Fair Domain-Dispute Arbitration Firm Quits the Business

fwc writes: "According to this Newsbytes story, EResolution has decided to quit the Domain Name Dispute-Resolution business because its reputation for being fair has driven away its potential customers - the trademark holders who are filing the complaints. Apparently (and understandably) the trademark holders prefer to use those arbitrators who find for the trademark holder most of the time. Perhaps it is time for ICANN to rethink their policy."

Comments

Not a great business model then is it?

[Mike Connell]

I hear that the founders are starting up a new company: the "Our premiums are really low because we *never* pay out" insurance company ;-)

i c a n n . B l o g

[webword]

While we are on the topic of ICANN...

Here is the ICANN weblog.

...it is about 1 year old.

Re:i c a n n . B l o g

[webword]

See the left hand navigation on the blog page. He updates it very regularly, like a good blog should. For example, here is the archive page for 12/00.

why are there more than one involved?

[night_flyer]

There be only ONE organization to settle these things, and that ONE organization should be a fair one... ok, Ill wake up from my dream now...

Re:why are there more than one involved?

[Masem]

Even if there is only one resolution organization, you'll have different people involved in that organization that may have different attitudes on trademarks and the like. IIRC, a statistical summary of DNS rulings from about 6 to 10 months ago certainly indicated that 2 resolution organizations were trademark-friendly, but even more so, certain people in those organizations were more opt to go with trademark owners than others. Now, sure, just like most US courts, the selection of exactly whom is on the resolution committee is random from a pool from that organization, but there's no way to iron out the biases of individaul members.

Re:why are there more than one involved?

[CaptJay]

The actual reason there are multiple organizations to serve as arbiters was to try to balance the system in more fairness. The obvious question is fairness to whom, and I think the answer is pretty obvious: those who have the money and pay for this "service".

As far as I'm concerned, if someone wants to have a domain which I payed for, they should have to come here in front of a judge in MY jurisdiction and argue that it is theirs. Therefore if I disagree, I have means to appeal, and so on.

We have enough trouble keeping a sane justice system, let alone parrallel ones funded by plaintiffs...

Re:why are there more than one involved?

[pagsz]

Well, hopefully by having such a random selection you would get a more balanced organization. Of course there would always be some trade-mark friendly ones, but there would also be anti-trademark ones and the rare impartial ones.

By having only one organization, trademark holders can't shop around for the friendliest one. They are forced to go to one organization, which may or may not be friendly to their needs.

Also, let's say that this solo orgainization is trademark friendly. It may not stay that way as members come and go (mostly randomly). So there could be runs of pro- and anti-trademark rulings, but the trademark holder could never be sure which they were going to get. This contrasts with the current system, where trademark owners know there are certain places they can go for a friendly ruling.

No solution is perfect, but this announcement certainly shows that the current one doesn't work. IMHO, a single arbitration orgainzation would be the best solution.

That's just the way I see it,

Re:why are there more than one involved?

[night_flyer]

well they should be completely independent, and funded by a fee tacked onto the purchase, renewal, and transfer of domain names...

Re:why are there more than one involved?

[webword]

"One organization to rule them all One organization to find them, One organization to bring them all And in the darkness bind them.

Predictable Big Business

[FlowerPotAdmin]

It's the same thing with legal proceedings in situations where corporations can choose where they take place (i.e., judges who are known to rule a certain way. The bottom line is that one cannot expect businesses to do anything contrary to their own advantage, because the system in which they operate is of that mentality.

Re:Predictable Big Business

[marcop]

Is this blatently allowed? Remember when Rambus was reprimanded for "Judge Shopping".

Re:Predictable Big Business

[Nematode]

It happens a lot more when it comes to arbitration. In all sorts of goods and (especially) service contracts, the fine print includes provisions for binding arbitration to settle disputes, instead of litigation. You see them a lot in doctor/dentist-patient agreements, financial services, and many other agency situations, like getting your house sold or repaired, etc. It's cropping up a lot in sales of goods, too - especially high cost items.

Binding arbitration can offer some advantages to litigation, in terms of speed and efficiency, but just as with domain name disputes, the deck often gets stacked. Most of that fine print lets the person who wrote it choose the arbitrator, choose the location for the arbitration (wherever the company's counsel is located, often a plane flight away from where you are), and even the rules for the arbitration. Now, many times these are ostensibly neutral - the arbitrator and rules are adopted from the standards set for by the American Arbitration Association - but the location for the hearing is rarely convenient for the non-drafting party (i.e., you).

