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Consultation Responses



Dispute Resolution Service

26 March 2001

David Thurgate

 

Name-Shop consultation response

Origins of Nominet initiative:

"Communique from the Policy Advisory Board Issued 4th February 2000 [] C. Domain Name Warehousing

The issue of Domain Name Warehousing, and in particular the mass registration of village names in co.uk, was discussed. It was agreed that Nominet ought to investigate means by which it could deal with those Domain Names that are registered in `bad faith'.

The PAB have recommended that the CoM provide some financial backing for a quasi-legal group to conduct a feasibility study. Work is to be spearheaded by Eric Ramage, with involvement from Geoff McMullen, Steve Dyer, Richard Almeida and Clive Feather."

Name-Shop involvement:

Giant Games Limited (trading as the "Name-Shop") have been through the current Nominet DRS as a defendant, and also have experience of one actual and several abortive "reverse hi-jacking" (our subjective opinion) legal actions.

Name-Shop has sold over 80 .co.uk domain names in the past three years, many to household name corporations, for prices ranging from around 1,000 to over 100,000. Our business is proof of the inherent value of short, memorable and generic domain names, and of the increasing importance of the .co.uk namespace for commercial enterprise.

As such, we like to think of ourselves as the respectable face of domain name trading. Others might have a different opinion, but we have always been at pains to avoid conflict with apparent trademark holders.

Pressures on Nominet:

Pressure from large companies - "Reverse hi-jacking": It was apparent at Nominet's member meeting on January 31 2001 to unveil its proposed changes to the current Dispute Resolution Service (DRS), that a number of large, household-name corporations believe that they are currently not well served by Nominet's existing DRS.

Such organisations, however, are also very well aware that legal action to "reclaim" (as they see it) "their" name is liable to be a very expensive procedure with an uncertain outcome. In our opinion, Nominet should be aware that whatever results from the current review of the DRS, pressure from these institutions is unlikely to diminish unless the new procedure means in effect that trademark law is to be applied by Nominet (so that they have no new rules to learn and can rely on existing trademark law only), but more cheaply than the courts and with a better guarantee of success for the trademark holder.

International pressures:

ICANN, WIPO and others may want Nominet to appear to conform to ICANN precedent on Dispute Resolution. "Reverse hi-jackers" (see above) may try to ignore Nominet and turn to ICANN and WIPO if they feel Nominet is not giving them the result that they want.

Name-Shop opinion:

Nominet should resist such pressures and make specific efforts to get the courts to push complainants to use the DRS procedure before they embark on court action and to try to respect the DRS outcome. Nominet should actively promote the current Wolfe reform instructions to make the parties pursue mediation before using expensive court facilities at the taxpayer's great expense. As for resolution by International authorities, Nominet should insist on maintaining UK jurisdiction over the .uk namespace.

 

Issues of definitions as identified by Name-Shop

Discussion about domain name disputes have tended to use a number of phrases which at first sight may appear to have a generally understood meaning in conversational English. However, the apparent meaning may not be so clear on closer examination, and in the legal or quasi-legal application of a Dispute Resolution Procedure, these phrases may become somewhat of a liability; at the very least an "in context" definition should be attempted:

"bad faith"

This is the original ICANN definition of "bad faith" from www.icann.org/udrp/udrp-policy-24oct99.htm

"b. Evidence of Registration and Use in Bad Faith. For the purposes of Paragraph 4(a)(iii), the following circumstances, in particular but without limitation, if found by the Panel to be present, shall be evidence of the registration and use of a domain name in bad faith

  1. circumstances indicating that you have registered or you have acquired the domain name primarily for the purpose of selling, renting, or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of your documented out-of-pocket costs directly related to the domain name; or
     
  2. you have registered the domain name in order to prevent the owner of the trademark or service mark from reflecting the mark in a corresponding domain name, provided that you have engaged in a pattern of such conduct; or
     
  3. you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or
     
  4. by using the domain name, you have intentionally attempted to attract, for commercial gain, Internet users to your web site or other on-line location, by creating a likelihood of confusion with the complainant's mark as to the source, sponsorship, affiliation, or endorsement of your web site or location or of a product or service on your web site or location."

As re-phrased by Nominet, and submitted at the DRS Review, 31-Jan-2001:

"A non-exhaustive list of factors which may be evidence that the Respondent has registered and/or is using the Domain Name in bad faith is as follows:

  1. circumstances indicating that the Respondent has registered or has otherwise acquired the domain name:
     
    1. primarily for the purpose of selling, renting, or otherwise transferring the domain name [] to the complainant [] or to a competitor of that complainant, for valuable consideration in excess of the Respondent's documented out-of-pocket costs directly associated with acquiring or using the domain name;
       
    2. as a blocking registration against a name or mark in which the complainant has rights;
       
    3. primarily for the purpose of disrupting the business of the Complainant;
       
    or
  2. Circumstances indicating that the Respondent is using the Domain Name in a way which has confused people or businesses into believing that the domain name is registered to, operated or authorised by, or otherwise connected with the Complainant."

