THE MANAGEMENT OF INTERNET NAMES AND ADDRESSES:
INTELLECTUAL PROPERTY ISSUES

Final Report
of the
WIPO Internet Domain Name Process

http://wipo2.wipo.int

April 30, 1999

3. RESOLVING CONFLICTS IN A MULTIJURISDICTIONAL WORLD
WITH A GLOBAL MEDIUM: A UNIFORM DISPUTE-RESOLUTION POLICY

129. As indicated in the previous Chapter, there is widespread support for the adoption of a number of practices in the administration of domain name registrations as a means of reducing friction between such registrations and intellectual property rights. There also appears to be widespread support, however, for the view that those practices should not interfere with the functionality of the DNS as a cheap, high-speed, high-volume system for obtaining an Internet address. For this reason, as mentioned previously, such measures as requiring registration authorities to search applications against previously registered trademarks, which might reduce friction even further, attracted little or no support.

130. While the vast majority of domain names are registered in good faith for legitimate reasons, even with enhanced practices designed to reduce tension, disputes are inevitable. Not more than five years ago, before graphical Internet browsers became popular and there was little or no commercial activity on the Internet, a trademark infringement stemming from the registration and use of a domain name was not regarded as a serious issue. As long as no significant business activity was taking place on the Internet, any potential for harm was offset by the near invisibility of the network – at least when compared to infringements in mainstream media such as television, the press and billboards. This changed, however, when business investments, advertising and other activities increased on the Internet, and companies began to realize the problems that may occur when a website using their trademark as a domain name was operated in an infringing manner without permission. Disputes have now become numerous, while mechanisms for their settlement, outside of litigation, are neither satisfactory nor sufficiently available.

131. Intellectual property right owners have made it clear throughout the WIPO Process that they are incurring significant expenditures to protect and enforce their rights in relation to domain names. Existing mechanisms for resolving conflicts between trademark owners and domain name holders are often viewed as expensive, cumbersome and ineffective. The sheer number of instances precludes many trademark owners from filing multiple suits in one or more national courts. Moreover, registration authorities have frequently been named as parties to the dispute in litigation, exposing them to potential liability and further complicating their task of running the domain name registration process.

132. Disputes over domain name registrations and intellectual property rights present a number of special characteristics:

(i) Because a domain name gives rise to a global presence, the dispute may be multijurisdictional in several senses. The global presence may give rise to alleged infringements in several jurisdictions, with the consequence that several different national courts may assert jurisdiction, or that several independent actions must be brought because separate intellectual property titles in different jurisdictions are concerned.

(ii) Because of the number of gTLDs and ccTLDs and because each gives the same access to global presence, essentially the same dispute may manifest itself in many TLDs. This would be the case, for example, if a person sought and obtained abusive registrations in many TLDs of a name which was the subject of corresponding trademark registrations held throughout the world by a third party. In order to deal with the problem, the intellectual property owner may need to undertake multiple court actions throughout the world.

(iii) In view of the ease and speed with which a domain name registration may be obtained, and in view of the speed of communication on the Internet and the global access to the Internet that is possible, the need to resolve a domain name dispute may often be urgent.

(iv) A considerable disjunction exists between, on the one hand, the cost of obtaining a domain name registration, which is relatively cheap, and, on the other hand, the economic value of the damage that can be done as a result of such a registration and the cost to the intellectual property owner of remedying the situation through litigation, which may be slow and very expensive in some countries.

(v) The registration authority has often been joined in domain name disputes because of its role in the technical management of the domain name.

133. Because of the special features of domain name disputes, considerable support has been expressed for the development of expeditious and inexpensive dispute-resolution procedures, which are comprehensive in the sense of providing a single means of resolving a dispute with multiple jurisdictional manifestations. At the same time, discussions and consultations have revealed a natural level of discomfort in placing complete trust in a system which is new and which has the capacity to affect valued rights. There has been, in consequence, in some quarters, a reluctance to abandon all possibilities of resort to litigation as a result of the adoption of new procedures, at least in the first stage before experience of a new system.

134. In the WIPO Interim Report, it was stated that, in considering options for dispute resolution, the draft recommendations of that report were guided by the overall consideration of finding a balance between, on the one hand, the preservation of the long-tried right to seek redress through litigation, and, on the other hand, the desire to proceed to develop a workable system that can fairly, expeditiously and cheaply resolve the new type of disputes that arise as a consequence of the arrival of the Internet. The majority of commentators found this formulation to be too broad insofar as the draft recommendations suggested that domain name applicants be required to submit to a mandatory administrative dispute-resolution procedure in respect of any intellectual property dispute arising out of the domain name registration. In particular, those commentators considered, in relation to such a comprehensive procedure:

(i) that it might unfairly expose domain name applicants acting in good faith to costs in responding to complaints brought against them;

(ii) that it might lead to the harassment of domain name holders acting in good faith by trademark owners seeking to acquire a domain name that is being used in a way which did not infringe the trademark owner’s rights ("reverse domain name hijacking");

(iii) that it would be preferable to commence a new procedure in a less ambitious way and with reference to disputes concerning the known and certain forms of offensive behavior, rather than with respect to all forms of disputes;

(iv) that, in opening the procedure to all forms of dispute, the Interim Report failed to address specifically the most egregious problem, namely, the problem of "cybersquatting" or deliberate, bad faith, abusive registrations of domain names in violation of others’ rights;

(v) that, because of the lack of international harmonization in the application of trademark laws, it would be preferable, at least initially, to avoid mandatory submission to the procedure in respect of disputes over competing, good faith rights to the use of a name.

135. In view of the weight of opinion against mandatory submission to an administrative procedure in respect of any intellectual property dispute arising out of a domain name registration, the final recommendations of the WIPO Process contain two major changes in respect of the suggested administrative dispute-resolution procedure:

(i) First, the scope of the procedure is limited so that it is available only in respect of deliberate, bad faith, abusive, domain name registrations or "cybersquatting" and is not applicable to disputes between parties with competing rights acting in good faith.

(ii) Secondly, the notion of an abusive domain name registration is defined solely by reference to violations of trademark rights and not by reference to violations of other intellectual property rights, such as personality rights.

136. The discussion and the recommendations in the remainder of this Chapter are organized under the following headings:

– achievable amelioration to the use of court litigation as a means of resolving disputes;

– guiding principles in the design of the administrative dispute-resolution policy;

– mandatory administrative procedure for abusive registrations;

– the availability of voluntary arbitration; and

– the role of mediation.