The subtler problem is what you see here with domain name disputes. Arbitration firms aren't stupid, they know who butters their bread. If their firm has handled 200 arbitration cases from a particular HMO in the past, and that HMO comes before them yet again with a malpractice dispute, it's entirely possible they are going to feel just a -hint- of pressure to avoid a ruling that pisses off their repeat customers, even though both sides are splitting the fee, in a display of "fairness."

Privitizing justice runs the risk of selling it to the highest bidder, whether it's domain names or medical malpractice. Many mediators and arbitrators are entirely fair - or at least think they are. But there's a reason that extra-judicial dispute resolution is getting increasingly popular among those that are usually on the "defendant" side of the dispute.

At least the can get their's

[satanami69]

eResolution v. eResolution.com There is nothing in the spirit or substance of American law that could ever justify the expropriation of one person's rightful property in order to transfer ownership to some other person, based on the argument that the original owner had not yet "done anything" with his property other than simply holding it, whereas the other person has intentions and/or plans to put that property to some commercial use.

Re:At least the can get their's

[Stiletto]

You know, I've never looked at ICANN's rules until I browsed that link you just posted. The case seems pretty straightforward to me. A cyber-squatter got squashed.

Paragraph 4(c), which the "respondant" can use to defend the domain name, seems pretty easy to satisfy:

(i) before any notice to you of the dispute, your use of, or demonstrable preparations to use, the domain name or a name corresponding to the domain name in connection with a bona fide offering of goods or services; or

(ii) you (as an individual, business or other organization) have been commonly known by the domain name, even if you have acquired no trademark or service mark rights; or

(iii) you are making a legitimate noncommercial or fair use of the domain name, without intent for commercial gain to misleadingly divert consumers or to tarnish the trademark or service mark at issue.

Note that this is a logical-OR. If you can claim any of the above you get to keep your domain. This guy didn't fall under any of the categories.

I must admit though, I don't like the terms "bona fide" or "legitimate" in the rules. It would be nice if they could define what a "bona fide offering of goods" is or what "legitimate noncommercial use" means. Maybe they do in another portion of the rules--I didn't read that far :-)

Re:At least the can get their's

[dillon_rinker]

Yes there is. Congressional land grants in the 1800s were dependent on your improving the land. If you didn't improve the land, you didn't get to keep the land. So you go to the registrar (Congress) and request your domain name (parcel of land). You receive it and don't post any actualy content (build structures / farm the land). You lose the domain (the land grant).

This was also the legal justification for taking lands from the American natives - they had not improved the land. They had a Biblical imperative to farm or work the land; since they weren't doing so, they had no right to the land.

I am a firm believer in the principle that if you don't use a scarce resource to benefit everyone, and if someone else will, then they should be the owner. Property ownership is not natural; it is the product of the laws of our civilization. The laws should benefit everyone and not a select few individuals.

Re:At least the can get their's

[david duncan scott]

Actually I think that's the basic argument for "Manifest Destiny", and that was used to justify the taking of property and indeed a good many lives.

Re:At least the can get their's

[Carlos Laviola]

You're goddamn right! What I mostly see on the absurd cases that show up on Slashdot once in a while is that the arbitrators' way of finding out if the person is using the domain is going to www.domain.com. Doesn't exist? Under construction? Oops! ALERT! ALERT! BAD FAITH! (they love using this expression.)

eResolution's case seems very fair, though. But LOTS of ridiculous cases have passed thru the dirty unfair hands of WIPO.

One Law for the Rich....

[MosesJones]

and another for the Poor.

And this suprises us how ?

Welcome to freedom by cheque book.

The .es Domain

[YearOfTheDragon]

The Spanish(.es) solution to domain names isn't very good.

"Only the following regular domain names will be assigned:
a) The full organisation name as it appears in its deed or constitution document.
b) An acronym of the full name of the organisation qualified ...
c) One or more trade names or legally registered trademarks as they appear in the register of the Spanish Office ..."
Complete text can be found here.

