UDRP Response

[hkollar@NBA.COM]

The following is sent from Kathryn Barrett Park, Vice President and Senior
Intellectual Property Counsel of NBA Properties, Inc.

NBA Properties, Inc. ("NBAP") Response to Draft UDRP, Accompanying Rules,
and Provider Selection

     The following is the response of NBA Properties, Inc. ("NBAP") to the
request for comments from the Internet Corporation for assigned Names and
Numbers ("ICANN") on the Uniform Dispute Resolution Policy ("UDRP"), its
accompanying rules, and provider selection which were posted on the ICANN
Web site on September 29, 1999.  NBAP found the UDRP posted on ICANN's Web
site to generally be a positive development in terms of the protection of
trademarks in cyberspace.  However, we have noted a number of areas where
we believe amendments are needed.  They are listed below.


     NBAP thanks ICANN and its counsel, Louis Touton, for including
trademark owners and practitioners in the drafting process and looks
forward to working with the Internet community to ensure that the UDRP is
administered in a fair and effective manner.  We also welcome the
opportunity to revisit the UDRP issue 12 months after its implementation by
ICANN, so as to determine its effectiveness and whether changes are in
order.


The UDRP


Section 4(a) (iii)


     NBAP recommends that the word "and" as it appears between "registered"
and "is" in this provision be stricken and replaced with the word "or."
The provision would therefore read: "your domain name has been registered
or is being used in bad faith."


     We recommend this change so as to make it clear that instances of
alleged warehousing are considered to be "Applicable Disputes."
Increasingly, cybersquatters are registering famous trademarks in bulk, but
in most cases, do not post an active Web site.  Moreover, as currently
drafted, this provision is inconsistent with the provisions of 4(b) wherein
mere registration of a mark can be in bad faith and, therefore, subject to
the policy.


Section 4(b) (i)


     NBAP believes that the burden of proof required by the phrase
"primarily for the purpose of" as contained in this provision is  far too
high of a hurdle for the complainant.  It requires the complainant to know
of the domain name owners intent -- his state of mind when the domain name
was registered.


     For the phrase in this provision which states "for valuable
consideration in excess of your documented out-of-pocket costs directly
related to the domain name," NBAP recommends inserting the words
"registration of the" before the word "domain."  While a domain name
registrant may incur costs in connection with developing a Web site, it
will incur virtually all of those costs regardless of the domain name
associated with that site.  In the experience of the trademark community,
cybersquatters will claim any and all costs associated with the development
of a Web site as being directly related to its selection of a domain name.
This change will make clear that general Web site development costs should
not be considered in considering whether a demand for a fee to transfer a
domain name is in excess of what is reasonable.


Section 4(b) (ii)


     NBAP requests clarification of the meaning of the term "pattern" as it
appears in this provision.


     In the final phrase of this provision, "provided that a pattern of
such conduct has been established on your part," NBAP recommends that
everything after the word "conduct" be stricken and that the words "the
facts indicate" be inserted before "a pattern."  The new phrase would read:
"provided that the facts indicate a pattern of such conduct."


     This change clarifies the ambiguous passive use of the term "has been
established."  It clarifies that the panel may properly infer a pattern of
past misconduct from the facts or circumstances presented in the case.


Section 4(b) (iii)


     NBAP believes that the burden of proof required by the phrase
"primarily for the purpose of" as contained in this provision is far too
high of a hurdle for the complainant.  It requires the complainant to know
of the domain name owners intent -- his state of mind when the domain name
was registered.


Section 4(c) (preamble)


     NBAP believes that the circumstances listed in 4(c) should be treated
as "facts" and not conclusive proof of "legitimate rights."  Guiding
factors rather than conclusive proof is, in our opinion, more preferable in
fact intensive cases such as those involving domain names.


Section 4(c) (i)


     NBAP believes that the phrase "demonstrable preparations to use," as
contained in this provision leaves trademarks subject to abuse by
cybersquatters.  It provides a cybersquatter with an easy-to-use mechanism
for defeating pre-existing trademark rights.  What precisely are
"demonstrable preparations to use"?  Could they be as simple as a
one-paragraph business plan?  Could this simple document somehow take
precedence over years and millions of dollars worth of investment in a name
by a trademark owner?  The phrase leaves open too many questions.


     Moreover, despite the so-called "preparations" the domain name holder
has made to use the particular domain name, they simply may not have the
right as a legal matter to use such name.  For example, an individual who
wishes to set-up a site called to sell shirts with NBA team names and logos
(e.g., the Knicks, Lakers, Celtics, etc.) on them does not have the right
to use the NBA trademark in his domain name because he has developed a
business plan.  The name belongs to The National Basketball Association and
only the NBA can use it or authorize its use.


Section 4(c)(ii)


     NBAP strongly recommends that this provision be stricken completely.


     First, this provision creates a giant loophole for an individual to
adopt or allege that a trademark is a nickname in order to obtain the
domain name that corresponds to that nickname.  Moreover, what would be the
burden of proof imposed upon an individual to show that the domain name is
indeed his or her nickname?  Finally, once the respondent asserts that he
or she is "commonly known" by the domain name, how can the complainant, as
a practical matter, disprove this fact?


     Second, the "commonly known" concept is dangerously ambiguous.  For
example, who must the domain-name owner be "commonly known by" in order for
their ownership of the domain name to be deemed legitimate?  In additional,
it is unclear as to how long the domain name owner must be known by the
domain name.


