In commercial arbitration it is argued that reliance on non-national legal systems fails to provide predictable result. However, this appears to be the best option in the specific area of domain name dispute resolution.
The Internet is multijurisdictional as users can access it from any place on Earth. The global presence of Internet and domain names might give rise to infringement of intellectual property rights in several jurisdictions.
This also means that different national courts might assert jurisdiction over a dispute involving a domain name, or that multiple proceedings would be initiated by a trademark owner that wants to protect its trademark in various jurisdictions where separate intellectual property titles might be invoked.
Trademarks are territorially limited, while domain names are globally effective, with technical addresses being instantaneously available on a first came, first served basis. Having access to a quick system for solving disputes of abusive registration of domain names was and is key to both trademark owners and consumers.
The Uniform Domain Name Dispute Resolution Policy (“UDRP”) fulfils this function in cases of collision between trademarks and domain names, the scope of the procedure being limited at preventing abusive registration of domain names (cybersquatting) and not solving complex litigation between parties, such as those deriving from prior commercial relationship.
This post deals with the substantive law applicable to such disputes by WIPO panels applying UDRP. A general overview of the procedure is available here.
Applicable law in UDRP disputes
In accordance with article 15(a) of the Rules for Uniform Domain Name Dispute Resolution Policy (the Rules), “a Panel shall decide a complaint on the basis of the statements and documents submitted and in accordance with the Policy, these Rules and any rules and principles of law that it deems applicable”.
Some authors interpret the provision to mean that the UDRP panels are not bound to apply any domestic law at all but should only apply the rules of a non-national lex mercatoria, based on the common usages of electronic commerce; others consider that conflict-of-law rules should be applied.[1]
Another approach is that the UDRP determines both the way the procedure is conducted and the way the merits of the case are assessed. Although article 5(a) of the UDRP refers to any rules and principles of law that the panel deems appropriate, it appears that the dominant source is the UDRP itself.[2]
According to section 4.15 of the WIPO Overview 3.0 concerning the provisions in paragraph 15(a) of the UDRP, “Panels have broadly noted that insofar as the UDRP system is designed to operate in a global context, while rooted in general trademark law principles, in its own terms UDRP jurisprudence generally would not require resort to particular national laws.”
In the very first decision rendered under the UDRP, the panel decided there was bad faith use on the part of the respondent, analysing the facts of the case against the very wording of the Policy, without relying on national laws. The panel looked at the facts of the case, where the respondent offered to sell the domain name to the complainant “for valuable consideration in excess of” any out-of-pocket costs directly related to the domain name and concluded that the respondent has “used” the domain name in bad faith. Nevertheless, given that both parties were from the same country i.e. the US, the panel considered relevant United States’ courts decisions and concluded that decisions of those courts in similar cases support the panel’s conclusion.
Sometimes a specific issue in dispute might direct the panel to a specific national law.
Applicable law in case of the first element of the Policy
Within the first element of the Policy a complainant must prove that it holds rights in a trademark, which can be either registered or acquired by use in commerce.
While in practice this is usually a straightforward exercise, specific situations might trigger discussions under relevant national laws such as, whether the trademark is indeed registered, if it can sustain a UDRP complaint absent a finalized registration, when the complainant relies on an application.
The absence of an express provision in the Policy specifically regulating that no proceedings can be commenced until the date of registration of the trademark is generally interpreted to mean that reference to and reliance on a trademark application alone cannot be treated as sufficient rights for the purposes of the Policy. This is notwithstanding the fact that it might be argued that, technically, rights in a trademark might exist under a national legislation from the date of publication conditional upon subsequent grant. If the application proceeds to grant, then it will always be open to an applicant to commence UDRP proceedings at that stage.
Nevertheless, in certain limited circumstances, a mere trademark application might give rise to rights under the Policy. This might be the case (i) where a trademark opposition period has passed, (ii) an opposition or oppositions have been filed but the nature of these oppositions is such that it is clear that ultimately the complainant will be awarded a registration (in at least one trademark class) regardless of the outcome of those oppositions.
