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Mandatory Proceeding to Resolve a Claim of Abusive Registration

It is useful to pause in dissecting cases and addressing evidentiary issues to outline for those unfamiliar with the UDRP the mechanism that compels a respondent to answer for its choice of domain name. The authority for hauling a domain name registrant into a UDRP proceeding in response to a trademark holder’s complaint that the registration is abusive is found in a contract provision incorporated in the respondent’s registration agreement. The provision requires the registrant/ respondent “to submit to a mandatory administrative proceeding in the event that a third party (a ‘complainant’) asserts to the applicable Provider, in compliance with the Rules of Procedure, that the respondent’s” domain name is identical or confusingly similar to a trademark or service mark in which the complainant has rights” (Paragraph 4(a) (i) of the Policy).

More likely than not, the arbitration panel is either sitting in a different country or remote from the registrant’s home state. “The Policy is of international scope and the framers required it to be capable of practical application by a panelist that might be drawn from any jurisdiction (and more often than not a panelist who would not be drawn from the jurisdiction of either of the parties to a dispute),” Aubert France SA v. Tucows.com Co., D2008-1986 (WIPO March 17, 2009).

Why should an arbitration be mandatory where the parties are strangers to each other? The question is important because as a matter of law no party can be compelled to arbitrate disputes. Arbitration has to be consensual. Parties must mutually agree to waive the right to be heard in a court of law. What is unusual with the UDRP is that while arbitration is a non-negotiable feature of the registration agreement it is not a bilateral contract with the trademark holder. Trademark holders aggrieved by violation of their rights are third-party beneficiaries to a weave of contracts between ICANN and the Registrar on the one hand and the Registrar and the Registrant on the other. The terms incorporated into the registration agreement are dictated by ICANN to its accredited Registrars who alone are authorized to register domain names pursuant to a Registrar Accreditation Agreement.

The registrant agrees to the procedure for weighing partyies’ rights to a disputed domain name as a condition of registration. It expressly represents and warrants that its choice of domain name “will not infringe upon or otherwise violate the rights of any third party” and agrees to“submit to a mandatory administrative proceeding in the event that a third party (a ‘complainant’) asserts to the applicable Provider” that the respondent acquired the disputed domain name in bad faith. If the respondent is found to have registered and is using the disputed domain name in bad faith the penalty is either cancellation of registration or forfeiture of the disputed domain name to the complainant. The sole recourse for the unhappy party – in 15% of the time this is the complainant – is to challenge the Panel’s order in a court of law. In this respect the UDRP differs from the typical ADR model in which the decision is final (although challengeable under the Federal Arbitration Act and the Revised Uniform Arbitration Act).

Paragraph 4 of the Policy describes the arbitral procedure as a “mandatory administrative proceeding.” The term “mandatory” should not be misunderstood as meaning that the registrant must participate in the proceeding – indeed respondents default approximately 85% of the time. Due process dictates that the respondent be given notice of the complaint, but it is the disposition of the domain name that is in issue, whether or not the respondent appears. The term mandatory administrative proceeding refers to the respondent’s contractual agreement to submit the claim to an impartial or neutral arbitrator to determine the merits of the complaint. “It is these Rules with which all applicants for the registration of domain names agree to be bound,” Cimcities, LLC v. John Zuccarini D/B/A Cupcake Patrol, D2001-0491 (WIPO May 31, 2001). Respondent is also bound by its representations and warranties to the Registrar, Carolina Herrera, Ltd. v. Alberto Rincon Garcia, D2002-0806 (WIPO October 16, 2002).

Levine Samuel, LLP <researchtheworld.com>
Gerald M. Levine <udrpcommentaries.com>
E-Mail gmlevine@researchtheworld.com

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