The best laid plans: how unrestrained arbitration decisions have corrupted the Uniform Domain Name Dispute Resolution Policy.

• Author: Stewart, Ian L.

1. INTRODUCTION

   In any expanding environment, limitations are sometimes needed to provide order and stability. The Internet revolution has penetrated every corner of the globe. National boundaries have failed to contain the amazing growth of this phenomenon. "From 1990 to 1997, the estimated number of Internet users grew from around one million to around 70 million,"(1) and these numbers have only grown since then. The number of Web sites and their corresponding domain names have reached staggering levels as well. As of March 2001, more than thirty-three million domain names had been registered, and more than twenty million of these domain names were for .com sites alone.(2) While the possibilities of the Internet seem limitless, the number of desirable domain names remains finite. As the Internet continues to grow, the number of available and desirable domain names continues to decrease.

   Given the limited supply of desirable domain names, disputes over these domain names were inevitable. Because of the breakneck speed of Internet growth, the jurisdictional problems inherent in an international network, and the sheer volume of domain names, courts of law do not always provide the best forum to decide these disputes. On October 24, 1999, the Internet Corporation for Assigned Names and Numbers ("ICANN") approved the Uniform Domain Name Dispute Resolution Policy ("Policy") as a quick and inexpensive alternative to court proceedings for domain name disputes.(3)

   ICANN designed the Policy to apply commonly accepted international standards to disputes in order to achieve quick and economical domain name dispute resolutions. These dispute resolutions were intended to supplement court proceedings, not replace them entirely. The designers of the Policy limited the scope of its authority in order to keep the Policy in check while at the same time strengthening its foundation. Unfortunately, unrestrained arbitration decisions have threatened the Policy by shattering the internal safeguards that reinforced its foundation.

   This Note examines how unfettered arbitration decisions made with even the best of intentions can corrupt a good dispute resolution policy. Part II provides background information on ICANN, domain disputes involving cybersquatting and reverse domain hijacking, and the Policy. Part III explains how ICANN's dispute resolution providers' expansive decisions have weakened the Policy by removing the internal limitations that made it strong and effective. Finally, Part IV offers a discussion of how the Policy can still be saved through the exercise of restraint by ICANN's dispute resolution providers.

2. CREATION OF THE UNIFORM DOMAIN NAME DISPUTE RESOLUTION POLICY

   The Internet is structured on the domain name system, which functions as a user-friendly guide to navigate the Internet. Each host computer attached to the Internet has a "unique 32-bit Internet protocol ("IP") address that is separated into a series of four 8-bit groups."(4) Each unique IP address enables users to link with that particular host Web site. Because the average Internet user would find memorizing and identifying numerous strings of numbers a daunting task, however, a more user-friendly system emerged.(5) Domain names are the easy-to-remember words, numbers, or phrases that correspond to IP addresses.(6)

   The domain name system is composed of "two domain levels: a top-level and a second-level domain."(7) Top-level domains ("TLDs") include the generic TLDs: .com, .net, and .org.(8) Second-level domains ("SLDs") are the words or phrases that appear before the TLDs in addresses.(9) SLDs normally include descriptive words that reflect the ownership or purpose of the Web site, often including the name or trademark of an individual or company.(10) Because each address is unique, two Web sites cannot have the same SLD if they also have the same TLD. In the real world, more than one company or person can share a name, but on the Internet only one entity can use that name for a .com site. This necessary limitation effectively drives up the value of a domain name as Internet traffic increases. Correspondingly, more and more emphasis has been placed on the registration of domain names and the procedures for addressing domain name disputes.

   1. The Formation of ICANN

      Domain name registration has had a busy existence in its relatively short history. The first entity to carry the mantle of domain name registrar was SRI International, a nonprofit research institute.(11) SRI International took on the responsibility of registering domain names for the fledgling Internet from the Defense Department in 1985.(12) Commercial domain name registration did not begin until 1992, however, when Network Solutions, Inc. ("NSI") entered into an agreement with the U.S. government to oversee domain name registration.(13) Over time, concerns about NSI's huge profits from domain name registration and a lack of competition in the field led to the call for a new nonprofit entity to centralize domain name system management.(14) In response to these concerns, ICANN was formed.

