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Why is a WIPO panelist sending a C&D letter to my personal trainer?

2011 October 21
by Nat

For several years, Chay, my personal trainer at our local gym here in Washington, DC, had the thankless task of trying to get my computer-softened body into some kind of shape.   He is serious about fitness and wanted to publish a web site.  In July, while brainstorming possible names, he came up with and registered SoFitDC.com.  Last week he received a Cease and Desist (C&D) letter from Sofitel, the hotel chain, which happens to have a hotel in DC.

In the C&D letter, Sofitel claims that SoFitDC.com “imitates its trademark SOFITEL [and] refers to the name of the hotel located at Washington DC operated by Accor” (the parent company of Sofitel).  The letter goes on to say that unless Sofitel receives a satisfactory reply, that “our client will take all necessary measures to put an end to this infringement including legal proceedings” [emphasis in letter].

Chay plans to respond that he registered SoFitDC.com for a fitness website, and so his use isn’t infringing.

The letter was written by Nathalie Dreyfus, a French attorney who founded her own IP law firm and represents many trademark holders in domain disputes.   The Dreyfus website boasts of its success in winning UDRP complaints for trademark holders.

After more than 5 years in existence, [as of 2009] Dreyfus & associés has filed before the WIPO Arbitration and Mediation Center almost 200 UDRP complaints with a successful outcome in 99% of the cases. This high success rate is greatly above the average, as approximately 15% of the Complaints are denied by the WIPO Arbitration and Mediation Center.

But that is only part of her accomplishments.

How would you like the opportunity to have Nathalie Dreyfus serve as a UDRP panelist for a dispute involving one of your domains, and have her decide whether you get to keep the domain or whether it will be transferred to the company that is claiming trademark rights to the domain?

Well, you’re in luck.  You can!

In addition to being a trademark attorney, she is also a WIPO panelist and an NAF panelist.  According to her website, as of 2009 she had appeared on 70 UDRP panels.  She sends threatening C&D letters by day, and decides UDRP cases by night.

John Berryhill has already called out Ms. Dreyfus for the inherent conflicts of this double-duty, in comments on Domain Name Wire.  It is a fascinating thread.  Berryhill points out that in 2001, Dreyfus was on the UDRP panel that ruled in favor of Pernod Ricard and ordered the transfer of the domain pernod.com.  Fast forward several years to 2008, when Pernod Ricard decides to go after Ricard.com, owned by Tucows as a personal name through their MailBank acquisition.   Whom does Pernod Ricard choose to represent them?  The panelist that helped decide the Pernod.com case in their favor – Ms. Nathalie Dreyfus.

The panelists deciding the Ricard.com UDRP case are now in the awkward position of ruling on a case in which one of their colleagues is representing the Complainant.  Further, as a Panelist in the earlier case involving Pernot Ricard, Dreyfus helped draft the Pernod.com UDRP decision, which the Ricard.com panel will likely rely on for guidance on how to decide the dispute involving Ricard.com.

Tucows has a nearly unbroken string of success in defending its surname domains, which it uses as part of its Hover personal email service.   But not in this case.  The panel ordered Ricard.com, which was registered by MailBank back in 1996, transferred to Pernod Ricard.

Bill Sweetman is the General Manager in charge of the Domain Portfolio at Tucows.  “Because of unhappiness with the UDRP process,” Sweetman says, “Tucows now responds very aggressively and in certain cases has filed preemptive lawsuits to avoid what feels like a flawed UDRP process.  We used to have some faith in the UDRP process, but it has become so flawed.  I’ve become so much more cynical and I’m not a cynical person.”

The flaws in the UDRP process are largely the responsibility of ICANN, which has neglected its oversight role over the UDRP process it put in place.  ICANN authorized WIPO and NAF to decide UDRP cases without requiring them to be bound by a contract that spells out their obligations and permitted behavior.  WIPO and NAF can, and do, create their own supplemental rules.  They can accredit whomever they see fit as panelists.  They operate without any observable oversight from ICANN.

The rot at the root of the system is that the Complainant chooses the UDRP forum.  The various forums who handle UDRP cases compete against each other to be chosen by the Complainant, in effect screaming “Pick Me!”, “Pick Me!”  All their incentives rest with pleasing and making themselves attractive to the Complainant.  The domain owner, who is the Respondent, is just along for the ride.  In this environment is it a big surprise that active trademark lawyers also serve as panelists?  Do you think that active trademark lawyers would be picked as panelists if the Respondent, rather than the Complainant, was empowered to choose the forum that will decide a UDRP complaint?

