VII.

DISPUTE RESOLUTION THROUGH ALTERNATE DISPUTE

RESOLUTION MECHANISMS

In today’s world intellectual property is rising as a standout amongst the

most important items in the worldwide business sector, as in a few routes than

one, the worldwide economy now being subject to engineering constantly

expanding the essentialness of its security through Intellectual Property Laws.

Resultantly, different countries around the globe have entered into multilateral

bargains which have instruments to expand the assurance of intellectual property.

Arbitration and Mediation systems have been delineated in recent multilateral

agreements with the distinguishment that conventional litigation is no more the

most suitable method for settling worldwide intellectual property disputes.

VII.1. THE IMPORTANCE OF ALTERNATIVE DISPUTE MECHANISMS IN T HE IP

DISPUTES

Intellectual property disputes have a tendency to be vast and complex and

regularly include high stakes. Determining these clashes through conventional suit

methodologies can again be impeding to the business interests of both sides to the

dispute. The major disadvantages of litigating these disputes can be the

(1) prolonged time to arrive at a resolution333,

(2) high cost334

333
Kevin R. Casey, Alternative Dispute Resolution and Patent Law, 3 Fed. Cir. B.J. 1 (1993); see

also Deborah L. Jacobs, Controlling Litigation Costs With a Neutral Third Party, N.Y. Times,

September 23, 1990, at 12.

272
 (3) inflexibility of the result335,

(4) lack of control over the outcome,

(5) poor predictability of the result,

(6) negative publicity and

(7) harm to the business relationship.

Interestingly, Alternative Dispute Resolution (ADR) methodologies offer

various preferences over prosecution in intellectual property cases. For sure, ADR

is assuming a bigger part in intellectual property debate. In a few cases, ADR can

give an excellent substitute to conventional routines. Former Chief Justice of the

U.S. Supreme Court, Chief Justice Burger once said “that the notion that ordinary

people want black-robed Judges and well dressed lawyers and fine Courtrooms as

settings to resolve their disputes is not correct. People with problems, like people

with pains, want relief, and they want it as quickly and inexpensively as

possible.”336

334
Margaret F. Anderson, Intellectual Property Mediations: Special Techniques for a Special

Field, 3 Tex. Intell. Prop. L.J. 23, 24 (1994).

335
Wayne D. Brazil, A Close Look at Three Court-Sponsored ADR Programs: Why They Exist,

How They Operate, What They Deliver, and Whether They Threaten Important Values, 1980 U.

Chi. Legal F. 303, 325; see also Victoria A. Cundiff, Companies are Seeking Litigation

Alternatives; They Say ADR Can Be Effective in Intellectual Property Disputes, 15 Nat'l L. J.,

May 17, 1993, at S25.

336
Dina R. Janerson, Representing Your Clients Successfully in Meditation: Guidelines for

Litigators, N.Y. Litigator, November 1995, at 15 (quoting Chief Justice Burger at the 1985 Chief

273
 The trend of increasing access to ADR in intellectual property disputes

now provides for more efficient and economical resolution of these

disputes337. By their nature, intellectual property disputes often involve technical

information. Areas of intellectual property, such as patents, often involve issues of

law and technology that are rarely addressed by Judges, and thus, the Judges are

unfamiliar with these issues338. Therefore, the use of ADR, with arbitrators and

mediators with the use of ADR in intellectual property disputes will lessen the

burden that courts face when disputed technology has gone beyond the scope of

the status quo legal systems. Experience in the technical field at issue, will save

time and effort and will likely lead to more equitable results. The nature of

international disputes lends itself to conflicts as a result of diverse legal systems

and tribunal procedures. Also, international intellectual property disputes often

involve nations that may have very different ideas regarding intellectual property

and the level of protection that it should be afforded. Finally, the use of ADR in

intellectual property disputes will alleviate the burden that Courts face when

disputed technology has gone beyond the scope of the status quo legal systems.

The ADR mechanism conjures up various advantages when the same is applied in

resolving various IP disputes. To sum-up, following are the various advantages :

 Quick and Efficient Resolution.

Justice Earl Warren Conference on Advocacy: Dispute Resolution Devices in a Democratic

Society (Roscoe Pound-American Trial Lawyers Foundation 1985).

337
World Intellectual Property Organization, Press Release No. 93, October 1, 1993

338
Tom Arnold Et Al., Patent ADR Handbook § 5.02 (1991).

274
  Cost Savings.

 Creative, Business-Driven Results.

 Control Over Process and Result.

 Better-Informed Decision-Making.

 Maintained, Improved, or New Business Relationships.

 Confidentiality.

VII.2. FORMS OF ADR MECHANISMS

ADR refers to procedures for settling disputes by means other than

litigation339. ADR primarily consists of two forms – arbitration and mediation.

