PSWG members appreciate the fact that the World Intellectual Property Organization (WIPO), has been so responsive to concerns raised by the private sector to the First Revised Draft and has taken steps to modify certain provisions and eliminate others. For example, the deletion of the requirement to own 35 or more or 75 or more national registrations and the broadening of the identical or closely similar standard in the latest Guidelines were very much appreciated. Although many of the difficulties in the first draft were corrected, the revised draft Guidelines raise a host of new questions and issues -- including the proper judicial role for the Administrative Challenge Panels (ACPs), and the ease at which domain name holders can exploit differences in national trademark laws to prove the existence of their own "demonstrable intellectual property right." Although we have attempted to provide detailed comments, questions and suggestions below, the group looks forward to working further with WIPO on these complex issues.
One overarching concern with the new Guidelines is that it creates a new role for the ACPs as the judicial creator of a new body of international trademark law that currently does not exist. The Guidelines radically change the original focus and intent of the ACPs. The ACPs were originally created for the limited purpose of protecting trademarks from infringement by cybersquatters and other infringers based on a specific set of easily identifiable criteria. The new Guidelines replace the ACP role in this situation with broad judicial powers and discretion, outside the context of a national legal system, to decide disputes based on a laundry list of amorphous definitions and concepts. Without the checks and balances of a system grounded in national laws, the ACPs will now be weighing the rights of domain name applicants and creating a new form of international legal precedent. This is not the role that trademark owners envisioned for the ACPs.
In addition, a number of important issues are not addressed in the Guidelines and remain to be answered, including:
The new Guidelines are silent on the need for harmonization of world trademark laws. Most of the problems in the Guidelines, along with the proposed creation of new gTLDs, stem from lack of a harmonized trademark law. The existence of inadequate protection for trademarks in many countries will lead certain domain name holders to forum shop in order to exploit these differences. Without harmonization at some level, the collision of trademark rights and domain name registrations cannot be resolved. The lack of adequate protection for trademark rights raises serious questions about whether the ACP determinations can be enforced and respected worldwide. The group believes that concurrent with the implementation of the Guidelines, WIPO should announce an expedited schedule to begin harmonization of the necessary trademark laws that affect the domain name process.
Has WIPO dropped its support for the 60 day waiting period prior to issuance of domain name registrations?
It remains unanswered whether the ACPs will have legal standing in any and all legal jurisdictions. Under the ACP process, WIPO acts as a facilitator but does the process have legal standing? Can the ACPs enforce their decisions? What gives the ACPs the authority to instruct the CORE to remove a domain name or suspend a domain name registration? Could the ACP be sued for negligence?
What is the effect of the ACP process be on those jurisdictions in which binding arbitration creates tensions with local laws, such as Belgium or Germany? Will the ACP process have jurisdiction to decide disputes over domain name applicants in those countries?
· What power does the ACP have to enforce its decisions and impose sanctions for noncompliance? There appears to be no other mechanism for enforcement other than bad faith. Similarly, how what will be the effect of ACP rulings with respect to concepts such as res judicata, stare decisis and collateral estoppel?
· What are the procedural rules for the ACPs, including the presentation of evidence?
· Will the ACPs be the exclusive arbiter of domain name disputes in the first instance or will there be alternative tribunals available to the trademark community to resolve these disputes?
Specific concerns with the new Guidelines are discussed below and follow the numerical order of the Guidelines:
Paragraph 3 -- Any person may file a request for challenge under the WIPO ACP Rules by asserting "a demonstrable intellectual property right, having effect in at least one country in which the challenger either resides, has an effective business establishment, or carries on non-trivial business activities." This standard is too easy for an infringer to establish. Because trademarks (and now domain names) can be registered easily in many countries with no proof of use-- and sometimes in as little as one day -- this standard invites an infringer to forum shop, rely on creative lawyering and take other necessary steps to meet the "demonstrable IP right" standard. Many domain name applicants will use this standard inappropriately to register domain names as trademarks in order to (1) remove themselves from ACP jurisdiction; (2) create "superior" rights over existing trademark holders in other jurisdictions; or (3) hijack the trademarks of others. The definitions of "resides," "effective business" and "non-trivial business activities" are also not defined and subject to exploitation. For example, does residency refer to a business or personal residence? How long is residency triggered? Is residency satisfied by ownership of a server in a country? What constitutes an "effective business"? Does it relate to the size of the work force, period of doing business, sales or revenues? What constitutes "non-trivial" business activities? It appears that almost any activity, including advertising on the Internet could arguably be considered non-trivial.
