A Catalog of Critical Process Failures; Progress on Substance; MoreWork Needed [duplicate?]

["Michael Froomkin - U.Miami School of Law" <froomkin@law.miami.edu>]

I attempted to submit comments yesterday but do not see them archived at 
http://www.icann.org/comments-mail/comment-udrp/current/maillist.html

I have therefore posted a copy of my comments at <A HREF =
"http://www.law.miami.edu/~amf/icann-udp.htm">
http://www.law.miami.edu/~amf/icann-udp.htm</A>.

-- 
A. Michael Froomkin   |    Professor of Law    |   froomkin@law.tm
U. Miami School of Law, P.O. Box 248087, Coral Gables, FL 33124 USA
+1 (305) 284-4285  |  +1 (305) 284-6506 (fax)  |  http://www.law.tm
                 -->   It's warm and wet here.   <--

---------- Forwarded message ----------
Date: Wed, 13 Oct 1999 23:21:44 -0400
From: A.Michael Froomkin <froomkin@law.tm>
To: comment-udrp@icann.org, froomkin@law.tm
Subject: A Catalog of Critical Process Failures; Progress on Substance; More
    Work  Needed

A. Michael Froomkin
Professor of Law
University of Miami School of Law
froomkin@law.tm
http://www.law.tm

[Please note: I an organizer of disputes.org, a potential Provider under
these Rules, and my comments on matters relating to providers of
arbitration services may need to be discounted appropriately.]

Introduction

The process that has taken us to this point has been seriously deficient
in a number of ways.  Each of these failures individually would be
sufficient to require that this proposal be re-evaluated.  Taken as a
group they admit no other possibility.   In my opinion, and I do not say
this lightly, no one aware of all the facts could claim "consensus" has
yet  been demonstrated for this policy based on its history to date.

The irony is, however, that although,
	(1) there remain very principled reasons to question the
appropriateness (and indeed legality under anti-trust principles) of a
Uniform Dispute Policy (UDP) that intrudes so deeply into the working of
the market in an anti-consumer fashion; and 
	(2) the current draft does not achieve all the goals set out in ICANN
Board Resolution 99.83 at paragraph 3; and
	(3) there remain a small number of other critical flaws in the proposed
UDP which should be removed before the policy goes into effect; 
the current draft is, for all its substantial problems, unquestionably
an improvement over its predecessors.  Alas, this may say as much about
the sad state of the predecessor drafts as about the virtues of the
current document. 

Process Failures
================
	Working Group A

Working Group A, the ostensible source of the recommendation that has
lead to the current proposal suffered from both formal and real
failures.   

As a formal matter, Working Group A was not properly constituted
according to ICANN's own rules.   A Working Group requires a
representative from each constituency of the DNSO.  It did not have one
from each.

As a practical matter Working Group A was both manipulated and
railroaded.  I had both written (email) and oral assurances from the
Chair that I would be included in the working group.  Somehow,
mysteriously, I was never formally included, and thus my dissents (while
often referred to in substance) could be somehow be excluded from the
claimed consensus.  Nor was I not the only person excluded from this
group.  

The Working Group was further manipulated by being cut up into
sub-groups.  People were not always allowed access to the sub-group they
wished to be in, thus reducing the amount of input and disenfranchising
those points of view that the Chair chose to exclude.  

The ultimate report was written single-handedly by the Chair, and posted
for comment to the full working group for a brief period.  It does not
in my opinion represent a consensus of the group or of the community at
large.

	The pNC Endorsement

I have grave doubts as to the validity of the pNC endorsement of the
WG-A report.  At the time of the endorsement the pNC existed in a rump
form, and it is not evident that it was appropriate for it to act on
substantive matters.  In any event, from the external evidence available
(which may not be all the relevant facts), it appears the pNC failed in
its duty to scrutinize the existence of a consensus in even the most
elementary way.   I am not aware of any consultation or investigation by
the pNC on this subject.   Consensus was not documented in any
meaningful or adequate way beyond the then-members of the pNC.

