ISOCNZ

RESPONSE BY THE INTERNET SOCIETY OF NEW ZEALAND
TO INTERIM REPORT OF THE WIPO INTERNET DOMAIN NAME PROCESS
OF 23 DECEMBER 1998

The Internet Society of New Zealand has pleasure in responding to the request for comment by WIPO on its report.

Introduction

The Internet Society of New Zealand is a not for profit, incorporated society. Its membership is open. Membership subscription costs NZ$50 per year. A full description of the principles of ISCONZ may be obtained at its website at http://www.isocnz.org.nz.

ISOCNZ has no affiliation or relationship with ISOC.

ISOCNZ is responsible for management of the ".nz" ccTLD. It has contracted the management of this to its wholly owned for-profit company, the New Zealand Internet Registry Limited, which trades as Domainz.

ISOCNZ has monitored the process of the devolution of internet governance from the United States Government through the Green Paper and the White Paper. Prior to that, ISOCNZ monitored the formation of the IAHC and the MoU.

ISOCNZ has, through Domainz, participated in this WIPO process, attending the Sydney meeting and presenting submissions in response to:

RFC-2(see:http://www.domainz.net.nz/newsstand/wipo2.html.).

Representatives of ISOCNZ and Domainz attended the presentation by WIPO general counsel to the open Board meeting of ICANN, in Singapore in February 1999.

The White Paper

ISOCNZ notes the involvement of WIPO in the IAHC, and the criticisms of the MoU at p.6. It notes the White Paper comment that:

… neither national governments acting as sovereigns or intergovernmental organisations acting as representatives of governments should participate in management of internet names and addresses.

It notes the brief to WIPO contained at p.13 to:

develop recommendations for a uniform approach to resolving trade mark/domain name disputes involving cyberpiracy (as opposed to conflicts between trade mark holders with legitimate competing rights);

recommend a process for protecting famous trade marks in the generic top level domains; and

evaluate the effect, based on studies conducted by independent organisations … of adding new gTLDs and related dispute resolution procedures on trade mark and intellectual property holders.

It notes at p.14 a recommendation that:

Whatever dispute resolution mechanism is put in place by the new corporation (now ICANN) that mechanism should be directed towards disputes about cyber squatting and cyberpiracy and not to settling the disputes between two parties with legitimate competing interests in a particular mark. Where legitimate competing rights are concerned, disputes are rightly settled in an appropriate Court.

The Interim Report

ISOCNZ has not completed its deliberation on this report, nor completed consultation with its members. The comments that follow are less detailed than might be desirable.

ISOCNZ intends to participate in further consultation with its members and interested parties in New Zealand, and proposes to make fuller recommendations to the ICANN board, through its Domain Name Supporting Organisation.

Preliminary

The extent of the conflict between trade marks and domain names which forms the focus of the WIPO exercise appears, on the basis of the New Zealand experience, to be overstated in the Report.

ISOCNZ has had public meetings with its members to review the problem, and proposed, as a mechanism for easing the tension between trade marks and domain names, the formation of an enlarged number of second level domain names. The creation of additional 2LDs, equating with the international trade mark classifications was proposed. A mechanism was put in place for their creation. To date, no such additional 2LDs have been required.

To date, there have been two allegations of "cyber squatting" in New Zealand that have reached the Courts. In both cases, the cyber squatter has been unrepresented by counsel at the hearing, and in the second case the cyber squatter did not even appear in person. In both cases the Courts had no difficulty in applying existing rules of law to the facts.

In a third case, involving a complaint by a New Zealand trader about a website and domain name registered in the gTLD.com, a potential issue concerning jurisdiction was resolved on the basis that the owner and operator of that site was personally within the jurisdiction, and subject to the Court’s sanction.

New Zealand has approximately 30,000 domain names registered.

The comments that follow are by reference to the paragraph numbers of the report.