Suggested Amendment: The concept of "demonstrable intellectual property right" should only exist if the threshold for establishing such right is raised considerably and the concepts clearly defined. The concept itself should be contained in a separate definitional section. Although the group has not yet devised a final formulation for this concept, it should only exist if the ACP relies on a set of quantitative, measurable standards. For example, the ACP could require proof of the existence of a trademark registration from Paris Convention or TRIPs agreement countries. Along with proof of registration, ACPs should also consider evidence (1) that one provides goods and services under the mark; (2) of substantial, not token use; and (3) of use in commerce. A separate issue and unresolved issue is whether an Intent to Use application can create a demonstrable intellectual property right and if so, whether measurable criteria can be created to assess such a right. Factors could include consideration of an effective business plan to do business within a jurisdiction, evidence showing a legitimate business purpose, obtaining license to do business within the jurisdiction, and similar evidence. Consistent with prior proposals made by the International Trademark Association, each domain name applicant should sign a declaration as part of its application stating that its application does not violate the rights of any trademark owner. The application should also require the domain name applicant to disclose whether the proposed domain name has already been subject to challenge or threat of challenge prior to registration. The application should also place applicants on notice that forum shopping is not allowed.
If the concept of "demonstrable intellectual property right" proves unworkable,
consideration should be given to lowering the bar to establish an internationally known mark (perhaps with registrations in 3-5 countries who provide a full and complete trademark examination process -- including review for (1) likelihood of confusion with prior registrations; (2) descriptive/generic refusals; (3) deceptively misdescriptive marks; and a publication and opposition process. The ACPs could also consider use factors similar to those discussed above.
Paragraph 4 -- The emergency ACP process can only begin if the request for challenge is "lodged within 30 days of the date on which the information concerning the registration of domain name became publicly available." It is not clear how often domain name registration information becomes "publicly available" and in what manner it is published for review. Assuming that domain name registration information is published on a web site on a daily basis, the 30 day challenge requirement forces trademark owners to engage in continuous, daily monitoring for each and every trademark infringement. The numbers point to hundreds of thousands of names each month. It would be unclear how new "publicly available information" would be distinguished from the old. The ambiguity also places trademark owners at a significant risk of missing critical deadlines and reviewing domain name information in a timely and efficient manner.
Suggested Amendment:
The challenge deadline should be changed from 30 days to 90 days. Domain name registrations must be published in an international electronic publication, such as a WIPO database to be released in electronic form on a bi-weekly basis. Domain names would be listed in alphabetical order and could be easily searched via search engine. Criteria for the information would include the name and address of the party, name of the domain name, the filing date, the purpose of the use of the domain name (60 words or less) and disclosure of whether the domain name is in use as a trademark. The 90 day challenge deadline would be reasonable because trademark owners would not have to engage in daily monitoring activities. The periodic publications also help distinguish the new from the old listings. Domain name applications must include a statement in which the applicant agrees (and may not opt out of ) the publication of the information to avoid any violation of European data protection laws, privacy laws or other national rights.
[Paragraph 4 ]-- This paragraph proposes that the ACP engages in a provisional suspension to determine whether the domain name holder (1) has its own intellectual property rights; (2) has begun good faith commercial activities; or (3) can determine if the challenger has not adequately asserted intellectual property rights. This places the ACP in the inappropriate judicial role of granting or denying "injunctions". ACPs should not make this determination. The domain name application should be placed on hold automatically, but the ACP process must work quickly to resolve the dispute. Other problems are also raised. For example, the section also mentions bonds, without addressing the amount of the bond, where it is posted and in which currency. There may also be problems associated with receiving payment and wired funds within the 48 hour period. As to the provisional suspension, when do the 48 hours begin to run? Questions are also raised as to what is meant to "lodge" a challenge within 30 days?
Suggested Amendment:
ACPs should not be making emergency or provisional suspensions, which require them to adjudicate equitable relief (i.e, injunctions), which are outside the scope of ACP authority. If the challenger can establish demonstrable IP rights, the application should be suspended pending the outcome of the challenge. ACPs should be required to reach a decision in each case on a timely basis, taking no longer than 60 days. Lodging a challenge should be effective on the date it is received by WIPO (no later than 30 days from the date which the information is published). In order to avoid the problems inherent in the delivery of international mail, filings should be simultaneously made both electronically and by registered mail to follow. WIPO should be able to provide electronic confirmation in the form of a receipt and other confirmation by WIPO of the challenge by electronic means and/or registered mail. In addition, the requirement for the posting of a bond should apply to both parties involved in the dispute. This will encourage both parties to put financial resources on the line and will discourage cybersquatters and other trademark infringers from hoarding marks and trying their luck in the ACP process.