There aren't discusion about domains.
But there isn't any freedom.
If I want to register the domain "YearOfTheDragon.ES" I need to get the Trademark.
Do it Happens in other countries?

Re:The .es Domain

[pubjames]

Yes, the Spanish system is especially crap, and demonstrates that there is actually a lot of good in the "first come, first served" method of .com assignment.

One of the great failings of the Spanish system is that you have to be a registered company to get a .es domain name, and there is a lot of red tape to jump through to set up a company. Even with expensive lawers, it can still take a month, and then another few weeks until your registration is approved, and you need a minimum capital (about $3000) to start a company.

Compare this to the UK where you can buy an off-the-shelf company in 24hrs for about $150 and get the domain name the same day.

Re:The .es Domain

[mttlg]

Damn, and I really wanted to register cojon.es...

Re:The .es Domain

[mpe]

If they created subdomains, such as .com.es, .edu.es, etc. then they would be able to have different rules on the sort of domain name you were wishing to register. For example a company name would have to use the .com.es domain and then have to follow those rules.

Which are actually a fairly decent set of rules

Eductional insituations would have to use the .edu.es domain and follow the specific rules for that domain. An individual would have to use the .person.es domain and follow a first come first served basis.

You'd still need some rules. e.g. person could only use their own name or produce documentation showing they had authority to use someone elses...

Re:The .es Domain

[Carlos Laviola]

I believe the Brazilian system sucks even more. FAPESP, a research institute that manages our sole registry, requires you to actually prove you own a company before you can register a domain. You have to give them the numbers. But then, when you whois a domain, you discover its owner is a grocery store, for instance.

But there's more! There's the stupid Internet Managing Committee, that is a government committee (don't get fooled by that .org.br!) that harasses Brazilian users that care about their freedom with its decisions.

Bah.

WHAT?!

[The Smith]

From the article:

The firm, one of four accredited under ICANN's Uniform Domain-Name Dispute Resolution Policy (UDRP), said that the policy under which those filing complaints get to choose the arbitrator encourages businesses to seek out the referee they believe is most likely to see domain-name holders as cybersquatters. [my emphasis]

I don't believe it: the plaintiff actually gets to choose which arbitrator will try the case, and the defendant has no say! This is like the MPAA being allowed to select which `justice' they want to try their court cases.

Hey, wait a minute...

Re:WHAT?!

[ethereal]

I believe you can still take the matter to court if arbitration doesn't work out the way you like, though. The arbitration is just offered as an option since sometimes it turns out to be cheaper. The moral for the little guy in these cases seems to be: either go to court immediately to defend your domain, or else cave right away. Arbitration will just suck up time and money that you don't have.

Re:WHAT?!

[Rupert]

Nope. The arbitration is binding.

The only option that even vaguely favors the defendant is to opt for a three judge panel, in which the plaintiff appoints one judge, the defendant appoints another, and the third is "randomly" selected by the registrar. However, three judge panels are significantly more expensive (>3x IIRC) and much more of the financial burden falls on the defendant. They do, however, have a much more balanced average outcome (I don't have exact figures to hand).

Re:WHAT?!

[monkeydo]

The filing party _always_ gets to chose the arbiter. Haven't you ever signed a contract, lease, rental agreement, or loan app. of some sort. There is almost always a clause that you agree any dispute will be settled by arbitration and the arbiter will be ...

Re:WHAT?!

[monkeydo]

First of all these disputes have Complaintants and Respondants

You are coorect that no contract needs to exist between these parties before the complaint, but if you search you will find that one often does. In any case, the contract that gives authority in these cases is the one between the Registrar and the Registrant. These contracts stipulate that you agree to ICANN's rules for resolving disputes.

Everyone seems to be hung up on the fact that the Complaintant gets to pick the arbitrator, who cares? Would it be more fair if the respondant got to pick the arbitrator? Or if they were randomly selected from a rotating pool? The answer is it wouldn't matter. Even this "fairest" arbitrator only decided in favor of the "little guy" less than 40% of the time. If you actually look at these disputes most of the time the trademark holder is right, there have been very few cases (etoy and nissan computers come to mind) where the current holder actually has a legitamate claim to the name, and most of these cases involve lengthy legal battles instead of simple arbitration.

