IMPERATIVES OF PRIVATE ARBITRATION IN INTERNATIONAL INTELLECTUAL PROPERTY DISPUTES

• Author: Jacqueline LIPTON Baker Botts Professor of Law and Co-Director, Institute for Intellectual Property and Information Law, University of Houston Law Center. Mary WONG Professor of Law and Director, Franklin Pierce Center for Intellectual Property, University of New Hampshire School of Law.
• Published date: 01 December 2012
• Citation: (2012) 24 SAcLJ 978
• Date: 01 December 2012

The introduction by the Internet Corporation for Assigned Names and Numbers of a new massive generic top-level domain process in 2012 will put more pressure than ever on private methods of dispute resolution. Many of the same balancing issues that exist in the current Uniform Domain Name Dispute Resolution Policy dealing with cybersquatting are likely to arise in the new generic top-level domain process: the balance between the protection of trade mark interests and competing interests such as free speech, privacy, culturally and geographically significant terms and personal names. The Uniform Domain Name Dispute Resolution Policy was implemented in 1999; despite its success in terms of the number of disputes resolved and the cost and speed with which these disputes are resolved, it has never been meaningfully reviewed. As intellectual property disputes become increasingly global, particularly in the context of the Internet, more pressure is put on private arbitration systems such as the Uniform Domain Name Dispute Resolution Policy and the latest dispute resolution procedures to be implemented under the new generic top-level domain process. This is unsurprising, given the lack of other bodies with constitutional competence to resolve such disputes in a time—and cost-effective manner. This article argues that because of the increasing significance of private arbitration mechanisms in international intellectual property disputes, it is imperative that existing and proposed new dispute resolution procedures be examined to ensure that they strike an appropriate balance of interests. These mechanisms should be developed and applied to take account of the importance of globally significant social values such as free speech, democracy, privacy and effective commercial competition.

Introduction

1 In a previous article, the authors had traced the evolution of the new trade mark rights protection mechanisms (“RPMs”) that have been developed by the Internet Corporation for Assigned Names and Numbers (“ICANN”) for deployment in its new generic top-level domain (“gTLD”) programme.1 At the time, ICANN was preparing to launch the new gTLD programme, and the authors had identified certain substantive problems with the proposed new mechanisms that could pose significant free speech issues. Since then, ICANN has received 1,930 applications for new gTLDs as at the close of the formal application period, of which 637 (33%) were by, or for, trade-marked brands.2 Questions that had been raised previously as to whether brand owners and trade mark rightsholders would take advantage of the imminent expansion of the Internet domain name system to either develop new or further markets for their products and services or enhance and deepen their brands' reputation, now seem to have been answered in the affirmative.3 What is not yet known, however, are how these brands and trade mark owners will operate their new gTLDs, if approved. Under ICANN's application policies, a new gTLD applicant can determine whether its domain will be open (that is, available for the public to register and use) or reserved for limited, exclusive or purely internal uses. Many brand owners who have applied for a gTLD corresponding to their trade marks have indicated that they will operate them as closed domains, initially at least.

2 Of the near-thousand or so new gTLDs that may be approved by ICANN, a large number are what may be termed true “generics”, that is, rather than distinctive marks, they are ordinary descriptive words. Examples of these gTLD strings include “art”, “auto”, “book”, “cloud”, “hotel”, “jewelry”, “movie”, “music”, “online”, “pet”, “shop”, “web”, “dentist”, “doctor”, “engineer” and “lawyer”– all of which have at least

one application pending for a new gTLD, with applicants ranging from well-known retail stores and major corporations to non-profit organisations and entities set up for the sole purpose of operating new commercial gTLD registries. There are also applications for strings that are likely to rouse political, religious or cultural sensitivities, such as “bible”, “catholic”, “church”, “halal”, or “islam” and “patagonia” (the applicant for which is the rightsholder of the trade mark PATAGONIA for sporting goods and not the Argentine government). ICANN has also received applications for”.sucks” and “.gripe”.

