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.”