COURT LITIGATION

137. Court litigation is governed by the civil law of sovereign States. The WIPO Process, which will result in recommendations to the private, not-for-profit corporation that will manage the DNS (ICANN), is not properly concerned with matters that fall within the purview of those civil laws, except insofar as those laws, in accordance with recognized international principles, leave open areas of choice.

Preservation of the Right to Litigate.

138. The first area of such choice, where the recommendations of the Process might have an influence, is the abandonment of the right to litigation in respect of a dispute, which is recognized in the majority of countries as the effect of agreeing to submit a dispute to arbitration. That effect of an arbitration agreement is recognized in the arbitration laws of countries and in the obligations assumed by more than one hundred countries by becoming party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958 (the New York Convention). If submission to arbitration by domain name applicants in respect of any dispute relating to the domain name registration were, for example, to be a requirement of the domain name registration agreement, the effect would be to require the domain name applicant to abandon the right to litigate such a dispute if called to arbitration by the other party to the dispute. As mentioned above, however, the discussions and consultations in the WIPO Process indicated considerable reluctance to subscribe to such a solution, at least in the initial stage of the new management of the DNS.

139. The WIPO Interim Report recommended that any dispute-resolution system alternative to litigation that might be adopted for domain name disputes should not deny the parties to the dispute access to court litigation. This recommendation met with the support of virtually all commentators.

Submission to Jurisdiction.

141. A second area of choice, based on widely accepted principles, is the choice of submission to the jurisdiction of the courts in one or more locations for the resolution of a dispute. There has been broad support throughout the WIPO Process for requiring the domain name applicant to exercise such a choice in the domain name registration agreement in order to create greater certainty in relation to the venue in which litigation can be brought, and in order to ensure a venue in a country in which intellectual property rights are respected.

142. While a submission to jurisdiction can create greater certainty, it should not have the effect of imposing the exclusive possibility of litigation in venues that are perhaps remotely connected to the allegedly infringing activity that is taking place through a domain name or to the location of the domain name applicant. Furthermore, a submission to jurisdiction by the domain name applicant should not inhibit a third party’s freedom to seek to obtain jurisdiction over a domain name holder in any location where there may be an independent and sufficient nexus to support local jurisdictional requirements. On this basis, an agreement to submit to jurisdiction in a domain registration agreement should be without prejudice to the possibility of establishing jurisdiction under normally applicable law and should not exclude that possibility. The effect of an agreement to submit to particular jurisdictions in the domain name registration agreement would thus be to forgo the possibility of contesting the jurisdiction of courts over a dispute arising out of the domain name registration in those particular locations.

143. The question arises as to which locations ought to be so designated in the submission to jurisdiction by the domain name applicant in the domain name registration. Several possibilities have been mentioned in this respect, namely, the location of the registry, the location of the domain name database, the location of the registrar and the location of the "A" root server. It is considered that the choice of appropriate venue should, on the one hand, strike the right balance between the interests of the domain name holder and any potential third party complainant, and, on the other hand, be consistent with fundamental concerns of fairness, which provide the foundation for existing jurisdictional principles.

144. In the WIPO Interim Report, it was recommended that the domain name applicant should be required, in the domain name registration agreement, to submit, without prejudice to other potentially applicable jurisdictions, to the jurisdiction of (i)  the country of domicile of the applicant, and (ii)  the country where the registration authority was located. Comments expressed on this recommendation were divided between those who considered that it did not go sufficiently far in attributing possible jurisdiction, and those who considered that it was too extensive in attributing jurisdiction. In the former category were those who considered that domain name applicants should also be required to submit to jurisdiction at the locations of the registry and of the "A" root server. Those in the latter category were concerned by the ambiguity of the expression "registration authority," a term used in the Interim Report to include both registrars and registries in deference to the decisions that ICANN was yet to take on the structure of registrar and registry services. Certain other commentators misread the recommendation, thinking that it sought to attribute exclusive jurisdiction to the locations of the domicile of the applicant and the registration authority, even where jurisdiction could be asserted and attributed on the basis of an independent nexus elsewhere.

145. ICANN’s Statement of Registrar Accreditation Policy contains a provision on jurisdiction that is substantially similar to the draft recommendations in the WIPO Interim Report. It requires domain name applicants to submit to the jurisdiction of the courts of the location (i) of the applicant’s domicile, and (ii) of the registrar (as opposed to registration authority).

146. We agree with the formulation in ICANN’s Statement of Registrar Accreditation Policy, subject to the reservation that, until such time as registrars are accredited on a widespread geographical basis, the submission to jurisdiction in the location of the registrar may work to the inconvenience of applicants located in countries distant from accredited registrars. This situation is, however, expected to be transient and short-lived. Moreover, such applicants always have the possibility of seeking a domain name registration in a ccTLD if they are uncomfortable with the requirement of submission to jurisdiction in the location of the registrar.

GUIDING PRINCIPLES FOR THE DESIGN OF THE ADMINISTRATIVE DISPUTE-RESOLUTION POLICY

148. While, as mentioned above, there is general agreement that the right to litigate a domain name dispute should be preserved, court litigation may have several limitations as a means of dealing with such disputes. In particular, because of the multijurisdictional character of many such disputes, court actions in several countries may be necessary in order to obtain an effective solution. In addition, in some countries, the court system suffers from dysfunction, with the consequence that decisions cannot be obtained within a period of time which is commensurate with the speed with which damage can be done by virtue of an infringing domain name. As indicated above, the cost of litigation stands in stark contrast to the cost of obtaining a domain name registration. Finally, there is a possibility that, with a number of different courts in several countries being involved with domain name disputes, inconsistent decisions may be given or inconsistent principles concerning the relationship between domain names and intellectual property rights may emerge from such decisions.

149. In addition to the perceived limitations of litigation, a number of commentators have expressed dissatisfaction with current dispute-resolution policies in the gTLDs. One of their important deficiencies results from their reliance on the ability of the parties to produce certain trademark certificates, without any review of the question of use of the domain name and alleged infringement. These policies are seen as not sufficiently allowing for the consideration of all legitimate rights and interests of the parties (which are not necessarily reflected in a trademark certificate), opening the door to unjust results, including for those who are not trademark owners. In light of these difficulties, a substantial majority of commentators favored the adoption of a form of administrative dispute-resolution more suited to the proper review and consideration of the rights and interests of all parties involved in a dispute.

150. Taking into account these perceived limitations of litigation and current dispute-resolution policies, as well as the comments expressed throughout the WIPO Process concerning the desirable features of the administrative procedure, the recommendations that follow in the remaining part of this Chapter concerning the administrative procedure have been based upon the following principles:

(i) The procedure should permit the parties to resolve a dispute expeditiously and at a low cost.