3 All of the above examples – from closed “dotbrand” domains to the possibility that a single entity can control a true generic word as a gTLD – highlight potential free speech issues that surround ICANN's new gTLD programme. A number of these will arise in a wide variety of situations in which ICANN may be called upon to make highly difficult decisions, both politically and legally, ranging from whether the applicant is the appropriate entity to be operating that particular top-level domain, to whether particular communities or governments ought to be entitled to object to certain domains, and on what basis. Unfortunately, ICANN's own actions since its Board formally approved the new gTLD programme in 2008 have created doubts as to whether it is sufficiently well equipped and qualified to make such sensitive decisions. Where trade mark protections are concerned, ICANN has approved a new set of RPMs that continues to be the subject of debate and controversy regarding their implementation.4

4 An even more worrying matter is the fact that many of the sensitive disputes and trade mark problems will not be resolved by traditional adjudicatory institutions. Instead of judges, courts or tribunals, national legislation or international treaty, all these disputes will be handled by means of private arbitration and other privately administered evaluation mechanisms. Just as the oldest ICANN consensus policy, the 1999 Uniform Domain Name Dispute Resolution

Policy (“UDRP”) against cybersquatting, is administered by third-party dispute resolution service providers (“DRSPs”), many of the expected objections to new gTLD applications and trade mark disputes will be sent to arbitrators and expert panels convened by third parties who are authorised to administer the relevant ICANN-approved processes.

5 Further complicating this scenario is the political reality of the ICANN framework. ICANN operates as a multi-stakeholder organisation, where although ultimate decision-making authority (and thus fiduciary duties) lie with its Board of Directors, substantive policymaking is developed bottom up, from among the community consisting of individuals, non-profit groups, domain name industry players, small and large businesses, trade mark interests and governments.5 Consensus is derived from compromise, negotiation and collaboration, resulting in policy recommendations and processes that some subsequently seek to overturn or bypass. Such a forum encourages active lobbying, especially of the ICANN Board and the Governmental Advisory Committee (“GAC”), and the unique position of governments vis-à-vis other non-state actor stakeholders creates a certain imbalance of influence that further exacerbates the politicking that takes place.6

6 With the Internet domain name system poised on the brink of the largest expansion it has seen,7 and with ICANN in the main role of facilitator and co-ordinator, ICANN's actions and the success of its policymaking processes directly affect the level of public trust in it as a multi-stakeholder institution co-ordinating a truly global, open and essential resource. By increasingly “outsourcing” important decisions impacting the Internet domain name system to third-party private arbitrators, however, ICANN is creating a system of private law that

transcends national borders and principles of territoriality. It is not clear at this stage how far or how quickly this parallel system will develop, nor whether and how national sovereign governments will react to this phenomenon. What is clear, however, is that many of the policies and problems surrounding the new gTLD programme will be developed, applied and determined by persons and institutions outside traditional judicial and legislative structures, thereby creating a body of legal principles (of a sort) that will increasingly be relied upon by rightsholders and governments as both “de facto” solutions and precedent for future Internet policymaking.

7 This article analyses how several of ICANN's trade mark-related dispute resolution procedures will contribute to the development of this body of private trade mark law. Part II outlines the context for, and evolution of, the various trade mark protection mechanisms and how they fit with the existing UDRP, first instituted in 1999 and never substantively reviewed. Part III examines the two processes in the new gTLD programme most likely to expand the scope of non-judge-sanctioned, non-legislative, non-territory-based trade mark law: the legal rights objection process for new gTLD applications and the proposed Uniform Rapid Suspension System (“URS”) for second-level registrations in approved new gTLDs. In addition, Part III highlights various concurrent trade mark-related policy developments that reveal singular weaknesses inherent in ICANN's own processes and thus its trade mark policy development. The analysis concludes with Part IV, which describes the political realities in the ICANN ecosystem that may serve to further give ICANN the responsibility of deciding on trade mark-like protections for certain entities. Part IV also discusses the implications of an expanding Internet domain name system, where, on the one hand, trade mark owners seek increasing protection for, and control over, the online use of their marks, and on the other hand, a wealth of actual generic, non-trade-marked terms come under the control of single entities, without any effective means of objection and recourse. The article also notes the risk of permitting ICANN's policy development processes to continue as they are, as well as the risk of...