Leading New York City Domain Dispute Attorney Warns: Domain Industry Professionals Should Do Something To Stop Frivolous Domain Dispute Arbitration Proceedings

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New York City domain dispute attorney, Karen Bernstein, says that domain industry professionals (affectionately known as "domainers") are being hammered by meritless domain disputes and should lobby the Internet Corporation for Assigned Names and Numbers (ICANN) harder for changes to its existing arbitration policy and to block a pending ICANN policy that could change the domain name dispute process severely crippling their businesses.

the National Arbitration Forum Panel's decision to decline a finding of reverse domain name hijacking for my client is yet another example of how business owners are using the UDRP [Uniform Domain Name Resolution Policy] to strong arm domainers into transferring their profit-making domains with no repercussions.

New York City domain dispute attorney, Karen Bernstein, says that domain industry professionals (affectionately known as "domainers") are being hammered by meritless domain disputes and should lobby the Internet Corporation for Assigned Names and Numbers (ICANN)] harder for changes to its existing arbitration policy and to block a pending ICANN policy that could change the domain name dispute process severely crippling their businesses.

Recently, this point was highlighted by a failed case brought by an insurance company against one of Ms. Bernstein's clients, WeDirect, Inc., an Internet company that promotes web properties through search engine marketing for purposes of selling Internet traffic to automobile dealers, insurance companies, and educational providers.

In its decision, the three-member National Arbitration Forum Panel denied transfer of WeDirect's domain name located at http://www.cheapautosinsurance.com despite the complaining insurance company's federally-registered trademark for CHEAP AUTO INSURANCE. The Panel held that WeDirect, as well as anyone else, is entitled to register a commonly used phrase, so long as the domain is used in a descriptive fashion. Here, WeDirect was offering a comparative website offering cheap auto insurance. WeDirect asked the panel for a finding of reverse domain name hijacking [RDNH], which is a type of countersuit brought by the respondent (like the defendant in a court case), requesting the panel to acknowledge that the arbitration complaint was brought in bad faith but the arbitrators declined to make that determination. In the case, the insurance company filed over 1,000 pages of documents that weighed over 16 pounds.

As Ms. Bernstein puts it, "the National Arbitration Forum Panel's decision to decline a finding of reverse domain name hijacking for my client is yet another example of how business owners are using the UDRP [Uniform Domain Name Resolution Policy] to strong arm domainers into transferring their profit-making domains with no repercussions." Ms. Bernstein speculates that since domain arbitrations are relatively inexpensive to bring some business owners wrongfully decide to take advantage of the domain arbitration system by filing complaints for less money than they would if they had simply made an offer to buy the domain name. Instead, they think that by virtue of their federal trademark registrations that may have been issued years after the domainer registered the domain they are in the superior position to obtain an order to get the domain transferred to them. "Ownership of a federal trademark registration does not necessarily win the day in a domain dispute," Ms. Bernstein says.

Ms. Bernstein is of the opinion that a majority of panels decline to find RDNH despite the arbitration complaint not having any basis in the law and that even if reverse domain hijacking is found for the respondent the finding does not award damages for the complaining party to pay the domainers legal fees as a penalty for bringing an abusive complaint.

Ms. Bernstein recommends that domainers urge ICANN to change the arbitration procedure by requiring it to assess fees to the complaining party if RDNH is found to deter frivolous UDRP proceedings. She also believes that domain arbitration panels such as the National Arbitration Forum should charge a modest fee to the party bringing the complaint so that there can be a preliminarily determination by an arbitration panel of whether a case has any merit before allowing the matter to go forward. "These types of domain disputes hurt domainers who operate legitimate businesses by forcing them to needlessly spend money in arbitration and legal fees," Ms. Bernstein said.

"The average cost to file a domain dispute is low compared to the enormous sums that must be shelled out to bring a federal trademark infringement lawsuit and that's why so many companies opt to go through the UDRP process. On the other hand, the average domainer does not necessarily have the financial resources or the time to fight the domain dispute and either does not respond to the arbitration complaint (allowing in most cases the domain to be transferred) or spending the time and money to fight it," Ms. Bernstein said.

ICANN, the organization that sets the guidelines for arbitration panels to follow in reaching their decisions, governs the issuance of domain names ending in .com and .net, for example, and has recently proposed a new plan called the Uniform Rapid Suspension System Policy (URS) that could give trademark holders the ability to file a simple form complaint for only $200. By filing the URS complaint it automatically freezes the domain name in dispute before the domainer ever has a chance to respond to the complaint and before a decision is ever rendered.

"The UDRP system is set up now where the domain name does not get transferred unless there is a transfer decision rendered by the Panel or by a court if the arbitration is appealed which gives the domainer the opportunity to make their case before a decision is reached for why the domain name should not be transferred. But if the URS is implemented it could make things a whole lot worse for domainers by halting their businesses entirely until a domain decision is reached or an appeal is decided and that takes a lot of time and money. There needs to be strong efforts by the domain community to lobby ICANN to change its arbitration complaint intake policy and not to permit the URS to take effect," said Ms. Bernstein.

The http://www.cheapautosinsurance.com National Arbitration Forum decision can be found on its website located at http://domains.adrforum.com/decision.aspx. The case is Combined Insurance, Ltd. v. iclicks c/o Michael Mayder, Case No. 1261538 (NAF June 26, 2009).

Karen Bernstein is available for interviews. For more information, call 212-339-9955 or Web: http://www.karenbernsteinlaw.com

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