Parties may use arbitration, mediation, and other hybrid forms of dispute

resolution to settle their disputes without proceeding through the trial

process340. ADR mechanisms varies from country to country. For instance the

United States has Sixteen Hybrid forms of ADR’s, but the

World Intellectual Property Organisation has just three mechanisms, so ADR

mechanisms are highly country specific. Following are the two most commonly

used mechanisms.

339
Adam Epstein, Alternative Dispute Resolution in Sport Management and the Sport

Management Curriculum, 12 J. Legal Aspects Sport 153, 154 (2002).

340
Adam Epstein, Alternative Dispute Resolution in Sport Management and the Sport

Management Curriculum, 12 J. Legal Aspects Sport 153, 154 (2002).

275
 VII.2.a. Arbitration

Arbitration serves as one of the most popular and well-known forms of

ADR. This binding and final method of private adjudication offers clients an

alternative to Courtroom litigation. In arbitration, the parties may select one

private arbitrator or a panel of three private arbitrators, who often possess a

particular expertise in the area of the dispute341. General rules and regulations on

arbitration have been promulgated by various specialized organizations; however,

parties may agree to tailor the regulations to fit their individual situations342.

Depending on the structure the parties have selected, the arbitrators themselves

can offer the parties limited discovery, freedom from some or all of the rules of

evidence, an opportunity to examine and cross-examine witnesses, and the option

to use briefs and oral argument343.

Further modifications can limit the range of possible outcomes. For

example, in a “bracketed” or “high/ low” arbitration, the parties can agree in

advance to maximum and minimum liability amounts. In contrast, “final offer

arbitration” requires each party to submit a final offer to the arbitrator who must

then choose between the two submissions. The fear that the arbitrator will not

accept an excessively inflated (or deflated) figure encourages the parties to submit

341
See Endispute Inc., ADR Processes 4-18 (1994).

342
See e.g. Institute for Dispute Resolution, Center for Public Resources, Inc., CPR Model ADR

Procedures and Practices: Arbitration I-5 to I-18 (1995).

343
Gregg A. Paradise, Arbitration of Patent Infringement Disputes: Encouraging the Use of

Arbitration Throughout Evidence Rules Reform, 64 Fordham L. Rev. 247, 270-78 (1995).

276
more moderate proposals and works to drive the parties closer to a mutually

acceptable solution.

VII.2.b. Mediation

Mediation provides the distinct advantage of allowing the parties to design

their own resolution by means of a mutually agreed-upon solution344. The

mediator serves as a felicitator, guiding the parties to reach an agreement. The

mediator expands the parties’ available resources by providing an understanding

of the complicated issues at hand as well as an unemotional analysis of the

underlying problem. Mediation deflects the focus of the dispute away from rights,

winners and losers345. Instead, mediation focuses on the parties’ interests and

mutual gains. As a result, mediation gives the parties an opportunity to reinforce

their relationships with one another346. Parties in mediation may strengthen

relationships of trust and respect or terminate the relationship altogether in a

manner that minimizes mental anguish as well as monetary costs. Mediation

serves as one of the beneficial forms of ADR for resolving intellectual property

disputes.

344
Howard C. Anawalt & Elizabeth E. Powers, IP Strategy: Intellectual Property Planning, Access

and Protection § 5:26 (2003).

345
Danny Ciraco, Forget the Mechanics and Bring in the Gardeners, 9 U. Balt. Intell. Prop. L.J. 47,

60 (2000).

346
Kathy L. Cerminara, Contextualizing ADR in Managed Care: A Proposal Aimed at Easing

Tensions and Resolving Conflict, 33 Loy U. Chi. L.J. 547, 557 (2002).

277
 The true nature of intellectual property disputes lies in each party’s interest

commitment. Because mediation focuses on the parties’ interests, it is best tailored

to handle intellectual property disputes. Mediation focuses on each party’s interest

commitment to assist the parties in creating a mutually beneficial agreement.

Stated differently, mediation focuses on the parties’ interests to resolve the dispute

rather than declare a winner. Mediation thus overcomes the shortfalls of

arbitration. Mediation allows the parties to design a mutually beneficial solution,

whereas arbitration only provides a more efficient means of declaring a winner .

Mediation provides a platform where both the owner and infringer may satisfy

their interest commitment to some extent.

VII.3. R OLE OF WIPO

WIPO’s principal objective is to promote the protection of intellectual

property throughout the world through cooperation among States, and, where

appropriate, in collaboration with other international organizations. WIPO

recognizes that protection of intellectual property is not an end in itself. Rather,

such protection is a means to encourage creative activity, industrialization,

investment and honest trade. A robust and dynamic intellectual property system

supports and encourages technological innovation and artistic creativity.

For the promotion of the protection of intellectual property throughout the

world, WIPO encourages the conclusion of new international treaties and the

modernization of national statutes. Also, WIPO provides technical assistance to

developing countries, assembles and disseminates information, and maintains

services that facilitate the obtaining of protection for inventions, trademarks and

industrial designs. WIPO also promotes other administrative cooperation among

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Member States. WIPO provides dispute resolution services through its Arbitration

and Mediation Center.