(ii) The procedure should allow all relevant rights and interests of the parties to be considered and ensure procedural fairness for all concerned parties.

(iii) The procedure should be uniform or consistent across all open gTLDs. If different procedures were available in different domains, there might be a danger of some domains, where procedures are weaker or do not lead to binding, enforceable decisions, becoming havens for abusive registrations. Uniform or consistent procedures, however, do not necessarily mean that the dispute-resolution service provider must be the same for all procedures.

(iv) As indicated above, the availability of the administrative procedure should not preclude resort to court litigation by a party. In particular, a party should be free to initiate litigation by filing a claim in a competent national court instead of initiating the administrative procedure, if this is the preferred course of action, and should be able to seek a de novo review of a dispute that has been the subject of the administrative procedure.

(v) While it is desirable that the use of the administrative procedure should lead to the construction of a body of consistent principles that may provide guidance for the future, the determinations of the procedure should not have (and cannot have) the effect of binding precedent in national courts. It would be up to the courts of each country to determine what weight they wish to attach to determinations made under the procedure.

(vi) In order to ensure the speedy resolution of disputes, the remedies available in the procedure should be restricted to the status of the domain name registration itself and should not, thus, include monetary damages or rulings concerning the validity of trademarks.

(vii) The determination resulting from the procedure should, upon notification, be directly enforced by the relevant registration authority by making, if necessary, appropriate changes to the domain name database.

(viii) Registration authorities should not be involved in the administration of the procedure, other than by implementing determinations made in it (and, perhaps, by supplying any requested factual information about the domain name registration to the dispute-resolution neutral or tribunal).

(ix) A decision by a court of competent jurisdiction, in a country that is party to the Paris Convention for the Protection of Industrial Property or bound by the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), which is at variance with a determination resulting from the procedure should, subject to the application of normal principles for the enforcement of judgements, prevail over the administrative determination.

151. Based on these principles, the remaining part of this Chapter recommends that:

(i) A uniform administrative procedure for the cancellation of bad faith domain names registered in deliberate abuse of trademark rights should be available in all open gTLDs.

(ii) Arbitration and mediation, each of which is described and discussed, have a role and should be considered as valuable procedures for the resolution of domain name disputes. However, for different reasons in respect of each procedure, it is recommended that neither should be a mandatory part of a dispute-resolution policy for registration authorities. Rather, they should be available for parties to choose on an optional basis, where they consider the circumstances of a dispute appropriate for the use of such procedures.

MANDATORY ADMINISTRATIVE PROCEDURE CONCERNING ABUSIVE REGISTRATIONS

152. The present section recommends that a mandatory administrative procedure be adopted uniformly across open gTLDs. It discusses the means of implementing the procedure, its desirable features and its administration.

153. The administrative procedure proposed is an adjudicatory procedure where the neutral decision-maker appointed for the dispute would have the power to impose a binding decision on the parties. The scope of the procedure would be limited to cases of abusive registrations (or cybersquatting), as defined below, and would not be available for disputes between parties with competing rights acting in good faith. The procedure would allow for a neutral venue in the context of disputes that are often international in nature, and would be conducted in accordance with procedural rules laws which take account of the various legal procedural traditions around the world. The procedure would not exclude the jurisdiction of the courts. A party would be able to pursue a claim in a national court, or seek the ruling of a national court in respect of matters that had already been submitted to the administrative dispute-resolution procedure. It is to be hoped, however, that with experience and time, confidence will be built up in the credibility and consistency of decisions made under the procedure, so that the parties would resort less and less to litigation. The decisions taken under the procedure would be made available publicly.

Uniform Availability of the Procedure in the Open gTLDs.

154. In the WIPO Interim Report, it was recommended that the administrative dispute-resolution procedure should be available uniformly in all open TLDs. Subject to reservations concerning the scope of the procedure, which have been discussed above and are further dealt with below, this recommendation received wide support.

155. Some commentators sought clarification as to the meaning of "uniform." We mean the following in this respect:

(i) The procedure should be available in all open gTLDs. The possible adoption of the procedure in open ccTLDs is discussed in Annex VIII. At least in the open gTLDs, the non-availability of the procedure in any gTLD would lead to uneven protection for intellectual property rights and could cause any gTLD in which the procedure was not available to become a haven for predatory practices in respect of intellectual property rights.

(ii) The scope of the procedure and the procedural rules pursuant to which it is conducted should be the same in all open gTLDs. Again, differences in the scope of the procedure in the open gTLDs could lead to uneven protection for intellectual property rights.

156. We discuss below the means of implementing the procedure uniformly in the open gTLDs, where it is recommended that a uniform policy on administrative dispute-resolution be adopted by ICANN and that domain name applicants be required to submit to the administrative procedure under that policy. ICANN’s Statement of Registrar Accreditation Policy envisages the possibility of requiring domain name holders to submit to such a policy.

Mandatory Nature of the Procedure

158. In the WIPO Interim Report, it was recommended that the administrative procedure be mandatory in the sense that each domain name applicant would, in the domain name registration agreement, be required to submit to the procedure if a claim was initiated against it by a third party. If submission to the procedure were to be optional for applicants, it was considered that the adoption of the procedure would not result in significant improvement on the present situation, since those persons who register domain names in bad faith in abuse of the intellectual property rights of others would be unlikely to choose to submit to a procedure that was cheaper and faster than litigation, but would instead prefer to leave the legitimate owners of intellectual property rights with the possibility only of initiating court litigation, with its attendant costs and delays.

159. Most commentators supported the mandatory nature of the procedure, although a number expressed a preference for a voluntary procedure. Furthermore, as signaled in the Interim Report, concerns were raised that mandatory submission to a comprehensive procedure covering all intellectual property disputes relating to a domain name registration might raise questions in certain jurisdictions regarding validity and enforceability, particularly in light of consumer protection laws, due process considerations and the fact that such a submission purports to create rights for a party who is not privy to the domain name registration agreement.

160. It is considered that concerns about the mandatory nature of the procedure can be greatly alleviated, if not removed entirely, by confining the scope of the procedure to abusive registrations or cybersquatting, as proposed in the next section of this Chapter. Since the procedure would apply only to egregious examples of deliberate violation of well-established rights, the danger of innocent domain name applicants acting in good faith being exposed to the expenditure of human and financial resources through being required to participate in the procedure is removed.

161. Since the procedure will apply only to abusive registrations or "cybersquatting," we consider that it is essential that the procedure be mandatory. It is highly unlikely that those responsible for such activities would ever submit to the procedure on a voluntary basis.

