Domain Names and the FTAA: A Bad Mix

[HTMLized version of document presented to today's conference on Negotiating Intellectual Property Provisions in Free Trade Agreements]

FTAA

Intellectual Property Rights Chapter, Part II, Section 1
Article 13 — Domain names on the Internet

[13.1. Each Party shall participate in the Government Advisory Committee (GAC) of the Internet Corporation for Assigned Names and Numbers (ICANN) to promote appropriate country code Top Level Domain (ccTLD) administration and delegation practices and appropriate contractual relationships for the administration of the ccTLDs in the Hemisphere. Each Party shall have its domestic Network Information Centers (NICs) participate in the ICANN Uniform Dispute Resolution Procedure (UDRP) to address the problem of cyber-piracy of trademarks.]

[13.1. Each Party shall make efforts, to the extent possible, to promote an adequate administration of domain names.]

Summary

The first paragraph is highly objectionable. The second is acceptable, although it is vague.

Nations should not be required to impose the ICANN Uniform Dispute Resolution Procedure (UDRP) by law on their citizens because:

• Governments should not be subordinate to the decisions of a private corporation, ICANN;
• Nor should the legal rights of citizens be decided by a private corporation;
• The UDRP is subject to change, and governments should remain free to opt-out if its provisions become unacceptable;
• As it stands, the UDRP fails to guarantee basic due process to consumers;
• Serious questions have been raised about the even-handedness of some of the arbitration service providers who supply the arbitrators for the UDRP.

Governments that have thought most carefully about what rules should be imposed on their ccTLDs and their registrants have imposed their own arbitration systems which, while modeled after the UDRP, use home-grown rules that more closely track local law, customs, and commercial expectations. Canada is the leading example of this. This choice should not be over-ridden by the FTAA.

The term “Network Information Centers (NICs)” used in the first version of Art. 13.1 is poorly chosen because it refers to an entity concerned with the allocation of Internet Protocol numbers, rather than bodies such as registrars and registries that actually allocate Domain Names.

Requiring nations to participate in the ICANN Government Advisory Committee commits them to use resources attending far-flung meetings in expensive venues all over the globe, meetings which may not bring much in return. The GAC is in any event a secretive and undemocratic organization, so it is not obvious that governments would necessarily see their participation as warranted. The appropriate level of participation in the GAC should be left up to individual governments to decide for themselves.

In contrast, the second paragraph in the proposed text of Article 13 is acceptable. Although unobjectionable as written, its very lack of clarity — what is “an adequate administration of domain names”? — is slightly troubling, and perhaps invites future mischief.

Analysis & Explanation

Background

Domain names are the alphanumeric text strings to the right of an “@” symbol in an e-mail address, or immediately following the two slashes in a World Wide Web address. Thanks to a massively distributed hierarchical system for resolving domain names to IP numbers, the DNS, Internet software can rapidly and invisibly convert a domain name to its unique Internet Protocol (“IP”) number, the number used to route data correctly.

There are many “top level domain names” (TLDs), including .com and also 244 “country-code top-level domains” (ccTLDs), all of which are two-letter codes, and most of which use the two letters associated by ISO Standard 3166 to refer to a country. Thus, Canada's ccTLD is .ca, and Columbia's is .co. These ccTLDs are managed either by national governments, or by private citizens domiciled in the relevant nation, ensuring that the government has regulatory authority over the ccTLD.

Traditionally, second level domain names, such as “example” in example.ca, have been allocated on a first come, first serve basis. Every ccTLD has its own rules; some impose limits on who can register what, but others do not. This sometimes results in unhappy trademark and service mark owners, late to the Internet, discovering that “their” name is already registered by another. In some cases the earlier user is a legitimate business from a different sector, or is a non-commercial user who cannot be considered an infringer. But in other cases, the first registrant is either a standard trademark infringer, or a so-called “cybersquatter” — a person who in the business of registering domain names in the hope of reselling them to owners of identical marks, and who counts on the high cost of litigation, or its slow pace, to negotiate a windfall.

The Internet Corporation for Assigned Names and Numbers (ICANN) is a California non-profit corporation that manages the Domain Name System under contract to the U.S. Department of Commerce. It has an international board of directors, and an unusual structure that includes a “Government Advisory Committee” (GAC) which, despite its name, participates in the selection of ICANN directors and has a right of consultation on key policy issues.

ICANN imposes a mandatory arbitration clause on registrants to .com and other “global” TLDs (gTLDs) that are not linked to anparticular country. The clause can be invoked by anyone, anywhere, who thinks that his trade or service mark is infringed by a second-level domain name registered in a gTLD. The UDRP is popular with mark holders, who find it quick and relatively cheap. It has been criticized by the majority of academics who have studied it for lacking procedural due process, having structural biases, and for failing to give due consideration to the expressive rights of non-commercial users seeking to criticize corporations by hosting web sites with derogatory domain names (e.g. “companysucks.com”).