Who is more qualified, and more expert, in UDRP disputes than domain attorneys such as Ari Goldberger, John Berryhill, and Zak Muscovitch?  But don’t hold your breath waiting for any of them to be qualified as WIPO or NAF panelists.  None of them are.  It is possible that they would even refuse the appointment, recognizing the inherent conflicts that would present.

But WIPO and NAF pick attorneys, such as Nathalie Dreyfus, who make their livelihood enforcing trademark interests and appoint them as “impartial” panelists to decide disputes between these same trademark interests and domain owners.  Is an attorney serving as a panelist likely to make a decision that would adversely affect her ability to make a pro-Complainant argument when she is serving as a lawyer in front of a panelist?  Would an active trademark attorney who is constantly seeking new clients, make a ruling that would be viewed unfavorably by a prospective client?

The conflicts of interest are inherent in trying to fulfill both roles.  Even if the attorney/panelist has no relationship with the parties in a dispute, she cannot claim to be impartial as to the outcome.  The decisions reached by the panel on which she serves may be used as guidance by those panels before which she appears.

I am not suggesting that Ms. Dreyfus has fulfilled her duties as a UDRP panelist with anything less than the utmost professionalism and integrity.  I am questioning a process that permits, and even encourages, the potential for the conflicts of interest that arise when the same person serves as an advocate and a panelist in the same forum.

As John Berryhill eloquently says in the same comment thread mentioned above,

[P]ermitting panelists to also represent parties in proceedings is structurally unethical, because it is a needless opportunity for mischief. There are plenty of qualified attorneys, and accredited panelists, who do not represent claimants in UDRP proceedings. There is no need to have panelists which also represent UDRP claimants. None.

The UDRP was intended to be a quick, inexpensive, and efficient alternative to Federal court as a means to resolve domain disputes.  Due to the persistent, uncorrected flaws in the UDRP process, however, some participants have lost confidence in the UDRP process and are choosing to opt out of the UDRP entirely to go straight to court.  ICANN can address this problem and help fulfill the original intent of the UDRP process as a fair and efficient domain dispute mechanism by fixing some of the well-known inequities in the UDRP process.

Ten years have passed since the UDRP came into existence.  UDRP reform is overdue.  ICANN recently considered whether the time had come at last to review the UDRP procedures for possible corrections.  Their decision: “Not Yet“.

Chay has not yet responded to Ms. Dreyfus.  I hope she is satisfied with his answer.  Otherwise, he may find himself facing Ms. Dreyfus as the attorney for Sofitel in front of a UDRP panel composed of her former and future colleagues.

 

 

16 Responses leave one →
  1. October 21, 2011

    This displays a tremendous flaw, where an average person who had no intention on trademark infringement gets caught in an endless legal struggle. This has become a game, one which profits the lawyers and law firms partaking in it. The Dreyfus law firm might of went too far with this one. Hopefully they end up backing off and chock this up as a lost cause.

    I look forward to visiting your friends website in the future.

  2. domains permalink
    October 22, 2011

    Unbelievable and I call it bullshit. Reading this makes me more angry about things.

    Major conflict of interests and guess what, its not fair game neither for any of us or going through udrp process.

    I told 2 close friends this just recently. When rapid udrp arrives, you will see less domainers imo and the guys who are smaller will be impacted the most. Then the conclusion would be this imo. Are domains considered a Liability? I love domaining and its the cost of doing business but let’s admit this, anyone can file a udrp on generics and scare tactics.

    Welcome to domaining or building a website. Feel sorry for your trainer Nat and headaches. Nat I am sure your trainer won’t like the outcome on this even if its for a website and not conflicting. So 7k in defending a udrp or principal on things.

    Sorry for other topics but this is just amazing. Unfortunately the risks involved in domain names. Its going get a lot more worse for all of us. Big or small players.