20-21 It is not the New Zealand experience that there is a "considerable amount of tension" between trade marks and other rights of business identification, with the DNS.
39 Given the apparently low level of conflict in New Zealand, ISOCNZ is cautious of an approach which sets up additional procedures which may be burdensome to domain name applicants, and impose additional costs, to prevent what in fact is a low level of actual dispute. Further, because of the decisions of the New Zealand High Court and authoritative decisions of Courts to which New Zealand Courts look for guidance, it is expected that instances of cyber-squatting and cyberpiracy will further diminish.
40 It is not clear that the system of trademark registration and domain name registration require to operate with any further attention to each other. The instances in this paragraph which follow are matters of Registry process (about which we comment later) and do not relate to nor require closer attention to trademark registration practices.
41 ISOCNZ supports the application of great care not to unduly impede the functionality of the present "low cost and highly efficient system of proven successes".
44, 45 ISOCNZ notes that contractual arrangements between domain name holders and registries are outside the scope of WIPO’s brief, but considers the comments may be of some assistance to those registries currently without such contracts.
47 ISOCNZ believes it is important that, subject to issues of privacy, proper contact details should be provided to a registry for each domain name holder. Trademark owners wishing to dispute with the domain name registrant are but one example of the commercial need to maintain an accurate accessible registry.
49 ISOCNZ supports in principle the concept of distinguishing between collecting information and making all, or some, of that information available. It supports the principle of allowing registrants, in certain conditions, to maintain anonymity by appointing an accessible and responsive agent.
56 ISOCNZ supports the principle that the failure to supply accurate and reliable registry information can constitute a basis for cancellation of the domain name.

ISOCNZ opposes the additional requirement that a domain name registrant be obliged (on pain of any sanction whatsoever) to furnish a statement of proposed use, or to prove use. ISOCNZ firmly believes that the use to which domain name holders put their domain names is outside the scope of the contract between a domain name holder and the Registry. All disputes arising out of allegations of abuse should be referred to the appropriate Courts.

63 ISOCNZ agrees that the concept of an agent who might, inter alia, accept service of process, could be useful.
65-70 ISOCNZ is committed to the first come first served principle of registration, and to speed of connection to the internet. Prior payment of registration fees and a waiting period prior to activation are inconsistent with those policies. The low level of trademark disputes in New Zealand militates against adopting pre-payment or a waiting period. ISOCNZ has no evidence of the "hoarding of registrations" but considers the use to which domain names are put to be the business of registrants, not the Registry.
71-73 ISOCNZ supports the availability of suspension through resort to the Courts, or an agreed alternative dispute resolution procedure. ISOCNZ does not support the form of "automatic take-down" proposed in para.73 because that process does not involve prior, proper judicial consideration of the allegations of misuse.
76 ISOCNZ maintains that no searches by the Registry should be required as a pre-condition to registration of a domain name.
77 ISOCNZ, through Domainz, informally encourages voluntary domain name, trademark and other registry searches by domain name applicants.
108 ISOCNZ is not satisfied that it has been demonstrated that litigation is an unsatisfactory or insufficiently available mechanism to resolve trademark/domain name disputes involving cyberpiracy.
109 ISOCNZ has been named as a party to litigation in New Zealand. The current policy of ISOCNZ/Domainz is to indicate to the parties that it regards itself as playing no part in their dispute and will abide the decision of the Court. In a judgement of the High Court of New Zealand dated 11 November 1998 the High Court said of Domainz’ policy and conduct:

"I agree that there is no basis for pleading that Domainz committed some breach of a legal duty. It was not in any way party to conduct of a third defendant; on the contrary it has acted, as one would expect, honestly, efficiently, moderately and in conformity with its role as disinterested gatekeeper to the domain names system. The present exercise of discretion must take into account these factors and the overall desirability of the Courts encouraging what Lockheed Martin shows will be a rapidly developing public service."

110 ISOCNZ is not aware of any dispute involving cyberpiracy, which has manifested itself in many TLDs. It is therefore unaware of any reason to establish a mechanism for solving such a situation. ISOCNZ notes with concern the mistaken assumption in this paragraph, repeated throughout the Report, that equates a domain name with a trade mark.
114 ISOCNZ supports the retention of existing remedies, available to parties involved in disputes involving cyberpiracy. We are concerned at the extension of the WIPO recommendations in this area, which go well beyond paragraph 1 of the brief given in the White Paper. ISOCNZ recognises the opportunity presented by the internet to create novel mechanisms which are free of the restrictions imposed by the concept of national sovereignty-based jurisdictions, and to their application to disputes other than those involving trade marks.
ISOCNZ considers that a registration in a registry is subject to the jurisdiction of the country in which that registry operates. The national laws of the country in question are the appropriate ones to apply to a dispute arising from such a registration.

ISOCNZ does not accept that involves a submission by the applicant to jurisdiction in person in that country.

ISOCNZ does not accept the proposition that accession to the Paris Convention or TRIPS should be a qualifying requirement as to jurisdiction.

The possibility exists of Registries located outside national boundaries, for example on the high seas, or in space.

