Expansion of Domain Name Space May Shift Trademark Protection Strategies

Geneva, March 17, 2014
PR/2014/756

The unprecedented expansion of the Internet domain name space, until now dominated by .com and a handful of other generic top-level domains (gTLDs), is likely to disrupt existing strategies for trademark protection on the web.

“Trademark owners have been facing significant uncertainty in the expansion of the Domain Name System (DNS) while at the same time working with reduced protection budgets,” said WIPO Director General Francis Gurry. “The proliferation of potential web addresses, with the expected roll-out of 1,400 new gTLDs, will force trademark owners to adjust their priorities in terms of registration and protection choices,” he added.

In 2013, 2,585 cybersquatting cases based on the UDRP (Uniform Domain Name Dispute Resolution Policy) were filed with the WIPO Arbitration and Mediation Center (WIPO Center). Reflecting a trend across the UDRP, this number represented a 10.4% decrease from the 2012 record level. At the same time, the number of domain names in WIPO cases rose by 22% from the 2012 level to 6,191, the most domain names included in WIPO cases in a single year. (Annex 1) Certain trademark owners made savings by grouping larger numbers of domain names in single cases. The total number of domain names in over 28,000 UDRP-based WIPO cases received since 1999 rose to 51,500.

2013 also saw the WIPO Center active in administering cases under the Legal Rights Objection (LRO) procedure. With substantive input by WIPO, this new mechanism aimed to safeguard third-party trademark rights corresponding to an applied-for new gTLD. In September 2013, the WIPO Center posted the expert panel decision in the last of 69 cases that it administered. All expert panel decisions and a December 2013 WIPO report on the LRO process are available online.

With the first new gTLDs having become operational, attention is now focusing on registrations in these domains. On February 11, 2014 the WIPO Center received the first UDRP case in relation to a new domain. This and other new gTLD cases now being filed with the WIPO Center will provide insight into how brand owners spend legal budgets in the new domains.

Updated WIPO Rules

In the area of IP and technology dispute resolution, the WIPO Center in 2013 undertook a review of the WIPO Mediation and (Expedited) Arbitration Rules (WIPO Rules). Informed by WIPO case experience and by the global evolution of ADR practices, the updated WIPO Rules will enter into effect on June 1, 2014.

“The WIPO Rules have proven a robust yet flexible framework for resolving IP and technology disputes for parties and neutrals alike,” said Mr. Gurry. “The update of the Rules serves the WIPO Center’s goal to provide economical and productive dispute resolution procedures,” he said. “The latest provisions, for example on emergency relief and multiparty arbitration, ensure that the WIPO Rules respond to the evolution of technology, business, and legal conditions,” the Director General added.

In a separate development, the WIPO Center in December 2013 made available tailored model agreements that companies involved in the telecom industry may use to refer a dispute concerning the fair, reasonable and non-discriminatory (FRAND) terms to WIPO Mediation and (Expedited) Arbitration. Aiming to facilitate cost- and time-effective FRAND adjudication, these model agreements were developed in consultation with patent law, standardization and arbitration experts from various jurisdictions, including some members and the Secretariat of the European Telecommunication Standards Institute (ETSI).

“We have seen some of the top filers under WIPO’s Patent Cooperation Treaty involved in smartphone wars in multiple jurisdictions,” said Mr. Gurry. “At the same time competition authorities in the United States and Europe are encouraging parties to resolve their disputes through ADR. By providing such an option, WIPO hopes to be of assistance to IP producers and consumers alike," he added. The WIPO Center maintains a special list of mediators, arbitrators and experts for patents in standards.

WIPO Arbitration and Mediation Center - 2013 Review

Domain Name Dispute Resolution

WIPO cases in 2013 were filed by complainants and respondents from 109 countries. (Annex 2) Their cases were decided by 327 WIPO panelists from 50 countries, with 14 different languages of proceedings, namely (in order of frequency) English, Spanish, Chinese, French, German, Dutch, Portuguese, Turkish, Italian, Korean, Romanian, Russian, Japanese, and Swedish.

Among WIPO cases in 2013, country code Top-Level Domains (ccTLDs) accounted for almost 13% of filings, up 1% from the previous year, with 70 national domain registries now connected to WIPO domain name dispute resolution services. In 2013, the WIPO Center became a provider for the .FM (Micronesia (Federated States of)), .GD (Grenada), and .ML (Mali) domain spaces.

The top three areas of complainant activity in 2013 remained retail, fashion, and banking and finance. Annex 3 The caseload featured many well-known names from business as well as public interest sectors, such as universities. Annex 4 Of the gTLD cases filed with WIPO in 2013, 66.4% concerned registrations in the .com domain, down by 8.5% in UDRP share, with .org and .net somewhat increasing theirs. Annex 5 Filings related to fashion and luxury brands again included cases where brand owners allege counterfeiting via the web pages under the domain name.

Parties settled around one out of five WIPO cases before reaching panel decision, resulting in a refund to filing parties of the panel fees. In 91% of cases ending with a panel decision, WIPO panels in 2013 ordered the transfer of the domain name to the trademark owner.

To assist their case preparation, WIPO parties took advantage of the Legal Index of WIPO UDRP Decisions and the Overview of WIPO Panel Views on Selected UDRP Questions. The same online tools also serve the predictability of WIPO panel decisions.