	The ICANN Board Resolution

The deficiencies of the Working Group and the pNC might perhaps be
regarded as an academic issue, since the ICANN Board's actual action
bore only an indirect relationship to what had actually been alleged to
be agreed by the Working Group.  Resolution 98.3 of the ICANN Board
states that the "Registrars' Model Dispute Resolution Policy should be
used as a starting point".  This was, to me at least, a complete
surprise, and I have been participating fairly intensively in this
process for some time.

This document was not the product of any working group.  It was not the
product of the DNSO.  It was prepared by one group of partisans, at
their own expense, working largely in secret.  The only notice that
ICANN even contemplated such an action was, I gather, posted somewhere
on the ICANN web page approximately seven days before the Santiago Board
meeting.  I certainly did not notice it at that time, and I doubt
seriously whether many other concerned parties noticed it either.  
Prior to this decision, ICANN had been stating that the Registrars would
be encouraged to come to agreement among themselves, as some sort of
supplement to the ICANN processes, and to inform ICANN of it.  I at
least did not understand this to mean that ICANN proposed to use
consensus among the Registrars as a substitute for consensus among a
more diverse group of stakeholders and I suspect I was not alone in this
understanding.

The question of provenance is an important issue because one of the most
objectionable features of the current draft has its origins in the
Board's resolution in Santiago, and indeed the entire document currently
being proposed is materially different from previous proposals.  (It
also has implications for the legality of the proposal under competition
law.)  Furthermore, from the time that I was added to the "small
drafting committee" part way through its deliberations and continuing
until the end of its existence, members of that group were told that
comments would only be accepted on the limited matters referred to the
committee by the ICANN Board.   

The small drafting committee, for all its virtues, was composed entirely
of North Americans who communicated erratically with ICANN counsel,
himself a US lawyer.  I am especially concerned that non-US viewpoints
may not have been heard, and also about the effects of some of the
proposals on non-US registrants.  This is a true concern rather than a
conclusion that something is wrong-–I do not actually know what effect
these rules are going to have in large parts of the world, and I fear no
one else involved in the drafting process does either.  It may be that
the effects of the rules are no worse outside the US than in it; but I
think considerable further thought needs to be given to this issue by
non-US trained lawyers before they can be approved.  (I discuss
specifics below.)

Thus, it is critical to note that this current, rather short,
fourteen-day comment period represents the only opportunity that most
non-registrar stakeholders have ever had to comment on the major
features of the actual text and substance of the proposed UDP.  I do not
consider this to be adequate to determine consensus.

Substantive Issues
==================
	General Considerations

My comments on the substance of UDP policy and rules are based on the
following assumption, which I take to be shared by ICANN, although not
by all commentators: the purpose of the UDP policy is to provide a
quick, cheap, just, and generally lightweight process to resolve clear
cases of abusive registration.  Easy cases are those where facts are
either not in dispute, or where there is dispute it is easy to tell
where the truth is.  (Cyber-arbitrators are not well positioned to make
difficult credibility determinations in a paper process.) Easy cases are
those where the law is relatively clear, and in most cases those where
the relevant law is the same in all jurisdictions relevant to the
dispute.  

I take it that it is not, and could not be, the objective of the UDP to
provide a global trademark court that would be able to resolve every
dispute; hard cases belong in a court.  This is especially the case
since in the most complex matters what constitutes a "legitimate
interest" in a domain name may be a difficult question of national law. 
A major goal of the UDP is thus deterrence of clearly abusive
practices.  This should benefit trademark holders who will benefit from
global jurisdiction, low fees, and a relatively quick process, and (one
hopes) will provide some benefit to registrants, although exactly what
this in the current proposal is somewhat hard to discern.

	Critical Issues

A few major issues cry out for re-assessment or further discussion and
explanation.

