive *all* claims against the dispute resolution provider, the
registrar, the registry administrator, and ICANN (as well as their
directors, officers, employees, and agents.  It is inconceivable to me
that this provision would be enforceable, at least to the extent that
it is imposed on a *uniform* (i.e., non-competitive) basis across all
registrars.  It is also blatant overreaching on ICANN’s part, an
attempt to insulate itself, and the other institutions involved in this
process, from all claims relating to domain name registrations as a
pre-condition to obtaining relief.

	Para. 5(b)(vii) What does it mean for the Respondent to state that
his/her assertions in the Response are “warranted under these Rules and
under applicable law”?  And why is that required in a uniform fashion
across all disputes? 
****
David Post -- Temple Univ. School of Law
202-364-5010		215-204-4539		Postd@erols.com
http://www.davidpost.com		http://www.temple.edu/lawschool/dpost.html
Also, see http://www.icannwatch.org 
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