IMHO, domain names should only be forcibly transferred if: The holder is using the name for purposes which could reasonably cause confusion with the TM-holder, OR The holder has no reason whatsoever to have the name, while the plaintiff has every reason, OR The holder is not using the name for anything.

This is actually very close to the critera used by WIPO to define cybersquatters.

Problem with the arbitration system

[fhwang]

The biggest problem is that under ICANN rules, only the person filing the complaint has any say as to which arbitrator is selected. The person defending against the complaint has no power whatsoever in deciding who the arbitrator is. So the complainant will pick an arbitrator with a history of favoring complainants.

Well, duh. Of course if you give only one side the ability to choose the adjudicator, then the odds will be completely skewed. A sixth-grader could design a more fair system.

Re:Problem with the arbitration system

[Zocalo]

While I think that arbitration is, on paper, a better solution than the "first-come, first-served" approachm with all the domain-squatting that ensued as a result of that. The problem for ICANN seems to be making arbitration work without any possible bias. If either of the two sides in the argument is allowed to choose the judge, then how can the result be anything other than biased? It seems incredibly naive of ICANN to think that anything other could be the case when money (and lawyers) are involved.

The best way forward might be to log the dispute with ICANN (or some other neutral body) and they randomly assign it to an one of the arbiters on a pro-rata basis. The more resources the arbitrator has the more cases they get. There definately needs to be a process of appeal as well; maybe to a committee of several arbiters whose decision is final.

Re:Problem with the arbitration system

[fhwang]

In real life there are plenty of arbitration systems where both parties have a say. Just a quick google search reveals:

1. The Federal Mediation Conciliation service (which appears to settle labor disputes) takes suggestions from both parties, then picks an arbitrator based on those suggestions.
2. CAP-MPT (apparently a malpractice insurer in California) has both parties pick one arbitrator, and then they decide on a neutral arbitrator, and all three choices form an arbitration panel.

... and if I can find these on my free-time at work, surely someone at ICANN could've found them, too. Why the ICANN rules are the way they are is beyond me.

The first paragraph says it all.

[A_Non_Moose]

A Canadian firm specializing in arbitration won't be settling any more cybersquatting disputes, saying Friday that its reputation for being fair has driven away the trademark holders who file complaints and thus decide who makes money in that business.

First off they are Canadians, which is rife with humor all by itself, but I'll say this is good because most of our brothers to the north are very level-headed.
Good thing to have in an arbitrator.

Reputation for being fair: Kiss of death for a business, and, once again a "Good thing (tm)" when dealing with an arbitrator.

Being fair "drives away trademark holders"...does this say anything about the current situation?
I'm sure copyright holders (RIMPAss's--RIAA/MPAA Ass.--a la the Register) can buy...uh, select the most corrup^H^H^H^H^H easily persuaded judges.

Maybe I'm too damn tired, and too damn cynical, but this suprises anyone?

Uh-huh. Ethics in business has about as much of a chance as chastity in a whorehouse.

IMO, that is.

.

Needs to be more like Mad Max

[Cesaro]

This all needs to be more like MadMax in my opinion. Forget courts and "litigation". If I want to take your domain, trademark or not, we fight to the death and winner takes the domain. If we both lose then it is up for grabs, just like my gold teeth.

Seriously though, one of the largest problems with litigations surrounding these technological items is that the people in power DO NOT UNDERSTAND TECHNOLOGY. This has been proven time and time again by the US patent office (not that other countries are immune), and time after time. The judge telling Kazaa that it must stop people from transferring files. Does the judge not understand a word in the phrase "Peer to peer"? Now I'm not saying that in this case ICANN is technologically illiterate, they're just a corporate whore who refuses to stand up for the little man. I just wanted to rant on the other subject. ;)

=Cesaro

Re:Needs to be more like Mad Max

[Svartalf]

"The patent office doesn't have to understand the technology. Look, its like this. If they have a question to grant or deny a patent - they typically grant. There policy recently with high-tech concepts/ideas is grant the patent, and let the courts handle the mess."

It is part of the requirements of their job to understand something about the technology. If they don't, how are they supposed to grant a Patent on it- rubber stamp it? And don't rely on the courts to sort it out- it's not really their job to understand the technology either so they won't know that someone in the USPTO rubber stamped something.