  3. Nathalie Dreyfus permalink
    October 24, 2011

    I have read Mr Cohen’s post with interest and surprise. It is particularly remarkable that Mr Cohen took the time to review UDRP panels in such details, knowing his activities both as a blogger and as domainer and knowing that questioning possible conflict of interest in those two activities may be time consuming. I was surprised to see my activities – and success – scrutinised in such an aggressive way but isn’t it more agreeable to mock an independent female trademark attorney than a more masculine big law firm? Mr Cohen made the effort to detail a case but he probably did not find interesting to quote from the very strict rules of ICANN and UDRP; they are rather technical and a certain expertise is needed to understand them. Mr Cohen wanted to be elegant in stating that I act “with anything less than the utmost professionalism and integrity”, after trying to argue that my decisions as a UDRP panellist are biased for commercial reasons. For myself, I very frequently refuse to serve as a panelist when one of my client is involved in the case, whether as a claimant or as a defendant. And I do it by day and by night.
    Nathalie Dreyfus

  4. Nat permalink*
    October 24, 2011

    Ms. Dreyfus,

    Thank you for your comment. The point of the post is to raise concerns about the lack of fair treatment for Respondents under the UDRP, and in particular to highlight the potential for conflicts of interest when the same person acts as both an advocate and a panelist in the UDRP dispute mechanism.

    My intention was not to single you out, nor to subject you to different treatment for being a woman. My wife, mother and sister are all attorneys, and I respect your success as a lawyer. As you mention, both ICANN and UDRP require a panelist to make a statement of impartiality before being selected to serve on a UDRP panel.

    I was looking to bring a personal angle to what is a fairly dry and technical topic. Since your signature is on the C&D letter to my personal trainer, that is how you were brought into the post. Further research showed that concerns about your dual role as advocate and panelist had already been raised by others.

    Your comment does not address any of the substantive concerns raised in the post. Experienced attorneys and business people such as myself have found reason for concern in active trademark attorneys serving as panelists. We have detailed reasons for those concerns, as it is impossible to eliminate the conflicts of interest that arise when acting simultaneously as an aggressive advocate and an impartial judge on the same issues. Moreover the commercial considerations of trying to attract new clients, while also being called upon to make decisions as a panelist that could be adverse to current or new clients, create additional conflicts.

    As you are someone who has likely thought hard about how to reconcile these conflicts, I would be interested in how you have accomplished this for yourself.

    Nat

  5. October 24, 2011

    Ms. Dreyfus i would like to read your comment on Nat’s last comment.
    I am sure we can exclude the female part since this has nothing todo with the underlying issue.
    This is a matter of conflicts of intrest.
    And this should be addressed simple as that.

  6. November 1, 2011

    Natalie,

    I have no doubt that you are an excellent attorney and in fact I have retained you on behalf of several of my clients relative to trademark matters in France. However, as Mr. Cohen stated, the article is not about you personally and absent the fact that you issued the C&D, you may not have even have been mentioned. Rather, the article is about the apparent conflict in having panelists be permitted to serve as advocates in the same dispute system.

    I have yet to hear a single cognitive argument that defends any need to have panelists serving as advocates. Nor have I ever seen any objective criteria for being included as a panelist. I have requested to become one on several occasions, each time being provided with a polite “no thank you”. I even received a rejection from the CAC when I had not even applied.

    You can imagine the obvious concerns when advocates such as myself are dealing with a UDRP in which the complainant is represented by an attorney who is a well known panelists. Those concerns are heightened when the panelists available to adjudicate the matter have all worked side-by-side with the complainant’s counsel as panelists in other proceedings. Moreover, they have all attended private panelist conferences together sponsored by the ADR provider – conferences I might add to which only panelists are invited.

    Further, the process of panel selection remains shrouded in secrecy. Judging by some of the studies that have been done, panel selection is by no means random. I have little doubt that panelists are hand-picked by a few of the ADR providers with a view as to the issues presented and how those panelists have ruled on those same issues in the past. I also see an overall pattern which seems to exclude those panelists who issue decisions that go “against the grain” of what the ADR providers believe to be “precedent”.

    I understand that at least one ADR provider has now “opened” conferences dealing with UDRP issues at which non-panelists are invited. This is a good start but in my opinion only a start. I have attended several, the last one being just this past October in Geneva. However, I am still baffled by the fact that the virtually the entirety of the presentations are given by a select few panelists (or ADR staff) without any presentation time being provided to the respondents’ side of things. While I know those panelists and believe they are smart people, they are all advocates for IP rights holders. To my knowledge, there has, to date, been one (1) presentation by a respondent-side attorney in 2010. That was not repeated in 2011.

