WIPO domain proposals coming

By the end of next month, the World Intellectual Property Organization (WIPO) is scheduled to submit its final policy proposal for dealing with this long-standing problem.

Then a new nonprofit corporation anointed to oversee the Net's address system, the Internet Corporation for Assigned Names and Numbers (ICANN), is expected to implement the blueprint as directed by a Clinton administration white paper.

But as the March 12 deadline for public comment for WIPO's preliminary proposal draws near, at least one prominent Net legal expert is crying foul. Michael Froomkin, a professor at Miami's School of Law, has released a 50-page critique saying parts of the plan could put mom-and-pop Web sites at the mercy of big business.

The U.S domain name resolution process is murky enough--but coupled with various international laws, a growing number of disputes has legal minds around the globe in a quandary over how to settle them.

Offline, the same trademark can be used in different markets. For example, there could be equally famous trademarks for Sun dishwashing soap, Sun courier service, Sun software, and Sun publishing. But on the Net there can only be one "Sun.com," opening a legal can of worms when it comes to deciding which company is entitled to the domain name.

WIPO's December 23 interim report calls for all domain name buyers, at the time of registration, to agree to submit to arbitration if any party in the world challenges their ownership of a name. Although the complainant has to pay the initial fees when he or she calls for arbitration, both parties then have to agree on a "decision maker" who could later revise the payment scheme.

"If submission were optional for applicants, it is doubtful that the adoption of the procedure would result in significant improvement on the present situation," WIPO's interim report states.

ICANN still has to set up a list of potential arbitrators from which interested parties can choose.

But Froomkin pointed out that for a trademark infringement case to be heard in the United States, someone has to be allegedly misusing a name for commerce and there has to be the risk of consumer confusion. Under WIPO's proposal, he said, there are no safe harbors for someone who has registered a domain name for personal use.

"Under WIPO's plan one cannot rely on the protection of national law, because the WIPO rules tell the arbitrator to pick and choose 'principles' from among the legal systems of the world. If the complainant wins, the registrant may have to pay the complainant thousands of dollars in expenses," Froomkin stated in his analysis.

"My fear is that only the most wealthy would undertake the risk of arbitration under these conditions, and that many ordinary people with perfectly legitimate domain name registrations will feel compelled to surrender without a fight.

"WIPO's proposals also fail to consider the ways in which they could be abused to restrict the freedom of expression on the Internet," he added. "In their current form the proposals would invite abuse from authoritarian governments seeking to shut down domains being used to criticize them; from politicians seeking to shut down domains being used to parody them; and from firms seeking to shut down domains being used to complain about them."

WIPO's primary goal, Froomkin contends, is to curtail "cybersquatting," the practice of hoarding potentially lucrative domain names for the purpose of reselling them.

The law professor said instead of requiring the world's domain name owners to submit to arbitration, "speculating" can be curbed by requiring registrants to pay up front. Currently, a name can be put on hold for 60 days without payment.

Until now, Network Solutions (NSI), the government-appointed domain name registry, has been the primary referee in domain name disputes, but that is going to change as new players enter the market, intensifying the need for standards.

Under NSI's policy, names can be registered on a first-come, first-served basis. If the owner of a U.S. registered trademark challenges the use of a domain name, in most cases the name will be put on hold after 90 days if the situation is not resolved between the parties. If one party sues, use of the name is put in the hands of a court.