Paragraph 5 - What legal standard is used to determine "relative harm" being suffered by the domain name holder or the challenger?
Paragraph 7(c) -- In the context of a general exclusion, there shall be a publication period for comment before such an exclusion is made. It is not clear what the time period is and the effect of such comment period on the ACP. The section requires further explanation. What weight will the comments be given by the ACP?
Suggested Amendment:
Steps must be taken to ensure that the ACP not become a forum for third party lobbying (e.g., the infringer arranges a letter writing campaign to protest a particular exclusion). If there is a comment period, there should also be a publication requirement. Any petition for pro-active exclusion should be published in a WIPO publication to advise others that a domain name will soon be excluded. The publication period should be linked to the comment period and the comments themselves should also be published as a matter of public record .
Paragraph 7(f) -- The ACP can determine that the conflict is not appropriate for ACP procedures and recommend that the dispute be submitted to another form of resolution, including to litigation before a national or regional court.
Suggested Amendment:
The ACP should not recommend any alternatives if a particular dispute exceeds its jurisdiction. By recommending particular forms of resolution, even without recommending any particular court , the ACP may inappropriately insert itself into a conflict and may deny the aggrieved party its full rights under the law. The ACPs should not engage in any legal advice and should simply notify the parties that it cannot resolve a particular dispute. All judicial fora for adjudication should always be available to any party to resolve trademark and domain name disputes.
Paragraph 10 -- "Cancellation of a domain name for conflict with an intellectual property right is an exception to that basic principle [first-come, first-served]"
Suggested Amendment:
See Comments to Paragraph 11. This should be deleted.
Paragraph 11 -- The ACP considers, based on the first-come, first-served principle, whether the challenger and the domain name holder both have rights in the domain name.
Suggested Amendment:
This section should be deleted in its entirety. The principle of first-come, first-served is only relevant in the administration of gTLDs, not in dispute resolution. The only role of the ACP is to resolve disputes between trademark owners and domain name applicants -- the fact that the domain name applicant may have registered the domain name first is irrelevant. The ACP should only take into consideration intellectual property principles to determine whether a domain name violates an existing trademark right.
Paragraph 13 -- This paragraph lists all the factors the ACP may consider in establishing an demonstrable IP right. Most of these factors again requires the ACP to engage in a complex, subjective, legal determination of rights, based on an unknown body of international trademark law. Many of the principles, in and of themselves, are problematic and it is not clear how the ACPs would interpret these principles in establishing the existence of a demonstrable IP right.
Suggested Amendments:
See Response to Paragraph 3. Specific problems with the list of items in this paragraph include:
-Intellectual Property registration certificate - If equal weight is accorded to all certificates by the ACP, this is yet another area in which national/regional international trademark differences may work to the detriment of legitimate trademark owners. Those countries serving as clearinghouses for trademark registrations should be not be considered by the ACP. It would be best to only consider evidence from a party that resides in a signatory country or in which the certificates of registration are from countries who adequately protect trademark rights through adherence to the Paris Convention or TRIPs Agreement.
- Search reports -- A search report cannot guarantee the existence of an intellectual property right. The search report does not guarantee a mark is valid or even in use. Not all search reports come from legitimate and reputable sources. It is clear that ACPs should not be in the business of examining search reports and search reports should have limited relevance in any ACP procedure. Search reports are inherently subjective and may include information that is not relevant to the mark in question.
- Court of other authoritative government opinions showing the existence of the intellectual property right. -- Such court opinion must be a body recognized as a court of competent jurisdiction by a U.S. court or other International legal authority such as the Hague Convention. It is not clear what is meant by "government opinions," but without proper clarification, this factor may be subject to abuse.
- Declarations or attestations of relevant governmental bodies. -- "Relevant governmental bodies" is too vague. This is another area in which creative lawyering and forum shopping will produce a variety of declarations from countries that do not adequately protect trademark rights.
- ITU Standards -- ITU standards must comport with accepted conventions and treaties with respect to the protection of intellectual property rights (at least meet the intent to use standards under U.S. law)
- "Other tangible evidence" -- again too vague and leaves too much to the ACP discretion. This should also be deleted.
Paragraph 15 -- ACPs should not be listing the rights that may not be considered demonstrable. If a right does not meet the criteria set forth for a demonstrable right, it will not apply. Evidence of common law rights, is subject to the courts and is outside the ACP process. Listing examples of common law rights or unfair competition appears to confuse the issue.
Suggested Amendment:
Delete this paragraph.
