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UDPR: a “fair system”?



Disputes arisen as a consequence of the development of the Internet

As the development of the Digital Society has grew increasingly up in Europe and abroad over the past decades, the business entities have globally recognized the Internet as one of the most (if not the most in absolute) important commercial tool.

One of the most relevant problem the national Legislators have faced with is related to the websites’ addresses or domain names. The domain names appear to be limitless in its availability on the Internet and their specific nature has caused new types of legal disputes in this specific field. Domain names can operate globally and do not have a territorial application such as trademarks: as a consequence, two different business entities cannot utilize the same web address.

These disputes have involved many issues. To begin with, there have been many cases in which two undertakings (both of them having a legitimate interest in a specific domain name) have “fought” to acquire the right to use it. For instance, in the case where a domain name also functions as (registered or not) trademark. These types of disputes are known as “domain name envy[1]. A second example of usual dispute occurs when a “playful” subject registers a domain name with the scope to later sale it to the trademark owner at an excessive price: this action is commonly known as “cyber squatting” or “domain name hijacking”[2]. To conclude, it worth including in the list of the most common disputes the cases where a trader registers a domain name which is extremely similar to a famous brand/trademark with the aim to attract purchasers to his/her own website.

Over the past years there have been many different legal/self-regulatory instruments for handling these disputes. The most generally utilized are National Courts and the Internet Corporation for Assigned Names and Numbers (ICANN)[3]’s Uniform Domain Name Dispute Resolution Policy (as known as UDPR)[4].

 UDPR Establishment, functions and purposes

       At the beginning of the Internet, the unique responsible for the allocation of websites’ addresses was the Internet Assigned Numbers Authority (IANA), an institution located at the University of Southern California. In the early ’90 the Network Solution Inc., a private American undertaking, closed a five-years agreement thanks to which it managed the generic most important domains, such as “.com” and “.org”. The enormous spread of internet in commercial activities during the middle of ’90 (and the ineffective dispute resolution system as provided by Network Solution Inc.) led international governments to establish the International Ad Hoc Committee (IAHC) – which included among its members the WIPO (World International Property Organization) and the International Telecommunications Union. Thanks to the work carried out by this Committee, in October 1998 the ICANN was established with the aim to “manage the domain name system, allocate IP address space, assign protocol parameters, and the manage the root server system[5]. This has been leading to a strong competition for the registration of domains so that there are now more than two hundreds ICANN registrars around the world and the list keeps growing up[6].

Along the growing number of domain names being registered, an effective dispute resolution system became a priority. The UDRP was approved by ICANN in October 1999 and was immediately effective. According to UDRP, registrant (who is bound to UDRP by his contract with the issuing registrar) is not entitled to take any action (in regard complaints received from trademark owners about the effect of registered domains) unless instructed by the domain registrant or by the competent court or by an independent arbitrator. As a result, in disputes related to abusive registration of domain names the registrants are obliged to submit specific dispute resolution proceedings in front of a specific providers. These approved providers are: WIPO, Asian Domain Name Dispute Resolution Center (ADNDRC), the Czech Arbitration Court Arbitration Center for Internet Disputes, the National Arbitration Forum (NAF) and the Arab Center for Domain Name Dispute Resolution (ACDR)[7].

Under paragraph 4(a) UDRP, the claimant is entitled to choose the service provider and he/she needs to demonstrate that the following elements are present: 1. Registrant’s domain name is identical or very similar to a trademark in which the claimant has a legitimate right; 2. The registrant has not rights (or legitimate interest) related to the domain name; 3. The domain name was registered and then used in “bad faith”. Paragraph 4(b) includes a (non-exhaustive) list of the actions that constitute evidence of bad faith for the purposes of Article 4(a): among others, registration for the purpose to re-sale the domain, registration to disrupt the business or to create false sense of affiliation with the another business entity[8]. Paragraph 4(c) defines the reasons the respondent (the registrant) may use to demonstrate to have rights (or legitimate interests) in the domain. The respondent will be able to defend his/her position by showing prior use of the domain in relation to a bona fide trading of products/services, by demonstrating that he/she is commonly recognized through the domain name or giving a proof that he/she has not used the domain name for commercial purposes. It should be noted that the parties have the possibility to resolve their dispute in front of three-member panel instead a one-member one; if the respondent requests this option, he/she is forced to overlap the expenses of the procedure with the claimant.