VII.3.a. The WIPO Arbitration and Mediation Center

Based in Geneva, Switzerland, the WIPO Arbitration and Mediation Center is an

administrative unit of WIPO’s International Bureau. It commenced operations in October

1994. The Center administers alternatives to court litigation, for the resolution of

commercial disputes between private parties concerning intellectual property. It also

serves as a resource center, offering a comprehensive website and a series of publications

in the area of dispute resolution of intellectual property disputes. The Center has

promulgated WIPO Mediation Rules, WIPO Arbitration Rules and WIPO Expedited

Arbitration Rules (together the “Rules”) for use in various dispute resolution procedures.

Importantly, the WIPO Rules have been designed for use in any legal system, and in

procedures anywhere in the world. Provided there is agreement among the parties to a

dispute, any person or entity, regardless of national affiliation, may refer a dispute for

resolution under any of the procedures administered by the Center. In the administration

of such procedures, the Center draws on its List of Neutrals, comprising highly

specialized arbitrators and mediators with expertise covering the entire legal and technical

spectrum of intellectual property. The dispute resolution procedures offered by WIPO are

nominally categorized as:

1. Mediation: It is a consensual process in which a neutral person facilitates

discussion and negotiation between the parties so that the parties themselves can

solve their problem. The parties design both the process and the terms and

conditions of their solution to their problem. In contrast to adversarial procedures,

such as litigation or arbitration, a mediator cannot impose a settlement on the

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 parties. Also, any party can abandon the mediation at virtually any time before

signing a settlement agreement.

2. Arbitration: It is a consensual procedure in which a neutral person or persons

impose a binding decision on the parties. Whereas the parties may design the

procedure, the arbitrator designs the terms and conditions of the decision. Also,

after a party has agreed to arbitrate, the party cannot unilaterally withdraw from

the arbitration process without risking an adverse decision on substantive issues.

3. Expedited arbitration: It is a consensual procedure in which the rendering of a

decision by the arbitrator is accelerated. In the WIPO expedited arbitration

model, only one arbitrator serves. Also, time periods are shortened, and

evidentiary hearings are condensed.

4. Mediation followed by Arbitration: In mediation followed by arbitration

(sometimes known as “med-arb”), mediation is undertaken first. If the dispute is

not entirely settled by way of mediation, arbitration ensues to resolve remaining

issues.

VII.3.b. Legal framework for Arbitration

Arbitration is a private mechanism, but does not take place in a legal

vacuum. Typically, different systems of law interact, most notably the law

governing the substance of the dispute, the law governing the arbitration process

itself and the law governing the arbitration agreement.

VII.3.b.(i). Law Applicable to the Substance of the Dispute

In general, parties are free to choose for themselves the law applicable to

the substance of the dispute. Under the WIPO Arbitration Rules, when the parties

280
fail to agree on the choice of substantive law, the tribunal applies the law that it

deems appropriate. The tribunal may also decide “in equity” (as amiable

compositeur or ex aequo et bono), provided that the parties have expressly

authorized it to do so347.

VII.3.b.(ii). Law Applicable to the Arbitration

The law applicable to the arbitration (lex arbitri or arbitral law) is the law

that governs the procedural framework, such as whether a dispute is arbitrable, the

availability of interim measures of protection, the conduct of the arbitration, and

the enforceability of the award. Subject to such arbitral law, parties are free to

designate a set of rules governing the conduct of the arbitration, such as the WIPO

Rules. The law applicable to the arbitration is usually the law of the chosen place

of an arbitration. For example, if that place is Geneva, Switzerland, the arbitration

will be subject to Swiss arbitration law. Thus, in determining the place of

arbitration, the parties select the arbitral law. If the parties fail to reach such an

agreement, under the WIPO Rules, the Center decides the place of arbitration

taking into consideration any observations made by the parties and the

circumstances of the arbitration348 . The arbitral law need not be the same as the

law applicable to the substance of the dispute. A tribunal may, for example, be

subject to the arbitral law of Switzerland, but may be required, by party

agreement, to apply English law to the substance of the dispute. It is important for

parties to choose an arbitral law that:

347
Article 59
348
Article 39

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  Provides support to the arbitration where necessary: examples may relate

to taking of evidence or rendering of conservatory or interim measures;

 Does not unnecessarily interfere with the pending arbitration. Today, most

arbitral laws contain only a limited number of mandatory provisions and

generally give deference to the arbitration rules chosen by the parties.

VII.3.b.(iii). Law Applicable to the Arbitration Agreement

The validity of the arbitration agreement is normally governed by the law

applicable to the contract of which it forms part, or, more generally, the law

applicable to the substance of the dispute. Under the WIPO Arbitration Rules, an

arbitration agreement is effective if it conforms to the law applicable to the

substance or to the law applicable to the arbitration349.