The Scope of the Administrative Procedure

163. The WIPO Interim Report discussed in detail the respective advantages and disadvantages of, on the one hand, applying the administrative procedure to any intellectual property dispute arising out of a domain name registration and, on the other hand, limiting the application of the procedure to clear cases of abusive registrations of domain names or "cybersquatting." The description of those advantages and disadvantages will not be repeated here.

164. The views of commentators on the desirable scope of the administrative procedure were divided. Certain commentators favored the broad approach of opening the procedure to any intellectual property dispute with respect to a domain name registration. In general, they favored the development of a body of administrative law that would, through the procedure, provide an effective international enforcement mechanism for intellectual property rights as an alternative to expensive and time-consuming multijurisdictional litigation.

165. The preponderance of views, however, was in favor of restricting the scope of the procedure, at least initially, in order to deal first with the most offensive forms of predatory practices and to establish the procedure on a sound footing. Two limitations on the scope of the procedure were, as indicated above, favored by these commentators.

166. The first limitation would confine the availability of the procedure to cases of deliberate, bad faith abusive registrations. The definition of such abusive registrations is discussed in the next section.

167. The second limitation would define abusive registration by reference only to trademarks and service marks. Thus, registrations that violate trade names, geographical indications or personality rights would not be considered to fall within the definition of abusive registration for the purposes of the administrative procedure. Those in favor of this form of limitation pointed out that the violation of trademarks (and service marks) was the most common form of abuse and that the law with respect to trade names, geographical indications and personality rights is less evenly harmonized throughout the world, although international norms do exist requiring the protection of trade names and geographical indications.

168. We are persuaded by the wisdom of proceeding firmly but cautiously and of tackling, at the first stage, problems which all agree require a solution. It was a striking fact that in all the 17 consultation meetings held throughout the world in the course of the WIPO Process, all participants agreed that "cybersquatting" was wrong. It is in the interests of all, including the efficiency of economic relations, the avoidance of consumer confusion, the protection of consumers against fraud, the credibility of the domain name system and the protection of intellectual property rights, that the practice of deliberate abusive registrations of domain names be suppressed. There is evidence that this practice extends to the abuse of intellectual property rights other than trademarks and service marks, but we consider that it is premature to extend the notion of abusive registration beyond the violation of trademarks and service marks at this stage. After experience has been gained with the operation of the administrative procedure and time has allowed for an assessment of its efficacy and of the problems, if any, which remain outstanding, the question of extending the notion of abusive registration to other intellectual property rights can always be re-visited.

The Definition of Abusive Registration ("Cybersquatting")

170. Before considering in the next paragraph the definition of abusive registration that it is recommended be applied in the administrative procedure, some explanation should be given of the suggested terminology. In popular terms, "cybersquatting" is the term most frequently used to describe the deliberate, bad faith abusive registration of a domain name in violation of rights in trademarks and service marks. However, precisely because of its popular currency, the term has different meanings to different people. Some people, for example, include "warehousing," or the practice of registering a collection of domain names corresponding to trademarks with the intention of selling the registrations to the owners of the trademarks, within the notion of cybersquatting, while others distinguish between the two terms. Similarly, some consider "cyberpiracy" to be interchangeable with "cybersquatting," whereas we consider that the former term relates to violation of copyright in the content of websites, rather than to abusive domain name registrations. Because of the elastic meaning of cybersquatting in popular terminology, we have therefore chosen to use a different term––abusive registration of a domain name––in order to attribute to it a more precise meaning.

171. The definition of abusive registration that we recommend be applied in the administrative procedure is as follows:

(1) The registration of a domain name shall be considered to be abusive when all of the following conditions are met:

(i) the domain name is identical or misleadingly similar to a trade or service mark in which the complainant has rights; and

(ii) the holder of the domain name has no rights or legitimate interests in respect of the domain name; and

(iii) the domain name has been registered and is used in bad faith.

(2) For the purposes of paragraph (1)(iii), the following, in particular, shall be evidence of the registration and use of a domain name in bad faith:

(a) an offer to sell, rent or otherwise transfer the domain name to the owner of the trade or service mark, or to a competitor of the owner of the trade or service mark, for valuable consideration; or

(b) an attempt to attract, for financial gain, Internet users to the domain name holder’s website or other on-line location, by creating confusion with the trade or service mark of the complainant; or

(c) the registration of the domain name in order to prevent the owner of the trade or service mark from reflecting the mark in a corresponding domain name, provided that a pattern of such conduct has been established on the part of the domain name holder; or

(d) the registration of the domain name in order to disrupt the business of a competitor.

172. The cumulative conditions of the first paragraph of the definition make it clear that the behavior of innocent or good faith domain name registrants is not to be considered abusive. For example, a small business that had registered a domain name could show, through business plans, correspondence, reports, or other forms of evidence, that it had a bona fide intention to use the name in good faith. Domain name registrations that are justified by legitimate free speech rights or by legitimate non-commercial considerations would likewise not be considered to be abusive. And, good faith disputes between competing right holders or other competing legitimate interests over whether two names were misleadingly similar would not fall within the scope of the procedure.

173. We consider that the definition given in the preceding paragraph draws on solid foundations in international and national law and in case law.

174. Insofar as international law is concerned, it is noted that both the Paris Convention for the Protection of Industrial Property, to which 154 States are party, and the TRIPS Agreement, by which 134 States are bound, establish obligations for the protection of trademarks. In addition, Article 10bis of the Paris Convention establishes an obligation to provide protection against unfair competition. It provides as follows:

"(1) The countries of the Union are bound to assure to nationals of such countries effective protection against unfair competition.

"(2) Any act of competition contrary to honest practices in industrial or commercial matters constitutes an act of unfair competition.

"(3) The following in particular shall be prohibited:

1. all acts of such a nature as to create confusion by any means whatever with the establishment, the goods, or the industrial or commercial activities, of a competitor;

2. false allegations in the course of trade of such a nature as to discredit the establishment, the goods, or the industrial or commercial activities, of a competitor;

3. indications or allegations the use of which in the course of trade is liable to mislead the public as to the nature, the manufacturing process, the characteristics, the suitability for their purpose, or the quantity, of the goods."

Article 10ter(1) of the Paris Convention requires contracting States to assure nationals of other contracting States "appropriate legal remedies effectively to repress all the acts referred to in Articles 9, 10, and10bis."

175. The case law which has developed in the application of national laws for the protection of trademarks and service marks and for protection against unfair competition also supports the prohibition of the predatory and parasitical practices that would be caught under the definition of abusive registration given above.