The dispute resolution introduced by ICANN was created to be an efficient, not expensive and fair alternative system of the traditional Court system. The process should entirely take forty-five days (notification to respondent included) to be completed. In addition, the costs of this procedure amount substantially less than the costs involved in a traditional courts and all the procedure is carried out online; according to a recent study conducted by the National Arbitration forum UDRP proceeding costs as little as seven hundred American dollar[9]. Even if this process is not structured to operate as a traditional court, however it should be noted that the dispute resolution panel usually refers to both UDRP rules and “any rule and principles of law that deems applicable” (paragraph 15(a)). In substance the panel uses to referring to the regulation of the State where the domain was registered and/or in which the trademark is protected[10]. The question of the what law the panel needs to apply has arisen little controversy, since the applicable law and the territoriality of claimant’s rights are often correlated. This is particularly relevant in cases where unregistered rights are trying to be protected. For instance, in Antonio de Felipe v. (WIPO n°  D2005-0969) the complaint Antonio de Felipe (a Spanish artist) obtained the transfer of the domain name from the American registrant, even if he had not any trademark right on this name. It should also be noted that Mr. de Felipe had the possibility to have the European panel (i.e. WIPO) deciding on this dispute: as we will see in more detail below, in UDRP procedure this is one of the advantages the claimant has. A different situation is that in which the claimant has registered a trademark in only few countries and deploys those rights against a respondent in a country where he has not (and cannot obtain) specific rights. On this regard it is worth citing the concerns expressed by the dissenting panelist in Ty Inc. v. Parvin (WIPO n° D2000-0688); the panelist suggested that the decision could have “enabled the owner of a foreign trademark to take away from another party domain names…which the registrant has a perfect legal right to register for use or sale in his own country under his own trademark laws”; in addition he states that £ we are dealing not with the sovereign territory of the United States and its laws, but with cyberspace, which is the “territory” in which domain names exist[11].

 UDPR Fair system?

It is undoubted that UDRP proceedings have had great success since they were established in 1999: based on the latest filing statistics released by WIPO, 22,500 UDRP based cases involving 40,500 domain names were filed since the implementation of the UDRP. In 2011, the WIPO Center received 2,764 cybersquatting cases filed by trademark owners involving 4,781 domain names. Cybersquatting cases increased by 2.5% compared with the number of cases filed in 2010[12].

On the one hand the number of cases ruled through UDPR demonstrates the efficiency and popularity of this alternative system, on the other hand many concerns remain about the fairness of this procedure which seems to favor the claimant especially when reverse domain name (hijacking) occurs. This practice is characterized by the fact that a trademark owner (especially the Majors which operate on the market) uses his strong influence to obtain the transfer of a domain name from a subject that may have legitimately registered it.

Although this specific practice has been one of the consequences of the impact of the Internet on IP rights world, it is nothing new in respect to the way by which the large Majors have always been protecting their trademarks. Threatening letters and legal proceedings have been often used to prevent new competitors to enter into the market, given that the excessive costs involved in law cases have the power to discourage small and medium entrepreneurs. Some[13] argues that UDRP paragraph 4 provisions set a fair standard of proof between claimant and respondent by creating a legal framework in which the claimants can not engage in domain name hijacking practice easily. This would be the result of the statement in Paragraph 15 UDRP rules, in which it is stated that “if after considering the submissions the Panel finds that the complaint was brought in bad faith, for example in an attempt at Reverse Domain Name Hijacking or was brought primarily to harass the domain-name holder, the Panel shall declare in its decision that the complaint was brought in bad faith and constitutes an abuse of the administrative proceeding”. However, even if the respondents are theoretically protected by reverse domain name hijacking, in practice a recent study demonstrated that the respondents claimed the reverse hijacking only in relatively few cases (3% of the total disputes handled by WIPO and NAF)[14]. The small number of cases ruled in favor of the respondents for reverse domain name hijacking clearly demonstrates that UDRP system has not been able to provide a balanced framework among trademarks owners and subjects that may have relevant legitimate interests in the disputed domain name.

The most important critic that has been arisen regards the fact the claimant may choose the dispute resolution service provider that he/she wants to handle the claim. It is crystalline that if there is a particular service provider that the claimant feels to be more inclined to transfer a contested domain name, then it will be the service provider designated to solve the dispute. It should be noted that the service providers are merely commercial entities and it is highly probable that they have the economic interest to be more favorable to potential claimants in order to have the opportunity to handle as many disputes as possible. As a result, the rules as provide by UDRP have often been interpreted in favor of claimants. This is easily demonstrable by considering the results of the cases ruled under UDRP: a report conducted by Harvard University[15] shows that claimants have prevailed in nearly 80% of the cases. This analysis highlighted that the majority of these cases had been ruled in absence of the respondents. It is not difficult to understand the reasons of respondents default: for instance, as already specified, the claimant may choose the service provider and this choice does not encourage respondents to face with an institution which is often placed in the claimant’s jurisdiction.