VII.3.c. Instances of Successful Dispute Resolution

VII.3.c .(i). A WIPO administered mediation of a Trademark Coexistence

Dispute

After a dispute arose between them, a North American company requested

mediation with two Italian companies and one Spanish company on the basis of

an agreement which the parties had reached for mediation under the WIPO

Mediation Rules. The goal of the mediation was to help the parties avoid

confusion and misappropriation of their similar trademarks and to regulate future

use of their marks. Although Italian was agreed as the language of proceedings,

any settlement agreement would be recorded in both Italian and English.

349
Article 59(c)

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 The Center suggested to the parties potential mediators with specific

expertise in European trademark law and fluency in Italian and English. The

parties selected an Italian mediator with a trademark practice. The mediator

conducted an initial telephone conference with the lawyers of the parties in which

he scheduled the mediation timing, and agreed on the procedure.

Two months later, the mediator met with the parties in a two-day session

in Milan. The meeting was held in joint session with the exception of two brief

caucuses. At the end of the second day the parties – with the assistance of the

mediator – were able to draft and sign a settlement agreement covering all of the

pending issues in dispute.

VII.3.c .(ii). A WIPO Expedited Arbitration of a Trademark Coexistence

Dispute

A European company had registered a trademark for luxury goods in

different countries. An Asian manufacturer started to sell fashion products under a

similar registered trademark. The Asian company filed a court case and

administrative cancellation proceedings in two European countries alleging non-

use by the European company of its trademark. After the court case went to

appeal, the parties settled their dispute by concluding a trademark coexistence

agreement which included a WIPO expedited arbitration clause. When the

European company used its trademark in a trade fair, the Asian company initiated

WIPO expedited arbitration proceedings claiming infringement of the coexistence

agreement. Following consultations between the parties and the Center, a

European trademark specialist was appointed as sole arbitrator. After two rounds

of pleadings, the arbitrator conducted a one-day hearing and issued an award six

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months after the commencement of the proceedings. Finding partial infringement

of the coexistence agreement, the arbitrator granted the primary remedy claimed

and ordered the European company to refrain from such infringing behavior.

VII.3.c .(iii). A WIPO Trademark Arbitration

A North-American software developer had registered a trademark for

communication software in the United States and Canada. A manufacturer of

computer hardware based elsewhere registered an almost identical mark for

computer hardware in a number of Asian countries. Both parties had been

engaged in legal proceedings in various jurisdictions concerning the registration

and use of their marks. Each party had effectively prevented the other from

registering or using its mark in the jurisdictions in which it holds prior rights. In

order to facilitate the use and registration of their respective marks worldwide, the

parties entered into a coexistence agreement which contains a WIPO arbitration

clause. When the North-American company tried to register its trademark in a

particular Asian country, the application was refused because of a risk of

confusion with the prior mark held by the other party. The North-American

company requested that the other party undertake any efforts to enable it to

register its mark in that Asian country and, when the other party refused, initiated

arbitration proceedings. Following proposals made by the Center, the parties

appointed a leading IP lawyer as sole arbitrator. In an interim award the sole

arbitrator gave effect to the consensual solution suggested by the parties, which

provided for the granting by the hardware manufacturer of a license on

appropriate terms to the North- American company, including an obligation to

provide periodic reports to the other party.

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VII.4. A NALYSIS OF THE INDIAN ADR M ACHINERY

VII.4.a. Statutory underpinnings for ADR

Alternate dispute resolution embodies within its garb different modes of

resolving a dispute, other than that provided by the traditional model of litigation.

Arbitration, mediation, settlement and conciliation are some of the models which

are the alternatives to court based litigation. The Arbitration and Conciliation Act,

1996 has been the main statute in India dealing with the two cited alternate forms

of dispute resolution350.The Civil Procedure Code, 1908 also provides for the

adoption of different models for the expeditious determination of disputes351. The

merits of the modes of alternate dispute resolution are not only limited to speedy

remedy, but also, to the flexibility, cost effectiveness, confidentiality and business

oriented results. The traditional court based litigation system is adversarial in

nature which might lead to severing the relationship between the parties, whereas

the alternative dispute resolution methodology provides a way for the amicable

settlement of disputes. In fact, the Indian judiciary has effectively tried to bring

mediation and settlement for intellectual property disputes in the traditional model

of litigation, through the reading of section 89 of the Civil Procedure Code, 1908.

Even where the alternative dispute resolution methods fail to be the effective

350
“An Act to consolidate and amend the law relating to domestic arbitration, international

commercial arbitration and enforcement of foreign arbitral awards as also to define the law

relating to conciliation and for matters connected therewith or incidental thereto.” Preamble,

Arbitration and Conciliation Act, 1996.