* Competition Law.  As a preliminary matter, I believe ICANN owes the
relevant stakeholders and the international community in general an
explanation as to why it believes that this proposal complies with US
anti-trust law and EU competition law principles.  It is not in keeping
with the nature of this process to put out some set of rules and dare
people and governments to sue.  All stakeholders have an interest in
stability, and stability is not achieved by rules that appear vulnerable
to accusations of illegality.  Although I am not an anti-trust
specialist, in view of the fact that there are already registrars who
are competing by offering consumers more favorable terms than those to
be mandated by the UDP and that the consequence of this proposal will to
require them (on pain of losing the ability to register in the gTLSs) to
cease to compete on quality of service, and in view of the fact that the
text on which the current document is based was primarily drafted by a
lawyer paid by an association of registrars, the case for a claim of
conspiracy in restraint of trade between ICANN  and the registrars (or
abuse of a dominant position by ICANN) would appear to be at the very
least to be plausible.  It may be that ICANN has commissioned a legal
opinion as to why this UDP proposal is in fact legal despite appearances
to the contrary.  If so, I think at least the broad outlines of that
case should be disclosed.  If ICANN has not secured such an opinion, I
believe it would be irresponsible for ICANN to subject itself and the
registrars to the potential liability, and that the potential for this
type of lawsuit or enforcement action would do more to create
instability in the Internet than almost anything else ICANN could do
with the UDP.

* "Parity" of Appeal.  Perhaps the single greatest improvement in the
current draft is that for the first time it creates a mechanism which
guarantees that a losing registrant will have some means, however
difficult, of securing court review of a decision against him.   The
fact that this right is now certain for the first time should not blind
one, however, to the extraordinarily cramped nature of that right, the
very difficult conditions under which it may have to be exercised, and
the possible adverse consequences for a registrant.  

The process proposed works as follows.  After a registrant loses,
implementation of a domain name transfer is stayed for ten business
days.  If the registrant files a complaint in the "Mutual Jurisdiction"
in that period the transfer is halted.   For all new registrants and for
all re-registrants the Mutual Jurisdiction will be the location of the
Registrar, not where the registrant is located.

The combination of the short time period to file a complaint, combined
with the location of the Mutual Jurisdiction raises a number of issues:

	(A) First, the short period to file a complaint means that a registrant
will have to hire a lawyer to represent him before the arbitration
provider, since it is unlikely to be possible to secure counsel quickly
enough once the decision has gone against him.   As a result, claims
that the UDP policy somehow benefits consumers because it will save them
money on lawyers are undermined.  This serious unfairness would be
ameliorated by extending the "freeze" time period to 30, or even 20
days.

	(B) There is a notice issue, especially for re-registrants who are
currently registered with NSI.  Under US law at present there is no in
rem jurisdiction in Virginia over domain names.  Will people
re-registering their domain names be told of the legal consequences in
clear terms?  The policy fails to address this, and it potentially
disadvantages non-US re-registrants the most as they are the ones who
will have the most difficulty finding US counsel in a hurry, and who are
the people who potentially will be paying two sets of lawyers, one at
home who speaks their language for the arbitration, and then another in
Virginia.  Somehow I suspect that unless someone requires it to do so,
NSI is not going to warn its foreign customers that they might be
substantially better of transferring their registrations to a
competitor.

	(C) Until there is a gTLD registrar in every country, there is a
fairness issue in requiring some people to give up their home forum to
register a domain name.  One hopes this will be a transitory problem,
but until it is no longer a problem one could fairly expect an
international body like ICANN to use a transitory rule that recognized
the fairness issue.  The current UDP does not address it.

