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<DIV><FONT face=Arial color=#0000ff size=2><SPAN class=382504022-28032002>FYI -
nice article encapsulating rights under UDRP and ACPA.</SPAN></FONT></DIV>
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<DIV>
<DIV align=center>Copyright 2001 NLP IP Company, Inc., <BR>a Subsidiary of
American Lawyer Media, Inc. <BR>E-Commerce </DIV><BR>
<DIV align=center>June 2001 </DIV><BR><STRONG>SECTION:</STRONG> Vol. 18; No. 2;
Pg. 1 <BR><BR><STRONG>LENGTH:</STRONG> 2264 words
<BR><BR><STRONG>HEADLINE:</STRONG> <STRONG>Practice Tips
How</STRONG> to Protect Trademarks in Domain Name Disputes With
Arbitration or Litigation <BR><BR><STRONG>BYLINE:</STRONG> BY BARRY G. FELDER;
Barry G. Felder is a partner at Brown Raysman Millstein Felder & Steiner LLP
in the firm's New York office. Kathleen Fay, an associate in the firm, assisted
in the preparation of this article. <BR><BR><STRONG>BODY:</STRONG> <BR>Lawyers
interested in protecting their clients' trademarks against infringing Internet
domain name registrations should be aware of the advantages and limitations of
the two primary remedies available to U.S.-registered trademark owners. This
article compares arbitration proceedings under the ICANN Domain Name Dispute
Resolution Policy (UDRP)1 with litigation in U.S. courts under the
Anticybersquatting Consumer Protection Act (ACPA).2 <BR><BR>Before proceeding to
a discussion of the merits of these respective proceedings, it should be noted
that they are not mutually exclusive. The UDRP contemplates that parties may
institute parallel court proceedings before, during or after the commencement of
a UDRP proceeding. Whether a trademark owner should pursue one, or the other, or
both kinds of proceedings depends on factors such as cost, the need for speed
and the strength of the trademark owner's claim. <BR><BR> Arbitration Under
the UDRP <BR><BR>The dispute resolution process established by the Internet
Corporation for Assigned Names and Numbers (ICANN) provides a remedy for a
narrowly defined group of particularly egregious cases of "deliberate, bad
faith, abusive, domain name registration," commonly referred to as
"cybersquatting."3 The exclusive remedies offered through this process are
transfer of the domain name to the complainant or cancellation of the domain
name registration. The UDRP requires that, in the event a complaint is filed
against the registrant of a domain name, the registrant must submit to an
administrative proceeding to determine whether (1) the domain name is identical
or confusingly similar to a trademark or service mark in which a complainant has
rights; (2) the registrant has no right or legitimate interest in the domain
name; and (3) the domain name has been registered and is being used in bad
faith. <BR><BR>Under the UDRP, evidence of bad faith includes, but is not
limited to, registration of a domain name under the following circumstances:
<BR><BR>* For the sole purpose of selling the domain name to the trademark owner
(e.g., cybersquatting); <BR><BR>* To prevent the trademark owner from using the
mark in its own domain name; <BR><BR>* Primarily to disrupt a competitor's
business; or <BR><BR>* To intentionally attract, for commercial gain, Internet
users by creating a likelihood of confusion. <BR><BR>A respondent's defenses
under the UDRP may include the following circumstances: <BR><BR>* Before notice
of infringement, the domain name was used in connection with a bona fide
offering of goods or services. <BR><BR>* The respondent or respondent's business
is commonly known by the domain name. <BR><BR>* The respondent uses the domain
name for legitimate non-commercial or fair use, without intent for commercial
gain or to misleadingly divert consumers or tarnish the mark at issue.
<BR><BR>Early last year, a WIPO administrative panel decided the first case of
cybersquatting under the UDRP. World Wrestling Federation Entertainment Inc. v.
Bosman, No. D1999-0001 (WIPO Jan. 14, 2000). Since then, there have been
thousands of proceedings under the UDRP, with domain name transfers far
outnumbering decisions in favor of the respondents. <BR><BR> Litigation
Under the ACPA <BR><BR>In 1999, Congress enacted federal anti-cybersquatting
legislation specifically designed to clarify the application of U.S. trademark
law to domain name registrations. The ACPA amends § 43 of the
Trademark Act of 1946, establishing that a person who registers, traffics in or
uses a domain name with the bad faith intent to profit from the name will be
civilly liable if: <BR><BR>* The domain name is identical or confusingly similar
to a protected mark. <BR><BR>* The domain name dilutes a famous mark; or
<BR><BR>* The domain name is a protected trademark, word or name. <BR><BR>The
ACPA outlines several factors that may lead to a finding of bad faith. In
addition, the ACPA specifically affords protection to personal names. A finding
of liability can result in forfeiture or cancellation of the domain name or
transfer of the domain name to the owner of the mark. Moreover, plaintiffs may
be entitled to actual damages, or if they elect otherwise at any time prior to a
final judgment, statutory damages in the amount of not less than $ 1,000 and not
greater than $ 100,000 per domain name. The ACPA also provides that a mark owner
may file an in rem action against the domain name itself in certain situations.
