The Uniform Rapid Suspension (URS) System – an Alternate Highway for Domain Name Dispute Resolution?

Published July 7th, 2014

Over 250 new generic Top Level Domain Names (“gTLDs”) have been delegated since October 2013 and the world over has been clamouring to get a piece of the new gold mine in domain names.  As disputes over entitlement to domain names are inevitable, the Internet Corporation for Assigned Names and Numbers (“ICANN”) pre-emptively implemented the Uniform Rapid Suspension (“URS”) system last year as a complement to the Uniform Dispute Resolution Policy (“UDRP”) system for domain name dispute resolution.  The URS system is designed to provide a faster, lower-cost alternative to UDRP proceedings for resolving clear-cut domain name disputes.  A review of the decisions issued under the URS system thus far indicate that the system can indeed churn out determinations with a short turn-around time.  However, the URS system may not be an appropriate alternate highway for all cases of domain name disputes given its inherent characteristics and limitations.

There are three main differences between the URS and UDRP systems:

1. Generally speaking, the URS system provides determinations of domain name disputes at a lower cost and with a shorter turn-around time than the UDRP system. The URS system also provides an appeals process, unlike the UDRP system.

2. The ability to make legal/factual submissions under the URS system is significantly restricted in comparison to the UDRP system. The remedies available to a complainant under the URS system are also limited to a suspension of the domain name, as opposed to a cancellation or transfer of the domain name registration under the UDRP.

3. The burden of proof under the URS system is more stringent, requiring “clear and convincing evidence” from the brand owner, as opposed to a “balance of probabilities” standard for the UDRP system.

The Faster and Cheaper Alternative

There are currently only two approved URS dispute providers – the National Arbitration Forum (“NAF”) and the recently approved Asian Domain Name Dispute Resolution Centre (“ADNDRC”).  This article focuses on cases from the NAF, the more experienced of the two in terms of URS determinations.

The Short Turn-Around

A determination under the URS system should generally be issued and implemented within 25 days after the filing of the Complaint.  Within 2 business days of the filing of a Complaint, the URS provider verifies that the Complaint is compliant with the filing requirements.  Once deemed compliant, the URS provider will have 24 hours to notify the Registry Operator(s) of the subject domain name(s) of the Complaint via a Notice of Complaint (“Notice”).  Within 24 hours of receiving the Notice, the Registry Operator(s) must “lock” the domain name(s) at issue from any changes and confirm with the URS provider that the domain name(s) has been locked.  Within 24 hours of the locking of the domain name(s), the URS provider must send a copy of the Notice to the registrant.  The registrant then has 14 days from receipt of the Notice to file a Response.  Failure to file a Response will allow the URS provider to make a default determination, i.e., a determination based on the prima facie merits of the Complaint.  A 48-hour period is then given to the URS provider to confirm the receipt of a Response and to notify the parties of the appointed Examiner.  The Examiner must make a determination of the Complaint within 3 business days, absent exceptional circumstances.  A final 24-hour period is given to the URS provider to notify the parties of the determination.

Compared to the approximate 55-day time period required to implement a determination under the UDRP process, the URS system can provide a significantly shorter process in obtaining a domain name dispute determination.

A Second Kick at the Can

Despite the short turn-around time, the URS system provides extensions of time and appeals in certain circumstances, which may prolong the process.

In the case of a default determination, the URS system allows the registrant to file a Response up to 6 months after the default determination and a de novo re-examination will be conducted, provided the additional re-examination fee is paid (free of charge if Response is filed within 30 days).  The registrant may also be granted a further 6-month extension of time to file its Response where there are exceptional circumstances warranting the extension.

Unlike the UDRP, the URS system also provides an appeals process, where either party has a right to seek a de novo appeal of a determination, based either on the existing record or on admissible supplemental evidence (i.e., new evidence that is material to the determination and clearly pre-dates the filing of the Complaint).  A Notice of Appeal must be filed within 14 days after a determination is issued.  A response to the appeal must be filed within 14 days after the Notice of Appeal is filed.