	(D) The most serious potential long-run issue, however, has to do with
the consequences of imposing a 10-day filing rule on parties who
register with a non-US registrar and whose "Mutual Jurisdiction" is
therefore a non-US court.  The US and many European jurisdictions have
relatively liberal rules of pleading.  In the US, for example, an
initial complaint (in federal court at least) can be very skimpy, even
mildly inaccurate in places, and can be amended once as of right with no
or minimal consequences to the plaintiff.  A rule that says, rush to the
courthouse, file in a hurry and amend at leisure is not unjust in such a
regime.  Pleading rules were not always so liberal, however; the filing
of an inaccurate complaint (and any complaint that needed amendment
potentially was "inaccurate"!) was once considered fraud on the court. 
In some regimes pleadings could not amended, but had to be withdrawn and
re-filed (which under the UDP policy would be cause for enforcement of
the arbitrator's decision even if the complaint were re-filed the same
day); under some of the older forms of action some pleadings could not
be withdrawn without prejudice.   I personally have no idea how many
countries in the world use liberal pleading rules.  I would be surprised
to learn that they all do.  Indeed, I read in Jorge A. Vargas, Mexican
Law: A Treatise for legal Practitioners and International Investors §
20.2 (1998) that in Mexico, "Once drafted, a complaint cannot be
refiled."  I would not be surprised to learn that many other countries
have the same illiberal rule.  The UDP puts all nationals of such
countries to an unreasonable choice: they must either give up their home
forum by registering with a foreign registrar, or do a great deal of
advance legal work before they even know the result of the arbitration
if they want to have a meaningful chance of appeal.   (Note that the
same does not apply to a losing challenger, who can wait as long as he
likes before trying for a second bite at the legal apple, subject only
to laches or the statute of limitations.)  This matter requires a degree
of study it simply has not received.

* Tarnishment. Policy ¶ 4(c)(iii) contains a provision which states that
a legitimate noncommercial use of a domain name will nonetheless be
denied protection under paragraph 4(c)(iii) if the panel determines that
the registrant has an intent to "tarnish" the complainant's trademark. 
This is wholly inappropriate, undermines the a very substantial part of
the free-speech enhancing value of 4(c)(iii), and will have especially
pernicious effects outside the US.  

Within the US, there is a substantial risk that this language will be
used to deny protection to legitimate criticism cites.  A cite designed
to attack a company's labor practices, its environmental record ("MegaCo
kills the earth") might be considered to show an intent (recall-it's
mere intent, not even actual tarnishment) to tarnish a mark.   This
would go far beyond US law in protecting trademark holders.  The picture
is even more disturbing if one considers the various meanings of
tarnishment in other legal systems.  At various times and places, even
gentle criticism of corporations such as comparative price and quality
advertisement have been held to be tarnishment.   It seems certain that
the effect of this language will be to blunt the protection of free
speech that noncommercial users are entitled to.   The inclusion of this
tarnishment language is particularly inappropriate given that it was
inserted at the eleventh hour, by either the registrar draft or the
ICANN board itself.  It does not belong in this document.

* Reverse Domain Name Hijacking  The current UDP contains no meaningful
punishment for reverse domain name hijacking (RDNH) other than the
potential slap on the wrist of being chastised in an decision.  Nor,
other than the aspects of the policy that might make it hard for RDNH to
succeed (primarily the defenses listed in Policy 4c), does it contain
provisions calculated to deter RDNH.  In this respect, therefore, the
proposed policy does not even pretend to comply with the Board's
Santiago resolution.

Although this is not a small problem, I believe that this lapse will
have to be forgiven so long as the other problems with the Policy and
the Rules are corrected because I believe this problem cannot be solved
without causing worse problems.  It is generally agreed that the UDP
process should not give the arbitrators authority to levy fines.  Yet
without this authority there is essentially no sanction which could be
applied against a reverse domain name hijacker other than excluding them
from any further UDP process–something that might be contractually
awkward.

Criticisms of the UDP which seek to further weaken the various
protections offered to registrants, e.g. amendments advanced by INTA,
should be read with this failure to address RDNH in mind.  Although as I
explain below those amendments are misguided on their own terms, they
are doubly inappropriate given that they would worsen the already
one-sided nature of the UDP.

* Rules for Computation of Time.   The rules for computation of time are
extremely hard to follow and, to the extent I can follow them, either
unfair or poorly thought out.  I think they should be re-written from
scratch to flow in a logical order.

We begin with Rule 4(c) which states, "The date of commencement of the
administrative proceeding shall be the date on which the complaint is
forwarded by the Provider to the Respondent" and Rule 2(f) which states
that "All time periods calculated under these Rules shall begin to run
on the earliest date that the communication is deemed to have been made
in accordance with Paragraph 2(e)."  

The key parts of Rule 2(e) state that "Except as otherwise provided in
these Rules...all communications provided for under these Rules shall be
deemed to have been made.... if via the Internet, on the date that the
communication was transmitted, provided that the date of transmission is
verifiable." [Note that this refers only to transmittal, not receipt.]