<BR><BR> Choosing Between Arbitration or Litigation <BR><BR>The following
are issues a trademark owner might want to consider when choosing whether to
bring an action under the UDRP or the ACPA. <BR><BR>* Speed <BR><BR>In clear
cases of cybersquatting that fall under the scope of both the UDRP and the ACPA,
trademark owners interested in fast transfer or cancellation of a domain name
from a cybersquatter may want to consider choosing arbitration over litigation.
A UDRP panel can resolve the domain name dispute and implement a decision to
transfer or cancel a domain name within a matter of months after commencement of
the proceeding. Evoking the UDRP to rapidly retrieve a domain name prior to or
concurrent with filing suit is economically prudent, since a trademark owner may
lose potential customers every day that a domain name corresponding to its
trademark is unavailable. <BR><BR>* Cost <BR><BR>An arbitration proceeding under
the UDRP and the accompanying UDRP Rules4 is generally much less expensive than
traditional litigation. The fees payable to dispute resolution service providers
are relatively small.5 The UDRP Rules limit the length of submissions to
arbitration panels and the time periods for submissions, and there is no
provision for discovery proceedings. These limitations tend to correspondingly
limit the attorney fees that are incurred in the course of a UDRP proceeding.
The cost-efficiency of the UDRP can benefit small businesses or individuals
without the financial resources to litigate. <BR><BR>However, low cost doesn't
mean no cost, and a complainant must weigh the relatively low cost of a UDRP
proceeding against the possibility that a respondent may file a court action in
response to an unfavorable administrative panel decision. If a losing respondent
notifies the domain name registrar of the filing of such a proceeding within ten
days of the adverse decision, UDRP 4(k) stays the implementation of the UDRP
proceeding pending the resolution of the litigation. This eventuality may leave
the trademark owner at the proverbial "square one," facing a second proceeding.
A trademark owner who believes the domain name holder is likely to file a court
proceeding if the UDRP decision is adverse may therefore find litigation from
the onset to be a more efficient approach. <BR><BR>* Finality <BR><BR>A UDRP
proceeding may not result in a final decision on the right to a domain name
registration. UDRP 4(k) expressly permits a trademark owner to seek judicial
resolution of a domain name dispute before or after an administrative
proceeding. In <A
href="http://www.nexis.com/research/search/buttonTFLink?_m=bba3a6363441512045b7717150ae1164&_butType=3&_butStat=242&_butNum=1&_butInline=1&_butinfo=106%20F.%20Supp.%202d%20505&_ansset=A-WA-A-Y-MsSEWE-UUA-AUADCWDYUZ-VBEZEEAWU-Y-U&_fmtstr=FULL&wchp=dGLSzS-lSltW&_md5=5ecdfaeeb5d4877a88ffa8cc96b382e3"
target=CONTENT>Broadbridge Media LLC v. HyperCD.com, 106 F. Supp. 2d 505
(S.D.N.Y. 2000),</A> the court held that UDRP 4(k) does not preclude a trademark
owner from filing suit during the pendency of a UDRP proceeding. <BR><BR>Not
only is a UDRP proceeding not final (unless the losing party chooses not to
pursue further remedies), under NetLearning Inc. v. Parisi, 2001 W.L. 503004
(E.D. Va., May 10), a court in subsequent proceedings is not bound by the
decision of the UDRP panel and it need not accord any deference to the decision.
The court in NetLearning concluded that "the UDRP's contemplation of parallel
litigation and abbreviated proceedings does not invite...deference" and the UDRP
itself contemplates "comprehensive, de novo adjudication" of the issues,
including "the parties' overarching trademark, contract, and other claims and
defenses." Id. <BR><BR>Thus, although a UDRP proceeding may be relatively
inexpensive and fast, it may yield a useless result if the domain name
registrant is a committed adversary. <BR><BR>* Jurisdiction and Venue
<BR><BR>The UDRP may be the best option for trademark owners concerned about
obtaining personal jurisdiction over a domain name registrant. Jurisdiction is
not an issue under the UDRP, as a domain name registrant has expressly agreed to
the jurisdiction of the administrative panel in its agreement with the domain
name registrar. See UDRP 1 and 4. Additionally, because disputes under the UDRP
are handled through paper and electronic communications and filings, the need to
travel to a forum is eliminated, and along with it disagreements over the
convenience of the venue. <BR><BR>* Availability of Remedies <BR><BR>A choice of
litigation over arbitration affords the trademark owner the opportunity to seek
damages and remedies other than the cancellation and transfer of the disputed
name, the only two remedies available under the UDRP. The range of remedies
available under the ACPA and the Lanham Act includes treble damages, defendant's
profits, attorney fees and up to $ 100,000 in statutory damages per domain name,
in addition to forfeiture and transfer of the domain name. See 15 U.S.C.
