On last Friday, January 28th the U.S. Department of Commerce (DOC) submitted a paper to ICANN’s Governmental Advisory Committee containing its suggestions for what position the GAC should push for at its February 28 – March 1 meeting with ICANN’s Board.
According to the letter the U.S. wants the GAC to ask ICANN to make the Uniform Rapid Suspension (URS) into a “loser pays” system.
The DOC also wants ICANN to give trademark holders the right get the domain names transferred to them instead of the currently proposed system in which the domain is simply suspended by the registry.
The combination of a “loser pays” rule along with giving the trademark holders the right to get the domain transferred to them, would very likely increase the number of cases filed by trademark holders and would put additional pressure on domain holders to hand over their domains on receipt of a C & D Letter.
Under the current system (UDRP), while a domain holder has to pay his own fees and costs the if the domain holder would also responsible for the trademark holders legal fees the “risk” to the domain holder increases many fold.
Trademark interests are usually represented by large national law firms which have a LOT higher hour rate than those attorney’s who general represent domainers in such proceedings. While many attorneys who represent domain holders charge a flat rate of $1,500-$5K to defend a UDRP, a trademark firm’s fees could easily run into the five figures.
Trademark holders typically push a lot of paper in UDRP including a lots of exhibits, have staff do research, charge a high hourly rate for all the work, and losing domain holders will be paying for all of that.
The URS was proposed as a supplement to, and not a substitute for, the UDRP and that a losing registrant would face domain suspension but not transfer.
If domain transfers are made available through the URS, the URS would wind up being the mechanism of choice for trademark holders.
The URS will have cheaper filing fees, with a much quicker time frame for decisions.
Therefore if the DOC requests are adopted by ICANN, trademark holders would file most of their cases and certainly all of the cases which they feel they have a substantial likelihood of success under the URS rather than UDRP.
Who could blame them?
If trademark holders could get their costs and fees paid by from the domain holders and get the domain name transferred to them, in a quicker process why would they bother with UDRP’s?
A couple of days ago we we wrote about possible UDRP reform, but if these demands of the US government are adopted, trademark holder’s won’t need to use the UDRP process thereby making reform a non-issue.
(There are other issues raised by the DOC letter but we will address those in separate posts.)
Once again I reached out to the Internet Commerce Association Phil Corwin for comment on this action by the US who said:
“The ICA is extremely concerned about the position paper’s stance on the URS, which go beyond even the original IRT recommendations, which did not recommend a “loser pays” regime and which made clear that the URS was to be a supplement to and not a substitute for the UDRP (that is, no domain transfers via URS).
“We we intend to communicate those concerns to the Dept. of Commerce as well as to Congress.”
“So we’re going to request that DOC withdraw its URS position and instead support initiation of a consensus process for UDRP reform”
“ICA is also concerned that a US position which implies that the GAC has the ultimate say in ICANN policymaking is subversive of the entire ICANN process, which is based on a bottom-up consensus process that ensures a large role for the private sector and civil society in determining policy.”
Typical tactic. Ask for the sun and settle for the moon.
Between the Republican’s successful defeat of net neutrality, combined with stuff like this…the end of the entrepreneurial internet is very near.
Still Chillin' After All These Domains says
Yes, it would not take long for sheer chaos to ensue.
Just imagine all the people out there that have no clue how domains operate and are just simply running their business and one day they are looking at possibly losing their business name, thereby crushing their business, and end up stuck with a $25,000 bill.
I smell bankruptcies everywhere once the shark lawyers smell the blood and start yanking away prime generic domains from mom and pops and even mid-tier businesses.
This has bad news written all over it for the prosperity of the Net.
And why has a single country, in this case the US, try pushing something that will affect the entire world, not only their citizens? Imagine trying to defend all your domains because some fishy trademark owner is trying to test their luck, on a “maybe it will work!” attempt.
I don’t know the alternative, in the past some people talked about the UN but I’m unsure if that would be good, but if we have an ICANN that follows what a single country tells, and US courts taking over domains as we have seen on the past, well… the WWW doesn’t seem too worldwide for me…
This URS is asking for trouble, it will just increase domain hijacking!
John B says
Typical redneck legislators. Make something that is far beyond their Gomer Pyle level thinking into a binary decision they can get their mindlets around. Understanding the decision is the same as understanding the process… not. These proceedings are complex, expensive and slow for good reasons.
Jeff Schneider says
Knowone can stand in the immutable force of business expansion on the Web. Those who try to obstruct this coming phenomenon will break themselves in doing so. Like it or not the tables are changing rapidly in the support and defense of a movement we are all a part of. Yes be aware of the barrier constructors, but know that the momentum is in place and increasing at a frenetic pace.
Small business owners on the Web will save everybodies BACON! It is no mistake that our countries leaders deep down know this. Hold on the future is bright!
Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)
The whole new gTLD proposal is so fundamentally flawed you can’t blame the IP lawyers looking to mitigate the damage to their clients by lobbying governments. The problem with their approach is they see most of the potential costs coming from the costs of squatting. However they have missed the bigger issues.
Here’s a few for starters
ICANN requires equal treatment of registries, and smaller existing registries are already requesting the same treatment.
No price caps?
It’s kind of ironic that some of those who shouted the loudest for Vertical Integrated registries / registrars built their businesses through Vertical Separation.
Rather than concentrating on defensive registrations and recourse mechanisms it would be far more appropriate to design a sensible plan for new gTLDs.
How can it be right to allow a plan which proposes granting monopoly positions to the most economically advantaged (Cost of such advantage $185,000 + $25,000 pa.?) And at the same time have no mechanism to prevent those contracted parties from using that advantage to compete against all other non contracted parties in the same vertical?
Trademark law doesn’t allow such advantage to be awarded for good reason. How come ICANN is allowed to say it will force through a system with such obvious failings?
New gTLDs might work well for branding for some companies. But even for brands what ICANN is proposing is fraught with issues…..
What happens is Toyota gets .cars? How does Ford, BMW Mercedes all feel about it?
.ibm .dell no problem but what about .hp? 2 letters being reserved for country codes
Its even worse for companies like Proctor and Gamble? not only is .pg not possible but their brands are built around products and $185,000 + $25,000 p.a. just doesn’t scale.
What about if the major player in your industry seeks such advantage? If names to the right of the dot become to be perceived as superior, what about all the SMEs? Do they suddenly need to also spend $185,000 + $25,000 p.a. with ICANN to enjoy the same level of branding?
What about start ups? The cost is likely to prove prohibitive. So what ICANN will have managed to have done is destroy one of the key driving forces of the Internet, namely a level playing field – Where anyone can reach billions of people for $10 a year + hosting, then its all down to skill and innovation.
The rule is – when lawyers gets involved (more) – we must be doing something right.
It makes the stuff (domains) that cannot be taken away goes thru the roof in value.
Mr. Deleted .com says
Well I agree with the post, but the way some comments are saying that the domains are being transfered, that is incorrect, at least from the proposal. While I would not want such a rule to be created, cause it could only end bad, saying that the domain name would transfer, is wrong.
The other side of the coin is, most lawyers probably would not try to file a case though cause they could collect the cash better from a major corp then a small time webmaster.