176. In applying the definition of abusive registration given above in the administrative procedure, the panel of decision-makers appointed in the procedure shall, to the extent necessary, make reference to the law or rules of law that it determines to be applicable in view of the circumstances of the case. Thus, for example, if the parties to the procedure were resident in one country, the domain name was registered through a registrar in that country and the evidence of the bad faith registration and use of the domain name related to activity in the same country, it would be appropriate for the decision-maker to refer to the law of the country concerned in applying the definition.

Implementation of the Procedure

178. It is suggested that the administrative procedure be implemented through the adoption by ICANN of a Policy on Dispute Resolution for Abusive Domain Name Registrations. The suggested Policy is set out in Annex IV.

179 At the level of individual domain name holders, as mentioned above, the Policy would be implemented through the domain name registration agreement, which would require the domain name holder to submit to the administrative procedure if a complaint for abusive registration is brought against the holder by a third party.

Procedural Rules

180. The procedure would be conducted in accordance with procedural rules, which are set out in Annex V. The aim of such rules is twofold: (i)  to ensure due process or fairness in the conduct in the procedure so that each party has an equal and adequate opportunity to present its case; and (ii)  to inform the parties how the procedure will be conducted, what they will be required to do, when they will be required to do it and what the powers of the decision-maker are. Thus, procedural rules will deal typically with the documentation that the parties are expected to produce, the time limits within which they must produce it, who the decision-maker will be and how he or she will be appointed, what remedies may be granted by the decision-maker and who will supervise the administration of the procedures.

181. The procedural rules are designed to be international, in the sense that they take account of differing legal procedural traditions; simple to follow, since domain name applicants will be required to submit to them; and uniformly applicable, regardless of the dispute-resolution service provider that administers the procedure. The main features of the rules, which take into account the comments made on the discussion of those features in the WIPO Interim Report, are described in the ensuing paragraphs.

Remedies Available under the Procedure

182. It has been apparent throughout the WIPO Process that there is a general desire to have a simple and efficient procedure. Moreover, the mandatory requirement that applicants submit to the procedure demands that domain name applicants should be able to understand easily the potential consequences of their submission to the procedure.

183. For these reasons, it seems appropriate that the remedies that could be awarded by the neutral decision-maker be limited to the status of the domain name registration itself and actions in respect of that registration. In other words, monetary damages to compensate for any loss or injury incurred by the owner of an intellectual property as a result of a domain name registration should not be available under the procedure. Such a restrictive approach to remedies would underline the nature of the procedure as an administrative one, directed at the efficient administration of the DNS, which is intended to be complementary to other existing mechanisms, whether arbitration or court procedures. The approach would also accommodate the preferences of a number of commentators for an ADR procedure that was compatible with available judicial remedies.

184. An approach in which remedies were limited to that status of the domain name registration would mean that the remedies available under the procedure would be the cancellation of the domain name registration and its transfer to the third party complainant. Broad support was expressed in favor of these remedies in the comments received by WIPO.

185. The Interim Report requested comments on whether the decision-makers in the procedure should have the power to order other measures concerning the status of the domain name registration that might remove the grounds of the dispute, such as the modification of the domain name registration, re-assignment of the domain name to a different TLD, or the maintenance of a gateway or portal page or other indexing mechanism. Although several commentators were in favor of vesting power in the decision-makers to impose such remedies, most commentators were opposed to such power, considering that such measures might affect the broader business interests and strategies of the parties involved in the dispute and, thus, require careful consideration. While decision-makers could always recommend such alternative measures to the parties involved, they should be implemented only pursuant to voluntary agreement.

186. The question of the initial payment of the costs of the proceedings is discussed below. The ultimate responsibility for the payment of costs is an important control mechanism in relation to the procedure, particularly since the procedure would be limited to cases of abusive registration. If the procedure were available at no cost, frivolous and groundless actions, or actions designed to harass a party, would be encouraged. Similarly, if responsibility for the payment of costs always rested with the complaining party, there would be no disincentive for a bad faith applicant to proceed to try its luck with an abusive registration of a domain name. It is considered, therefore, that the decision-maker should have the discretion, in the decision, to allocate responsibility for payment of the costs of the procedure (which are detailed below) to the winning party, after consideration of all the circumstances of the case. (This discretion would also allow the decision-maker to allocate the costs among the parties in accordance with some other appropriate apportionment.)

187. A number of commentators expressed anxiety about the power of the decision-maker to allocate costs to the winning party. Since the scope of the procedure is now limited to cases of abusive registration, we expect that the power to allocate costs will be broadly supported.

Expedited Procedure for Suspension of a Domain Name

189. A number of commentators were in favor of the possibility of an expedited application under the administrative procedure, whereby a complainant could obtain a suspension of a domain name registration on short notice pending a final decision on the merits. We consider that the limitation of the scope of the administrative procedure to cases of abusive registration makes this possibility unnecessary. Instead, it is recommended below that all cases should be processed in an expedited manner within a short time frame. In addition, in keeping with the desires to commence the procedure on well-known and well-tried grounds and to have a simple, easily understood procedure, we think that it would be preferable not to add an additional sort of procedure, which might be confusing to domain name holders, at the outset.

Consolidation of Different Claims

190. A number of commentators indicated that one of the difficulties in dealing with domain name disputes was the sheer number of instances in which their rights may be allegedly violated. For example, the trademark "INTEL" might be the subject of an allegedly infringing registration of the domain name "INTLE" or "INTTEL," or any number of other minor variations producing the same phonetic result. The consequence is that, in order to protect the mark effectively, the owner is obliged to undertake a multiplicity of actions.

191. One legal method for dealing with a multiplicity of similar actions is to permit the consolidation of such actions into one procedure. The question arises, however, as to the extent to which such consolidation should be permitted. Here, several points of reference could be considered in determining the scope of possible consolidation:

(i) the consolidation of all actions brought by the same complainant in respect of domain name registrations held by the same holder in the same TLD that are alleged to infringe the same or different trademark rights;

(ii) the consolidation of all actions brought by the same complainant in respect of domain name registrations held by the same holder in different TLDs that are alleged to infringe the same or different trademark rights; and

(iii) the consolidation of all actions brought by the same complainant in respect of domain name registrations held by different holders in the same or different TLDs that are alleged to infringe the same or different trademark rights.

