[Cross posted from susanchalmers.com] To those familiar with the United States’ approach to intellectual property rights (“IP”) and trade policy, it will come as no surprise that the US is pressing other countries to give IP owners more in the Trans Pacific Partnership Agreement (“TPP”), that is, more powerful economic rights and more power to enforce them.
Some, however, may be surprised by one way in which the United States Trade Representative (“USTR”) is angling to satisfy this aim through the TPP.
In the section of the TPP text that addresses trademarks, there is a provision titled Domain names and the Internet (the “Provision”). The effect of the Provision would be to establish uniform standards for a group whose non-uniformity is widely recognised and accepted: country-code Top-Level Domain managers (“ccTLDs”).
Below I explain why the Provision should not be included in the TPP, based on principle, but I do acknowledge that at least two thirds of it will be. Then I point out why the remaining third of the Provision should be rejected.
There is surprisingly little written on this issue. The primary motivation behind this article is to generate public discussion on the matter before negotiations conclude.
A bit of Background
A ccTLD is “an Internet top-level domain generally used or reserved for a country, a sovereign state, or a dependent territory,” for example .nz for New Zealand or .cl for Chile.  There are 246 of them. These two letter domains come from the ISO-3166 country code list, and the institutions that manage them range from governmental to academic, commercial to non-profit, to management by an individual, and different shades in between. Initial delegations of ccTLDs were made in the 1980s and 1990s, generally to individuals connected to the Internet, often University personnel. ccTLD managers determine their own policies, “according to the relevant oversight and governance mechanisms within the[ir] country,” territory or geographical location.
ccTLDs enjoy relative autonomy in developing the policies for the domains that they manage. For example, ICANN, the organisation that coordinates and manages the Internet’s domain name system, requires all generic top-level domain managers (“gTLDs”), for example .com, .net, and .org, to resolve domain name disputes according to the Uniform Domain Name Dispute Resolution Policy (“UDRP”). (For an example of a domain name dispute, click here.)
For ccTLDs, however, use of the UDRP is optional. They can use something different if they want, or choose to not have a dispute resolution policy at all, sending complainants in the direction of the court instead. A document called RFC 1591 is widely accepted by the ccTLD community as a sort of guidance touchstone, describing what they do and how they should operate.
On the TPP
The United States Congressional Research Service describes the TPP as the “leading trade policy initiative of the Obama Administration, and…a manifestation of the Administration’s “pivot” to Asia. If concluded, it may serve to shape the economic architecture of the Asia-Pacific region by harmonizing existing agreements with U.S. [free trade agreement] partners, attracting new participants, and establishing regional rules on new policy issues facing the global economy—possibly providing impetus to future multilateral liberalization under the WTO.”
There are 12 countries currently negotiating. Negotiations are conducted in private and the text is confidential, but the Intellectual Property Rights chapter, in which the Provision is found, has been leaked on a number of occasions. The text I provide here is from the most recent leak, which occurred in late 2013.
Below I address the Provision in some detail, but first I’d like to offer some thoughts on involving ccTLDs in the TPP, in general.
The basic problem: collision of policy fora
Fluid (ccTLD) versus Fixed (TPP)
Subjugating a ccTLD to a plurilateral trade agreement is problematic. As a matter of principle, ccTLDs should decide themselves what their policies are and have the flexibility to determine how and when those policies should be modified, in a regulatory environment marked by fluidity that allows individual ccTLDs to respond best to the needs of their particular community.
The TPP however would fix regulatory parameters, and limit the flexibility of the ccTLD in developing its own policies. By and through the Provision, the TPP collides with other ccTLD policy fora. It sets enforceable standards for ccTLD policies where such standards may not otherwise exist, or where the standards clash with pre-existing policy. Whereas the ccTLD will have previously enjoyed the liberty of developing its policies in light of RFC 1591 and according to the needs of its own community, or in line with best practices developed at the ccNSO, for example, it will be prevented from doing so if those changes conflict with TPP requirements. Lest we forget that such requirements may come about not out of consideration for what is best for ccTLD management, but as a result of a trade. Countries’ concessions on IP issues may come as a result, for example, of their desire to export more sugar or beef to US markets.
The most basic illustration of different standards is with respect to dispute resolution. RFC 1591 explains that when it comes to dispute resolution, all ccTLDs need do is provide contact information to the parties at odds. Contrast this basic standard with what is required by the TPP in Section 1(a) – the establishment of a dispute resolution procedure specific to trademark cyberpiracy – which is discussed below.
Proponents of the provision might point out that since ccTLDs have the flexibility to decide their own policies, then they have the flexibility to agree to the TPP terms. It is important to keep in mind, however, that not all ccTLDs are organs of their government. A country’s position on the Provision could very well be inconsistent with that of the ccTLD. Non-governmental ccTLD managers could find their policies in conflict with those terms to which their government has agreed. The ccTLD’s policy development autonomy could be lost as it is directed, through legislation or otherwise, to revise its policies into harmony with the TPP.
Nonetheless, US free trade agreements (“FTAs”) have already obligated five of the 12 negotiating countries to at least part of the Provision. For all intents and purposes, this means that all others will likely have to agree to the same. For better or worse, ccTLDs are involved in US FTAs.
As I explain below, this involvement shouldn’t expand beyond that which is required by previous FTAs.
