The Problem of Forum Shopping must be resolved before accrediting new UDRP providers

[Nat Cohen <ncohen@xxxxxxxxxxxxx>]

The world is made of many flavors; justice should have but one.

Ownership rights to the domains that are the foundation of the Internet and
the Internet economy are revokable under the UDRP.  A stable and secure
Internet economy requires clarity as to domain ownership rights.

A UDRP that comes in a variety of flavors, where the rights to domain names
are determined differently by different UDRP providers, turns a standard
that is called "Uniform" into a bazaar where each provider is hawking its
own version of justice for the benefit of those seeking to seize domains
from the current registrants.

ICANN, by creating a multitude of UDRP providers, is creating the
conditions for forum shopping.  Under the UDRP the Complainant is empowered
to select the forum in which the UDRP dispute is heard.  This creates a
powerful pro-Complainant bias as those forums seen to favor Complainants
will be selected by the Complainants, while those viewed as more neutral
will be shut out.

ICANN has already created the conditions for forum shopping by accrediting
several UDRP providers.  Continuing to accredit new providers will only
exacerbate the problem of forum shopping.  In setting up a system that
encourages forum shopping, ICANN is destroying the uniformity and the
integrity necessary for the successful application of the UDRP.

ICANN is attempting to reconcile two irreconcilable goals in establishing a
large, geographically diverse group of UDRP providers while also attempting
to ensure a dispute resolution process that is "uniform" across all
providers.

Intellectual property rights are treated differently in different parts of
the world.  The U.S., European, Indian, and Chinese legal systems each have
evolved with different views on IP rights, and one could expect that this
holds true for each country in the world.  Panelists will be shaped by a
lifetime of experience in a particular legal system and will bring those
views to UDRP panels.

If the UDRP criteria were clear-cut and based on readily identifiable
facts, this diversity of views may not be an issue.  But instead the UDRP
criteria are highly subjective.  UDRP panelists are required to speculate
as to the intent of domain registrants that they have never met, as to
their state of mind at the time many years or even a decade earlier when
the registrant registered the disputed domain.  Panelists must often make
this determination based on a minimum of relevant evidence as to the
registrant's intentions, with such evidence presented informally without
the safeguards that apply to evidence is a court proceeding.

Because of these limitations, the UDRP is supposed to apply only to
'clear-cut' cases of cybersquatting.  Yet panels routinely order transfers
of domains in disputes that are anything but clear-cut, as once granted the
power to order transfers many panelists are loathe to exercise discretion
by limiting their exercise of that power.

There is no review of panelists decisions.  Once accredited, some panelists
have decided hundreds of cases over more than a decade without any
procedures in place to harmonize differences in application of the UDRP
between panelists.  I know of no instance where a panelist has been
de-accredited.

This lack of oversight has allowed panelists to interpret the UDRP in
contradictory ways.  There is a wide divergence of opinions among panelists
as to what factors are considered to be bad faith, with some viewing
speculative registration of common word domains to be inherently bad faith
while others viewing such speculative registration to be a legitimate
business model.  Ten years into the UDRP such a basic element of what
constitute bad faith remains unresolved.

Some panelists have even attempted to rewrite the UDRP, for instance, by
asserting that the provision that a transfer can only be ordered if a
domain was registered AND used in bad faith can at times be reinterpreted
to mean that a transfer can be ordered if a domain was registered OR used
in bad faith.  This divergence of views creates splits among panels within
the same UDRP provider (
http://domainnamewire.com/2011/03/03/a-landmark-showdown-at-world-intellectual-property-organization/).


A uniform standard whose application depends upon which panelist is
applying it is not uniform.  Use of a domain that is permitted under one
panelists interpretation of the UDRP will result in a finding of bad faith
and an order to transfer the domain under a different panelist's
interpretation of the UDRP.

This lack of uniformity undermines ownership rights of all domain owners
subject to the UDRP and creates great uncertainty in operating a business
on the Internet.

ICANN's mission to create a stable foundation for the Internet is
undermined when the uniform dispute resolution procedure is applied in a
way that is not uniform.  Continuing to accredit new UDRP providers without
resolving the underlying problem of lack of uniformity in the application
of the UDRP, will only serve to make the UDRP less uniform and will destroy
the benefits that would result from a truly uniform procedure.

Bad faith intent is at the heart of the UDRP.  Yet ICANN's proposes to
accredit numerous UDRP providers without first ensuring that a uniform
standard is established across UDRP providers will mean that UDRP providers
will adopt different standards as to what is meant by bad faith intent.
The standards as to what is bad faith intent might vary regionally, or
depend upon the selection criteria used to accredit panelists, or in the
choice of panelists to hear cases.  When the US Supreme Court operating
within one judicial system under the most rigorous procedures routinely
returns 5-4 decisions, one cannot expect uniformity across a global network
of independently operating UDRP providers.

While greater global outreach is a desirable goal for ICANN, doing so by
accrediting UDRP providers throughout the world puts at risk a process
intended to provide a uniform procedure for all participants across the
globe whose valuable domains are put at risk.  Accrediting additional UDRP
providers does not further the aims of ICANN but rather undermines its core
mission of providing for a stable foundation for the growth of the Internet.

A variety of UDRP providers, operating without a standard contract with
ICANN, each offering its own supplemental rules and standards for
accrediting panelists, and all competing as market participants in a market
whose customers are Complainants will produce a result that is anything but
uniform or just.  UDRP providers cannot successfully act both as
competitors offering a service and as neutral arbitration bodies.  To
believe otherwise is to ignore the laws of human nature and the marketplace
and compelling examples from recent history.

