Rechtsanwältin, Senior Associate
Out-Law News | 19 Sep 2007 | 2:32 pm | 5 min. read
Nominet is consulting on a plan to streamline the dispute resolution process so that unopposed disputes are automatically resolved in favour of the party claiming a right to the domain name. This is designed to help legitimate rights holders to reclaim domain names held by cybersquatters, who rarely defend against such claims.
But while the new plan could save someone trying to claim a name £550, it will not save them the more significant expense of preparing a full case, with all the management time and legal bills that that is likely to involve.
The move is designed to help brand holders to cope with the rocketing problems of cybersquatters and domainers who register thousands of domains at a time and generally do not oppose attempts by rights holders to take the domain names back.
In addition to management time, Nominet's process costs £750 – and significantly more if a brand holder instructs a law firm to prepare the claim. Disputes expert David Barker of Pinsent Masons, the law firm behind OUT-LAW.COM, said that the process can be arduous.
"The process is a good thing because it is quicker than a court and is inexpensive by comparison," said Barker. "The problem is that you still have to fill out a quite substantial document setting out your rights and explaining that the other party doesn't have rights. In general it is advisable to get a lawyer's help to do it."
Domain name squatters sometimes register hundreds or thousands of names at a time which are similar to business trade marks and earn money from advertising displayed to visitors. When .uk names are involved, the practice gives grounds for a complaint under Nominet's Dispute Resolution Service (DRS) policy.
Cybersquatters typically do not respond to challenges made under the Nominet Policy because it is not economic to do so. There is no deterrent because they do not pay any damages if they lose a dispute. However, few businesses can afford the time, energy or fees to claim all of the names to which they are entitled.
Nominet's new proposal is only a partial solution to these problems, said Barker. It allows a claim to be lodged for £10 and, if it is unopposed, the name will transfer for a further £200 rather than the £750 fee payable if the claim has to be ruled on by an expert.
Crucially, though, the initial £10 claim must be accompanied by a full application setting out the claimant's case. Then, if the claim is opposed, whatever documents you originally send are used in the full dispute resolution process.
"The Nominet DRS is supposed to be relatively layman friendly, but of course quite a few parties in DRS disputes are represented," a Nominet spokesman told OUT-LAW. "But we are not actually proposing that you don't have to present a case initially – you'd still have to file your complaint in full including your arguments and evidence as to Rights and Abusive Registration."
"Provided a defence in response is filed you'd then proceed as usual through our mediation and ultimately expert decision stages," said the spokesman.
If there is no defence, the details of a claim are never read or considered; but most claimants will not risk making an abridged claim, according to Barker.
"At best, this just saves you £550 on the fees, but that is not the main cost," he said. "That comes in the legal fees associated with making a full application or, if you do it yourself, the management time."
"You only get one chance, and if you're a large organisation you are not going to risk losing the claim, so you will prepare a full application. That's time-consuming. This is a missed opportunity to provide a real fast-track alternative to the current process," he said.
"What we'd really like to see is a system that lets the brand owner make a summary claim," he said. "If undefended, the name is transferred, subject to safeguards. If defended, the claimant then prepares a full claim and the registrant has an opportunity to make a full defence."
Pinsent Masons is responding to Nominet's consultation with a suggestion that the fast-track procedure is limited to holders of registered trade marks. A claimant would provide only a trade mark number as evidence of rights in a disputed name and state that the domain name's registration was an abusive registration, without supporting evidence. If the registrant indicates an intention to defend, the claimant must then file a full claim, together with evidence. The registrant is then given an opportunity to defend the claim.
There are other potential problems with the current proposal, though, and Nominet recognises that in order for it to be successful there must be measures put in place to protect legitimate domain name holders from 'reverse hijacking' by unscrupulous operators.
Barker said that there was one missing safeguard related to the fact that many people do not keep their contact details up to date. Legitimate domain names could be taken from their owners because out of date contact details meant the owner had not received notification of a claim, he said.
"If you look at the way that abusive domain names are registered, the domainers always look at the systems and find ways to exploit the processes," he said. "You might find that a rogue operator instigates the process for legitimately held domains. If the contact details are not kept up to date, you risk a legitimate domain holder losing the address."
"I'm concerned that charging only £10 up front will encourage this sort of behaviour," he added. "That could lead to reverse hijacking with unscrupulous people making lots of speculative claims. If the process is going to cost at least £200 whatever the outcome, the entry fee should be £200."
In theory, a contractual condition of registering any .uk domain name is that contact details must be kept up to date. But Barker said that the condition is generally not enforced, so registrants have never considered out-of-date details a significant risk. "Nominet's plan would increase that risk significantly," said Barker.
He said that in order to make sure that a domain holder is made aware of the changes, the policy should be changed on a 'rolling' basis, so that it only comes into effect once a person renews their registration of a domain.
"That is when the change can be drawn to the attention of the holder of the domain name, so that they then know how important it is to keep their contact details up to date," he said. "It's the only time when you can be sure that you have a registrant's attention."
The consultation closes on 3rd October 2007.
Editor's note: A story appeared on OUT-LAW yesterday under the headline 'Nominet plan could trip legit domain name holders, warns expert'. That story focused on the need for additional safeguards in Nominet's plan. When it was written, our interpretation of Nominet's consultation was that its fast-track procedure would require only a summary claim. Nominet contacted OUT-LAW yesterday to clarify that a complaint must be submitted in full "including your arguments and evidence as to Rights and Abusive Registration." We think that is the wrong approach and a more significant issue than the need for safeguards. Accordingly we removed that story and replaced it with this one, which we hope will provoke some debate on this subject.
Rechtsanwältin, Senior Associate