§ § 1116(a); 1117(d); 1125(d)(1)(C). <BR><BR>* Reverse
Domain Name Hijacking <BR><BR>A trademark owner filing a UDRP complaint must be
prepared for the respondent not only to defend against the transfer, but also to
argue that the proceeding itself was brought in bad faith. The arbitrators'
decision in Deutsche Welle v. DiamondWare Limited, No. D2000-1202 (WIPO Jan.
20), for example, adds to the growing number of cases in which the arbitrators
ruled in favor of the respondent, and found that the trademark owner improperly
sought to use the UDRP in bad faith to "hijack" the domain name. There are no
consequences to such a finding in the UDRP proceeding itself. UDRP Rule 15(e)
merely permits a panel that concludes a complaint was an attempt at "reverse
domain name hijacking" to declare that "the complaint was brought in bad faith
and constitutes an abuse of the administrative proceeding." No remedy for such
abuse is provided. <BR><BR>However, a finding of "reverse domain-name hijacking"
in a UDRP proceeding might have repercussions in a subsequent court proceeding
brought by a trademark owner with respect to the same domain name. A court faced
with such a proceeding may be influenced by the arbitration panel's finding of
bad faith, whether or not the court regards itself as either bound by such a
finding or required to afford it any deference. It has also been suggested that
a reverse domain name hijacking ruling against a complainant in a UDRP
proceeding may prompt a victorious registrant to file an action alleging abuse
of process. Thus far, there are no judicial decisions giving guidance as to how
courts will view a finding of reverse domain name hijacking, suggesting that due
caution is advised in considering a UDRP proceeding which might be susceptible
to such a finding. <BR><BR> Combination of Both Measures <BR><BR>A
combination of arbitration and litigation may be the best choice for the
trademark owner who wishes to recover a domain name as quickly as possible to
minimize lost profits and also wishes to recover damages. Consideration should
be given, however, to the effect that a prior UDRP proceeding may have on
subsequent court proceedings, as noted above. Not only may the trademark owner
fail to prevail in the UDRP proceeding, but under certain circumstances a UDRP
proceeding can also result in a finding that a complainant has engaged in
"reverse domain name hijacking." <BR><BR> Conclusion <BR><BR>The UDRP and
the ACPA provide different procedures, protect different substantive rights, and
offer different remedies. In doing so, they provide two effective and
complementary mechanisms for U.S. trademark owners seeking to enforce their
rights in domain names--a quick, relatively inexpensive mechanism to rectify
abusive registrations, while leaving intact the right of trademark owners to
pursue additional causes of action and remedies under state and federal
anti-cybersquatting laws. Attorneys advising clients should give careful
consideration to the relative merits of these proceedings, and weigh the
strength of client's claims in deciding which proceedings to pursue. <BR><BR>(1)
Uniform Domain Name Dispute Resolution Policy (adopted Aug. 26, 1999), see <A
href="http://www.icann.org/udrp/udrp-policy-24oct99.htm"
target=_blank>http://www.icann.org/udrp/udrp-policy-24oct99.htm</A> <BR><BR>(2)
Anticybersquatting Consumer Protection Act of 1999, 15 U.S.C. §
1125(d). <BR><BR>(3) See WIPO Final Report of the WIPO Internet Domain Name
Process P.135i (Apr. 30, 1999) at <A href="http://wipo2.wipo.int/process1/"
target=_blank>http://wipo2.wipo.int/process1/</A> report/finalreport.html.
<BR><BR>(4) Rules for Uniform Domain Name Dispute Resolution Policy, see <A
href="http://www/" target=_blank>http://www</A>.
icann.org/udrp./udrp-rules-24oct99.htm. <BR><BR>(5) See World Intellectual
Property Organization Arbitration and Mediation Center, Schedule of Fees under
the ICANN policy, at <A href="http://arbiter.wipo.int/domains/"
target=_blank>http://arbiter.wipo.int/domains/</A> fees/index.html; eResolution:
Integrity Online, Schedule of Fees, at <A href="http://www.eresolution/"
target=_blank>http://www.eresolution</A>. ca/services/dnd/schedule.htm; National
Arbitration Forum, Dispute Resolution for Domain Names Schedule of Fees, at <A
href="http://www.arbforum.com/domains/domain-fees.html"
target=_blank>http://www.arbforum.com/domains/domain-fees.html</A>; CPR
Institute for Dispute Resolution, CPR's Supplemental Rules and Fee Schedule, P.
12, at <A href="http://www.cpradr.org/" target=_blank>http://www.cpradr.org/</A>
ICANN/RulesAndFees.htm. <BR><BR> Where to Find Them On the Web
<BR><BR>Arbitration proceedings under the ICANN UDRP are indexed and the
decisions archived on the ICANN web site at <A href="http://www/"
target=_blank>http://www</A>. icann.org/udrp/udrp.htm. <BR><BR>The reports of
the World Intellectual Property Organization (WIPO) on the ICANN domain name
dispute resolution process are available at <A href="http://ecommerce/"
target=_blank>http://ecommerce</A>. wipo.int/domains/
<BR><BR><STRONG>LOAD-DATE:</STRONG> July 13, 2001 </DIV></BODY></HTML>