351
Section 89, Civil Procedure Code, 1908.

285
choice for the determination of disputes related to intellectual property rights, they

can be used for narrowing down the issues for contestability in a traditional model

of litigation.

VII.4.b. Judicial approach to ADR

While evaluating the performance shown by the Indian judiciary in cases

related to intellectual property rights, the Supreme Court of India has in the case

of Shree Vardhman Rice & Gen Mills v. Amar Singh Chawalwala352 held that

“Without going into the merits of the controversy, we are of the opinion that the

matters relating to trademarks, copyrights and patents should be finally decided

expeditiously by the Trial Court instead of merely granting or refusing to grant

injunction. In the matters of trademarks, copyrights and patents, litigation is

mainly fought between the parties about the temporary injunction and that goes

on for years and years and the result is that the suit is hardly decided finally. This

is not proper…In our opinion, in matters relating to trademarks, copyright and

patents, the proviso to Order XVII Rule 1(2) C.P.C. should be strictly complied

with by all the Courts, and the hearing of the suit in such matters should proceed

on a day to day basis and the final judgment should be given normally within four

months from the date of the filing of the suit.”

Reiterating its stance in Bajaj Auto Ltd. V. TVS Motor Company Ltd353.,

the Supreme Court of India held that “experience has shown that in our country,

352
(2009)10SCC257; See also Pachranga Syndicate Pvt. Ltd. v. Som Nath and Anr

2010(42)PTC253(Del); See also Sri Rajeswari Fire Works v. Kaliswari Fire works and Ors.,

C.M.A. (MD) Nos. 1378 and 1388 of 2010.

353
(2009)9SCC797.

286
suits relating to the matters of patents, trademarks and copyrights are pending for

several years and litigation is mainly fought between the parties over temporary

injunction. This is a very unsatisfactory state of affairs, and hence, we had passed

the above quoted order in the case of Shree Vardhman Rice & Gen Mills v. Amar

Singh Chawalwala to serve the ends of justice. We direct that the directions in the

aforesaid order be carried out by all courts and tribunals in this country

punctually and faithfully.” It is evident that due to unwarranted delay in the

disposal of cases and the costly litigation which could prolong the protection

accorded to the work, rather than promoting the progress of intellectually

protected work, the aggrieved parties are opting for alternate dispute resolution

mechanisms for the advancement of intellectual property rights in India.

Moreover, the commercial nature of the transactions involved in majority of

intellectual property based litigations, solicits such an approach.

In a landmark judgment in the case of Bawa Masala Co. vs. Bawa Masala

Co. Pvt. Ltd. And Anr354., where a number of legal disputes were resolved

through a process of alternate dispute resolution, the Delhi High Court passed

orders for adoption of a process known as early neutral evaluation, in an

intellectual property based litigation suit. The Court in this case, under the

umbrella of section 89 of the Civil Procedure Code, 1908 mooted for the inclusion

of such procedures for amicable settlement of disputes. The Court further said

that the early neutral evaluation procedure shares the “same features as a

mediation process…the difference is that in case of mediation the solutions

354
AIR 2007 Delhi 284

287
normally emerge from the parties and the mediator makes an endeavor to find the

most acceptable solution” whereas “in case of early neutral evaluation, the

evaluator acts as a neutral person to assess the strengths and weaknesses of each

of the parties.” The Court further made a distinction between early neutral

evaluation and arbitration by stating that in early neutral evaluation “there is no

testimony or oath or examination and such neutral evaluation is not recorded.”

The Court also held that early neutral evaluation is “confidential and cannot be

used by any of the parties against the other. There is no award or result filed.”

This stands as a seminal case, where, Indian Courts have tried to bring alternative

dispute resolution machinery for solving intellectual property infringement related

matters. This case also highlights the inclination, which Indian Courts have started

sharing, towards involvement of alternate dispute resolution measures in

resolution of such disputes.

VII.5. UNIQUE MECHANISM TO RESOLVE DOMAIN NAME DISPUTES

Cyber squatting is the act of unlawfully registering domain names that are

identical or deceptively similar to organization’s or individual’s trademark and/or

domain name. The effect of cyber squatting can be grave as it could not only

cause monetary loss but also tarnish the reputation by misleading the public and

consumers. In the present digital era, the rate of cyber squatting activities is on

rise and it is becoming increasingly important for the bonafide owner to safeguard

their domain names. The present bulletin discusses the dispute resolution

mechanism for domain name disputes and analyses the manner in which effective

reliefs can be sought against cyber squatting.