Paragraph 16-- This paragraph is too vague as to exactly what the standards are for the ACPs' consideration of goods and services for conflicting trademarks and domain names.
Suggested Amendment:
See Response to Paragraph 31 proposing changes to the "closely similar" standard. Also insert language that the ACP will consider "relatedness" of goods and services, offered under the conflicting trademark and domain name rights.
Paragraph 17 - It is not clear what a "significant number of countries" is. If, for example, "significant" was a majority, rights would need to be obtained in more than half the world. Given the differences in worldwide trademark laws, are rights obtained in all countries treated equally? One concern is that this section, by citing only a "significant" number of countries, implies a tacit understanding by the ACP Panels that a certain unnamed numerical threshold must be met. In addition, factors such as "market presence" and "geographically widespread" intellectual property rights may be difficult to establish in the electronic age. What is meant by a "significant number of years?"
Suggested Amendment:
See Response to Paragraph 3 above. The ACPs must lower the threshold for establishing an internationally known mark again using quantitative criteria.
Paragraph 18 -- What is meant by "good faith use" of the domain name on the Internet? This appears to be another area in which the ACP will delve into subjective inquiries into the mind of the user which standards again may be interpreted very differently by national laws.
Suggested Amendment:
Delete this paragraph.
Paragraph 19 -- ACPs should not be considering whether all marks are descriptive or generic terms outside its field of commerce. Such a standard would automatically prejudice the owners of distinctive marks, such as APPLE , which is by definition, are always generic terms outside of a field of commerce.
Suggested Amendment:
Delete this section in its entirety.
Paragraph 20 -- These factors should not be considered by the ACPs. This type of determination, relying on subjective and complex factors, appears to lie outside the scope of the ACP process. All should be deleted in their entirety:
- "Relevant IP right held by the domain name holder" -- How does relevant IP right differ from demonstrable IP right? Why should the domain name holder be subject to a lesser standard than the trademark holder? If the domain name holder cannot establish an equivalent demonstrable IP right, the ACP should be free to place the registration on hold and ultimately deny the right to register a domain name to such domain name holder.
- Good faith use - The ACPs should not be considering factors relating to common law rights, such as the domain name holder's "good faith use on the Internet for less than two years." It is not clear why less than two years would prove anything. This creates a new standard of law not in existence today. In fact, existence on the Internet for more than two consecutive years of continuous use would also not necessarily prove "good faith" because an infringer could easily have hidden itself from a trademark holder by existing quietly with little use or existing in a remote country code.
- Evidence of widespread recognition of the domain name holder - This factor is also inappropriate and invites litigants to engage in a battle of survey evidence. This matter should also lie beyond the scope of the ACPs.
- Prior rights -- This standard is too vague and seems to imply inappropriately that common law rights will be considered.
- "Any other right to use" -- too vague.
Paragraph 21 -- The ACP should not create any rebuttable presumption for a domain name holder simply because it has appeared on the Internet for two years (not clear whether consecutive and continuous years) prior to the lodging of the challenge. As stated earlier, the domain name holder could have easily escaped detection in numerous ways, including by (1) registering in an obscure country code; (2) having no real operational server; (3) offering a web page that did not fully reveal the services offered; or (4) offering services different than that offered at the time of registration. Given that the Internet and Internet watching services are still in their early stages, this factor unfairly prejudices the rights of trademark holders. This rebuttable presumption runs counter to presumptions under trademark laws, including U.S. law, that holds that the trademark owner is not prejudiced (by laches or estoppel) from prosecuting infringers simply by enforcing their rights after learning of their existence many years later.
Suggested Amendment:
Delete paragraph in its entirety.
Paragraph 23 -- This paragraph indicates the offender shall bear all costs of the challenge. These "costs" are never defined anywhere in the ACP Guidelines. What incentive is there for ACPs to keep costs low?
Suggested Amendment - The losing party should bear all costs of the challenge. In addition, "costs" should be proposed and appended to the next draft Guidelines.
Paragraph 29 - The ACP considers whether the challenge has been brought for the sole purpose of appropriating a domain name. This section surely will be cited by the domain name holder in each and every controversy as evidence of the trademark holder's "bad faith." What is to stop a domain name holder from inappropriately asserting accusations of bad faith against a trademark holder. How will these assertions affect the time of the ACP decision or the costs of the matter? This is a very subjective inquiry and not appropriate for ACPs to consider.
Paragraph 30 - The language and intent of this paragraph is not clear and needs to be rewritten more clearly.
Paragraph 31 - This section is an improvement over the prior identical or closely similar standard. See additional suggested revisions below.