     Third, it runs contrary to U.S. law.  The "commonly known" clause is
an example of people substituting their emotional take on an issue for the
considered deliberation of many courts.  In the 1800's courts used to say
that "Every man has the absolute right to use his own name in his own
business, even though he may interfere with or injure the business of
another person bearing the same name. . ."  Meneely v. Meneely, 62 NY 427
(1875).


     This "sacred" right theory is now referred to as "archaic" by
Professor McCarthy in his treatise entitled, McCarthy on Trademarks and
Unfair Competition (Fourth Edition, Section 13:8, note 14), and has been
expressly repudiated.  See, e.g., David Findlay vs. Findlay, 18 N.Y. 2d 12
(1966); John R. Thompson Co. v. Mrs. Lee Holoway, Sr., et. al. 366 F.2d 109
(5th Cir 1966).


     In 1914, Supreme Court Justice Oliver Wendall Holmes wrote in the
"Waterman Pen" case that while everyone had a right to use their own name,
the junior user must take precautions in the manner of use so as not to
cause confusion with the senior user's mark.  L.E. Waterman Company v.
Modern Pen Company., 235 U.S. 88, 59 L. Ed. 142 (1914).


     Thus, we have seen people ordered not to utilize their names in a
certain manner so as to avoid confusion with a prior right.  Sullivan v. Ed
Sullivan Radio & T.V., Inc., 152 N.Y.S. 2d 227, 110 USPQ 106 (1st Dept
1956) (Defendant ordered to change name of business for ED SULLIVAN to E.
J. SULLIVAN); E. & J. Gallo Winery v. Gallo Cattle Co., 12 USPQ2d 1657 (ED
Cal. 1989) (Joseph Gallo not permitted to use GALLO as a trademark,
non-trademark use of name limited); Lyon v. Lyon, et. al. 246 Cal App 2d
519, 152 USPQ 719/(2d Dist 1966) (partner named Lyon left the law firm of
LYON & LYON, enjoined from using Lyon as the name of his new firm).


     A belief in the "sacred right" has led to a series of cases where
companies have hired people of a certain name to join their businesses in a
bad faith attempt to acquire a defense against infringement, see Cartier v.
Three Sheaves Co., 465 F. Sup. 123 (SDNY 1979) (bad faith license by Pierre
Cartier), or where people have entered businesses just to take advantage of
their last name, Champion Spark Plug Co. v. Champion, 23 F. Supp. 638 (E.D.
Mich 1938) (Prosper Champion enjoined from selling spark plugs).


     People have even legally changed their name to take advantage of the
so-called sacred right, Societe Vinicole De Champagne v. Mumm, 143 F. 2d
240 (2d Cir 1944) (woman named Mumm van Schwarzenstein legally changed her
name to merely MUMM, enjoined from using MUMM to sell champagne).


     All the above cases refer to surnames.  The circumscribed right to use
one's own name has, for the most part, not been extended to nicknames.
John Walker & Son Ltd. v. Bethea, 305 F. Supp. 1302 (D.S.C. 1969) ("Johnny
Walker" Bethea enjoined from using JOHNNY WALKER).  As the court pointed
out, when adopting a nickname as a trademark, the defendant had an infinite
number of choices and chose a confusingly similar one.


     However, if ICANN elects to retain the provision in some form, we
recommend that amendments be made.  In particular, we suggest that there be
some type of high evidentiary standard placed upon the domain name owner to
demonstrate that he is known by the domain name in question.  Another
suggestion is to insert language which suggests that the domain name
owner's use is legitimate if he is "legally known by" the domain name.
Finally, we also believe that this provision should only be relevant if the
domain name owner is known by the name prior to any notice of the dispute.


     The re-drafted provision could read:


"you (as an individual, business or other organization) provide substantial
(or clear and convincing) evidence that, piror to any notice of the
dispute, you have been legally known by the domain name, even if you have
acquired no trademark or service mark rights at issue."


Accompanying Rules


Rule 2(a)


     While NBAP believes that it is important that domain name holders
receive actual notice of any proceeding, we find that the language in this
provision places an undue burden on the provider, increasing their level of
administration, as well as transaction costs.  Ultimately, providers may
elect not to participate in the ICANN UDRP process because of their
responsibilities under 2(a).  We recommend that ICANN revisit this
provision and consult with the providers concerning matters of notice.


Provider Selection


     NBAP believes that of the options regarding provider selection which
were presented in the "Staff Report, " letter d is the most appropriate.
Letter d allows both the complainant and the respondent some level of
control in a system which is new and will likely be met with some
skepticism.  Allowing the complainant to choose the provider will encourage
competition among providers to offer efficient and cost effective dispute
resolution to the parties, thereby decreasing the transaction costs
involved in the UDRP.  Moreover, given that the complainant has to pay, it
is only fair that a complainant have a choice in whose rate fits its
budget.  Lastly, this is fairly close to the way typical arbitration
proceedings are carried out.


Personal name/right of publicity


     Finally, NBAP believes that applicability of the Draft UDRP, as set
forth in section 4(a), should be broadened to include limited circumstances
where a registrant has registered or reserved a domain name in bad faith
that is identical or similar to a complainant's personal name, regardless
of whether the complainant has established full trademark rights in such
personal name.  There are many examples of cybersquatters reserving and
registering the personal names of promising college and high school
athletes before the athlete has had an opportunity to establish trademark
use in their names.  A complainant should have the right to challenge
another's registration or reservation of a domain name which is (i)
identical or confusingly similar to a personal name in which the
complainant has rights; (ii) when the registrant has no rights or
legitimate interests in the domain name, and (iii) the domain name was
registered and/or is being used in a manner constituting bad faith as set
forth in section 4(b).