Another characteristic of the UDRP which seems to be fundamentally unfair is the selection-procedure used by the providers  in order to decide which panelist should handle what cases. It is worth recalling a study carried out by Michael Geist[16]  according to whom the selection process is far from being random. For instance, in cases handled by NAF just six panelist have decided the majority of the cases and in 95% of these cases the claimants saw their reasons prevailing. In my view, it would be more compliant with the general purposes reached by UDRP whether the respondent could choose the service provider: this would lead the providers to apply more diligently the rules established by UDRP.

UK Courts and domain name disputes

The Law related to domain name cases has created many challenges in UK jurisprudence and the national courts have generally applied the 1994 Trade Marks act and the “passing off” solution to these disputes. As already specified, there are two main kind of disputes, more precisely domain name hijacking/cybersquatting and domain name envy. Since the cases related to domain name envy do not generally refer to UDRP solutions, they are not a relevant point of comparison between the UDRP and traditional dispute resolutions systems. These kind of cases have been generally ruled by UK courts on the basis of Art. 10 1994 Trade Marks Act.[17]

As regard cybersquatting, it is worth citing one of the first decisions on the matter taken by a UK Court: Harrods v. U.K. Network Services Ltd.[1997] EIPR D106. In this case, the plaintiff, who was owner of the trademark Harrods for products in various classes sought a summary judgment versus the defendant in respect of the registration of the domain name for trademark infringement and passing off. The Court held in favor of Harrods without considering relevant the main defense of the defendant which declared not to have any intention of using the domain name for commercial purposes. This decision has been fundamental on this field since it was the first that clarified that trademark law applies to the Internet.

In order to analyze the UK courts approach on the domain names disputes, another important case that is worth citing is British Telecomm. v. One in a Million Ltd[18]. The case referred to the registration of many domain names with the scope to sell them to the respective trademark owners. The Court of Appeal decided on the basis of passing off (but also the infringement under Art. 10(3) of TMA 1994 was cited). Also in this case, the registration of a domain name without  the intention to use it, was not sufficient to show the degree of public deception necessary for passing off.

The general principle we can summarize from the UK Court approach leads us to consider a domain name as an instrument of fraud only after having examined all the circumstances such as, among others: the similarity between the domain name and the trademark, the real intention of the defendant, the use of the domain name. In my opinion, this interpretation, which greatly expands the boundaries of passing off, should be revised in the light of the fact that the distinction – between the consequence of the mere possession of a domain name and the intention to use this name for trading purpose – should be taken in more consideration; as a consequence of this distinction, the passing off is not properly suitable for cases of cybersquatting. On the Internet, the concept of infringement takes a new meaning. To begin with, trademark infringement – in its traditional meaning – cannot occur on the Internet. Galloway noted in his thesis “Even the UDRP itself does not mention the term infringement when it establishes that a domain name’s registration and use in bad faith should lead to transfer of the domain name[19].

For the this reason, trademark law as applied by UK Courts should not be considered as the ideal framework on which domain name hijacking can be effectively addressed.

Even the UK national courts seem to favour the trademark owners/plaintiffs as UDRP seems to do with trademark owners/claimants. A clear example of how UDRP procedures allow the claimants to abuse a dominant position in order to forced the registrants to transfer the domain names is the “gripe domain names[20]

More precisely, paragraph 4 UDRP defined the legitimate interests as “non-commercial or fair use of the domain name … to misleading divert customers or to tarnish the trademark..”. This adaptation provides the trademark owners/claimants with effective tools to prevent other subjects from registering domain name as “gripe” site.

As we will see below, the jurisdictions (such us in the USA), where cybersquatting has been addressed to legislation, have led many UDRP cases to end up in courts.

 US Courts and domain name disputes

The need of a specific legislation designed to regulated cybersquatting cases in United States of America has arisen following the appeal of UDRP case, Inc. v. Excelentisimo Ayuntamiento de Barcelona[21] to U.S. District Court. The latter ordered the transfer of ownership of the domain to the city of Barcelona upholding the WIPO decision. The US Court deemed sufficient proof of bad faith the mere intention to generate profit on behalf of the claimant/plaintiff according to the Anticybersqautting Consumer Protection Act[22]. In my view, the approach used by the US Legislator aimed at providing a specific set of rules is definitely more suitable than the “ad hoc” approach utilized by UK Courts which have been obliged to adapt trademark law to handle a dispute to which is substantially unsuited (such as in the already mentioned One in a Million case).