      ICANN is a "non-profit corporation ... formed to assume responsibility for the IP address space allocation, protocol parameter assignment, domain name system management, and root server system management functions previously performed under U.S. Government contract by ... other entities."(15) Immediately after ICANN's formation in 1998, the U.S. government entrusted it with the duty of centralizing domain name system management.(16) In addition, ICANN also assumed responsibility for addressing abusive domain name registration and domain name disputes.(17)

   2. Cybersquatting and Reverse Domain Name Hijacking

      There are two basic types of abusive domain name registration practices--cybersquatting and reverse domain name hijacking. Cybersquatting, the better-known practice, occurs at the time of domain name registration, and involves "the `deliberate, bad faith registration as domain names of well-known and other trademarks in the hope of being able to sell the domain names [back] to the owners of those marks'" for a profit.(18) Reverse domain name hijacking, by contrast, occurs after the domain name has been registered, and it is the "bad faith [] attempt to deprive a registered domain-name holder of a domain name."(19) Reverse domain name hijacking involves the initiation of a court or dispute resolution proceeding by which the hijacker wrests control of the domain name from its rightful owner. The hijacker either wins the name outright or waits the owner out and receives the domain name in a settlement.

   3. The Uniform Domain Name Dispute Resolution Policy

      The concern about domain name disputes in general and abusive domain name registrations in particular led to the creation of the Uniform Domain Name Dispute Resolution Policy. In July 1998, based on a proposal by the U.S. Commerce Department, the World Intellectual Property Organization ("WIPO") began an international consultation process to address conflicts between domain names and intellectual property rights.(20) In April 1999, the WIPO presented its findings to ICANN in its Management of Internet Names and Addresses: Intellectual Property Issues: Final Report of the WIPO Internet Domain Name Process ("Final Report").(21) After a series of resolutions and conferences, ICANN adopted the Final Report and approved the Policy and its accompanying Rules for Uniform Domain Name Dispute Resolution Policy ("Rules") in October 1999.(22)

      The Policy prescribes a mandatory administrative proceeding to handle designated domain name disputes.(23) Each domain name registration agreement incorporates the Policy by reference and, therefore, requires submission to its administrative proceeding.(24) Such an administrative proceeding is initiated by filing a complaint with an administrative dispute resolution service provider ("Provider") previously approved by ICANN.(25) An Administrative Panel is then selected from a list of arbitrators kept by the designated Provider.(26) This Administrative Panel conducts the proceedings and renders judgment on the dispute.(27)

      To win an administrative proceeding under the Policy, a complainant must prove that the domain name in question is identical or confusingly similar to an existing trademark or service mark, that the owner of the domain name has no legitimate rights to that name, and that the name was registered in bad faith.(28) If the Administrative Panel rules in favor of the complainant, the Panel may cancel, transfer, or otherwise change the domain name in question.(29) If any party initiates a court proceeding during the administrative proceeding or within ten days after the Panel reaches a decision, however, the Panel will halt any action until the lawsuit has been resolved.(30)

      Since the first administrative proceeding commenced in December 1999,(31) ICANN's Providers have been extremely busy implementing the Policy. ICANN currently employs four different Providers to administer the Policy.(32) As of April 2001, these Providers had administered more than 3,500 proceedings affecting more than 6,200 different domain names.(33) One Provider, the WIPO's Arbitration and Mediation Center, has heard the majority of these cases.(34) More than 2,300 cases have been filed with the WIPO, and as of April 1, 2001, the WIPO had completed 1,859 cases,(35) the majority of which favored transfer of the disputed domain names.(36) The Providers have administered decisions at a breathtaking pace; some decisions, however, may have seriously damaged the foundation of the Policy.

3. CORRUPTION OF THE UNIFORM DOMAIN NAME DISPUTE RESOLUTION POLICY: HOW ARBITRATORS ARE EXCEEDING THE SCOPE OF THE POLICY

   The WIPO designed the Policy to offer a quick, efficient, and economical process that applied commonly accepted international standards to resolve domain name disputes. Overly broad arbitration decisions, however, have corrupted the...