Another issue that might be analysed through the lens of a national law under the first limb of the first UDRP element, is whether the complainant can show unregistered or common law rights in a trademark. They depend upon the extent to which the laws of a particular country recognise, or do not recognise, that the activities of the complainant provide unregistered rights.
A personal name can qualify as an unregistered trademark recognised by the Policy, but in determining whether it does in a particular case, a panel will look to the jurisdictions in which those rights are claimed. The panel will then determine whether the complainant can show that the name provides an unregistered right in at least one of these jurisdictions (e.g. here).
When analysing whether the second limb of the first element is met, respectively the domain name at issue must be identical or confusingly similar to the trademark rights which had been proven, a comparison between the trademark and the domain name is performed to determine the likelihood of Internet user confusion. This test typically involves a side-by-side comparison of the domain name and the textual components of the relevant trademark to assess whether the mark is recognizable within the disputed domain name (this may also include recognizability by technological means such as search engine algorithms), as per para 1.7 of the WIPO Overview 3.0. The first element of the Policy functions primarily as a standing requirement. Therefore, this second limb of the first element is generally analysed without any reference to national laws, where similarity between trademarks and other signs requires a more detailed analysis, on conceptual level as well.
Applicable law in case of the second UDRP element
The second condition that the complainant must fulfil is that the holder of the domain name has no rights or legitimate interest in respect of the domain name. When addressing this element, national laws might become relevant in the so called “gripe site” cases where the holder of a domain deliberately uses a protected trademark in order to criticize the trademark holder (e.g. “sucks cases”).
There are two main positions on what law should be applied in such cases. According to the first one, the local law has no bearing in UDRP cases, as the wording of paragraph 15(a) of the UDRP does not actually refer to national laws at all; it instead refers to the “rules and principles of law”. In addition, the Policy and local laws regulating cybersquatting and trademark infringement are different and are not intended to cover the same situation. Also, laws on freedom of speech are not unique to a specific country. They exist in many countries and frequently form part of those countries’ basic constitutional rules, even if the exact way in which the laws operate may vary from State to State.
The second position is that panels can consider national laws in assessing whether the respondent has established a fair use right for criticism sites, just as much as these are considered when assessing whether the complainant has established trademark rights. In terms of which national law should apply, if both parties are resident in the same jurisdiction, the national law of that jurisdiction might be appropriate, since, presumably, that law also governs the parties’ conduct, legal rights, and potential liabilities. If doubt remains, a panel could consider applying the national law that would be determined by the courts at the location of mutual jurisdiction when applying conflict of law rules.
The first opinion is sensible, as the Policy provides an international procedure for international application by a panel comprising panelists who may come from a jurisdiction unconnected with either party. As correctly held, to apply a national rule simply because both parties come from the same jurisdiction may result in similar cases being decided in a different manner dependent upon geographical element.
Applicable law in case of the third UDRP element
The third condition the complainant must comply with to succeed in a UDRP claim is to show that the domain name has been registered and used in bad faith. Bad faith must exist both at the date of registration and at the date of the complaint. As with the first element, national laws might become relevant to assess if a trademark was registered prior to the registration of the domain name. Other than that, recourse to the Policy itself should be sufficient.
The advantage of the system, as briefly described above, is that UDRP offers a predictable tool for trademark owners to obtain swift protection of their trademark rights on the Internet and to fight cybersquatting.
This post is part of a larger study, “Applicable Law in Domain Name Arbitrations”, published in the Romanian Arbitration Journal, no. 1/2021.
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[1] Moritz Renner, “Towards a Hierarchy of Norms in Transnational Law?”, in Journal of International Arbitration, Kluwer Law International, 2009, Volume 26, Issue 4, p. 549.
[2] Thomas Schultz, ‘Chapter 7: The Roles of Dispute Settlement and ODR’, in Arnold Ingen-Housz (ed), ADR in Business: Practice and Issues across Countries and Cultures II, Kluwer Law International, 2010, p. 153.