The NAF’s Supplemental Rules also contemplate an “appeal” under the UDRP system, where the appellant now becomes the complainant in the UDRP process.  Within 30 days of a determination under the URS system, the appellant/complainant can bring a UDRP case against the same domain name(s) for a reduced fee.

Accordingly, it could be several months, especially in the case of default determinations, before a decision under the URS system becomes final.  This also does not account for a further “appeal” under the UDRP system or the commencement of proceedings in a court of competent jurisdiction.

Promising Numbers

A review of the initial decisions published by the NAF suggests that the turn-around time for URS determinations, at least at first instance, can be quite expeditious.  At the time of writing, determinations were generally rendered between 1 to 23 days (average of 14.5 days) from the commencement of the URS proceeding.  A more detailed analysis is summarized below:

Determination (Type*) Total # of Decisions Avg # of Days from Commencement to Decision
Suspended (Final) 24 11
Suspended (Default)** 27 18
Suspended (Final, Appeal) 3 14 (first instance)34 (incl. appeal)
Claim Denied (Final) 4 11
Claim Denied (Default)** 3 20
Claim Denied (Final, Appeal) 1 22 (first instance)67 (incl. appeal)

* “Final” indicates that a Response was filed and that the determination at first instance is final without re-examination. “Default” indicates that a determination on the prima facie merits of the Complaint was made, with the possibility of a de novo re-examination if the registrant files a Response within 6 months. “Appeal” indicates that the determination was a result of an appeal from a prior determination.

** At the time of writing, only one of the default determinations had passed the 6-month period during which the registrant could file a Response and obtain a de novo re-examination (see Facebook Inc. v. Radoslav(Case No. 1515825). Re-examination was not sought in this case.

Lower Costs

The fees for a complainant under the URS system can be as low as $360 USD, as compared to $1,300 USD and higher under the UDRP system, depending on the number of disputed domain names and the size of the examining panel.  The costs can differ significantly for the larger and more complex disputes, but the difference in fees may be much smaller in simpler cases, particularly for determinations that are appealed under the URS system.

Limitations of the URS System – Submissions and Remedies

The ability to make factual and legal arguments in a URS Complaint is restrained to a 500-word submission.  The Examiner’s review of the Complaint on a “clear and convincing” standard further exacerbates the effect of the limit on submissions.  In contrast, a UDRP complainant is given a 15-page limit.

Under the UDRP, the complainant has the option to have the subject domain name registration cancelled or transferred to the complainant.  In contrast, the only remedy for a complainant under the URS system is to have the domain name suspended for the life of the registration.  Further, a determination under the URS system does not preclude a party from pursuing other remedies in a UDRP proceeding or in a court of competent jurisdiction.

The “Clear and Convincing Evidence” Standard

Under the URS rules, to be entitled to relief in the form of a suspension of the registered domain name, a complainant has the burden of proving, with clear and convincing evidence, each of the following three elements:

1. that the registered domain name is identical or confusingly similar to a word mark:

a. for which the complainant holds a valid national or regional registration and that is in current use;

b. that has been validated through court proceedings; or

c. that is specifically protected by a statute or treaty in effect at the time the URS complaint is filed;

2. that the Registrant has no legitimate right or interest to the domain name; and

3. that the domain was registered and is being used in bad faith.

The adoption of the “clear and convincing” standard suggests that the standard of proof is higher for URS decisions than it is for UDRP decisions.  A more stringent standard, combined with the limitation on submissions and quick turn-around periods, might also suggest that URS decisions should yield more consistent results.  However, from a review of the initial decisions issued by the NAF, the “clear and convincing evidence” standard appears to track on a blurred line, which may render it difficult for a prospective complainant to determine whether evidence short of blatantly obvious will be sufficient.  This is particular evident in cases where the domain name involves a common name that also happens to be a trade-mark.  The following are a few examples.

