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It’s cheap. It’s quick. And it’s designed to keep disputes over Internet domain names out of court. The nearly year-old arbitration system to resolve conflicts between domain name holders and trademark owners established by the Internet Corporation for Assigned Names and Numbers (ICANN) has been — by most accounts — a success. But there are a few glitches. Some lawyers worry established copyright law is sometimes undermined by arbitrators, giving trademark owners rights they don’t really have. Decisions are occasionally inconsistent, and ICANN panelists don’t have set guidelines to follow when they rule in a dispute, they say. “Generally the process is working well,” said M. Scott Donahey, a partner at Palo Alto’s Tomlinson Zisko Morosoli & Maser who has mediated numerous domain name disputes. “There are opinions that are wrongly decided and need to be corrected, but there is no process in place to correct them.” CONFLICTING DECISIONS Since the system was established last December, more than 1,800 complaints have been filed with ICANN-accredited arbitrators over disputes involving “top-level” domains .com, .org and .net. Dubbed the Uniform Dispute Resolution Policy, the ICANN procedure arose as a way to handle cybersquatting cases in which someone registers a domain name that is identical or confusingly similar to a trademark in order to make a profit off the name or draw traffic to a Web site. Under the system, a trademark owner who objects to a domain name registration can file a complaint with one of four ICANN-accredited bodies which then appoint a panel to hear the dispute. The parties can select either a one-person or three-person panel, which issues an opinion within about two weeks. In making their decision, panelists must consider whether a domain name is identical or confusingly similar to a service mark, if the registrant obtained the name in bad faith, and if the registrant has a legitimate interest in it. The types of cases the panelists have reviewed have become more complex over time. While initial disputes involved clear cases of cybersquatting, panels are now handling “more questionable cases that are not as clear cut,” Donahey said. Take for instance, fights over domain names that use a generic word that also serves as a trademark. J.Crew International Inc. was incensed when it learned an individual had registered the domain name “crew.com” and was attempting to sell it. The company filed a complaint, and a mediation panel ruled 2 to 1 in its favor. On the other hand, a man who registered penguin.org won his fight to keep the domain name, despite a complaint from publishing giant Penguin Books Ltd. Jamie Love, director of Consumer Project on Technology, a consumer advocacy group founded by Ralph Nader, said decisions like the one in the J.Crew case are unjustly expanding trademark law “to give trademark holders broader rights in cyberspace than they have in the real world.” Love and others contend the use of a generic name as a service mark does not guarantee that the trademark owner has exclusive rights to all uses of the word. But David Bernstein, a lawyer who serves as an ICANN arbitrator, said the issue is not as simple as that. The key question, in his mind, is what is the domain name holder’s motivation. “You need to look beyond the name itself to the motivation of the registrant and the way the name is being used,” said Bernstein, a partner at New York’s Debevoise & Plimpton. Panelists have also been split in cases where a registrant claims fair use rights to a trademark, such as to criticize a company or set up a fan site. A former employee of Bridgestone Firestone Inc. registered bridgestone-firestone.net for a Web site that included critical information about the tire manufacturer. A panelist ruled that the registrant had legitimate fair use and free speech rights to the domain name. In another case, a mediator ordered the registrant of wal-martsucks.com to transfer the domain name to Wal-Mart Stores Inc. The panelist concluded that the domain name was identical or confusingly similar to Wal-Mart’s trademark and that the registrant had registered the name in bad faith, intending to sell the domain name for profit. Panelists acknowledge that inconsistencies in opinions encourage trademark holders to seek out panelists that are more likely to rule in their favor. “You can go read the opinions and see which panelist is likely to come out your way,” Donahey said. Mediators are also concerned that their colleagues are going beyond their mandate. “It’s not clear to some people whether traditional infringement is or should be grounds for finding a violation of the [domain name] policy,” said Mark Partridge, a partner at Chicago’s Pattishall, McAuliffe, Newbury, Hilliard & Geraldson. Partridge, who was among a panel of experts that recommended creation of ICANN’s dispute resolution system, said he believes panels were not intended to rule whether domain names constitute infringement. Panelist Dana Haviland agrees. “The process is designed to provide a quick remedy — not binding — to cybersquatting,” Haviland, a partner at Wilson Sonsini Goodrich & Rosati, said. “The proceeding is not intended as a substitute to going to court to prove trademark infringement.” FINE-TUNING THE SYSTEM Nevertheless, panelists, IP attorneys and consumer advocates believe the system can be fixed. Donahey, for one, advocates creation of an appellate process that can overturn improper decisions and establish precedent. “No one analyzes contradictory opinions,” Donahey said. “We need someone to say ‘this is the standard.’” But A. Michael Froomkin, a professor at the University of Miami School of Law who has closely followed ICANN procedures, argues an appeals process will make the system more expensive. Instead, he thinks the fix lies in a stricter set of rules. “There ought to be a set of agreed examples of the application of the rules” that would serve as guideposts for panelists mediating certain issues, such as free speech, Froomkin said. Others suggest ways to cut down on the docket of disputes. Love argues that there would be fewer battles if the domain space was expanded to include top-level domains that define one’s Internet address by what one does (e.g. .airline, .union). ICANN plans to select a test bed of new top-level domains by the end of the year. IP attorney Carl Oppedahl, of Frisco, Colo.-based Oppedahl & Larson, believes trademark owners who act in bad faith should be dinged. There should be “a meaningful penalty” imposed on those who misuse the system in an attempt to steal a domain name by claiming it to be a trademark — so-called reverse domain name hijacking, Oppedahl said. ICANN is open to hearing recommendations about the dispute system. Andrew McLaughlin, ICANN’s chief policy officer, plans to see how the rules are being applied and if they need to be tightened up. As to the proposal for an appellate body, McLaughlin said he was personally opposed to the idea. “The right appeals forum is a court,” he said. ICANN’s system “was intended as a cheap, quick alternative to court. If the UDPR goes into the appeal process, everyone will appeal and it will double the amount of time” to resolve a dispute.

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