[comments-wipo] Why the WIPO Report is Wrong about Famous Marks (II-procedure)

["Michael Froomkin - U.Miami School of Law" <froomkin@law.miami.edu>]

[this is a quote from paras. 108-116 & 145 of my wipo commentary.  You can
find it at http://www.law.miami.edu/~amf/commentary.htm#_1_25 ]

Problem: Vague & Prejudicial Criteria. 

The fear that 'discipline and rigor' would be short-lived at best is
strengthened not only by WIPO's inability to make an estimate of the total
number of marks likely to qualify, but also by the vague and in one case
prejudicial criteria that WIPO proposes be used to rule on applications
for global famousness. To begin with, WIPO offers the six vague and
manipulable considerations for determining if a mark is famous or
well-known issued by WIPO Standing Committee on Trademarks, Industrial
Designs and Geographical Indications and set out in Para. 282 of the Final
Report.

WIPO then added a seventh "non-exhaustive" criterion not approved by the
committee: "Evidence of the mark being the subject of attempts by
non-authorized third parties to register the same or confusingly similar
names as domain names." Final Report, Paragraph. 283. No justification was
offered for this suggestion in the Interim Report other than it would
serve "to accommodate the specificities of the protection of famous and
well-known marks in relation to domain names" and, again, no further
justification for this seventh factor is offered in the Final Report. Why
precisely a mark should be more likely to be considered globally famous
because it happens to attract the attention of a single enthusiastic
domain name speculator, numerous parody sites, or nettlesome critics, is
unclear. Indeed, if a firm is attracting the attention of many critics who
register names similar to it as a form of protest, this seems to be the
weakest case for special protection. Indeed, as WIPO argues ADR is needed
because cybersquatting affects so many trademark holders, making being the
subject of cybersquatting an indication of global famousness seems
especially odd.

Furthermore, the experience of the United States with the federal
Anti-Dilution Act suggests that when faced with a blameless trademark
holder, a predatory domain name registrant, and a set of rules that allows
the decision maker to do equity, even federal judges cannot resist
declaring that trademarks one never heard of are famous. Adding the
seventh criterion ensures that the decks will be stacked before the
special tribunals as well, with predictable results.

Problem: Inappropriate Additional Remedies and Benefits-"Evidentiary
Presumption". 

WIPO also proposes that the owners of certified globally famous trademarks
benefit from an "evidentiary presumption". The "evidentiary presumption"
is in fact a shifting of the burden of proof. The mechanism is not
explained as clearly as one would like, but it appears that after having a
mark certified as globally famous, a mark-holder would begin an ADR
proceeding against a registrant in the ordinary manner. Instead of having
to allege and carry the burden of proof that the registrant had no right
to use the domain name, and the registrant was acting in bad faith, the
extra-famous mark holder would only have to persuade the arbitrators that
the domain is "misleading similar" to his mark and that it is being used
in a manner which damages his interests. Upon that lesser showing (and
apparently without the benefit of knowing how the arbitrators have ruled
on the complainant's suggestion that the burden of proof be reversed), the
registrant will then have the burden of proving "justification" for her
use of the domain name. Final Report, Paragraph 289.

There are four problems with this idea. First, the term "misleadingly
similar" is vague and likely to be interpreted in an over-broad manner.
Second, the suggestion that any use of a domain name that might "damage
the interests of the owner of the mark" sweeps far too broad, and will
invite harassment of many legitimate domain name registrants. Third,
reversing the burden of proof-requiring someone to prove their good
faith-is inherently unfair. Fourth, the procedure proposed for the ADRs in
Annex V of the Final Report is designed in a manner that fails to ensure
that the respondent will given sufficient notice as to the case which he
has to answer.

What is "misleadingly similar"? WIPO's Final Report does not define the
term "misleading similar". While one could profitably attach some sort of
definition to the name (it sound as if it has some relationship to the US
idea of "likelihood of confusion" except that in the context of a famous
mark one would expect more a dilution than a confusion test), thus perhaps
lessening the ill effects of this proposal, I think it a fundamentally
unprofitable exercise because the entire idea is founded on a
misconception. In the US, and I suspect elsewhere as well, it is not
seriously disputed that a domain name is not a trademark. Therefore, what
determines whether the registrant of a domain name is infringing the
rights of any mark-holder, whether or not the mark is famous, is how the
domain name is being used. The issue therefore is not whether the domain
is the same as, or close to, or very close to a trademark, but whether the
name plus the uses made of that name dilute the mark.

What will "damage the interests of the owner of the mark"? The suggestion
that the owner of a certified famous mark need only allege that the
registrant's use of the domain name somehow damages the "interests" of the
owner of the mark requires too gentle a showing and risks inviting
frivolous and harassing claims. If Bob is running a site parodying Alice's
product, or a site that seeks to gather potential litigants to sue for an
alleged product defect in Alice's product, or an "anti-Alice" site with a
confusing name such as A1ice, or a site in which Bob's protest group is
coordinating a boycott against Alice for her labor or environmental
policies, it is quite likely that Bob is "damaging" Alice's
"interests"--yet each of these uses of a domain name similar to or even
identical to Alice's trademark is legal, and some are commendable. At the
very least, and as a deterrent to harassing applications, Alice, the
applicant, should be required to affirmatively allege that she believes
there is no reasonable case to be made that Bob is engaged in
non-commercial activities.

Is burden-shifting fair and appropriate? The suggestion that an person
should be considered a presumptive cybersquatter merely because they
register a domain name similar to a well-known trademark is a novel one.
One rarely if ever finds cases in the law of civilized countries where a
person must prove their innocence of an offence by a preponderance of the
evidence. This may seem a trivial point, but one must recall that the
critical issue is likely to be whether the registrant has"rights and
legitimate interests" in the name. The remaining uncertainty about what
law will be applied to determine this question, and precisely what the
terms mean, is worrying. Combined with the likelihood that many
respondents will be unrepresented consumers with no experience in
arbitration, much less the on-line variety, while the famous mark holders
are likely to the parties with the greatest experience at both and the
finest representation, and the issue of the burden of proof becomes more
significant.

WIPO argues that since the ADR is now more limited than in the Interim
Report, this evidentiary presumption can no longer be used in a way that
is likely to damage recognized rights of free speech. Alas, WIPO's
sanguine description of the likely uses of its proposal likely will prove
optimistic. Furthermore, WIPO suggests at several places in the Final
Report that the ADR procedure proposed is only a first careful step
towards the more ambitious plan it outlined in the Interim Report. One
should thus think carefully about the potential long-term consequences of
Chapter 4 in this context.

[and from para. 145:]

...in cases where the complainant benefits from a certified globally
famous mark, there appears to be no provision for putting the registrant
on notice as to the burden of proof he may have to shoulder. If there is a
dispute as to whether the domain name is "misleadingly similar" (and given
that the term is not defined, such disputes are inevitable), it seems only
fair to require the arbitrators to first decide whether they accept this
allegation (after hearing from the registrant), in order to then put the
registrant on notice as to the burden of proof he faces.


-- 
A. Michael Froomkin   |    Professor of Law    |   froomkin@law.tm
U. Miami School of Law, P.O. Box 248087, Coral Gables, FL 33124 USA
+1 (305) 284-4285  |  +1 (305) 284-6506 (fax)  |  http://www.law.tm
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