Dispute Resolution Service
29 March 2001
MARQUES' Comments on Nominet DRS Proposals
MARQUES, the Association of European Trade Mark Owners, welcomes Nominet's review of its dispute resolution service and in general views the proposals very positively. However, we do have some general comments on the Policy and Procedure.
Standard of Proof
The proposals provide that the complainant must prove bad faith to the criminal standard - that is to say beyond reasonable doubt. This is of great concern and appears to be a factor which is likely to dilute the effectiveness of these very welcome proposals by setting a standard of proof which may be extremely difficult to achieve on the information generally available to complainants. Arbitrators brought up in the civil system may be very reluctant to find that bad faith has been proved beyond reasonable doubt. If proceedings were brought against a cybersquatter through the Courts (at least in the UK) the burden of proof would be on the balance of probabilities.
Examples of factors which may be evidence of bad faith include circumstances indicating that the respondent has registered the domain name primarily for the purpose of selling the domain name to the complainant or a competitor for a sum in excess of out of pocket expenses; as a blocking registration against a name in which the complainant has rights; or primarily for the purpose of disrupting the business of the complainant.
Evidence in support of an allegation of bad faith is generally circumstantial. The Courts (or dispute resolution panellists) are asked to look at the particular facts in a given case in the light of evidence filed by the claimant and defendant and draw conclusions from those facts as to whether it is more likely than not that a domain name registrant has acted in bad faith. This must be the correct test.
If a cybersquatter uses a domain name to commit criminal activities, such as credit card fraud, then criminal sanctions will apply. In view of the severity of the sanctions for conviction, the prosecution must prove its case beyond reasonable doubt. It will generally have the benefit of cross examination of witnesses to establish the facts and the defendant's motives. However, if a defendant is found not guilty in a criminal trial, he may still be found liable, on the balance of probabilities, in a civil court.
Nominet states in its proposals that the requirement is to prove bad faith, which is not equivalent to the absence of good faith. It is clearly concerned to emphasise that it is for the complainant to prove its case, and that registrations will not be cancelled or transferred as having been registered and/or used in bad faith on scant evidence. This is a matter which should be dealt with in the administration of the process; not by imposing the criminal standard of proof. The Nominet dispute resolution policy is effectively a civil process and the civil standard must therefore apply.
Evidence of use in bad faith
Although the list of factors in paragraph 3(a) is not exhaustive, we suggest that paragraph (ii) is amended to include "circumstances indicating that the respondent is using the Domain Name in a way which has confused or is likely to confuse people or businesses ..."
Defences to an allegation of bad faith
Paragraph 4(b) of the Policy provides that fair use may include sites established in tribute to or criticism of a person or business. We have some concerns about this. Whilst the proposals should not impinge on the legitimate and lawful right of free speech, there is a danger that this will be seen as a loophole and that cybersquatters will create "gripe sites" for the sole purpose of thwarting a complaint to Nominet, when the real intention is indeed to sell the domain, block a registration by the complainant or disrupt the complainant's business. While other legal remedies may be available (for example passing off, malicious falsehood, or defamation), the ability to use this provision as a loophole may, again, undermine the effectiveness of the DRS.
Measures which encourage succinct representations are to be commended. However under paragraph 3(b)(ix) of the Procedure the complainant must include a "statement of truth" on its complaint - not only that the information contained in the complaint is true but also that it is complete. This does not sit well with paragraph 3(b)(i) of the Procedure which provides that the complaint must not exceed 2000 words. In cases where the complainant's rights are unregistered and protectable goodwill must be established and/or the facts are complex it may not be possible to provide the complete information required in 2000 words.
Whilst the DRP is not designed to deal with factually complex cases where both parties may have rights in the name, there are cases of bad faith which fall squarely within the ambit of the DRS but which are also factually complex. Cybersquatters have become much more sophisticated over the past few years and have learnt to generate a smokescreen by the creation of spurious businesses, which may take some time to unravel. The ability to provide a complete picture is of particular concern if the criminal standard of proof is to be adopted and may be all the more important for the respondent who is defending his actions, and faces the possibility of losing his domain name.
Liability of Nominet
In paragraph 8 of the Policy, Nominet attempts to restrict its liability to "deliberate wrongdoing". Nominet must also be liable if it is negligent. Furthermore, paragraph 8(b) should be deleted as it purports to oust the jurisdiction of the Court which is contrary to UK public policy.
Identification of the Registrant
One of the absolutely essential requirements for an credible domain name registry is that registrants must be identifiable.
It remains critical that Nominet updates its registration process to ensure that there are full details including the name of an individual or legal entity (and in the case of unincorporated organisations, an individual or individuals within that organisation) against whom proceedings may be brought, if necessary. Domain names must not be registered in the name of a trading style - not only because there is no identifiable legal entity against whom to bring proceedings but, more likely, it creates difficulties in conducting due diligence exercises and the assignment of the domain name(s) on the sale of the business or part of the business.
We understand that Nominet is currently considering transitional provisions and would suggest that these should also provide for the re-submission of cases where the domain name was apparently registered in bad faith but where Nominet has declined to suspend or cancel the domain name under its present DRS.
MARQUES Internet Committee