New Generic Top Level Domains

During 2012, a variety of organizations and companies submitted to ICANN over 1,930 applications for some 1,400 distinct new domains as part of ICANN’s New gTLD Program. This included 116 applications for a total of 12 different language scripts using the Internationalized Domain Name (IDN) system. Delegation of the first new gTLDs into the Internet’s Root Zone took place in October 2013 and in early March had passed 160.

The WIPO Center assisted ICANN in the establishment of the substantive criteria for the LRO mechanism. The window for filing LRO objections closed in March 2013, with the Center receiving 69 LRO objections found to be procedurally compliant. The geographical spread of the filed LROs covered objectors from 11 jurisdictions and applicants from 17 jurisdictions. Annex 6 The WIPO Center notified the first LRO determinations to the parties in July 2013, and completed all LRO processing by early September 2013. In total, the WIPO Center appointed 49 expert panelists to the LRO cases. The appointed panelists spanned 17 nationalities, and between them had decided more than 6,000 WIPO UDRP decisions.

In a summary of panel findings, the WIPO LRO report notes that an overwhelming majority of LROs were filed against applications for gTLD strings with descriptive or dictionary meaning. Where a trademark owner has adopted a common dictionary term as a trademark, LRO panels found that an applied-for gTLD focusing on such common meaning would not as such violate the dispute resolution standards for LROs. Some panels expressed an expectation that the LRO objector (the trademark owner) would monitor future activity in the gTLD, with a view to possible later legal action.

Where the applicant’s use of an applied-for gTLD held potential for infringement, LRO panels focused on whether such use was unfair, unjust or impermissible. This test reflects the particular dynamics of the use of trademarks on the Internet.

The WIPO Center is in the process of implementing the ICANN Post-Delegation Dispute Resolution Procedure. This trademark-based mechanism aims to encourage responsible registry operator conduct once a domain has become operational.

WIPO Arbitration and Mediation of Intellectual Property and Technology Disputes

The WIPO Center administers IP and technology disputes under the WIPO Mediation, Arbitration, Expedited Arbitration Rules, and Expert Determination Rules. WIPO case parties include large companies, small- and medium-sized enterprises, research organizations, and universities. Their disputes before the WIPO Center have involved a range of issues, such as patent infringement, patent licenses, information technology transactions (including telecommunications), distribution agreements for pharmaceutical and consumer products, copyright issues, research and development agreements, trademark co-existence agreements, media-related agreements, and disputes arising out of IP litigation settlement.

In addition to administering such cases under the WIPO Rules, the WIPO Center also engages in policy activities for the integration of ADR for Specific Sectors including franchising, information and communication technology and the area of research and development and technology transfer (R&D).

R&D and technology transfer involve a multitude of transactions, including research contracts, collaborative projects, licensing, joint ventures, alliances, spin-offs and buyer-supplier relationships. Such collaborations can involve complex legal, commercial or management issues. Research partners from different institutional backgrounds may have diverging understandings of creating, using and exploiting IP rights. Efficiency in R&D dispute resolution can contribute to the continuation of research activities and commercialization of research results. As a recent example of policy collaboration, in 2013 the Austrian Intellectual Property Agreement Guide (IPAG) launched a set of model agreements including WIPO ADR clauses.

The WIPO Center also offers guidance to intellectual property offices (IPOs) seeking to establish cost-effective dispute resolution frameworks. This activity follows the establishment of a mediation option for trademark oppositions at the Intellectual Property Office of Singapore (IPOS), under which a number of such mediations have successfully settled.

Background on the WIPO Arbitration and Mediation Center

Based in Geneva, Switzerland, with an office in Singapore, the WIPO Arbitration and Mediation Center offers Alternative Dispute Resolution options for the resolution of international commercial disputes between private parties. The arbitration, mediation and expert determination procedures provided by the WIPO Center are recognized as particularly appropriate for technology, entertainment and other disputes involving IP.

The WIPO Rules are generally appropriate for all commercial disputes, and additionally feature provisions addressing specific needs in IP disputes, such as confidentiality, evidence, experiments, site visits, and trade secrets.

Committed to cost- and time-efficiency, the WIPO Center closely tracks user expectations. Parties to disputes submitted to the WIPO Center have the option of using the innovative WIPO Electronic Case Facility (WIPO ECAF), which allows for secure filing, storing and retrieval of case-related submissions in a web-based electronic case file, by parties and neutrals anywhere in the world.

Background on the UDRP

The Uniform Domain Name Dispute Resolution Policy (UDRP), which was proposed by WIPO in 1999 and has become accepted as an international standard for resolving domain name disputes outside the courts, is designed specifically to discourage and resolve the abusive registration of trademarks as domain names, commonly known as cybersquatting. Under the UDRP, a complainant must demonstrate that the disputed domain name is identical or confusingly similar to its trademark, that the respondent does not have a right or legitimate interest in the domain name and that the respondent registered and uses the domain name in bad faith.

Disputes are decided by independent panelists drawn from the WIPO Center’s global list of trademark specialists. The domain name registration in question is frozen (suspended) during the proceedings. After reviewing a case, panelists submit their decision within a period of 14 days. If a panelist’s decision to transfer a domain name is not challenged in a competent court within a period of ten business days, the registrar is legally bound to implement the panelist’s decision. The entire case normally takes no more than about two months.

The WIPO Center is the leading global provider of domain name dispute resolution services and provides a range of resources for users and the general public. An illustration of these resources is the freely available WIPO jurisprudential Overview, which provides a distillation of panel findings in the thousands of domain name cases filed with WIPO. Parties, counsel and others around the world use this unique WIPO tool to find their bearings in the growing cybersquatting jurisprudence.