IAHC Proposal (Attacks Thereon)

[Sally_Abel@fwpa.com (Sally Abel)]

        A number of folks on this list have questioned the 60 day 
waiting period, asking (a) what purpose it serves, and (b) why 60 days, 
rather than 10, 30, 59 or whatever. Many thoughtful responses have been 
posted to date, so I will try to avoid being (too) repetitive if 
possible. 
     
        (a) Purpose of the waiting period.  
     
                The primary purpose of a waiting period is to encourage early 
                dispute resolution which should result in:
     
                *  A reduction in litigation by encouraging dispute resolution 
                before that point;
     
                *  Fewer instances of domain name holders making significant 
                investment in a domain only to lose it;
     
                *  Increased certainty that a chosen domain can be developed 
                without unanticipated loss of the domain down the road;
     
                *  Decreased registry challenges.
     
     
        Many domain name applicants want an SLD that is or is capable of being 
more than part of a simple address.  In fact, those who oppose a waiting period 
as being an imposition on business development when the IAHC proposal includes 
a random alphanumeric for those who do not want to wait 60 days, appear to 
believe that a domain name creates a valuable identity for the new business 
that the business should not have to wait 60 days for (a reference was made 
yesterday to the need to "brand").  This valuable identity is what is known to 
trademark owners as "goodwill", and it is this "goodwill" that is the essence 
of trademark rights.  So, if you believe that it is important to preserve a 
domain name holder's goodwill, you can understand the importance of doing the 
same for a trademark owners.
     
        A waiting period is an attempt to strike a balance between the 
trademark owner's interest in preserving its goodwill, and the domain name 
applicant's interest in a domain name that may be perceived as generating 
"goodwill" or as an important business symbol. ("Trademark owner" should be 
read broadly to include other names which may be legally protectable in a 
commercial context, from business names and organization's names, all the way 
to celebrity's names).
     
        Combined with public notice of the application and related contact 
information, the waiting period gives the trademark owner time necessary to 
assess whether a particular domain may be a problem and to contact the 
applicant, before the name is awarded and the financial and emotional investment
significant, to attempt to resolve the perceived problem.  With a 60 day period,
trademark owners will not have an incentive to sue first and ask questions 
later.
     
        Obviously there will be some litigation where the parties 
cannot resolve their differences amicably and the trademark owner 
believes litigation is necessary to protect trademark rights.  But with 
a 60 day period, those instances should be infrequent, and the domain 
holder will be in a strong position to assess whether to proceed with 
the name in light of the challenge, again before making a significant 
investment in the domain.
     
        It is true that the waiting period proposed by IAHC does not legally 
require a challenger to raise a challenge during the waiting period (for such a 
legal requirement, we would have to go to Congress and the other 200+ 
governments around the world)
     
        However, U.S. courts and most courts around the world already
follow guidelines when granting preliminary injunctive relief (such as shutting 
off a domain name) -- specifically most courts won't grant such relief unless 
the challenger has acted very quickly to challenge the allegedly illegal conduct
-- if the challenger waits, then he will lose his right to preliminary relief.  
The reason the courts require quick action to obtain preliminary injunctive 
relief is because it is unfair to grant it if the challenger has just sat on 
his/her rights while the challenged party continued the allegedly objectionable 
activity.
     
        How quickly a challenger must act varies with the circumstances,
and varies from country to country.  For example, someone seeking a preliminary 
injunction against trademark infringement in Germany must sue within 4-6 weeks 
of finding out about the infringement.  In the U.S., the period is usually a 
longer and will depend upon how badly hurt both sides will be if the relief is 
or is not granted.  For example, if the alleged infringer has already invested 
heavily in the allegedly infringing name and has used it for six months 
publicly, and the challenger knew about the name six months ago, but didn't do 
anything to challenge it, a court will "balance the equities" and will likely 
conclude that the challenger should have acted more quickly and the challenged 
party will be greatly harmed by a preliminary injunction -- so it will refuse to
grant the preliminary injunction.
     
        This is how the waiting period is intended to work.  By creating 
a system whereby a domain name applicant's intention to use a new domain 
name is published on a public register for 60 days before use, 
challengers will *as a practical matter* be forced into acting quickly 
during the waiting period.  There will be no hard-and-fast legal 
requirement.  BUT courts will look at the fact that the new name was 
published and that a waiting period was imposed and will be very 
reluctant to grant preliminary relief to a challenger who failed to act 
during the waiting period.  This is basically true under most of the 
world's various trademark laws.  And, of course, challengers (and their 
lawyers) will know this and will therefore be pushed into acting quickly 
if they want to shut down an allegedly infringing new domain name.
     
        Of course, it would be even better if all challengers *had* to raise 
their objections before expiration of the waiting period -- this would increase 
certainty and fairness.  However, while this may be a laudable long-term goal, 
it cannot be implemented quickly in the short-term because it would require the 
passage of legislation in each country around the world.  
     
        So, while not perfect, the purpose of the 60 day waiting period
is to not only give challengers an opportunity to raise a challenge 
before someone invests in a domain name, but indeed to effectively 
require (to the extent possible) that such a challenge be raised before 
use is begun, so that a domain name user isn't put into the unfair 
position of using and investing in a domain name that will ultimately 
end up being taken away.
     
        (b)  Why 60 days?
     
        The choice of 60 days is not arbitrary.  In order for courts to
hold challengers to raising their challenge within the waiting period, 
the period has to be long enough that no-one can argue that they didn't 
have enough time to raise a challenge.  Unfortunately, it does take time 
for notice of a published domain name to reach interested parties, and 
for those parties to investigate the domain name, and for a demand letter 
to be sent and responded to, and for a challenger to pull together court 
papers -- if sufficient time isn't provided for in the waiting period for 
this activity to occur, then challengers will successfully argue that 
they shouldn't be held to acting within the waiting period, which is not 
what we want!
     
        Generally, the shortest period for acting to obtain preliminary 
relief in a trademark case is 4-6 weeks, as in Germany.  But most 
countries allow substantially more time, usually several months and 
sometimes a year or longer (depending on the circumstances).  The 
International Trademark Association's (INTA's) original proposal for a 
waiting period was 90 days in recognition of this norm.  However, in view 
of the demands of "internet time," IAHC has chosen to propose 60 days, 
which is a short period of time, but probably still long enough that the 
courts should generally be willing to hold challengers to it.  In 
addition, if a challenger acts early in the 60 day waiting period, then 
the waiting period will allow some time for the parties to work out an 
amicable resolution without actually going to court.  If a waiting period 
of less than 60 days is adopted, we run a real risk of the courts 
deciding not to "enforce" the waiting period on challengers seeking 
preliminary injunctive relief.
     
                                        
                                        
     Sally Abel
     Not speaking on behalf of the IAHC