192. The WIPO Interim Report recommended that the procedural rules provide for the possibility of consolidating, into one procedure, all claims by the same (or affiliated) party in respect of the same domain name holder where the claims relate to the alleged infringement of the same or different intellectual property rights through domain name registrations in any TLD. This recommendation received widespread support, particularly as a means of dealing efficiently with abusive registrations of domain names. Many commentators considered also that consolidation should be permitted in respect of claims against different domain name holders, provided that the complainant was the same party. They drew attention to the fact that abusive registrations often target one mark or group of marks and that the registrations can be placed in the name of different individuals or companies which might be related in business dealings. We consider that this form of consolidation is difficult to achieve legally, since each respondent should legally have a full opportunity to distinguish its own case from that of legally separate persons. However, a de facto consolidation can be achieved by organizing for panels to determine cases in batches (for example, once a week or once a month, as the demand might dictate). Such a method of organizing panels would also have distinct cost advantages and is discussed below.

Relationship with National Courts

194. The relationship between the administrative procedure and the jurisdiction of the courts has been discussed in the previous sections of this Report. The recommendations made, in this regard, in the Interim Report were widely supported.

195. Several commentators sought clarification of the effect on the procedure if litigation were commenced after the initiation of the administrative procedure. We consider that the best approach in these circumstances is to leave the panel the discretion to decide, in light of the circumstances, whether to suspend the administrative procedure or to continue. The panel will be best placed to assess the impact of the initiation of the litigation. It may be, for example, that the litigation is commenced in a distant jurisdiction, with an arguably dubious nexus to the circumstances of the case, as a delaying tactic.

Time Limitation for Bringing Claims

197. The WIPO Interim Report recommended that a time bar to the bringing of claims in respect of domain names (for example, a bar on claims where the domain name registration has been unchallenged for a designated period of years) should not be introduced. It was considered that such a measure would not take into account that the underlying use of a domain name may evolve over time (with the consequence that the use of a domain name may become infringing through, for example, the offering for sale of goods of a different sort to those previously offered on the website); that any related intellectual property rights held by the domain name holder may lapse; and that a time bar would in any event be undesirable in cases of bad faith.

198. The comments received on this question by WIPO were addressed to an administrative procedure with comprehensive jurisdiction over all intellectual property disputes relating to domain name registrations. Since the scope of the procedure is now limited to cases of bad faith, abusive registrations, we consider that the interim recommendation should apply with more force. It is usual for time bars in legal proceedings not to be applicable to cases of bad faith.

Length of Proceedings

200. Commentators universally viewed it as important that the administrative procedure be capable of providing determinations with speed and efficiency. The nature of the Internet demands such characteristics of dispute-resolution procedures. For example, an abusive registration of a domain name may block another with the legitimate right to presence on the Internet under that domain name in respect of a product that is about to be launched or an international event that is about to occur. Similarly, the damage that is being done by an abusive registration of a domain name may be extensive by virtue of global access to which the registration gives rise, so that it becomes urgent to limit that damage.

201. It is imperative, therefore, that the procedural rules for the administrative procedure be designed so as to ensure that decisions are taken in a timely manner. In the WIPO Interim Report it was recommended that final determinations on claims should be made within two months of the initiation of the procedure. Many commentators agreed with this time frame, others considered that it was too long, and yet others cautioned that all parties should be given adequate notice and time for preparation.

202. We consider that the organization of panels so that cases can be determined in batches will greatly facilitate the efficiency with which determinations can be made. Such a method of organization would overcome delays produced by decision-makers in different locations considering cases at a differential rate and would focus panels on the task. On this basis, we recommend the indicative time limit for determinations in the next paragraph as a suggested maximum.

Appointment of Decision-Maker.

204. The quality of decisions emerging from the administrative procedure will depend in large part on the quality of the decision-makers appointed for cases. In this respect, the panel of neutral decision-makers maintained by dispute-resolution service providers will be an important reference point for the selection of those service providers that may be authorized to administer the procedure. The panel should include persons having appropriate experience in domain names, intellectual property rights (including all the issues that operate to place limitations on the scope of such rights), litigation and alternative dispute-resolution.

205. The Interim Report raised the question whether cases should be handled by a single decision-maker, or a panel of three persons. Varying views were expressed on the question, as is usual on this question, reflecting broadly concerns, on the one hand, for efficiency and speed, which favor a single decision-maker, and, on the other hand, for balance and breadth of experience, which favor a three-person panel.

206. Since the scope of the procedure is limited to cases of abusive registration, we consider a three-person panel to be appropriate, especially since the organization of panels to make determinations on batches of cases will permit cost savings and thus limit the extra cost that a multiple-person panel might otherwise cause.

208. The WIPO Interim Report recommended that the procedural rules should allow for party participation in the appointment of decision-makers, reflecting common practice in international arbitration proceedings. That recommendation was made, however, with a view to an administrative procedure with comprehensive jurisdiction for intellectual property disputes between parties acting in good faith. Since the scope of the procedure is limited to cases of bad faith, abusive registrations, we consider that party participation in the selection of decision-makers is inappropriate. In order to give some assurance to parties as to the quality of decision-makers, however, we encourage dispute-resolution service providers to publish the names and details of the qualifications and experience of the decision-makers who may be appointed to panels.

The Use of On-Line Facilities to Conduct the Procedure

210. Most commentators expressed interest in or enthusiasm for the use on-line facilities to conduct the administrative procedure. Other commentators expressed hesitation about this possibility, while a number underlined the need for adequate security and authentication features.

211. The use of on-line facilities in the context of domain name disputes seems particularly appropriate for the following reasons:

(i) The Internet has created new opportunities for parties to communicate and to engage in transactions at great distance. At the same time, the potential for disputes arising out of such communications or transactions between parties that are physically remote from each other has been increased. On-line facilities can eliminate the barrier of distance.

(ii) Speed is equal to distance divided by time. The elimination of the barrier of distance by the Internet and the use of the Internet as the medium for resolving disputes will increase the speed with which the dispute-resolution process can be conducted.

(iii) Many domain name disputes may be capable of being resolved by reference to documents only, that is, without the necessity of hearing witnesses or receiving oral arguments in a physical hearing.

(iv) Since the dispute concerns domain names, assumptions can be made about the parties to the dispute having the requisite technical facilities to participate in the on-line resolution of the dispute.

(v) Some parties involved in domain name disputes may not have had significant exposure to legal proceedings and their attendant formalities. Enabling parties to initiate a claim (or to respond thereto) by accessing a website and completing electronic forms which guide them through the various stages of the process may be expected to reduce entry barriers to the administrative dispute-resolution procedure and make that procedure more accessible.

212. Recognizing that the use of on-line facilities causes some hesitancy, we would propose that secure on-line facilities be used to allow parties to file all pleadings in the procedure.