Rule 2(a) does not appear to be a rule "otherwise" providing in terms of
rule 2(e) because it does not speak of computation of time (this may be
a drafting error?).  It speaks only of a duty to achieve actual
notice....eventually.  Thus, if email to a defendant bounces, time
starts to run anyway while the Provider continues to attempt to achieve
actual notice by some other means. Similarly if an email is sent but not
read (e.g. if the recipient is on vacation), time starts to run anyway.  

I cannot say this clearly enough: A policy that starts the clock running
when an email is sent, and does not require either ACTUAL notice in
advance of starting the running of time or something substantial to show
that efforts have been made to achieve notice is immoral.  Merely
initiating communications via email is not adequate notice.   Repeat:
Merely sending email is not adequate notice.  Running a procedure of
this sort without actual notice or things reasonably calculated to
achieve notice prior to the commencement of the proceedings must surely
be contrary to the public policy of all civilized nations.  It will also
produce results that are unenforceable in the courts of all civilized
nations.  It is also unwise.   The idea that people go on vacation for
two to four weeks and might not check their e-mail is not new to this
process, but nothing has been done to take account of the issue.

At a very minimum, Rule 2(e)(iii) should have added to it, "...further
provided that the date of receipt must verifiable in the case of the
initial communication from the Provider to the Respondent." 
Alternately, the word "transmission" could be changed to "receipt"
(perhaps this is what was intended?).

	Other Issues
	============
* Policy ¶ 2 (b) ("By applying to register ... you hereby represent and
warrant to us that ... to your knowledge, the registration ... will not
infringe upon on otherwise violate the rights of any third party.") 
This language broadly follows the WIPO recommendation.  I continue to
believe that this language is counter-productive and unreasonable.   One
might argue that this requirement is pointless since it is not at all
clear whether a mere registration of a domain name can, without use,
infringe the intellectual property of another. Indeed, in the US, a
person cannot violate the Lanham Act or the Dilution Act without
commercial use of another's mark. The requirement may seem even more
innocuous when one considers that many lawyers I have spoken to take the
view that in all but the most obvious cases of unfair competition the
only way to know whether a proposed trademark, much less a domain name
registration, is an infringement is to see what a competent court says.
Whatever one may think of this type of legal realism, it demonstrates
that many lawyers will have no fear advising people to register whatever
they want and let the courts sort it out later; the rule will therefore
stop only the highly scrupulous (and those without legal advice) without
in any way daunting the ethically dubious.  

I am especially concerned that the words "interfere with" requires too
broad a representation by the registrant–one that goes beyond any
existing legal requirement.  If Alice and Bob both have registered the
same trademark in different sectors and/or jurisdictions, and Alice is
aware of Bob's registration, how can Alice give a representation in good
faith that her registration, which prevents Bob from registering his
mark in that gTLD, "the registration of the domain name does not
interfere with or infringe the intellectual property rights of another
party"?  There will be some names, like "united," that in theory no one
with a trademark containing the word could register because everyone
understands that one person's registration "interferes" with the holder
of a trademark in a different sector's ability to register that term. 
Furthermore If Bob is ignorant of Alice's registration (the proposal
creates no duty to investigate), he can make the representation, but
there seems no sound reason to reward Bob's ignorance at the expense of
an Alice too honest to make the representation. 

* Policy ¶ 9.  Contrary to the first sentence of this paragraph, the
Policy should accurately reflect what I understand to be the reality
that the Registrar cannot in fact modify the Policy at will.   The
document should be amended to accurately state that the registrar
retains the right to modify the rules when so instructed by ICANN.  The
language could be patterned on Rules ¶21 which require the express
written consent of ICANN.

* Rules ¶ 3(b). I am unclear why the rules require complaints to be
submitted in hard copy.   I would have thought that it might be in
everyone's interest to encourage or at least permit all-electronic
filings when possible.  Furthermore, does time begin when electronic or
hard copy is submitted, e.g. for the purposes or Rule 4(a)?  Finally,
the rules as drafted appear to make it very difficult, perhaps
impossible, for a Provider to use a web-based forms approach to
structuring filings, although I would have thought that this would be in
everyone's interest as it would make the process easier, reduce costs,
and minimize accidental filing errors.  (A similar question applies to
the Response, and to Rules ¶ 5 generally.)