Somewhere along the time of when the Omnibus Budget Reconciliation Act (ORBA) of 1990 is when things started really going downhill. It was at that point in time that the USPTO started operating more along the lines of a private business (mandated by ORBA) instead of an agency. With them being understaffed for the job, combined with them deriving a good portion of thier budget from Patent grants, etc. it's a recipe for disaster.

Re:Needs to be more like Mad Max

[Detritus]

That used to be part of English common law, it was called "trial by combat". Although it was repealed in England, I've read that it might be possible to petition a judge for trial by combat in some American states, since the legal systems of most states is based on English common law. It would make those Microsoft antitrust cases a lot more interesting :-).

Re:It's all so arbitrary...

[MeNeXT]

I don't get your humor. The issue is that some words belong to the language and were defined prior to a trademark. If this word is not being used within the same industrie to misslead the public then why not on a first come first serve basis. A good example that comes to mind is the word ajax. Which was being used by an ISP on a .NET and the trademark holder of cleaning supplies took them to court.

WORD is a trademark of MicroSoft and has been used in this comment without permission. If you feel offended please replace WORD with OPEN OFFICE. Thank you for your time.

Maybe they should have a Google vote

[night_flyer]

as to who gets the name....

Comment removed

[account_deleted]

Comment removed based on user account deletion

Just sometimes ...

[King Of Chat]

... it comes out OK for the "little" guy. My fave was the one during the last UK general election when www.williamhague.com got disputed (I advise you not to look at the actual content). IIRC William Hague (the naturist) won because he had been running the site for ages before William Hague (the politician) got elected leader of the Conservative party. There's nothing they could do about it.

Mind you, I'm not sure the result would've been much different if the naturist guy had stood instead. All OK now as they've got a completely different slaphead nonentity in charge now.

How about penalty for judge shopping

[horza]

We all agree that only an idiot would think up a system where the plaintif can pick which 'arbitrator' they want, that not only encourages judge-shopping but blantently declares it open-season. Let's assume (in our fantasy world) they decide to switch to, for simplicity, a round-robin allocation system. I think it would be nice that if the plaintif appeals to change arbitrator and fails to make a strong enough case, then they get fined a couple of hundred dollars that gets donated to those running free secondary DNS servers. There's a kind of symmetry in justice there that amuses me.

Phillip.

Re:.FI is very much the same

[pubjames]

I find it a sensible solution regarding to strictly national TLDs

I don't think it is sensible at all. What is sensible is to have a second level domains at the country level. They have this in the UK, so that, for instance,

company.ltd.uk

must be a registered, limited, company, but (as far as I am aware)

whatever.co.uk

can be registered by anyone.

Spain doesn't have this second level and is very restrictive about who can have domain names. It might, as you say, give "respect for the national flag", but I don't think it does much good for the new economy of Spain.

How do you become an arbitrator?

[uucp]

I'm not sure that I understand all of this. If the person filing the complaint can choose an arbitrator, then why isn't Slashdot an arbitrator? Or Stallman? Or Lessig? Or an Anonymous Coward?

Hmmmmm.
4.f. Selection of Provider The complainant shall select the Provider from among those approved by ICANN by submitting the complaint to that Provider.

OK. How do you become an approved provider? Well, the Approved Providers list is here. It says: "Additional providers may be approved soon. The above approvals are in effect until further notice at this web page" Nothing on how to become one.

Anybody have any ideas? I'd like to become a "Provider".

Why the Lawyer Bashing?

[sbarber]

From the article:

Said EResolution President Karim Benyekhlef: "It is but an open secret that lawyers advising their clients in domain name cases have no scruples about quoting the figures and saying that the odds are better with a given provider."

Why are the complainants' lawyers to blame for this? The ICANN rules let the complainant pick the arbitrator. In the US at least, an attorney has a ethical obligation (which are enacted as statutes or regulations in most states) to zealously represent a client's interest. Picking an arbitrator that rules less often for the complainant is arguably a breach of that obligation. In fact, the attorney who didn't do this could be sued (probably successfully) for malpractice and potentially disbarred or sanctioned by the state. Thus, by the admittedly a bit counterintuitive logic of the legal system, it is entirely scrupulous of the lawyers to advise using a complainant-favorable arbitrator.

The problem is in the ICANN UDRP rules, which are blatantly unfair to the defendant.