213. Several dispute-resolution service providers are working on the development of on-line systems for administering dispute resolution, as well as courts in a number of countries. The WIPO Arbitration and Mediation Center has developed such an on-line system, which is Internet-based. Digital communication tools have been designed to allow the parties to file requests by completing electronic forms and to exchange information on-line through secure channels. The parties and the decision-maker are able to communicate electronically also through audio and video facilities, where these are available to them. The system also includes such functions as automatic notifications, an electronic fee system, secure facilities for the on-line exchange and reading of documents, and back-end databases to support the logging and archiving of submissions.

Enforcement and Publication of Determinations

215. Commentators in favor of an administrative policy for the resolution of domain name disputes universally supported the need for the determinations of the dispute-resolution procedure to be directly enforced. The possibility of such direct enforcement exists through the registration authorities and, indeed, constitutes one of the major reasons why an administrative procedure could be made workable and efficient in respect of domain name disputes.

216. In order to implement the direct enforcement of determinations by registration authorities, it would be necessary to ensure that registration authorities agree to do so. ICANN’s Statement of Registrar Accreditation Policy provides for adherence by registrars to any policy or procedure for dispute resolution established by ICANN. In addition, it would be desirable to make explicit in the domain name registration agreement that the domain name applicant agrees, in submitting to the administrative procedure, that the procedure may determine the applicant’s rights with respect to the registration of the domain name and that any determination made in the procedure may be directly enforced by the relevant registration authorities.

217. Direct enforcement of determinations by registration authorities would, however, be subject to a contrary order from a court with jurisdiction over the registration authority. In this connection, several commentators were of the opinion that there should be a minimum period of time between the issuance of the administrative determination and its implementation by the registration authorities, in order to provide a losing party with the opportunity to file suit in a national court to suspend implementation of the determination and ultimately to obtain a reversal. A period of seven days is proposed for this purpose. If, however, no court order is obtained during this time, the decision would be communicated to the registration authority to take immediate effect and continue to have such effect, unless and until a contrary order is given to the registration authority by a court of competent jurisdiction.

218. Several commentators also expressed concern about the threat of litigation being brought against the registration authorities that would implement any changes to the status of a domain name. To minimize this concern, domain name registration agreements should make clear, in addition to the terms noted in the paragraphs above, that the applicant agrees that the relevant registration authorities (e.g., the registrar, registry administrator and registry) shall have no liability for acting in accordance with their enforcement responsibilities in relation to the administrative procedure.

219. Several commentators were of the view that efforts should be made to promote the development of a body of persuasive precedents concerning domain name disputes through the administrative dispute-resolution procedure. It was considered that such a body of precedents would enhance the predictability of the dispute-resolution system and contribute to the development of a coherent framework for domain names. To this end, it would be desirable that all determinations resulting from the administrative dispute-resolution process be made publicly available by being posted on a website.

Appeals

221. The Interim Report requested further comments on whether a centralized appeal process from determinations in the administrative process should be established. While a number of commentators were in favor of incorporating appeal procedures in the administrative mechanism, the majority were not. As the administrative procedure in any event would allow the parties to resort to the national courts after the issuance of a determination, an appeal process would be redundant and unnecessarily complicated for a procedure that is meant to be as streamlined and efficient as possible.

Costs

223. The administrative procedure will entail the following elements: (i)  an administration fee to be paid to the institution administering the process (the dispute-resolution service provider); (ii)  the fee to be paid to the panel of decision-makers; and (iii)  the expenses that may be incurred in relation to the proceedings (e.g., telecommunication charges, etc.).

224. The fee for the panel will be the most significant cost component. It is imperative for the quality of the determinations resulting from the process that the decision-makers have the required degree of expertise and experience. Furthermore, it is important to engage the decision-maker’s professional responsibility, as he or she will be taking important decisions affecting the rights and interests of the parties. The organization of meetings for processing batches of cases, however, will enable these fees to be spread over a number of cases.

225. It is suggested that the administration and decision-maker’s fees should be set freely by the dispute-resolution service providers that may be mandated to administer the procedure. Allowing the institutions to set their own rates should stimulate competition and ultimately benefit the public.

226. In general, in alternative dispute-resolution proceedings, parties are normally expected to advance an equal share of the anticipated costs of the proceedings. This practice may not be the most appropriate approach, however, for the administrative procedure. Under this procedure, the domain name holder would submit to the procedure through a standard clause in the domain name registration agreement. It may be difficult in these circumstances to require the holder to advance, at the outset of the procedure, what may be viewed as a substantial sum of money. It is, therefore, proposed that the third party complainant should be required to pay the initial administration fee, as well as the full advance payment of the fees allocated for the panel and any anticipated expenses. However, as recommended above, the panel would have discretion, in the determination, to decide on the allocation of these costs of the procedure among the parties in light of all the circumstances of the dispute and the result. Such costs should not, however, include any attorney’s fees that the parties may incur in participating in the procedure.

Dispute-Resolution Service Providers

228. It will be necessary to designate, in the clause providing for submission to the administrative dispute-resolution procedure in the domain name registration agreement, the administering authority or dispute-resolution service provider. It is suggested that a list of several well known and well respected institutions be designated in the domain name registration agreement. The institutions to feature on such a list must be chosen on the basis of: (i)  the international character of the institution; (ii)  the quality of the list of neutrals or decision-makers maintained by the institution and, in particular, whether it contains persons with appropriate experience in respect of domain names, intellectual property and technical matters concerning the Internet; (iii)  the likelihood that the institution will continue to be available to offer its services; and (iv)  the facilities that the institution provides for the on-line administration of disputes.

THE AVAILABILITY OF VOLUNTARY ARBITRATION

229. Arbitration is a private adjudicatory procedure, modeled on court litigation, in which the arbitrator has the power to impose a binding decision on the parties in respect of the dispute submitted to arbitration. The procedure is conducted in accordance with procedural rules established by the dispute-resolution service provider (the arbitration center) and under the supervisory guidance of the courts in respect of the arbitration procedure and its relationship to the law.

230. Arbitration takes place within a well-established international legal framework. Under that framework, the law recognizes the choice of parties to submit a dispute to arbitration as excluding the jurisdiction of the court in respect of the dispute. The arbitral award (the decision of the arbitrator) is not just binding, but also final, in the sense that the courts will not entertain an appeal on the merits of the dispute. Arbitral awards are enforceable relatively easily internationally by virtue of the New York Convention.

231. In arbitration, the parties may choose the applicable law pursuant to which the merits of the dispute will be decided. Their freedom of choice may be limited by certain mandatory laws that cannot be excluded (for example, parties cannot exclude the application of criminal law that might be applicable). If the parties fail themselves to choose the applicable law, the arbitrator will designate and apply the appropriate applicable law. It is possible, even common, for several applicable laws to be applied depending on the circumstances of the dispute (for example, where several different national trademarks are in question, questions relating to those trademarks will be assessed in accordance with the respective national laws under which the trademarks have been registered).