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 VII.5.a. Uniform Domain Name Dispute Resolution Policy

The Internet Cooperation for Assigned Names and Numbers is a non-

profit organization incorporated on September 30, 1998, to administer the internet

protocol addresses and to maintain the domain name space. Domain names are the

address of the website by which it is located in the internet and, therefore, it

becomes pertinent to prevent registering similar or deceptively similar domain

names to safeguard the bona fide registrant and public. The main objective of

ICANN is to ensure stable and secure internet operations and, therefore, UDRP

was framed to deal with the disputes relating to (i) registration, and (ii) use of

domain names. The UDRP applies only to domain name disputes relating to

Generic Top Level Domain Names (“gTLDs”). There are 18 gTLDs including

.com, .edu, .aero, .biz, .org, .jobs, .mobi, .museum, .net, .tel, .travel, .info,

.coop.etc.355

Under UDRP, the domain name disputes are resolved in a quicker and cost

effective manner by way of arbitration. UDRP does not specifically ouster the

jurisdiction of civil courts and, the complainants still have the recourse under both

UDRP and civil proceedings356. The question arises here is how the domain name

registrant is binding by arbitration proceedings under UDRP? The person or

organization seeking to register a gTLDs has to necessarily enter into an

agreement with ICANN approved registrar wherein he agrees to submit himself to

resolve any domain name disputes in accordance with UDRP. If the complaint is

355
http://www.icann.org/registrar-reports/accredited-list.html

356
http://www.icann.org/en/help/dndr/udrp/policy

289
filed with civil court it shall be dealt under the Trademarks Act, 1999 and the

proceedings shall be conducted in accordance with the Civil Procedure Code,

1908. However, it is more advantageous to initiate arbitration proceedings under

UNDRP for domain name dispute since the proceedings will be normally

completed within 60 days from the date of receipt of the complaint357 and the

official fee is fixed. Whereas, the civil proceedings is not time bound and

relatively consume longer time period to decide the issue, and the court fee to be

paid varies with the jurisdiction of the court and value of the suit and is relatively

higher.

VII.5.b. Procedure for Dispute Resolution under UDRP

If a person or organization intends to settle the domain name dispute

relating to gTLDs through UDRP, a complaint can be submitted with the ICANN

approved dispute resolution service provider (“Provider”)358. There are four such

Providers namely; World Intellectual Property Organization (“WIPO”), National

Arbitration Forum, Asian Domain Name Dispute Resolution Center and Czech

Arbitration Court Arbitration Center for Internet Disputes359. The complaint

should necessarily mention the following details

XIII. name, address and contact details of the complainant;

(ii) the domain name in dispute;

357
http://www.wipo.int/amc/en/domains/guide/index.html

358
The list of ICANN approved registrar can be accessed at http://www.internic.net/regist.html

359
http://www.icann.org/en/help/dndr/udrp/providers.

290
 (iii) name, address & other details of the present registrant;

(iv) name of the registrar with whom the disputed domain name is

registered;

(v) grounds of complaint;

(vi) details of the trademark registration, if any; and

(vii) relief.

Upon receiving the complaint and requisite fee360, the Provider forwards a

copy to the respondent who is alleged to have cyber squatted the domain name

and directs him to submit a reply within 21 days. Once the reply is received, the

Provider appoints the arbitrators as per the recommendation of the complainant

and the present registrant. If either party fails to submit their recommendation, the

arbitrator is appointed from the list of arbitrators maintained by ICANN.

The arbitration proceeding is normally conducted through tele/video/web

conference unless an exceptional requirement demands for a physical hearing. As

per Rule 6 of the UDRP Rules, the arbitrator has the obligation to issue the award

within 14 days from its appointment. Thereafter, the Provider communicates the

award to the parties and to the concerned registrar and also informs the date

within which the award has to be implemented. If the complainant is successful,

the domain name is either cancelled or suspended or transferred in favor of the

complainant. Under UDRP arbitration proceedings, the arbitrator itself sends the

copy of the award to the concerned registrar as soon the same is passed and,
360
The arbitration fee is decided based upon the number of domain names in issue. The information

on applicable fees can be accessed at www.wipo.int/amc/en/domains/fees/index.html

291
further the award is also implemented after expiry of 10 working days from the

date of receipt of the same. In case the registrar fails to implement the award

within the said time period, a complaint can be filed with the ICANN based on

which the registration of the registrar can be cancelled and also steps will be taken

to implement the award. Further, there could also be a possibility where the

present registrant does not follow the directions of the Provider and chooses not to

file any reply. In that scenario, the Provider shall decide and pass the award based

upon the complaint submitted by the complainant/aggrieved party. As per the

statistics provided by the WIPO, since 1990 a total number of 25,594 domain

name dispute cases have been decided by it until the year 2013. The said statistics

itself would stand as an exemplarily proof that disputes are disposed off in a

speedy manner initiated under UDRP.