    Being presented only by complaint’s counsel, I have sat through the most strange panelist presentations including those concerning:

    why using “Robots.txt” should be considered evidence of bad faith;

    how, using disjointed bits of wording in the UDRP can result in “and” meaning “or”;

    how the language of paragraph 2 – which is a contractual provision between the registrar and registrant and which uses “knowingly”, can be inferred to obligate a registrant to perform a trademark search;

    how the language of the 1st Element (identical or confusingly similar – a term of art with hundreds of years of history) can be ignored in favor of a “streamlined” standing rule over which the smallest of mice could crawl without assistance.

    ………and most baffling (particularly given the above)

    Why “bad faith” can mean one thing when applied to a registrant but something completely different (and far more difficult to establish) when dealing with the acts of a complainant in connection with reverse domain highjacking. After all, given that the respondent risks losing the domain while the complaint gets “criticized”, one would think the situation would be reversed with criticism being more forthcoming as against complainants who try their hand at the UDRP lottery to recover a validly registered and validly used domain name.

    All of this does nothing to lend credibility to the system. Rather, it leads to a possible conclusion that there is at least an indirect benefit of the doubt being granted to complainants who after all are the very clients to whom most panelist/advocates market their services.

    I know you to be an ethical attorney. But that, again, is not the point. The point of ethics rules is to keep everyone in check and not only those who by their nature are prone to act correctly. Having a professional panel group that is precluded from also serving as advocates would go a long way in terms of credibility.

  7. IP Nightly permalink
    November 3, 2011

    Lawyers with ip interests who make decisions which exand upon the intent of the policy while presiding as panelists only to subsequently refer to these decisions as evidence of some sort of jurisprudence when presenting complainants in the same forum. Conjecture or Fact?

    • Nat permalink*
      November 3, 2011

      Mr. IP Nightly,

      Despite the Bart Simpson level of humor in your choice of handle, you ask a good question.

      Andrew Allemann’s post on Andrew F. Christie that I cite in my post addresses your question. In addition, the 46 comments on the post are very informative. Andrew discovered that UDRP panelist Christie was citing cases that he himself decided as precedent to support his rogue interpretation of the UDRP, an interpretation which runs counter to established precedent.

      I am not privy to the Complaints that Natalie Dreyfus has submitted as an advocate for Complainants, but I can tell from experience that attorneys tend to cite decisions that they are most familiar with – namely those that they themselves have been involved in. It would be expected that any attorney would cite favorable cases in which they had represented the prevailing party. There is nothing preventing a lawyer who is also a panelist from citing cases that he/she decided as a panelist.

      One need not be cynical to expect that a panelist who is also a lawyer will consider, when deciding a case, how the reasoning in that decision would affect future cases that the panelist/lawyer will bring as a lawyer on behalf of his/her clients.

      As John Berryhill states, allowing lawyers to serve as panelists introduces a needless potential for mischief. It creates, at a minimum, the perception of conflicts of interests. Beyond the potential for the appearance of bias, the inherent conflicts between being both advocate and judge cannot be wished away.

      Nat

  8. Adam permalink
    November 3, 2011

    Is this common place, ie do judges do this when they go back to private practice ?

    The sex card play . . .seriously? very poor argument and conjecture

    • Nat permalink*
      November 3, 2011

      Adam –

      someone else would be better able to answer this question. Many arbiters are retired judges. Which makes sense.

      The one time I went to arbitration when I sued to stop a UDRP ordered domain transfer, the arbiter was a retired judge.

      Here is an article that touches on this trend.

      The conflict of an arbiter deciding a case where he or she has a legal interest in the outcome as an advocate for a third party is discussed in a long post entitled “The Arbitrator – As a neutral third party” (http://www.youngicca-blog.com/?p=96)

      But what if, on the other hand, the arbitrator is involved at the same time as the arbitration as counsel for a client that is not related to the parties, in an un-related arbitration or litigation, but which raise the very same legal issues as those he must decide on as arbitrator ? This circumstance is not taken into account in the IBA Guidelines.[80] The view has been expressed that, where he or she is acting as counsel in one arbitration or litigation where one legal issue is at stake, the arbitrator does not have the required impartiality and independence to rule upon the very same issue as arbitrator in another case. The arbitrator might indeed have an interest in solving the legal issue in a sense favourable to his or her client in the other arbitration. Or, saying it differently, the fact that he or she is acting as counsel for a client defending one legal position may prevent him or her from remaining un-biased towards that very same legal position. For this very reason, the fact that arbitrators generally also intervene as counsel in other arbitration has been criticised in the context of investment arbitrations.

