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Claims UDRP has cost over $360 million so far

Kevin Murphy, February 13, 2019, 14:50:11 (UTC), Domain Policy

Trademark owners have splashed out over $360 million on UDRP cases over the 20 years the policy has been active, according to an intellectual property trade group.

Marques, a European body representing trademark owners, reckons $360 million is a “conservative” estimate.

It reached the figure by multiplying the number of UDRP complaints filed to the end of 2018 — 72,038 — by the $5,000 estimated total cost of each complaint.

The World Intellectual Property Organization, which handles well over half of all UDRP cases, charges at least $1,500 per case, but trademark owners have other fees, such as paying lawyers to draft the complaints.

WIPO, which basically designed and wrote the UDRP back in 1998, has been paid at least $63.8 million in filing fees to date, Marques calculates.

Across all UDRP providers, well over 100,000 individual domain names have been subject to UDRP. It’s likely much more, but the National Arbitration Forum does not publish data on unique domains.

The Marques claims were made in a letter (pdf) from council member (and Com Laude managing director) Nick Wood to ICANN last week, part of IP lobbying efforts in the face of UDRP reform efforts. He wrote:

This lowest-case estimate of $360m is a very significant financial burden. Registrants, on the other hand, pay only for their own defence, if any. They do not pay damages, or even contribute to the provider fees, if they lose – which across the five active panel providers appears to be majority of the time.

One proposal that has been put forward by IP owners is for registrants to pay a $500 fee when they are hit by a UDRP complaint, which would be refundable if they prevail.

I can see this idea going down like a cup of iced sick in the domainer community.

Rather than lobbying for any specific proposal, however, Marques is asking ICANN to create an “independent expert group” outside of the usual Policy Development Process, to highlight “priority issues and possible solutions” for the PDP to consider.

Marques thinks the group should comprise a small number of trademark interests, registries and registrars, and registrant rights groups. It wants WIPO to chair it.

It also wants ICANN to coordinate UDRP providers in the creation of a unified set of data on UDRP cases processed to date, to help with future reform discussions.

ICANN community volunteers have been working on the “PDP Review of All Rights Protection Mechanisms in All gTLDs” — the RPM WG — since March 2016.

The RPM WG expects to put out its “Phase One” initial report, comprising recommendations for reform of the Trademark Clearinghouse, Trademark Claims and Sunrise policies, in early June this year.

Only then will it turns its attention to UDRP, in “Phase Two”, with talks due to begin at the ICANN 65 meeting in Marrakech later that month.

The working group has been beset by all kinds of personal drama among volunteers recently, which continues to add friction to discussions.

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Comments (8)

  1. John Berryhill says:

    “Registrants, on the other hand, pay only for their own defence, if any.”

    Mr. Wood ignores the fact that domain registrants pay $2000 to WIPO to obtain three member panels, in which domain registrants prevail more than 80% of the time.

    Whether Mr. Wood is ignorant or a liar is an exercise for the reader.

    • Bill Kara says:

      SO what you are saying is most don’t defend, but when they do its expensive and they win. So in most cases the ones that are the problem it costs domain owners nothing which is OK because they lose and should never have had the domain anyway.

      You see a problem here?

  2. Nat Cohen says:

    Respondents also incur an economic cost when due to a UDRP process with multiple layers of bias in favor of TM interests, UDRP panels issue decisions resulting in the wrongful deprivation of rights to a valuable domain name and when covetous companies file baseless complaints.

    For instance a UDRP panel unanimously and wrongly ordered the transfer of the ado.com domain name, purchased by the respondent for tens of thousands of dollars and requiring the respondent to incur likely tens of thousands of dollars to correct the error in Federal court –

    http://www.circleid.com/posts/20180301_ica_statement_on_adocom_udrp_decision_overreaching_panelists/

    The unanimous decision wrongly ordering the transfer of austinpain.com, forcing the respondent to likely incur tens of thousands of dollars in legal fees to rectify in Federal Court.

    https://domainnamewire.com/2014/09/30/company-pays-25k-resolve-lawsuit/

    Attempted hijackings of valuable domains, such as kiwi.com, later sold for $800,000-

    https://www.wipo.int/amc/en/domains/decisions/html/2004/d2004-0848.html

    https://namebio.com/kiwi.com

    Hundreds of abusive complaints that have been found guilty of RDNH (and hundreds more where the panel failed to make an RDNH finding) incur a substantial burden on the innocent domain owner to prevent an attempted hijacking of their properly registered domain name.

    https://www.rdnh.com/

    There are sensible improvements that can be made to the UDRP that would benefit both brand owners and domain registrants.

    It is possible to improve the UDRP so that it remains an effective tool for combatting blatant cybersquatting without perpetuating, or exacerbating, the current situation where investment grade domains that are lawfully traded in the aftermarket are needless put at risk.

  3. Andrew says:

    The idea of having respondents pay $500 has a couple of flaws.

    First, in many of these dead-on cases the respondent never shows up. Good luck collecting that money.

    Second, I’m sure domain investors would gladly pay the deposit if the Complainant had to pay a penalty for losing.

    • John Berryhill says:

      In point of fact, several registrars charge their customers an administrative fee for handling UDRP disputes.

      ——–
      Daniel Paden tells his tale on the blog Atheiststoday.com, in a post entitled, Stop Using Godaddy, including all the emails he exchanged with Godaddy.com complaining about a $50 fee charged to Mr. Paden credit card when a UDRP was filed against one of his domain names.

      “I purchased a domain name to use on a project I was working on. Someone had a problem with me owning the domain name because they thought it would negatively effect them. Whether that is true or not isn’t important really. This person filed a complaint with WIPO (World Intellectual Property Organization) over the right to the domain name which they have the right to do if they wish.”

      “Godaddy charges me $50 because of the dispute. Keep in mind no guilt had been proven to exist it had simply been a case of someone accusing me of being guilty. It could have been someone who had no real interest in the domain whatsoever. Godaddy and DomainsByProxy.com had no factual data on which to base their actions. The dispute should have had no effect on me except that my domain became locked to prevent it from being transferred to another party or evidence being destroyed.:

      The only reason godaddy could automatically take $50 from my bank account was because I had auto payments set up to renew my webhosting accounts with godaddy. Those hosting accounts were for domains completely unconnected to the the domain name in dispute.”
      ——————

      It’s written into the GoDaddy registration agreement (and at other registrars) and domain registrants get charged win or lose. Nick doesn’t know what he’s talking about.

      Over the years, my clients have paid more than $250,000 in panel fees to WIPO in the course of defending domain name disputes, and we’re talking about a single solo law practice here.

      • Kevin Murphy says:

        I see that the AtheistsToday post is several years old, from 2013. Is GoDaddy still charging that fee? I can well believe it, given my experiences with the company, but I can’t find a reference to it.

        • John Berryhill says:

          It is still in their Universal Terms of Service:

          “GoDaddy also reserves the right to charge you reasonable “administrative” fees” for … (ii) UDRP actions(s) in connection with your domain name(s)….”

          • Kevin Murphy says:

            That’s probably the same clause their idiot security guys tried to get me with 10 years ago when they accused me of being a spammer, then offered to let me continue spamming for $200.

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