UDRP providers are market participants competing among themselves to be
selected to handle UDRP disputes.  The entity who selects the UDRP provider
is the Complainant, which makes the Complainant the customer of the UDRP
provider.

When faced with a choice of UDRP providers, the Complainant will select the
one that it finds most appealing.  As the Complainant's primary objective
is to win the UDRP decision, its primary selection criterion will be to
pick the UDRP provider that it believes offers it the best chance of
success.

In order to be selected to decide a UDRP dispute, a UDRP provider needs to
be seen as favoring the Complainant otherwise it will not be selected by
the Complainant who will select a different UDRP provider that is viewed as
more favorable instead. Forum Shopping is corrosive to the aim of creating
a just, fair and uniform UDRP process.

UDRP providers currently respond to the incentive to appeal to Complainants
in their panelist selection criteria in which active Complainant attorneys
also concurrently serve as neutral UDRP panelists (
http://www.domainarts.com/2011/10/21/my-personal-trainer-registers-sofitdc-com-receives-cd-from-sofitel-sent-by-a-wipo-panelist),
in their allocation of cases to panelists who demonstrate a pro-Complainant
bias (http://www.dnattorney.com/study.shtml), and in their supplemental
rules which among other things allow Complainants months to prepare an
extensive complaint but Respondents only a few days to respond, and that
allow Complainants to make extensive supplemental filings that raise new
issues without allowing the Respondent an opportunity to respond (
http://www.thedomains.com/2012/02/22/guest-post-by-paul-keating-on-abusive-supplemental-filings-the-udrp-case-of-autoownersinsurance-com/
).

The UDRP is increasingly subject to abuse as Complainants use the UDRP as a
way to obtain through compelled transfers domains to which they are not
otherwise entitled.  While no one appears to track Reverse Domain Name
Hijacking (RDNH) decisions, from our research they appear to be on the rise:

Year    Number of RDNH findings

2009   8
2010   9
2011  12
2012  14
2013    4 in the first two months

source: RDNH.com

With UDRP panels awarding the transfer of million dollar domains based on
reasoning that appears to conflict with every requirement of the UDRP (
http://www.thedomains.com/2012/06/20/vanity-com-lost-in-a-udrp-despite-pending-federal-court-case-asking-1m-for-a-domain-is-bad-faith/),
one can understand the motivation of companies such as Proctor & Gamble to
file abusive complaints in the hopes that a flawed UDRP process will allow
them to seize a desired domain name without needing to pay for it (
http://www.thedomains.com/2013/03/11/p-g-found-guilty-of-reverse-domain-name-hijacking-misrepresentation-on-swash-com/
).

In the end both Complainants and Respondents are harmed by a flawed UDRP
process as Respondents are turning to the courts to seek a just result that
they can't find from the UDRP (
http://domainnamewire.com/2013/03/12/lawsuit-filed-to-halt-urbanhome-com-transfer-after-udrp-decision/),
(
http://www.thedomains.com/2012/11/27/marchex-files-federal-lawsuit-over-priceshoes-com-udrp-decision/),
(
http://www.elliotsblog.com/vanity-com-incorporated-files-lawsuit-against-vanity-shop-of-grand-forks-inc-4205).
The need to seek justice through the court system undermines the purpose of
the UDRP which is to provide quick, inexpensive and fair resolution of
domain name disputes.  When the UDRP fails to function properly, the courts
become the only recourse increasing the burden on all concerned.

Adding additional UDRP providers only exacerbates the problem of Forum
Shopping and speeds the devolution of the UDRP from a neutral means of
deciding disputes towards a casino row where Complainants roll the dice to
win valuable domains as prizes in a game where the odds are tilted towards
the Complainants.

Adding additional UDRP providers would create a race to the bottom where
providers who are seen as truly neutral will lose market share to providers
seen as being Complainant friendly.

This is not mere speculation.  We already have experience of the effects of
forum shopping as eResolution  was an early casualty of forum shopping due
to the perception that WIPO was more Complainant friendly:

"The system gave complainants, who invoke intellectual property rights, the
privilege to choose the provider. And statistics were soon released showing
that complainants tended to win significantly more often with some
providers, notably WIPO, than with others, notably eResolution, creating a
perception of bias from which the system never recovered."

http://www.theregister.co.uk/2001/12/04/eresolution_quits_domain_arbitration/

We also have the recent high-stakes example of the corrosive effects of
forum shopping among the rating agencies- Standard & Poors, Moody's and
Fitch - that helped produce the global financial crisis.  As is well known,
the US Government is pursuing charges against Standard & Poors claiming
that they let market considerations influence the ratings they provided, as
they were afraid of losing business if they provided ratings results that
didn't appeal to their clients - banks and bond issuers.

We can expect the law of the market to operate no differently among UDRP
providers.

A partial solution to the problem of forum shopping is for Complainants and
Respondents to participate equally in choosing the UDRP provider, perhaps
by having the UDRP provider randomly assigned unless both parties agree to
select the same provider.  This would give the UDRP providers the incentive
to be seen as truly neutral and fair as that would appeal to both parties.

Another part of the solution is to place all UDRP providers under a
standardized contract to ensure that no differences in supplemental
procedures or other processes - such as selection criteria for panelists -
make a particular UDRP more appealing to Complainants than others.

In my view it is the wrong direction to accredit additional UDRP providers
under current conditions and in the absence of a standard contract.  This
would destabilize the tenuous equilibrium that exists now and could
undermine the ten years of effort that has gone into developing a UDRP
process that quickly and efficiently provides resolution of domain disputes.

I also write in favor of George Kirikos' comments at
http://forum.icann.org/lists/comments-acdr-proposal-01mar13/msg00000.html.

Sincerely,

Nat Cohen

President
Telepathy, Inc.
Riptide LLC