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Court: U.S. law trumps domain decisions

Losers in international cybersquatting arbitrations can challenge the results in U.S. courts, according to a ruling by the 1st U.S. Circuit Court of Appeals.

    Decisions by international arbitrators in cybersquatting cases can be challenged in U.S. court, an appeals panel has ruled.

    Reversing a lower court, the 1st U.S. Circuit Court of Appeals in Boston on Wednesday found that federal courts have jurisdiction over international domain name disputes, including those filed with the World Intellectual Property Organization (WIPO), a Geneva-based arbitration organization approved by the Internet Corporation for Assigned Names and Numbers (ICANN).

    The appellate judges said that under the Anti-Cybersquatting Consumer Protection Act, signed by former President Clinton two years ago, a domain name holder may file a civil action suit in U.S. courts if the domain name has been suspended, disabled or transferred. As a result, the appellate judges determined that Jay Sallen, who lost the domain name to a Brazilian soccer team in a WIPO dispute-resolution process, may obtain a U.S. court decision that would permit him to keep the domain name.

    "Congress' authorization of the federal courts to 'grant injunctive relief to the domain name registrant, including the reactivation of the domain name or transfer of the domain name to the domain name registrant,' provides Sallen with an explicit cause of action to redress his loss of under the UDRP (Uniform Dispute Resolution Policy)," the appellate judges wrote in their decision.

    Sallen registered in August 1998 with Network Solutions, a domain name registrar accredited by ICANN, and posted Biblical material on the site. On May 18, 2000, Corinthians Licenciamentos, owners of the soccer team, filed a complaint with WIPO, alleging that Sallen's domain name was similar to its trademark and that it has rights in Brazil to the name, "Corinthiao," the Portuguese equivalent of "Corinthians."

    When a WIPO panel found that Sallen used the domain name in bad faith and ordered that be transferred to the owners of the soccer team, Sallen filed his case in a U.S. district court under the Anti-Cybersquatting law.

    Legal experts said the case set a significant precedent in establishing the right to appeal arbitration decisions under the UDRP.

    "There's not been an easy, simplified, effective means of appealing (a) decision," said Stephen H. Sturgeon, a Washington, D.C., Internet lawyer specializing in domain name disputes; he is not involved in the case. "This case opens the door for getting an opportunity for a federal court to issue a decree that overturns that international arbitration decision. Once the federal court and the United States have made that decision, then it can be enforced by Network Solutions."

    For its part, ICANN said it does not agree or disagree with the federal appeals court decision.

    "If the parties aren't satisfied with the outcome of the judge's decision or the trials through the UDRP, they have the right to have it tried in court," said Mary Hewitt, an ICANN spokeswoman. "It's always been that way; it's written that way...It's absolutely the prerogative of the parties involved. Either way, whatever the decision is, it doesn't matter; they have absolutely the right to go to court following a UDRP" proceeding.