Naked Law

Less squatters' rights? Nominet lowers the cost of complaining

Nominet's new Dispute Resolution Policy and Procedure come into force today.  A summary of the changes is available here.

The most significant change is the introdution of a new "summary decision" option.  If the domain name owner does not respond to the complaint, the complainant can opt (for £200 plus VAT) to have an expert's decision on the key issues of whether the complainant has rights in the domain name and whether there has been an abusive registration.  If the expert finds in favour of the complainant, the domain name is transferred. 

What you don't get for your money is the full, reasoned decision of the expert - but presumably most aggrieved complainants would be happy with just the transfer.

This new procedure seems to me to be a great idea.  Savvy cybersquatters have been all too aware of the higher cost of the full expert decision (£750 plus VAT) and choose to "offer" their domain names for sale for a slightly cheaper sum.  And in many cases this is successful and genuine rights holders pay up, because it still costs less than going down the official route. Hopefully this new procedure will help to alleviate this.

Of course, unscrupulous individuals will no doubt seek to capitalise on the new procedure where possible and this has led to concerns of reverse domain name hijacking - where someone issues a complaint, counts on the domain name holder failing to reply and then effectively "buys" the domain name for the £200 fee.  I am not wholly convinced of this - the hijacker would still need to pay out to get the name, which seems counter-intuitive when there are so many freely available names out there.  However, the message for genuine domain name holders is to ensure your contact details are kept up to date with Nominet and make sure you deal promptly with any complaints.

Skyping the Barrel

Skype have finally reneged on their ongoing challenge to the validity of the GPL2 open source software licence.

Skype had used open source software (Linux) licensed under the GPL2 in Skype-phones, but didn't comply with the requirement to supply the source code of the software with the phone. GPL compliance enforcer extraordinaire Harald Welte brought a case against Skype before the German Courts, who deemed this a breach of the GPL2 licence terms in August 2007. Skype initially decided to appeal against this decision.

Commenting on the issue of GPL2’s requirement to make source codes available, in possibly one of the more esoteric analyses of open source software terms, one of the judges stated:

“If a publisher wants to publish a book of an author that wants his book only to be published in a green envelope, then that might seem odd to you, but still you will have to do it as long as you want to publish the book and have no other agreement in place.”

This seems to me to imply that open source software licensing is really weird (at least to a German judge), but that an open source software licensee must still comply with the terms of the licence. Which is probably correct, albeit using a rather strange example.

Skype’s decision to withdraw from the Appeal (as opposed to being ruled against) sadly leaves us with no definitive legal decision to add any clarity (although we still have the first instance decision). It does, however, indicate that, at least in Germany, GPL licence terms are taken seriously.

Sweet victory

How much sweeter is a perfume when it is supplied by a selected distributor? Dior, Guerlain, Kenzo and Givenchy have clearly placed their marker in the French eBay case (in the perfume claims), where they have apparently succeeded in having eBay fined for permitting the auction of genuine branded products, because they were not being supplied through the appropriate distribution channels established by Dior, Guerlain, Kenzo and Givenchy for (as well as for counterfeit products in the handbag claims, discussed in my earlier post). Of course, if the brand holders are right that no branded products for which there is an established exclusive or selective distribution network can be supplied through eBay, it could also solve the problem of counterfeit sales at a stroke, at least where the brand name is mentioned. Establish a network and eBay can exclude all such products from its auctions.

However, this does, as ipKat notes, seem to raise some rather odd questions. Where did these products originate from in the first place? If they were on the market in the EU, then the brand owners rights should have been exhausted. And presumably they were being supplied by the brand owners or distributors within the brand owners' network. If so isn't there some breakdown in this network- unless network members are supplying large enough quantities for these to be resold on eBay, in which case the brand owner has already been paid? Shouldn't the brand owners take action against them? Or more profoundly, do we seriously think that selective distribution networks are justified for something like perfumes and many other branded goods, other than as a means for maintaining high prices? I can't remember when I have been helped by a store assistant in buying a perfume.

The Establishment bytes back

Do the French eBay decision and the US Google decision mark a real turning point in the very long legal honey moon for internet businesses? The early years of the internet were often described as a Wild West where laws did not apply. Of course, only partly true. Often too many laws applied; but few were applied. And an environment thrived which has created not just large and successful businesses, but new business models which now underpin the modern economy.

However, while politicians and legislatures have recognised the value of such an economy, and provided harmonisation and light touch regulation, established businesses have seen their business models undermined, frustrated at the impotence of existing rights and enforcement regimes to provide meaningful protection. Now perhaps the tide is turning. Despite the electronic commerce directive (which is intended to provide freedom for ISPs from regulation) a French Court has fined eBay (in the handbag claims) for failing to take adequate action to remove counterfeit handbags from auction sale.

The Directive is intended (amongst other things) to ensure that ISP hosts do not have burdens placed on them to keep track of what is going on and prevent it. If a host is notified of an alleged infringement it should take suitable steps to remove it; but shouldn't that mean just to stop that (specific) act of alleged infringement, not any other ones which are like it? If a take-down notice can properly apply to a range of potential infringements other than the specific one identified then effectively the host has a monitoring requirement imposed on it, which is not permitted under the Directive; on the other hand, if it only applies to the individual identified act of infringement then a rights holder has a monumental task to police possible infringements.

There has always been a concern that if a host does more than just host - eg provides some monitoring - that it may find that it is no longer protected under the Directive. It is unclear whether eBay has ironically fallen foul of this in its attempt to provide rights holders, through its VeRo programme, with tools to assist them identifying potential infringement, or perhaps with its other restrictions such as control over who may auction trade mark goods, and the types of auction they may enter. Or is this, a French judge being persuaded to protect a French institution - the fashion industry - just evidence of the Establishment rallying its forces more effectively against e-Commerce? If not a change in sentiment within the French court system - one could be forgiven for not being very surprised that a French court has decided this way - perhaps an astute choice of forum to make the point.

Even so, there are strong signs that political pressure, even if not public sentiment, is everywhere shifting towards much more rigorous protection of intellectual property rights, and even perhaps a trace of an idea that the incumbent e-commerce service providers would not be too unhappy with some shift now that they are incumbent. Either way there are clearly some very interesting battles to be fought out here because the interests of a very free and open market which lowers the costs of intermediaries (the cost of "doing the deal") is very much in tension with the fact that making it easy to do the deal makes it easier to do the illegal deal. Some changes will undoubtedly be on the way, but let us hope that they are not ones which stifle innovative new businesses.

newyork.newyork - so good they named it twice

Yesterday, at a conference in Paris, the internet domain name regulator ICANN decided in principle to deregulate the system for acquiring website domain names. The aim with this deregulation is to increase flexibility, particularly as to the choice of names available.

This could be great news for people like the New York State Tourism website information board, who will potentially no longer need to go by the website address of iloveny.com, instead they could simply become newyork.newyork (or big.apple or thecity.thatneversleeps maybe). Companies such as Apple and Microsoft may be able to become apple.apple and microsoft.microsoft. Such flexibility may come at a steep cost, with some estimating $100,000 or more per domain name!

Following approval of this recommendation, ICANN may now start the drawn out process of implementing these changes. Things have not changed dramatically yet (ICANN is working towards 2009), so watch this space for more announcements.

Domain names may now also be able to be used in other languages, such as Arabic or Mandarin Chinese.

If these suggestions are fully implemented then my worry is that this will increase cost for business. Businesses may now need to consider whether they register variants on their current trade mark portfolio with all these potential new domain names. There is also, potentially, a greater opening to cybersquatters, which businesses may need to consider.