* Rules ¶¶ 12 & 13.  I am unclear whether and how these paragraphs apply
to a Panel that wishes to view a web site for itself.   Is that
encouraged?  Allowed?  Discouraged?   (I think it should be allowed; but
more importantly, whatever the rule it should be explicit so that all
cases are treated alike.)

* Rules ¶¶ 15(e).  I can understand the policy reason for word limits on
pleadings.  I do not really see why one is needed on opinions.  Panels
are not paid by the word, but by the case, and they will thus have ample
incentive to keep decisions short as it is.

	Open Issues
	===========
I do not have an opinion on absolute word limits for pleadings.  
Whatever number is picked should be reviewed periodically in light of
experience.

I disagree with the ICANN staff report on the selection of Providers and
Panelists.  

First, I think this is an important issue that requires more discussion
than this 14-day comment period allows.  This is wholly new material,
and there has been absolutely no opportunity to either form or gauge
community consensus on this important topic.

As to the substance, whatever procedure is selected should have the
following properties:

* Encourage price and service competition among providers.
* Discourage forum shopping as to substantive results by parties.

As a matter of principle I do not believe that ICANN should have any
role whatsoever in the selection of arbitration providers.  The
selection and vetting of arbitrators is in no conceivable form a
technical issue relating to either names, numbers, or the functioning of
the Internet and is thus outside ICANN's  proper jurisdiction.   There
is nothing in the structural composition of ICANN, nor in the
composition of the current or any imaginable future ICANN Board, which
suggests any special competence in this area.  

Nevertheless, I understand that ICANN intends to take on this function. 
If it does so, it will presumably seek to ensure that the providers are
competent, and will monitor them for partiality.  As a result, if ICANN
is doing an adequate monitoring job, the danger of forum shopping can be
drastically reduced.

I think therefore that if ICANN is going to take a role in approving
Providers, a fairly simple and fair system that would ultimately make it
easier to take account of national and linguistic differences would be
as follows:

ICANN would require every Registrar to choose at least N providers from
the ICANN-approved list and offer those providers to potential
complainants.   The value of N could start small when there are few
providers and be adjusted with experience, but it would always be larger
than one.  Registrars would of course be free to offer more than N if
they wished, so long as all the choices were from the ICANN-approved
list.

Complainants would choose a Provider from the sub-list of Providers
maintained by the registrar who had registered the disputed domain
name.  The Provider would choose the arbitrators.

I believe that the Registrar is well placed to promote price and service
competition since it is the registrar's customers who will have to deal
with the Provider, and may be paying half of the Provider's fees.  The
chance that providers will collude with registrars to provide biased
services seems to me to be fairly remote.  If I am wrong about this, it
should be come evident fairly quickly when a particular provider's
decisions get overturned in court more frequently than the others, or
when a particular provider's decisions seem more pro-plaintiff or more
pro-respondent in a statistically significant manner.   If ICANN retains
a role in certifying Providers as eligible for the Registrar's list, it
can always decertify a rogue Provider.

Requiring Registrars to offer more than one Provider further encourages
competition, since complainants will be able to select on the basis of
the factors that they care about (price, service, quality, whatever). 
Respondents lose out on this, since they do not get a choice, but their
interests will be protected by the Registrars whose customers they are,
and by their choice of Registrars in the first place.

I do not in any way share the ICANN staff report's interest in option
(d), which I expect would be an administrative nightmare.

Responses to INTA
=================
I would like to conclude with a few comments relating to the INTA
submission because I fear that the extensive citation of legal authority
contained in that document may lend it an appearance of gravitas that it
does not deserve.   

