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

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.