Analysis of First Paragraph of Art. 13

The major problem with the first paragraph of proposed Art. 13 is that it forces signatories to impose ICANN's UDRP on the users of their ccTLDs, who will primarily be their own citizens (ICANN already imposes the UDRP on all registrants in gTLDs such as .com, and no FTAA action is required to maintain the status quo in this regard). Participation in ICANN's UDRP for every ccTLD should not be required by treaty because ICANN is a private corporation. International law should not make governments subordinate to a private corporation. Nor, if the national ccTLD is private, should a government be required by international law to subordinate its nationals to decisions made by a foreign corporation.

Indeed, some of the governments that have thought most carefully about this question, such as Canada for example, have adopted their own domain name arbitration systems for their ccTLDs. While modeled after the UDRP, these use home-grown rules that more closely track local law, customs, and commercial expectations. Canada's system is notably fairer procedurally than ICANN's.

ICANN can change the UDRP at any time. Indeed, discussions are currently under way to expand the reach of the UDRP. Even if one is satisfied with the UDRP at present, states should not allow themselves to be locked into a system that might change in ways they find objectionable. And, there are reasons to think the UDRP is not ideal:

As it stands, the UDRP has a large number of obscure but significant procedural defects. Because of these, the system fails to guarantee basic due process to consumers who register domain names.

In addition, serious questions have been raised about the even-handedness of some of the arbitration service providers who supply the arbitrators for the UDRP; as currently written, the UDRP creates economic incentives for arbitration providers to be “plaintiff-friendly,” and to discriminate subtly against consumers. Service providers' are nor required to disclose their methods of recruiting and assigning arbitrators, and the system permits provider manipulation of panelist selection to achieve a desired result in a given type of case.

Currently, the UDRP rules do not [corrected] require actual notice to the defendant, nor do they require sufficient efforts reasonably calculated to achieve actual notice, especially in countries with inferior postal systems. The time limits to respond are very short, and put ordinary people who do not have an internet-savvy trademark lawyer on permanent retainer at a substantial disadvantage. Although the UDRP purports to have word limits, these are routinely circumvented by the use of “attachments” further adding to the burden faced by parties needing to prepare their responses in a short time.

A final note on the first paragraph: The term “Network Information Centers (NICs)” used in the first version of Art. 13.1 is poorly chosen because this term usually refers to an entity concerned with the allocation of Internet Protocol numbers, rather than to the bodies such as registrars and registries that actually allocate Domain Names. The confusion could be damaging as to date the two regimes have intentionally been kept separate, and indeed are subject to very different governance mechanisms. Internet Protocol numbers are controlled outside the ordinary ICANN process via regional bodies ⁽¹⁾ and by the Internet Assigned Numbers Authority (IANA), which is technically a separate function from ICANN's management of domain names.

Analysis of Second Paragraph of Art. 13

As noted above, the primary problem with the second paragraph in the proposed text of Article 13 is that it is vague. It is not clear what constitutes “an adequate administration of domain names”, which perhaps invites future mischief. Since the duty to act is qualified by “to the extent possible” this provision does not appear too troublesome.

For further Information

     On ICANN

• Milton Mueller, Ruling the Root (MIT, 2002)
• A.Michael Froomkin, Wrong Turn in Cyberspace: Using ICANN to Route Around the APA and the Constitution, 50 Duke L.J. 17 (2000), available online http://www.law.miami.edu/~froomkin/articles/icann.pdf
• A.Michael Froomkin & Mark Lemley, ICANN and Anti-Trust, 2003 Illinois L. Rev. 1, available online http://personal.law.miami.edu/~froomkin/articles/icann-antitrust.pdf.
• ICANNWatch.org, http://www.icannwatch.org

On the UDRP

• A.Michael Froomkin, ICANN's “Uniform Dispute Resolution Policy” — Causes and (Partial) Cures, 67 Brooklyn Law Review 605 (2002), available online http://personal.law.miami.edu/~froomkin/articles/udrp.pdf
• Elizabeth G. Thornburg, Going Private: Technology, Due Process, and Internet Dispute Resolution, 34 U.C. Davis L. Rev. 151 (2000);
• Michael Geist, Fair.com?: An Examination of the Allegations of Systemic Unfairness in the ICANN UDRP, http://aix1.uottawa.ca/~geist/geistudrp.pdf (Aug. 2001);
• Milton Mueller, Rough Justice: A statistical assessment of ICANN's Uniform Dispute Resolution Policy, http://dcc.syr.edu/roughjustice.htm

1. These are APNIC (Asia Pacific Network Information Centre) – Asia/Pacific Region, ARIN (American Registry for Internet Numbers) – North America and Sub-Sahara Africa, LACNIC (Regional Latin-American and Caribbean IP Address Registry) – Latin America and some Caribbean Islands, RIPE NCC (Réseaux IP Européens) – Europe, the Middle East, Central Asia, and African countries located north of the equator, and soon to be joined by AfriNIC (African RIR, proposed).