Virgin Enterprises Limited v. lawrence fain (Case No. 1545807) involved the domain name <branson.guru>.  The complainant submitted that it owns extensive rights in the BRANSON mark (i.e., related to Virgin founder Richard Branson) and provided evidence of valid South African trade-mark registrations and the corresponding Trade-mark Clearinghouse records.  The complainant also submitted that it had significant reputation and goodwill in the BRANSON name around the world in relation to a wide range of goods and services.  While this evidence was sufficient to meet the first element of the URS test, the Examiner held that the complainant failed to provide evidence to support the second and third elements.  In particular, there was no evidence provided to support the claim that the complainant owned very extensive rights in the BRANSON mark or that it had gained significant reputation in association with the mark.  Further, the use of the domain name involved a monetized parking page for the registrar that did not include any references to Richard Branson or the BRANSON trade-mark.  In denying the Complaint, the Examiner noted that the “URS process is a narrow one” and that nothing prevented the complainant from engaging a court of competent jurisdiction or commencing a proceeding under the UDRP where “the record is more fully developed and the factual and legal arguments are not constrained by, among other things, the 500-word limit for URS complaints”.

Similarly, Finn.no AS v. North Sound Names et al. (Case No. 1558494) dealt with the domain name <finn.sexy>, which contained the common name “Finn”.  The complainant provided evidence of a valid registrations for the mark FINN in Norway and at the Trademark Clearinghouse, which was sufficient to meet the first element of the test.  However, as the word “Finn” is a common name, the Examiner held that there was no evidence that the domain name was registered and used by the registrant for any other reason than to benefit from its significance as a common name.  The registrant did not use the domain name to associate with the complainant’s mark and there was also no evidence that the domain name was registered primarily for the purpose of selling it to the complainant or to a competitor of the complainant.  Accordingly, the complainant failed on the second and third element of the test.

In contrast, Wolfram Group LLC v. Andrew Davis et al. (Case No. 1554143) aff’d on appeal dealt with a registrant that attempted to capitalize on a domain name involving a common first name, i.e., <wolfram.ceo>.  Unlike the cases above, the registrant was found to lack a legitimate right or interest in the domain name and that the domain name was registered and used in bad faith.  In this case, the registrant held a large portfolio of .ceo domain names, each associated with a common first name, with the intention of creating a website consisting of a large directory of CEOs, business owners and leaders associated with their respective names.  In the case of <wolfram.ceo>, the first name Wolfram also happened to be a well-known trade-mark owned by the complainant.  The complainant provided evidence of its trade-mark registration for WOLFRAM and the Examiners, both at first instance and on appeal, found that the mark was internationally well known.  The registrant argued that it had removed all possibilities of its website creating confusion with the complainant’s mark.  However, both Examiners were not convinced that the registrant’s future plans for his website constituted legitimate rights or interests in the domain name.  The Examiner on appeal also held that the registrant knew or should have known of the complainant’s well-known mark.  The fact that the registrant held a large portfolio of domain names was also held to be, in and of itself, an indicia of bad faith, particularly considering in this case that a well-known trade-mark owned by a third party was involved.

Similarly, Stuart Weitzman IP, LLC v. yoyo.email et al. (Case No. 1554808) dealt with the domain name <stuartweitzman.email> containing what could appear to be a common name.  In this case, the complainant provided evidence of a valid registration of the mark STUART WEITZMAN which was in current use.  The registrant submitted that it had a legitimate business purpose registering several .email domains, where each .email domain was to be used as an email “delivery gateway”, where users could register desired usernames (e.g., stuartweitzman.email) and the registrant would provide guaranteed proof of delivery of e-mails sent to and from each of the .email domains.  The registrant also stated that the domain name was only going to be used to point to its own website and it would not make any infringing use of any trade-marks or make any claims of affiliation to the trade-mark in a way that would confuse the public.  However, the Examiner held that the very nature of its business plan was to acquire domain names for the primary purpose of selling, renting or otherwise transferring the domain name to the owner of the trade-mark or to a competitor of the owner, for consideration beyond out-of-pocket costs.  Alternatively, the registration for sale to the general public would amount to the registrant knowingly creating a likelihood of confusion with the complainant’s mark.  Either way, the Examiner was not convinced that the registrant had any legitimate rights or interests in the domain or that the domain name was not registered and used in bad faith.