 

Nominet's DRS Policy should ensure that no complaint is brought other than by a party who "has rights in respect of a name or mark which is identical or similar to a Domain Name" - though interpreting "identical or similar" is this case somewhat begs the question.

Therefore ignoring this and other syntactical changes, significant changes and omissions by Nominet are in the paragraphs equivalent to ICANN's para.(iv), where "intentionally" is omitted. Why?

Both ICANN ("without limitation") and Nominet ("non-exhaustive") have allowed themselves to enlarge upon their definition of bad faith in the future, or as quasi-legal "case law" develops. Name-Shop would suggest an addition illustrated by this example:

A party has registered the name "vam.co.uk", and a complaint is brought under the revised DRS by the Vam Corporation, who consider that they have rights in the word "vam". Consider these three possibilities:

  1. Nominet WHOIS says "Registered For: Video Audio Media Ltd." - there is such a company, and they are the registrant.
     
  2. Nominet WHOIS says "Registered For: Vospers Antique Mirrors Ltd." - but there is no such company of that name.
     
  3. Nominet WHOIS says "Registered For: Speculative Domains Ltd."- there is such a company, and they are the registrant.
     

- we would argue that example 2 is prima facie evidence of bad faith, but that examples 1 and 3 are not. A clause could be added e.g.:

"(iii) circumstances indicating that the Respondent wilfully gave a false name or otherwise disguised their identity when registering the Domain Name with Nominet."

"cybersquatter"

We believe that Nominet would be well advised to avoid all usage of this term, as even more so than "bad faith" and "first come first served", the expression "cybersquatter" (and the associated verb) tends to mean whatever the user wants it to mean, i.e. anything from:

"someone who has, by their own admission, registered a name in the full knowledge that it infringes a trademark, and furthermore only intends to sell to the said trademark owner"

to:

"someone who has registered a name that someone else might have wanted".

With such a variety of interpretation, the expression is useless in a legal or quasi-legal context.

"first come first served"

Even this apparently straightforward expression, used in Nominet's "Terms Conditions for the Registration of Domain Names", has two quite different meanings in ordinary English:

Consider the analogy of a cafeteria with a display of food for sale, some of it appetising, some of it not. The customers arrive and form an orderly queue based on arrival time, all in the belief that the cafeteria offers a "first come first served" policy. However, at the head of the queue there is an enormously fat and wealthy customer who insists on purchasing virtually everything that the cafeteria has to sell, especially all the appetising dishes. The staff and other customers object "that's not fair!", "you can't possibly eat it all yourself!", "you've only left the horrible food for us!", etc. The fat customer retorts that the cafeteria will probably make at least as much money from him as from them, that his money is as good as anyone else's, it's not right to criticise him just because he's fat, it's none of their business if he's buying the food to sell to other people later on, etc.

The fat customer takes the expression to mean "the person at the head of the queue has priority over all those behind". This would be the commonly accepted meaning at a department store sale, etc.

The complainants take the expression to mean "the person at the head of the queue has their pick of what's on offer, but mustn't take more than their "fair share" (which is of course another hopelessly subjective phrase in its own right).

Name-Shop contend that Nominet has always taken the side of the fat customer, and must remain consistent on that point - the following is from Nominet's rules for the .co.uk sld:

"No limitation is placed on the number of names that may be applied for or the use for which they are being put to subject to any request meeting the rules as applying at the time when the request is made".

"use"

Reverse hi-jackers are apt to suggest that a blocking registration (q.v. Nominet's para.(B) "as a blocking registration against a name or mark in which the complainant has rights") is defined to specifically include registration of a domain name without use. However, referring again to Nominet's rules for the .co.uk sld:

"No limitation is placed on the number of names that may be applied for or the use for which they are being put to subject to any request meeting the rules as applying at the time when the request is made",

and also to Willie Black's (and others) oft-stated doctrine of not restricting business models, "use" of a name can only be reasonably defined as maintaining the necessary DNS service for that domain.

Otherwise, does the fact that a domain has no website mean there is no use? Or the fact that there is a website, but it's not very good, or has not been updated for a long time? Or what? Clearly Nominet's own rules cannot permit a retrospective definition at this stage, neither is any fair definition likely to be forthcoming. It is within both the letter and the spirit of Nominet and the Internet for someone to register, for example, "6g-mobile-phones.co.uk" now, knowing full well that it may be years or decades before such a thing as a sixth generation mobile telephone becomes a reality (if indeed it ever does), or to register a name such as "conflabula.co.uk" because they think it's a funny name - the fact that the registrant had never got round to creating an appropriate website before a major corporation subsequently decided to shed its dull image and re-brand itself as "Conflabula" would not make the registration a "blocking" one.

In order for the DRS to even consider that a registration might be a blocking registration, there must be some evidence that deceptions, or at the very least "some dealings which fall short of the standards of acceptable commercial behaviour", were involved with that registration, e.g. evidence that the registrant is a disgruntled employee or former employee of the claimed trademark holder, etc.