120- 137 ISOCNZ supports the principle of a voluntary resort to mediation or arbitration for resolution of disputes involving cyberpiracy. It supports the concept of an on-line procedure.
140 ISOCNZ supports the principle of voluntary adherence to an ADR procedure, while preserving the jurisdiction of the appropriate courts.
141 ISOCNZ opposes the premise that the procedure needs to be implemented in all open TLDs to be effective. ISOCNZ opposes the premise that domain name holders should, as part of their registry contract, submit to such a procedure. We believe that if effective, there will be voluntary submission to the process. In the alternative of a determined cyberpirate, our experience is that (a) the incidence of these will greatly diminish, and (b) the national courts have prompt and moderately priced alternatives.

Chapter 4 : Famous Marks

Preliminary

New Zealand is a party to the Paris Convention, and to Article 6(bis). New Zealand provides, in Section 36 of its Trade Marks Act 1953, for the registration of well known marks despite no use or intention to use the mark on products (goods or services) in the class for which the mark is registered. Such marks are not vulnerable to removal for non-use, in contrast with regular registrations.

In practice, these provisions are rarely used.

New Zealand is also a party to the TRIPS Agreement.

The law of passing off, and the Fair Trading Act also operate in New Zealand to protect famous marks, and product get up/trade dress from use by another which causes consumer deception. The New Zealand courts will promptly grant temporary injunctions in appropriate cases, and at moderate cost. (See, for example Midas International Corp v Midas Autocare Ltd, (1987) 2 TCLR 491: Joico Laboratories Inc v Beauty Products Co. Ltd, (1990) 4 TCLR 48, and CIVC v Wineworths Group Ltd, (1991) 4 TCLR 424.)

ISOCNZ does not believe there is a problem in New Zealand with protection of famous marks.

There has been one case of cyber squatting in New Zealand involving famous names. Others are not expected.

219 ISOCNZ opposes the concept of an exclusion from registration on the basis the domain name sought to be registered is, or contains a well known trade mark. Registration of a domain name is not, per se an infringement of a mark, and its use is not necessarily going to cause consumer deception. Where such does result, ISOCNZ believes (a) the Courts are the appropriate forum for dispute resolution, and (b) the onus of proof should be on the owner of the allegedly famous mark.

ISOCNZ opposes the formation of a panel to determine exclusions, and the reversal of the burden of proof.

244 ISOCNZ opposes the use by registries, particularly as a ground for cancelling a registration, of any concept of an "abusive registration". Such a concept implies an enquiry by a registry into the purpose of or use to which a domain name is to be put, and which is outside the scope of the contract between a registry and a domain name holder. Rather, it requires a registry to pre-empt the judicial function. ISOCNZ regards registries as ill-trained for such a purpose, and without a social mandate.
282 ISOCNZ believes there is currently no method for surveilling, or enforcing a breach, of domains to distinguish between "commercial" and "non-commercial" use.
283 ISOCNZ opposes the extension of US anti-dilution law to cyberspace, preferring the requirement that consumer deception be established as real, or likely. This is the legal standard of New Zealand, most of the British Commonwealth, Article 6 (bis) of the Paris Convention - "liable to create confusion", and the draft treaty on the protection of well known marks, produced by WIPO’s standing committee.

Conclusion

ISOCNZ commends WIPO on the scope of its report, the energy and skill with which it has been prepared, and particularly the attempt to produce an unbiased report, by widespread consultation, and written acknowledgement of the diverse submissions and interventions received.

In general, ISOCNZ regards the report as a major work. It is concerned, however to record its reservations about a number of factors.

The report goes considerably beyond the scope of the brief. While this willingness to increase the scope of the exercise is commendable for its contribution, it involves areas of expertise beyond those of the majority of participants. For example, issues of comparative privacy law and practice, conflict of laws, and international law are raised, but few submissions focus on those. None of the panel of experts appear to have expertise in those areas. The entities making submissions appear to come overwhelmingly from the intellectual property departments of national governments, and intellectual property rights practitioners and their organisations.

As a result, ISOCNZ believes the report contains a bias in favour of intellectual property rights, particularly trade mark rights, at the expense of users of the internet, including individuals.

ISOCNZ has reviewed the comments of Professor Froomkin:

(see : http://www.law.miami.edu/~amf), and is concerned to note the limited role the experts were able to play, in all the circumstances, in commenting, as opposed to drafting, the Report.

ISOCNZ endorses a narrow focus for WIPO at the present time, limited to the White Paper brief. Such a report is likely to result in greater acceptance than one which attempts to address issues beyond cyberpiracy, the contents of registry contracts, privacy etc.

12 March 1999

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