Suggested Amendment:
The ACP shall consider whether the second-level domain name is identical to the alphanumeric string which is the subject of the challenger's intellectual property right, or is [delete "so"] confusingly similar or dilutive to that alphanumeric string [such] that its use is likely to lead to the erroneous conclusion..............
Paragraph 32 - The definitions of "clearly misleading" marks should not list any proposed names of the new gTLDs for the reasons outlined in Paragraph 20. The Guidelines should also list examples of misleading marks.
Suggested Amendment
Replace "famousmark.firm" and other examples with "famousmark.gTLD." Include as another example, "the taking of the dominant portion of a famous mark, such as famousformative.gTLD or myfamousmark.gTLD." In addition, the definition of punctuation should include the insertion of an ampersand and other punctuation marks.
Paragraph 33 - Many of these factors again appear to be outside the scope of the ACP. It is not clear why the ACPs would look at commercial or noncommercial uses, or the undefined "special meaning" of a gTLD. In addition, the concepts of abandonment and "extended non-use" are undefined. What law would the ACPs apply to these principles?
Suggested Amendment
Delete all but the ACP's consideration of whether the goods associated with the domain name are "related" to those offered by the trademark owner. For famous marks, the "relatedness" inquiry would not need to be exercised at all.
Paragraph 34 -- The ACP considers the impact of the domain name on the challenger's business. Again, what legal standards would govern this subjective inquiry? It appears to be outside the scope of the ACP role. There appears to be market-based and antitrust issues inherent in this inquiry.
Paragraph 41 - ACPs should not be considering search reports, which do not necessarily reflect that conflicting marks are in use. The existence of new infringers on a search report also does not mean that the trademark owner is not taking steps to enforce its rights. See Response to Paragraph 13.
Suggested Amendment:
Delete requirement of search reports.
Paragraph 43 - Despite obtaining an exclusion from any of the gTLDs, a future domain name applicant can petition for an exception from the exclusion upon "a showing of some substantial independent right to use the name." This factor seems to easily undermine the whole purpose of the exclusion. What is meant by a showing of "some substantial independent right"? What is meant by "right to use"? It appears all too easy for a person to establish that they have some right to "use" based on the ease of registering trademarks and the establishment of token use in certain countries of the world. If a trademark owner does not learn of this infringer through its search reports or by other means, that infringer has now established a "right to use," which undermines the trademark owner's domain name exclusion and protection.
Suggested Amendment:
Exceptions from exclusions should only be granted upon a showing of "extraordinary evidence.
Paragraph 46 - See Response to Paragraph 43. There must be an "extraordinary" showing by a third party to trigger a modification or cancellation of the exclusion.
Paragraph 47 - Grounds for lodging a petition for modification or cancellation include a relevant subsequent national or regional court final (unappealable) decision. What is meant by relevant? This is another factor that pits different national legal systems against each other and invites parties to forum shop and litigate to obtain a favorable decision. This problem cannot be mitigated until there is harmonization of international trademark laws. See also Response to Paragraph 13.
Paragraph 53 - See Response to Paragraphs 41 and 13.
Paragraph 54 - See Response to Paragraph 20 regarding personal names and new gTLDs.
Paragraph 56 - What is meant by allowing an exclusion for only marks that have "sufficient extent and uniqueness"? This is not an known legal standard and seems to imply the creation of new legal standards. Does this only apply to well known or famous marks?
Suggested Amendment:
This is not a known standard and should not only apply to famous marks.
Paragraph 57 - What constitutes "intellectual property rights with effect for a large enough number of countries to justify a general exclusion" of a domain name? See Responses to Paragraphs 17 and 56. The reference to "other evidence of geographical extent of intellectual property rights and/or market presence" is also undefined. See Response to Paragraph 17.
Paragraph 58 - With respect to the appeal process, what constitutes an "obvious mistake of fact" or a determination that is "manifestly unreasonable"? What is the effect on the strength of your marks if you lose that appeal process or obtain an unwelcome result?
The PSWG looks forward to a constructive dialogue and continuing relationship with WIPO to work through these many difficult and critical issues.
Respectfully Submitted,
America Online, Inc.
Ameritech Corp.
AT&T Corp.
Bell Atlantic Corporation
BellSouth Corporation
British Telcommunications plc*
The Dun & Bradstreet Corporation
Information Technology Association of America
Nabisco, Inc.
Microsoft
Prince plc
SBC Communications, Inc.
U S WEST, Inc.
Warner-Lambert Company
--
* British Telecommunications plc, which has separately submitted its
own response to Notice-97-03, has also seen these comments and confirms
that it shares and supports the principal concerns expressed by the PSWG.