Big business choose WIPO the hanging judge

[Garry Anderson]

eResolution admit that they cannot compete with the prejudiced United Nations World Intellectual Property Organization (WIPO.org).

Even their own Canadian government went to UN WIPO - "while claiming unfailing support for Canadian know-how in e-commerce" - rather than them.

WIPO are the provider of choice, winning most cases for the 'prosecution' - they are obviously corrupt.

Especially as they know the solution to these problems on the Internet. They could stop 'consumer confusion', 'trademark conflict' and 'passing off'.

The solution was ratified by honest attorneys - including the honourable G. Gervaise Davis III, himself a UN WIPO panelist judge.

This is very important, as virtually every word is trademarked - Alpha to Zeta or Aardvark to Zulu, most many times over. The word Apple is trademarked hundreds of times in the USA alone - I have yet to check it in the 200+ countries. Conflict is IMPOSSIBLE to avoid.

The solution involves giving trademarks a domain in the restricted TLD of .reg - to act as certificate of authentication.

So when consumer enters apple.com, they are redirected to apple.computer.us.reg.

When entered directly, .reg can be used as a directory.

The thousands of other trademarks using the word 'apple' may then use their mark without any of these problems e.g. apple.tld redirected to apple.record.uk.reg !

Please visit WIPO.org.uk.

Usual disclaimer for the litigation mad and greedy lawyers: All is my logically considered and informed opinion. However, in the last two years nobody has yet proved me wrong. Corruption has yet to be proved in a court of Law.

Nature of the Business -- Rules must change

[werdna]

Because the ICANN rules permit the petitioner to select the forum (the arb), is it at all unsurprising that when a lawyer (me too) is filing one of these things, she will obtain the statistics for the various arbs to determine which group, if any, is more pro-petitioner than another.

Since an arb result is unappealable, every arb result is final. There is therefore no downside for an arb to be pro-petitioner. Since the petitioner gets to decide which forum gets the fee, why would any arb panel ever consider doing anything other than hiring a bunch of pro-petitioner arbitrators, and eventually phasing out anyone who drops the panel's statistics?

For the respondants, by the way, the strategy is to pay extra for the three-judge panel. The statistics drop from something like 88% pro-petitioner for single-arb panels to mid-sixties.

And don't freak too much about the numbers -- the vast majority of cases I have seen are serious cybersquatting cases. Despite the statistics, I have yet to lose a case due to perceived bias, though I have seen some howler opinions elsewhere. I wonder if those result as much from poor or pro-se representation as from bad arbitration?

At any rate, the RULES create an inherently unbalanced world. ICANN, or preferably a panel responsible to the public, and not the petitioner, should select the panel by random drawing, and should supervise and investigate allegations of bias. Even though the decisions themselves are not reviewable, the arbitrator should be accountable to someone to do justice, not merely "help up the stats."

Re:How did this crap even start?

[JatTDB]

The really sad thing is that the statement still isn't that far off, what with all the misspelled and typo'd variations that we've seen lawsuits over...

Arbitration NOT binding

[wiredog]

See this CNET article for details.

In-depth analysis of UDRP

[Froomkin]

I've written a paper ("ICANN's "Uniform Dispute Resolution Policy"- Causes and (Partial) Cures") that discusses the history of the UDPR and some possible improvements. I'm afraid there's only a .pdf version at present, however.

I also want to plug ICANNWatch as a place to go for discussion of all ICANN-related issues, including domain name arbitrations.

Re:Just sometimes is great PR!!!

[King Of Chat]

Interesting example of a "corrupt organisation". Seems to fit though (Archer, Hamilton etc.)

It seems like it's OK if it's your real name (like Wiliam Hague the naturist). If that were true, you could change your name to anything, then letgitmately register the domain. Not sure how it would hold up though. There was one guy in the UK who, (after being charged £10 by Yorkshire Bank for sending him a letter telling him he was £2.50 overdrawn) changed his name by deed poll (dunno what it's called in the US) to Mr. YorkshireBankPlcAreFascistBastards, then demanded that they issue him with a new chequebook (that's checkbook to you) etc. Wonder if he ever thought of registering the domain.

PS Sorry for those of you who can't pick up pound signs.
PPS The bank did issue him with new stuff, then closed his account.