VII.5.c. “.In” Dispute Resolution Policy

INDRP applies only to India’s top level domain names including “.in”,

“.co.in”, “.org.in”, “.ing.in.”361 The said top level domain names are administered

by “.IN” registry which is an autonomous body under the National Internet

Exchange of India (“NIXI”). NIXI is a non-profit company registered under

section 25 of Companies Act, 1956 and its main responsibilities are(i) maintaining

the “.in” domain names; (ii) ensuring the operational stability, reliability, and

security of .in domain names. Therefore, INDRP was framed to resolve the “.in”

related domain name disputes only. Similar to UDRP, the dispute resolution can

also be conducted by way of arbitration procedure under INDRP. At the time of

361
http://www.inregistry.in/

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registration of the “.in” domain names, the domain name registrant has to sign an

agreement with the registrar thereby agreeing to resolve the disputes arising over

the domain name through arbitration conducted under the Arbitration and

Conciliation Act, 1996 (“Arbitration Act”). If the registered “.in” domain name

conflicts with any legitimate rights or interest, a complaint can be filed with “.IN”

registry by paying the applicable fee to resolve the dispute. Rule 15 of INDRP

rules provides the fee applicable for arbitration proceedings362. The complaint

ought to contain all information similar to UDRP as mentioned above. The

arbitrator considering the grounds and supporting evidence submitted by both

complainant and respondent passed the award, which is forwarded to the “.IN”

registry. Thereafter, the “.IN” registry forwards a copy of the award to the

concerned parties and also communicates the date of implementing the award.

Unlike UDRP, the INDRP does not provide any specific provisions

permitting the complainant to resolve the disputes by approaching civil courts.

Therefore, it raises a legal question whether the civil courts shall have the

jurisdiction to deal with “.in” domain name disputes. In the case of Citi Corp and

Another vs. Todi Investors and Another363, the Delhi High Court held that the

INDRP does not specifically ouster the jurisdiction of civil courts and the

remedies mentioned under INDRP (i.e. arbitration) is merely an alternate manner

of resolving disputes. Such alternates cannot derogate the remedies available

under common law. Therefore, the civil courts in India shall have the jurisdiction

to deal with “.in” domain name disputes.

362
http://www.registry.in/INDRP%20Rules%20of%20Procedure
363
2006(33) PTC 631 (Del)

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 VII.5.d. Factors Guiding the Arbitration Decisions

Both under UDRP364 and INDRP, the arbitral tribunal shall pass an award

in favor of the complainant only if anyone of the following elements is proved

with sufficient evidence;

 the domain name is identical or confusingly similar to the trade mark/trade

name of the complainant;

 the domain name registrant has no legitimate rights or interests in respect

of the domain name; and

 the domain name registered is being used in “bad faith” by the present

registrant.

The expression “bad faith” includes using the impugned domain name(s) with a

view to sell, rent or transfer it to the complainant at high profits or to deceive the

public with respect to the trade mark, or to simply prevent the registered trade

mark of the complainant to reflect in corresponding domain name.

In light of the above, the dispute resolution mechanism under UNDRP and

INDRP is speedy and effective; however, the remedies are limited to cancellation

and transfer of domain name to the aggrieved party. Both UDRP and INDRP does

not ouster the jurisdiction of civil court and, therefore, if the aggrieved party

intends to seek for compensation then the complaint can be filed with the

appropriate civil court as the remedies available under common law are

exhaustive. If the complainant prefers to file a complaint before civil court, the

jurisdiction of the court is decided as per section 134 of the Trademarks Act, 1999

364
http://www.icann.org/en/help/dndr/udrp/policy

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according to which the suit is instituted either at the place of the defendant or at

the place where cause of action arises. But, if it is a registered trade mark then the

suit can also be instituted at the place where the trade mark proprietor resides or

carries on business.

VII.6. ONLINE DISPUTE RESOLUTION -A N OVEL FORM OF ADR

ODR is a branch of dispute resolution which uses technology to facilitate

the resolution of disputes between parties. It primarily involves arbitration,

negotiation or mediation, or a combination of all three. In this respect it is often

seen as being the online equivalent of ADR. Thus, ODR augments the traditional

means of resolving disputes by applying innovative techniques and online

technologies, such as teleconferencing to the process.

The disputes that can be resolved through ODR are those arising out of

online contracts, software development, cyber squatting, consumer complaints,

domain name disputes, intellectual property disputes and issues such as

censorship, privacy, fraud, e-commerce, etc. Globally, at present the two

approaches adopted by disputants to ODR are:

(a) non-adjudicative ADR, which focus on negotiation and mediation; and

(b) arbitration, which is adjudicative. Currently the National Internet

Exchange of India (“NIXI”)1 uses only the second approach. Arbitration,

negotiation and mediation may work when the system develops and the

process of ODR has evolved further.

Across the globe various procedural rules have already been framed by

various organizations which provide ODR in their respective specialized areas of

e-disputes. The following are some of the organizational rules and procedures

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which have been adopted and adapted to serve as model clauses for the parties

choosing ODR to resolve their disputes: ICC Rules of Arbitration, ICC Rules of

Optional Conciliation and the rules and procedures of International Center for

Settlement of Investment Disputes and London Court of International Arbitration.