232. Arbitration has a number of distinct advantages in the context of domain name disputes. It provides a single procedure for resolving multijurisdictional disputes (as opposed to recourse to several different national court actions). It is a procedure that has been developed to be international, taking into account the various legal traditions around the world. It is also a procedure which offers the parties the choice of a neutral venue, language and law, so that neither is necessarily favored by familiarity with its own local laws, institutions and customs, as may be the case in national litigation involving a foreigner. Arbitration offers the parties more autonomy in the choice of procedures and laws, as well as in their choice of the arbitrator or decision-maker, than litigation. It also offers a comprehensive solution, in that the arbitrator is typically empowered to grant the interim and final remedies that are available under the law.

233. In WIPO RFC-2, comments were requested on the desirability of making arbitration a mandatory feature of a dispute-resolution policy in the sense that domain name applicants would be required, in the domain name registration agreement, to submit to arbitration in respect of any disputes concerning the domain name if called upon to do so by a third party complainant. Commentators expressed three reservations concerning arbitration as a mandatory procedure. First, the effect of arbitration in excluding resort to the courts was, as mentioned above, not generally favored. Secondly, the finality of the arbitration award caused hesitance. And thirdly, the normal feature of arbitration as a confidential procedure between the parties to a dispute in which the award is not published, unless the parties agree to such publication, was considered disadvantageous in the present context. It was felt that consistency in decision-making and the development of appropriate principles for the resolution of domain name disputes was of great importance and militated in favor of the publication of ADR decisions wherever possible.

234. The WIPO Interim Report thus recommended that submission to arbitration by a domain name applicant should not be mandatory. However, in view of the advantages of arbitration, it recommended that a provision should be included in the domain name registration agreement allowing applicants to submit, on an optional basis, to arbitration in respect of any dispute in relation to the domain name. Most commentators supported this recommendation.

236. It is necessary, in a clause submitting to arbitration, to designate the procedural rules in accordance with which the arbitration will be conducted. The designation of such rules also determines who the administering authority or dispute-resolution service provider will be. In this respect, commentators expressed the view that, since one of the advantages of arbitration is the choice that it allows to parties, there should not be one exclusive dispute-resolution service provider. On the other hand, it is to be noted that there are well over one hundred arbitration centers around the world and, for the sake of providing some guidance to applicants, as well as for consistency in decision-making, it might be desirable to limit the available range of arbitration centers that may be designated in the domain name registration agreement to a selected list of dispute-resolution service providers. The choice of the institutions that would feature on that list is for a party other than WIPO to decide, since the WIPO Arbitration and Mediation Center acts as a dispute-resolution service provider. The choice could be made by registrars (which would allow local languages to be used) or by registrars upon advice from ICANN. It is suggested that the choice be made taking into account: (i)  the international character of the arbitration center, that is, whether it offers services for international or purely local disputes; (ii)  the rules of the arbitration center; (iii)  the quality of the list of neutrals or arbitrators maintained by the arbitration center and, in particular, whether it contains persons with appropriate experience in respect of domain names and intellectual property; and (iv)  the continuity of the arbitration center, in the sense that the center must be in existence at a later date when called upon to administer a dispute.

237. Many domain name disputes may be capable of being resolved by reference only to documents; that is, it may often not be necessary to hear witnesses or to receive oral arguments in a physical hearing. This feature, coupled with the fact that domain name disputes arise out of the use of the Internet, makes it appropriate to consider the possibility of conducting an arbitration procedure on-line. The features of an on-line system for dispute-resolution, and its advantages, are discussed above, where a positive recommendation is made for the consideration of the use of on-line facilities for the administrative procedure for cancellation of abusive registrations.

238. The same considerations concerning the possibilities of conducting an on-line procedure apply to arbitration. In particular, given that parties to a dispute may be located in different parts of the world, it is considered that an on-line procedure should also be particularly advantageous as a means of containing the costs of the dispute-resolution procedure in the context of arbitration.

THE ROLE OF MEDIATION

240. Mediation is an extension of direct negotiations between parties to a dispute in which a neutral third party acts as intermediary to facilitate those negotiations and assists in finding a solution that is satisfactory to both parties. It is a non-binding procedure in two senses: (i)  the parties are not obliged to remain engaged in the procedure, but may leave it at any stage; and (ii)  the mediator, as a facilitator, has no decision-making power and, thus, cannot impose a decision on the parties. Since mediation is not an adjudicative procedure, but a process for obtaining a negotiated settlement acceptable to both parties, there is no applicable law in accordance with which the dispute is decided. The parties are free to choose their own reference points for reaching a mutually acceptable solution, which, typically, will include their commercial interests, the legal merits of the case, and the cost of resort to other means of resolving the dispute.

241. Mediation has undoubtedly some potential applications and advantages in the context of domain name disputes. It is especially well suited to domain name disputes which involve intractable legal issues. For example, there might be a domain name registration held by a person who owns an identical trademark in one country, while there is another party with an identical trademark registered in another country. Similarly, there might be a domain name consisting of the initials of the name of a corporation that is well known in one country, while there is another corporation with the same initials to its name that is well known in another country. In each of the foregoing situations, it is envisageable that each of the parties might bring a successful action in its own jurisdiction (that is, the jurisdiction in which it has a trademark registration or in which its business operations are located). The procedure of mediation may, in these circumstances, be an attractive way of resolving the dispute, since the process of facilitating negotiations can give rise to a creative solution which satisfies the commercial interests of both parties, but which cannot necessarily be imposed by law (e.g., a gateway page shared by the parties could be agreed upon).

242. There is a significant disadvantage, however, to mediation in the context of domain name disputes. It is a procedure that relies upon the good faith engagement of both parties for success. Since it is non-binding and either party can abandon the procedure at any stage, it is of little or no value in disputes concerning bad faith abusive registrations where it is unlikely that the holder of the abusive registration will cooperate.

243. Given that the utility of mediation may be limited to good faith disputes where there are serious interests on each side, it was recommended in the WIPO Interim Report that it would not be desirable to incorporate mediation as part of a mandatory dispute-resolution policy for domain name disputes. Mediation is always available for parties to choose, in the same way that they might choose to negotiate directly, without the assistance of a mediator, in order to find a solution to a dispute. Including specific reference to the possibility of mediation in the domain name registration agreement might unnecessarily complicate the agreement or confuse applicants. We confirm this recommendation in the present Report.

[Chapter 4 follows]

FOOTNOTES