On appeal, the registrant filed further evidence regarding its intention to use the domain name in connection with a bona fide offering of goods or services.  In particular, it provided further evidence of other <.email> domain names that it had obtained in furtherance of its business plan.  The registrant also submitted that the service would be completely free and that there was no intention to profit from the <.email domain name> or from any brand logo or affiliation with the domain name.  The majority of the three-panel appeal board held that since the evidence on appeal indicated that the registrant’s service was completely free and the subject domain name was necessary for the operation of the service, it could be considered a legitimate fair use and was not clearly a case of trademark abuse.  Accordingly, the complainant did not meet the “clear and convincing” burden of proof.  The appeal panel found that the absence of evidence in the record regarding the intent to monetize the domain name was a distinguishing factor from a prior decision also involving the registrant (Deutsche Lufthansa AG v. yoyo.email et al., Case No. 1552833), where in that case the evidence included the registrant’s intent to monetize the e-mail service by generating revenue through advertising.

A more clear-cut case of cybersquatting involving a common name was found in IBM of Armonk v. Mark McNeely et al. (Case No. 1556548), which dealt with the domain names <watson.technology> and <watson.company>.  The complainant provided evidence of its trade-mark registrations in Japan for the WATSON mark and certified evidence that the mark was in current use.  In terms of its legitimate interests, the registrant argued that WATSON was a common name and in particular there were several companies in the technology field that used the name WATSON.  However, the Examiner found that the registrant did not provide any evidence that it owned rights in the WATSON name or trade-mark and thus concluded that it did not have legitimate rights or interests in the domain names.  The Examiner also found the evidence showed that the registrant was aware of the complainant’s rights in the WATSON mark.  In particular, the registrant registered the domain names after receiving notification that the domain names matched a trademark registered with the Trademark Clearinghouse, and in the case of <watson.company>, after receiving a cease and desist letter from the complainant. The evidence also showed that the registrant offered to rent the <watson.technology> domain name to the complainant for $6,000 per month.  The complainant counter-offered to reimburse the registrant for the out-of-pocket costs, but the registrant rejected the counter-offer.  All of the above was sufficient to satisfy the Examiner that the complainant had met all three elements of the URS test.

An Unclear Standard

It is evident from the foregoing decisions that there is some uncertainty as to the level of evidence required for a complainant to be successful under the URS system.  However, the silver lining for complainants is that an appeal procedure is readily available and supplemental evidence may be filed on appeal and reviewed on a de novo basis.

For example, in Aeropostale Procurement Company, Inc. v. Michael Kinsey(Case No. 1550933) relating to the domain name <aeropostale.uno>, the complainant failed to provide evidence that tied the complainant to the ownership of a valid registered mark to which the domain name was identical or confusingly similar.  As such, the Examiner denied the complainant’s claim.  However, on appeal, the complainant was able to file supplemental evidence relating to its valid registered trade-marks as well as evidence of current use of the mark.  In this case, the registrant essentially admitted his lack of legitimate rights or interests and that he had registered the domain name in bad faith.  Accordingly, the Examiner ordered the suspension of the domain name.

Conclusion

The URS system has shown it is capable of fulfilling its mandate as a faster, lower-cost alternative to UDRP proceedings.  It is particularly useful for complainants that hold well-known registered marks that wish to shut down blatant cyber-squatters as quickly and inexpensively as possible.  However, the URS system also has its limitations, such that it may not be an appropriate choice if:

1. the complainant’s purpose is to obtain the transfer of the domain name;

2. the registrant has possible legitimate arguments in its favour;

3. the complainant’s trade-mark rights are not expressly conferred on the complainant (e.g., only common law rights and no registered rights);

4. the complainant’s trade-mark has not gained notable reputation and goodwill, particularly in relation to domain names that cover common names; or

5. finality of the determination within a short time period is a primary concern for the complainant.

It is still too early to tell how and whether the full flexibility of the URS system will be utilized by either the complainants or registrants.  There is also some uncertainty arising from the exact standard of evidence that is required for a complainant to be successful.  However, the initial results from the URS system show promising potential for a speedy and low-cost alternative to the UDRP system for ensuring domain name rights are not misappropriated by another party.

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