The ICA hosted a webinar to discuss the Initial Report of the WIPO–ICA UDRP Review Project Team. The joint project between the two organizations aims to explore ways to strengthen the UDRP with incremental improvements.
The primary topics of discussion were related to the following:
- Registrar verification procedures
- Fee payment deadlines
- The potential for an appeals layer
- Challenges of implementing changes like a “loser pays” system
Domain investors frequently (and often rightfully) complain about UDRP abuse. I have covered numerous cases of Reverse Domain Name Hijacking and other attempts to use the UDRP as a means of acquiring a valuable domain name at a low cost. On the other hand, there are many more cases of blatant cybersquatting that are filed each day. It’s good to see these two organizations working together to improve the way the UDRP works.
Since there’s no time to waste on beating around the bush and none of us are any younger, would it be out on a limb to bet some people are still not being honest (or of sound mind, but my money’s on the former) after all these years about “loser pays”?
To remind again after all these years, and for the virgin readers of 2025, “loser pays” is a straw man.
It’s not about “loser pays.”
It’s about “abuser pays.”
Legitimate good faith “loser” does not pay.
Only illegitimate bad faith “abuser-loser” pays.
For the still clueless:
If someone is deemed to be abusing the system and committing RDNH, they are liable. If someone simply legitimately “loses,” not.
Carry on, until this has to repeated again for the next ten years.
Regardless of the circumstances under which anyone pays, would you kindly explain to me, since I’m obviously a slow learner, exactly (a) how is the amount of the penalty computed, and (b) how is it collected by WIPO (or any other dispute provider) and paid out?
If Example Co. of Anytown, US files a UDRP complaint which is found to be abusive, does WIPO dispatch the UDRP police to arrest someone or seize their assets until they pay the penalty?
Mr. Berryhill, I presume?
Yes, of course I thought of things like that too.
So we know there’s no such thing as perfect for this, so we can try in good faith to come up with something good or “pretty good” or even “not bad.”
Or maybe we wind up not being able to after all, perhaps – but it still matters if people persist in framing the issue as “loser pays” vs. only “abuser pays.”
So how do we do that? Who has the stones to at least propose something, knowing that’s the best you can do and of course expect it to still be shot down by those inclined? Well I’ll take a shot at it.
Maybe not always, but very often something (imperfect) is at least better than nothing (especially when perfect is not possible).
So as a starting point:
1. How about…forget about trying to compute anything. Just go for something which conveys the seriousness to people who might rush in without even considering it or are full of arrogance, foolishness and self-delusion, and which may at least also have some disincentivising effect as well?
So for example, how about perhaps…$5k? A different figure?
E.g. “Note that if you are found to be in abuse of the UDRP process and deemed to be engaging in RDNH you will be liable for a penalty of $5k, which will be transmitted to the respondent or paid to dispute org if no response, and barred from future proceedings after a first, second or third such attempt, etc.”
2. How do you collect? A topic I’m familiar with. Decades ago as a young man I was briefly a collector once myself, carrying the full authority and weight of the US government on my young man’s shoulder’s in my dark pinstripe suit wherever I went. But I was the kind you would’ve been proud and happy to call your family or friend; no power trips, no evil attitude, doing things the right way and even caring and trying to help some of the people involved who clearly deserved it and had been caught up in something innocently, while still being under practically total surveillance to make sure we all did our jobs. I only did that very briefly though, not as a career. It turned out it wasn’t for me despite how it seemed it would be cool to my young adventure seeking mind when I first read the job announcement at the federal center – then very soon off to completely and categorically new and different chapters of life. Like this. But I digress…
Okay…how about…the $ is placed in escrow when filing a dispute? Or there is a pending charge made against a payment source? Or something like that.
Now yes, none of this is perfect. And perhaps it’s even a bit problematic or disincentivising for those who do have a good and good faith dispute to file.
So maybe an idea like this is ultimately not fully desirable. But then again, maybe if it’s discussed, considered, or modified in good faith, then maybe something like it would be at least “not bad”?
Don’t hate me for that personal history by the way. It was my first real job after college, I wanted a real job and career, and it looked on paper like it would be cool, so I went for it. And I even took it home with me the times when I was trying to figure out how to possibly help some of the people involved before I finally left.
“So maybe an idea like this is ultimately not fully desirable. But then again, maybe if it’s discussed, considered, or modified in good faith, then maybe something like it would be at least “not bad”?”
It’s been discussed for the two and a half decades I’ve been doing these things. It’s a really simple question – how do you collect when the dispute provider does NOT have any legal authority to go taking money from people. So, let’s talk about the idea of having a “deposit” to cover a potential cost/damage award. First, it’s worth noting that north of 90% of UDRP cases are won by the complainant, simply because frivolous cases are rare. That’s what makes them newsworthy. Out of cases won by the respondent, an even smaller fraction are deemed abusive. So the various dispute providers – and more than just WIPO – are going to go into the banking business to address a tiny fraction of cases, and deal with constantly having to charge and refund the deposit. Okay fine.
But then, if we are charging a financial penalty for abuse, what about the 90% of cases which are found in favor of the complainant due to an abusive domain registration? The loss of a registration fee for the respondent is hardly enough of a penalty. So, once you have in place a deposit system to address abusive UDRP filings, what is the argument against having every domain registrant pay a deposit to cover UDRP filing fees in the event their registration is found abusive?
There was a case years ago where Telepathy Inc. sued the party which started an abusive UDRP and won.
I don’t really understand why this does not happen all the time, given that there is a successful precedent. People just keep complaining that there is no justice with those bad faith UDRP cases yet do nothing.
From DNW:
Cohen stuck to his promise and took it a step further. Before the WIPO panel decided the case, he filed a lawsuit against SDT in U.S. Federal Court requesting statutory damages for Reverse Domain Name Hijacking and a statement that its ownership of sdt.com was lawful. He was represented by David Weslow of Wiley Rein.
https://domainnamewire.com/2015/07/22/50000-penalty-for-filing-a-frivolous-udrp/
Now, I do understand that most of the domain investors may not be able to afford a US-based lawsuit, but the wealthier ones at least.
At the same time, a law firm could be running something like “sue for abusive UDRP as a service” even for the small folks who can’t pay upfront, and then taking the part/all of the awarded compensation as payment for their work.
“I don’t really understand why this does not happen all the time, given that there is a successful precedent.”
Because there are also several unsuccessful ones. However, the article you linked doesn’t even refer to a court decision of any kind. That case was settled for $50,000. The US District Court for the District of Arizona – where GoDaddy is located and where a lot of these cases end up being litigated – has repeatedly ruled that a domain registrant cannot cover damages for the domain having been locked in the event of a UDRP which the registrant eventually won.
“At the same time, a law firm could be running something like “sue for abusive UDRP as a service” even for the small folks who can’t pay upfront, and then taking the part/all of the awarded compensation as payment for their work.”
If it were that simple, you’d see that happening. Long story short – it’s not that simple.
Some additional thoughts (same John as above):
“There can’t be a perfect measure or solution, so therefore we and more specifically “they” can’t and shouldn’t do anything.”
Follow the money:
If a not-perfect but not-bad measure is enacted to at least discourage, disincentivise and perhaps greatly reduce bad faith abusive UDRPs, then 1. dispute orgs will make far less money from the filing of disputes and 2. lawyers will make far less money from a smaller pool of those who file such disputes.
I.e. lawyers on both sides, but notably including the defending side.