  9. November 7, 2011

    Although some time has passed, I wanted to address some of the points raised subsequent to my post above.

    I do not know of a single instance in which a judge acted as an advocate. I believe that their ethical obligations would preclude such activities certainly before their own court and the avoidance of any “appearance of impropriety” would most likely deter them from acting as advocates in another court. The analogy to judges is a good one here. For example the ethical issues noted would not be present AFTER a judge stopped being a judge. In other words, a judge who has retired from the bench could properly serve as an advocate in the same court where he once sat as a judge. He would obviously have to disclose this fact and his fellow judges may be subject to recusal due to conflicts or close personal relationships.

    I have asked to become a panelist. While some may see that as inconsistent with my prior comments, I don’t think that is the case. First, a respondent’s counsel is in a very different position vis-a-vis the conflict issue. Respondents do not control panels.

    Most complaints are resolved with a single panelists. The ADR provider does not disclose how such panelists are selected and it is clear that the process is not random (e.g. taxi-stand approach).

    In multiple panel cases, the respondent is at most able to “suggest” 1 of 3 panelists. However, that is exercised only by submitting a list of 3 with it being up to the ADR provider to select which of the 3 are “asked”. The chair is selected from a list provided by the ADR provider. The ADR providers do not disclose how the list is compiled and the evidence shows this is also not a random process. The selection process allows the complainant and respondent to either “rank” the selected list in order of preference or to each strike 2 from the list, thus in any case presumably leaving at least 1. In those cases where 2 or more panelists remain, the ADR provider itself makes the determination of which person serves as the chair.

    Respondents counsel thus have far less of a potential impact on precedent and their decisions would have very little chance of encouraging their selection by respondents. A “pro” respondent panelist would at most be 1 of 3 selected and it would be a rare event if a respondent’s advocate were selected by the complainant or IMO by the ADR provider in a single panelist case.

    If the time comes that ICANN or the ADR providers preclude panelists from being advocates, I am happy to stop asking to become one. However, until that day it would be nice to at least see some objective criteria used in determining who may and may not be a panelist. Given the current environment, here are a few suggestions:

    1. Publish the requirements for becoming a panelist.
    2. Have ICANN approve panelists for qualification and not the ADR providers
    3. Have a continuing education requirement for all panelists.
    4. Require disclosure to ICANN (confidentially) as to the number of cases assigned to each panelist.
    5. Require a random panel selection (as in a taxi-stand approach). Contrary to what I believe to be the fear with a random selection process, it would not endanger the process and evidence of a good random system in action is close-by (Nominet).
    6. Preclude panelists from being advocates in UDRP proceedings. This would not reduce the pool of panelists as there are many retired judges out there who are eminently qualified.

    There is no downside to the above and it would foster confidence in the system.

    A side benefit of the above would also be the reduction in the noise level of competition amongst the 2 ADR providers. With the same qualified bench and a random process, the differences in outcomes and “who has a more intellectual approach” would be quieting for all.

    Paul Keating, Esq.

  10. Nat permalink*
    November 7, 2011

    Paul,

    Thanks very much for your thoughtful and in-depth comments. Your suggestions are excellent and would go a long way to improving the perception that the UDRP process is being implemented fairly.

    That your suggested improvements are even necessary demonstrate the biased implementation of the UDRP by the ADRs, in the absence of effective ICANN oversight.

    Your suggestions address three key defects:

    1. Lack of transparency in appointing applicants as approved panelists, with the outcome that active TM attorneys are approved while those attorneys who represent domain owners.
    2. Lack of transparency and randomness in how panelists are selected for panels, with the outcome that a disproportionate number of cases are assigned to panelists who have “pro-complainant” interpretations of the UDRP.
    3. Allowing the perception of conflicts of interest by selecting active TM attorneys to serve as panelists. It is not necessary to undermine the perception of fairness in the UDRP process by allowing active TM attorneys to serve as panelists as there is a more than ample supply of retired judges available as panelists, whose use as panelists would not create the same conflicts of interest.

    Thanks,

    Nat

  11. domains permalink
    December 25, 2011

    Nat,

    Happy holidays! Can you update us on this or any recent updates. Curious.

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