To: process.mail@wipo.int
From: Telepathy, Inc.
Subject: RFC-3
Date: May 29, 2001
Remarks of Nat Cohen,
President, Telepathy, Inc.
At the WIPO Regional Consultation
Washington DC
May 29, 2001
My name is Nat Cohen. I am the President of Telepathy, Inc., a web development and Internet branding company based here in Washington, D.C. In our web development business, we have developed several local content portals that provide free information and services to approximately 500,000 users each month. In our Internet branding business, we have registered hundreds of generic domains that we offer to companies seeking an attractive online address.
We have been through four UDRP arbitrations, on Craftwork.com, crew.com, daf.com and, combined in one case, moneyplanet.com and travelplanet.com. We won all by unanimous decision, except crew.com which we lost by a split decision. We had some satisfaction in seeing the crew .com decision widely criticized as one of the most egregiously mistaken decisions ever handed down by a UDRP panel. In the moneyplanet.com and travelplanet.com we received, by split decision, one of the few findings of reverse domain name hijacking.
The flaws in the UDRP have been pointed out by many others. Interpretations of the UDRP vary widely from panel to panel and frequently contradict each other. ICANN and the arbitration bodies do not do enough to review the decisions to ensure consistency. Panelists at times stray from the guidelines and substitute their own standards. Complainants often submit amendments at the last minute and the respondents are not given time to respond. There is no effective mechanism to prevent reverse domain name hijacking.
The UDRP was created to prevent true cybersquatting. Namely those who register domains that only have value due to the goodwill of a single company and attempt to ransom this domain back to the company who generated the value therein. But the UDRP is written so broadly and without sufficient clarity that too many cases are brought in circumstances that are not true cybersquatting. This is particularly the case for generic domains.
I would like to propose two changes to the UDRP. First, the presumption that the registration of a generic domain is legitimate. Second, when a panel finds reverse domain name hijacking the Complainant owes compensation to the Respondent.
[Talking points ]
- development of a secondary market
- top companies such as Network Solutions acquired the largest companies involved in the resale of domain names. These companies now encourage domain name owners to list their domains for sale, and people seeking to register domains that are already owned to make offers to purchase the domains from the owners.
- definition of a generic domain, as a common word, phrase or acronym.
- a generic domain by its very nature can be, and usually is, used for a wide variety of commercial purposes.
- speculative registration is widespread, and as in the stock market serves a crucial role by adding liquidity and providing price information.
- the UDRP is intended to prevent abusive registration. This is when a third-party trades off the goodwill created by a trademark holder.
- the UDRP however as it is currently structured is encouraging abusive complaints. These occur when a trademark holder, holding very specific and limited rights in a term, tries to appropriate all commercial uses a generic term. The trademark holder in these cases is in effect trying to appropriate the goodwill associated in a generic term by its widespread everyday usage for the trademark holders' own commercial gain.
It is commonplace for trademark holders to make commercial use of the everyday meaning of words by associating the word with its product through a trademark registration.
These are words, phrases, acronyms such as house, pets, life, red, money, crystal, ccc, nec, sadsack, and moneytoburn. All of these terms are trademarked. Therefore, in all of these cases a trademark holder could meet at least one of the criteria of the UDRP, and initiate an action to seize ownership of the associated domain. Moreover, if the domain name holder is not using the domain, the Complainant could claim no legitimate use. In these cases the Complainant usually makes by extension an assumption of bad faith in registering a domain with a published trademark. Unfortunately, in certain infamous cases, such as current.com and traditions.com, this has been sufficient evidence for some panels to take the domain name away from the registrant and give it to the complainant. This in turn has emboldened trademark holders to initiate Complaints on generic domains. If the Complainant is lucky to get an activist panelist partial to trademark holders or a domain name holder who can't afford a response, they can take over ownership of a valuable domain.
The domain name system has now reached a point where no domain name registrant is safe from having to defend against a speculative complaint, no matter how generic the domain in question.
Yet when a business trademarks a generic term, the trademark holder is trying to appropriate for commercial benefit the common meaning inherent in the term. This is the reason why there over 2,000 US trademark applications incorporating the word "crystal" but not a single one the word "murky".
Pity the registrant of crystal.com, if the registrant is an individual or a small business owner and is not currently making use of the domain. The registrant of crystal.com could face up to 2,000 UDRP complaints from businesses seeing the UDRP as a cheap way to acquire a valuable domain. Of course, this number does not include those companies with foreign trademark rights or an unknowable number of companies with common law trademark rights in the term.
The irony in this is that the more generic the domain, the more exposed the domain name holder is to facing complaints since the more widespread the commercial usage and the larger the number of trademark holders.
We have faced several cases where multiple companies claimed exclusive ownership rights to the same generic domain, or where one company claimed exclusive trademark rights while another company was also making commercial usage of the term and was interested in acquiring the domain.
The UDRP also creates a Catch-22 situation, where it is very difficult for the owner of a generic domain to discuss selling a domain to a trademark holder. The trademark holder may recognize that it does not have exclusive rights and simply wishes to acquire a domain. Yet the domain name owner cannot offer to sell the domain to the trademark holder because that is identified as acting in bad faith. We have had cases where someone wishes to purchase a generic domain from us. We research the other commercial uses of the generic term on which the domain is based, and find one or more trademark holders that would likely be interested in knowing that the rights to the domain may soon be sold. But we cannot inform the trademark holders of the impending sale without creating the appearance ofbad faith behavior.
In short, the UDRP is ill-suited to the reality of an active secondary market in generic domains. Two important steps that ICANN can make to 'get with the times' are to include in the UDRP a presumption of legitimacy to the registration of a generic domain. Second, a finding of reverse domain name hijacking should have some real teeth behind it. Either the Complainant should put up a bond of, say, $5,000 or $10,000 which is forfeit to the Respondent in a RDNH finding, or the Complainant must pay the Respondent's legal expenses.