The US has FTAs in force with 20 countries, 16 of which have agreed to language that tracks section 1 of the Provision (“S1”). Five out of 12 TPP countries are already bound by S1 language – Australia, Chile, Peru, Singapore, and the United States. Section 2 of the Provision (“S2”) does not appear in any previous US FTAs. It is new for everyone which, practically speaking, means that it is the only part of the Provision that can plausibly be removed now, and not included within the final text.
Three parts or purposes
The Provision to serves three purposes, two of which make sense to me, one of which does not.
- S1(a) basically asks that the countries ensure that their ccTLD has a dispute resolution policy.
- S1(b) would have the countries ensure that their ccTLD maintain a WHOIS, or a searchable database of domain name registration information.
- S2 would require the countries to provide remedies for “trademark cyberpiracy.”
The latest available language reads:
1. In order to address the problem of trademark [VN/MX propose: geographical indication and trade name] cyber-piracy, each Party shall adopt or maintain a system for the management of its country-code top-level domain (ccTLD) that provides:
(a) an appropriate procedure for the settlement of disputes, based on, or modelled along the same lines as, the principles established in the Uniform Domain-Name Dispute-Resolution Policy, or that is:
(i) designed to resolve disputes expeditiously and at low cost,
(ii) fair and equitable,
(iii) not overly burdensome, and
(iv) does not preclude resort to court litigation;
(b) online public access to a reliable and accurate database of contact information concerning domain-name registrants; in accordance with each Party’s laws regarding protection of privacy and personal data.
2. [PE/SG/CL/AU/NZ/MY/BN/CA oppose; US/VN/JP/MX propose: Each party shall provide [VN: oppose adequate and effective] [VN propose: appropriate] remedies against the registration trafficking or use in any ccTLD, with a bad faith intent to profit, of a domain name that is identical or confusingly similar to a trademark [VN/MX propose: , geographical indication or trade name].]
On Section 1
S1 has two purposes – first to ensure that ccTLDs have a dispute resolution policy for “trademark cyberpiracy” in place, and second, a WHOIS. For most ccTLDs, these requirements, on their face, should not pose much of a problem.
Whilst S1(a) mentions the Uniform Domain Name Dispute Resolution Policy by name, the Provision wouldn’t force ccTLDs to adopt the UDRP wholesale and verbatim; it features a set of four principles that the ccTLD’s policy must honour. So long as the policy does this, its details are unimportant. These principles are new and an improvement upon the language of the past 16 iterations of the Provision in US FTAs. They should afford ccTLDs ample latitude to craft a policy that responds to local concerns. It could be worse.
S1(b) also improves upon past language of certain FTAs. Australia, Bahrain, Columbia, Korea, Morocco, Oman, Peru and Singapore have agreed to ensure that their ccTLDs will maintain a WHOIS, but these FTAs do not acknowledge domestic privacy and/or personal data protection regulatory frameworks. FTAs with Panama, Nicaragua, Honduras, Guatemala, the Dominican Republic, Costa Rica, and El Salvador require ccTLDs to have a WHOIS that can be designed subject to the country’s law protecting the privacy of nationals. For Chile, it is the law on protection of personal data. In the TPP, both privacy and personal data protection can be taken into account by the ccTLD when crafting their WHOIS.
Even so, however, for those ccTLD managers who do not have a formal relationship with the government, this section could provoke uncomfortable discussions about whether their approach to WHOIS meets the requirements of the TPP.
On Section 2
As stated above, S2 is new. It would require countries to provide “remedies against registration trafficking or use” of a ccTLD domain name that is identical or confusingly similar to a trademark. A bad faith intent to profit is required.
It is not entirely clear what this section seeks to achieve, and how ccTLD managers would be affected by it. Presumably, the dispute resolution policy required in S1 would provide effective remedies. Ergo, what extra problem does S2 solve and how will whomever insisted on it being in the text use it?
Which remedies must be provided, and as an outcome of which type of process – a court case or a dispute resolution policy? Cancellation and transfer are the traditional remedies in domain name disputes. What if monetary damages or domain name seizures are argued to be the most effective remedies under the Provision? These remedies go beyond those provided in the UDRP. Would a ccTLD have to offer these remedies as part of their dispute resolution policy? What would that entail? An evidentiary procedure for determining damages, for example?
If the Provision intends for countries to provide trademark owners with a cause of action under the country’s law, why must it be specific to a ccTLD? Why not all top-level domains? Couldn’t a simple trademark infringement action in court achieve the same result and don’t countries party to the TPP offer those causes of action in their trademark laws anyway?
If trademark owners already have avenues for redress, then S2 could result in unnecessary costs for ccTLD managers. I share in the position of the majority of TPP parties and believe that Section 2 should be removed.
Thanks to Carolina Aguerre, Keith Davidson and Burcu Kilic for providing feedback on the above – kind gestures that should not be taken as endorsement of the views expressed herein. Any errors are mine and mine alone.
 RFC 1591 states: “Rights to Names. In case of a dispute between domain name registrants as to the rights to a particular name, the registration authority shall have no role or responsibility other than to provide the contact information to both parties. The registration of a domain name does not have any Trademark status. It is up to the requestor to be sure he is not violating anyone else’s Trademark.“