The INTA submission is suffused with a fundamental misunderstanding of
the purpose of the UDP.  The UDP is not designed to enact a trademark
agenda in cyberspace that trademark interests have been unable to get
from legislatures.   Nor, as I suggested above, is the UDP intended (nor
should not be intended) to provide an arbitration forum for every
trademark related claim pertaining to a domain name registration that
might conceivably be litigated or even won in court.   Rather, it is and
should be designed to provide rapid resolution of easy – obvious –
cases, and only those.   By providing for quick and cheap resolution of
cases of clear abuse, legitimate interests of trademark owners can be
protected at significantly reduced cost without infringing the
legitimate rights of registrants.

INTA's fundamental confusion is that it wishes to transform a set of
rules designed to deal with cybersquatting and grossly unfair
competition – cases of clear abuse – into rules that cover all trademark
complaints.  

Unless otherwise stated below, I oppose all of the INTA suggestions.  My
comments will focus on those that I fear may sound most plausible, but
silence on others should not be read as agreement.

1. 4(a)(iii).  INTA proposes that ‘and' be changed to ‘or' in order, it
says, to make warehousing actionable.   The reason proposed for this
change demonstrates why it should not be adopted.  US law, at least,
does not create a right of action again mere warehousing of a domain
name.  Registration of a domain name is not a violation of a trademark. 
US Courts consistently require registration plus something, either a
pattern of registration for resale, or some sort of shakedown.

2. 4(b)(i).  INTA objects to reimbursement for out of pocket costs
beyond those relating to the registration of the domain name itself. 
This represents the thinking of traditional businesses, and ignores the
circumstances of the typical online startup.   In an online startup, you
start with the domain name, then you print the stationary, the business
cards, get the fictitious name, and so on.  Unlike the bricks and mortar
business, in a legitimate Internet business the online naming is the
occasion for a burst of significant expenditure.  It is thus proper to
allow recoupment of these expenses.

3. 4(c).  INTA's comments here are based on its misunderstanding as to
the objectives of the procedure.  Complex fact-intensive cases are by
their nature not going to be the sort of clear case appropriate for
resolution in the extremely lightweight procedure contemplated in the
UDP.  Any fact-rich case and especially one where there are complex
credibility issues belongs in court or in a more traditional arbitration
where parties can be heard directly.   The standard of proof, and the
conclusive defenses, to which INTA objects are essential in order to
ensure that the UDP applies only to the cases of clear abusive conduct
for which it is appropriate.

(Incidentally, INTA's example regarding Donald Duck may be poorly
chosen.  By its own terms, paragraph 4(c)(i) applies only the to BONA
FIDE offering of goods and services.   It is doubtful that the provision
of counterfeit goods would be considered a bona fide offering of goods
or services.)

INTA's suggestion that 4(c)(ii) be stricken is especially outrageous. 
First, it ignores the evident fact that this provision is designed to
deal with the "Pokey" problem (see also the donhenley.com problem). 
Second, it is supported by extensive citation to irrelevant authority. 
It is correct that under US law one does not have an absolute right to
use one's own name for commercial purposes in the face of a pre-existing
trademark registration for the same category of goods.  Many cases do so
hold, and INTA has helpfully cited a heap of them.   These cases are
however completely inapposite to cases where the registrant is making
non-commercial use of his name.

Of course, 4(c)(ii) is not limited to non-commercial uses.  Cases where
there is commercial use of one's own name or of a name one has used
commercially for a long time fall into the category of cases where  both
parties appear to have a legitimate claim of some sort (e.g. the Prince
case) and it is for the courts to determine who if anyone is an
infringer.  Given that the parties to the dispute may be in different
jurisdictions, these will often be complex matters ill-suited for
arbitration.   The point is that whatever these cases are, even when
they are real disputes based on meritorious claims, they are not likely
to be "abusive registrations".   Not every trademark dispute is a
cybersquatting case, and 4(c)(ii) properly aids in restricting the reach
of the UDP to the more narrow category.

--
A. Michael Froomkin   |    Professor of Law    |   froomkin@law.tm
U. Miami School of Law, P.O. Box 248087, Coral Gables, FL 33124 USA
+1 (305) 284-4285  |  +1 (305) 284-6506 (fax)  |  http://www.law.tm
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