An update to a controversial 2001 study that questioned the fairness of the Internet Corp. for Assigned Names and Numbers' domain name dispute-resolution policy suggests that things have gone from bad to worse.
Last summer, the study concluded that there was clear evidence of trademark holders selecting arbitration providers that would likely rule in their favour — a practice known as forum shopping — and identified disturbing trends in how certain providers allocated their cases.
The update, being released today, indicates that, over the past seven months, forum shopping has continued unabated, claiming its first arbitration provider victim — Montreal-based eResolution Inc. — which closed its doors for good in December because it could not compete with rivals that tended to favour complainants.
Meanwhile, case allocation trends have grown even more pronounced, with a small group of panelists deciding an ever-increasing share of cases.
The original study reached several major conclusions. First, it found clear evidence of forum shopping. Complainants, who are invariably trademark holders, tend to select the two arbitration providers — the World Intellectual Property Organization and the National Arbitration Forum — who rule most consistently in their favour.
Second, the study found a significant difference in case outcomes when comparing single-panel versus three-member panel cases. Since arbitration providers alone assign panelists for all single-panel cases (unlike three-member panel cases, where the participants themselves largely determine panel composition), they have the power to influence case outcome based on their case-allocation practices.
The data suggested that WIPO and NAF may have used that power to assign cases in a less than random manner. NAF assigned 53 per cent of its single-panel cases to only six panelists, who collectively ruled in favour of complainants 94 per cent of the time. WIPO, meanwhile, failed to assign any of its 1,629 cases to two panelists who are generally viewed as more sympathetic toward domain-name registrants.
Critics argued that there was a simple explanation for the findings, noting the study did not distinguish between cases where the registrant responded to a claim and those where no response was received, referred to as a "default" case. Critics claimed that focusing on the non-default cases would reveal no difference between providers.
The updated study now accounts for all 4,332 UDRP decisions released before Feb. 18, 2002. WIPO and NAF continue to rule in favour of complainants 20 per cent more often than their competitors, and have been rewarded with a market share near 95 per cent.
The differences between single- and three-member panel cases also remain unchanged. NAF's six busiest panelists have decided 56.4 per cent of all of that provider's single-panel cases, with the complainant-win percentage in those decisions over 95 per cent.
Most interesting are new data comparing default and non-default cases. Default cases constitute 54 per cent of cases, with complainants prevailing 94 per cent of the time. There are differences between providers, however — complainants win 98 per cent of NAF default cases, 92 per cent of WIPO cases and only 79 per cent of eResolution cases.
In fact, the default track records of some of NAF's busiest panelists might lead observers to conclude that the UDRP has reversed the traditional maxim of innocent until proven guilty. Three of its busiest panelists have never ruled in favour of a registrant in 324 default cases.
The data on non-default cases, meanwhile, suggests that, contrary to some critics' claims, differences between providers, as well as between single and three-member panels outcomes, do not change. Complainants win 70 per cent and 69 per cent of the time with WIPO and NAF respectively, but only 50 per cent of the time with eResolution.
Similarly, the exclusion of defaults does not affect the difference in complainant win percentage when comparing single and three-member panels. While complainants win 68 per cent of single panel non-default cases, they win only 46 per cent of contested three-member panel cases.
In short, defaults don't make a difference. Rather, with eResolution in bankruptcy court and allocation trends growing worse, the need for UDRP reform has become more critical.