A case is worth citing is Avery Dennison Corp. v Sumpton[23] in which the Ninth Circuit Court of Appeal reversed the previous decision held by the District Court and ordered the transfer of two domain names to the respondent. Differently from earlier cases, where the Judges focused their attention essentially on the requirements for dilution (taking unfair advantages from the distinctiveness of a trademark), in this case the famousness of the trademark played a crucial role in the final decision. The first Court rejected the defendant arguments that its use of the domain name was not a trademark use, noting that nothing would prevent the defendant from chancing his intent in the future.  However on appeal, the Ninth Circuit noted that fame requires more than a mark has acquired distinctiveness. The concept of famousness is set forth in Federal Trademark Dilution Act[24]; to meet the famousness element under this Act “a mark must be truly prominent and renowned[25]. As a result of this brief analysis, in my opinion the specific Regulations adopted by US Legislator have established a legal framework that balances the UDRP decisions (which, as we have seen, tend to create a system in which the claimants have substantial advantages) by giving to the respondent the possibility to appeal in courts where the applicable rules are not similarly favorable to trademark owners (such us in UK courts).

Final Considerations

To conclude this analysis, it is worth mentioning that the U.S. District Court in the cited case Barcelona Inc. took the position according to which “a Federal Court does not need to be bound by the outcome of the UDRP administrative proceedings and the case must be assessed on the basis of the evidence provided in Court”. According to some commentators (such as Howard[26]) the national courts should adhere (or at least give deference) to the outcomes of UDRP panels since the procedure established by ICANN appears to be more costless and faster than traditional law cases. In my view, even if these reasons should be taken in great consideration, judicial deference to UDRP decisions is quite problematic. Firstly, UDRP is intended to cover only a narrow range of domain disputes, more particularly disputes related to “abusive registration”; in addition, UDRP decisions lacks formal legal status. Finally, UDRP proceedings tend to handle trademark disputes differently from national courts: UDRP panellists usually decide merely by comparing the domain name with the trademark, while for instance, U.S. Courts take into account also the strength of the mark, the manner in which the domain name is used and other circumstances. The mentioned approach probably explains the reason why UDRP proceeding tend to favour the claimant (trademark owner) compared to what happens in national courts (especially in U.S. Courts).

In my view a preferable approach would be for the UK Legislator provides specific regulation on cybersquatting in order to encompass provisions such as Paragraph (4) UDRP. With this system, a double result could be achieved: transposing into national legislation the specialized knowledge of UDRP panels and allowing national courts to apply this knowledge in the relevant cases.

It is worth also pointing out that many UDRP decisions have been brought in front of national courts but few of them have been reviewed by the courts in detail. Nevertheless, since UDRP system is more suitable in terms of costs (especially for small domain name registrants) and it is able to assure a an extra-territorial protection to both claimants and respondents, this form of alternative dispute solution should be used to provide a substantial legal framework in which the national courts could find the necessary instruments to develop solid (and international) rules  applicable to these kind of disputes.

[1] Charlotte Waelde, Trade Marks and Domain Names: There’s a Lot in a Name, in LAW AND THE INTERNET: A FRAMEWORK FOR ELECTRONIC COMMERCE

[2] Vaibhav Priyadarshi,  Global Analysis of Laws Related to Cyber Squatting  – September 2011



[5] ICANN at  Large  Membership,

[6] List of ICANN accredited registrars available at

[7] List of ICANN providers available at

[8] Paragraph 4(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:

(i) 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

(ii) 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

(iii) you have registered the domain name primarily for the purpose of disrupting the business of a competitor; or

(iv) 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.

Available at

[9] Available at

[10] Graham J. H. Smith, Internet Law and Regulation – available at

[11] Ty Inc. v. Parvin (WIPO n° D2000-0688) available at

[12] Available at

[13] Jessica Sganga, Trademark owners’ strategy: UDRP versus Litigation , available at

[14] A Study by the Max-Planck-Institute for Foreign and International Patent, Copyright and Competition Law,

Munich available at

[15] ANALYSIS OF KEY UDRP ISSUES  available at

[16] Michael Geist, Fundamentally An Update on Bias Allegations and the ICANN UDRP, at

[17] Art. 10 1994 Trade Marks act available at

[18] British Telecomm. v. One in a Million Ltd,

[19] Jonathan Galloway , Like Alice in Wonderland: Applying EC Competition Principles in the Case of Domain Names available at

[20] Ibid.

[21] Available at

[22]  Available at

[23] Available at

[24] Available at

[25] Edward A. Pisacreta, Intellectual Property Licensing: Forms and Analysis available at

[26] Donna L. Howard, Trademarks and Service Marks and Internet Domain Names: Giving ICANN Deference

The contents of this page should not be taken as an authoritative statement of Italian law and practice. Neither the author nor the publisher are responsible for the results of actions taken on the basis of information contained in this summary, nor for any errors or omissions. This text is not intended to render legal, accounting or tax advice. Readers are encouraged to seek professional advice concerning specific matters before making any decision.