Once the disputants mutually agree, either by means of an agreement entered into

between the parties or when the dispute arises to follow the procedural rules of a

specific organization which is conducting the ODR, the said procedural rules shall

be binding on the parties.

VII.6.a. Advantages of Online Dispute Resolution

Economically viable: Cost is one of the most crucial factors in dispute resolution,

as disputants like to reach an optimal decision at the lowest possible price. ODR

best suits the financial demands of all parties to a dispute, as most of the

document are exchanged via e-mail and the proceedings take place online as

opposed to exchange of documents by post. The costs related to travel and

accommodation, venue for conducting the proceedings is also eliminated.

Therefore, carrying out ODR is not only easier and faster, but it is also

significantly cheaper.

Speedy resolution: One of the main advantages of ODR over conventional ADR

is that it is less-time consuming. Where, in ADR it may take several months to

resolve a dispute, ODR promises settlement of disputes within a few weeks.

Further, the borderless nature of the internet diminishes the communication

problems faced by parties and their counsels who may be located in different time

zones. Moreover, the internet enables parties to easily obtain data and other

information about their cases in real time. In addition to easy accessibility, e-mail

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simplifies the task of scheduling ODR proceedings and avoids any phone or fax-

tags in the process. The internet is also a superior and swifter form of

communication, as it facilitates the sending and storing of documents of multiple

parties simultaneously, thus saving both time and money.

Non-confrontational mechanism: By removing the physical presence of the

adversary, ODR enables the adjudicating body to dispassionately resolve the

dispute, purely on basis of the merits of the case. Further, since most of the

arguments or dialogues take place asynchronously over the internet, it allows the

disputants to reflect on their positions before articulating their response.

Additionally, such a mechanism neutralizes any economic or other power

disparities that may obtain between the disputants, as there may be several

instances where one party to the dispute is a small-time manufacturer/supplier and

the opposite party is global entity.

Neutral forum: The internet offers a neutral forum for adjudication and the

“home advantage” one of the parties hitherto enjoyed.

Facilitates record keeping: ODR facilitates the process of maintaining the record

of the correspondences, pleadings, statements, and other written, oral or visual

communications, by relying solely on digital records. This in-turn saves time and

money of the parties.

VII.6.b. Challenges in Online Dispute resolution

Lack of human interaction and miscommunication: The lack of face-to-face

interaction deprives the adjudicating authority of the opportunity to evaluate the

credibility of parties and the witnesses. Moreover, the impersonal nature of the

internet can potentially cause miscommunication between the parties, which is

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likely to occur when parties are located in different countries and speak different

languages.

Limited range of disputes: Like ADR, ODR is also best suited to resolve only

certain types of disputes, like, e-commerce and domain name disputes. The ODR

mechanism may not be suitable for resolving every kind of online dispute, for

example, negotiation and mediation may be more suitable in resolving issues such

as the damages that may be payable for breach of contract. Further, 298lobaliz

disputes, such as defamation and trespass, may require discovery, interrogatories,

recording the testimony of a witnesses and the cross-examination, which may not

be convenient to process over the internet.

Inadequate confidentiality and secrecy of proceedings: The secrecy of

proceedings is fundamental to the process of dispute resolution, which ODRs

inherits from ADRs. Accordingly, ODR providers have made technological

arrangements, such as, installation of various software’s, firewalls, etc., to protect

the data sent by the parties from data interception, alteration, etc. Though

substantial efforts have been made towards creation and implementation of data

protection laws, these measures do not ensure 100% protection from hackers and

other cyber offenders and require constant updating, despite which there may still

exist loop-holes which can be exploited. Thus, inadequate internet security may

act as a major deterrent in the growth of ODR.

Inadequate authenticity: Closely related to the issue of security is the issue of

authentic identification of the user. In an ADR process, one party can be certain

that the other party it is dealing with is the party actually involved in the dispute.

However, in cyberspace, it is not easy to verify the authenticity of messages

received and it is relatively easy for a third party to impersonate or misrepresent

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one of the parties in the dispute, causing confusion, thereby defeating the very

purpose of adopting ODR.

Jurisdiction: Internet being a borderless medium transcends and challenges

traditional concepts of jurisdiction. This leads to problem in deciding the

applicable substantive law which is to be applied to the dispute. This issue can

only be resolved by parties clearly identifying the applicable substantive and

procedural laws in the clause whereby they agree to submit the dispute to

resolution by ODR. Ultimately, the resolution of this issue would be contingent

upon the pronouncement of the court systems in different jurisdiction which

would examine and interpret such ODR clauses, but this process is inescapable

and inevitable and cannot be circumvented.

Hindrances at pre-trial stage: A significant component of the pre-trial stage is

discovery, interrogatories and collation of evidence in support the respective

contentions of the parties. This discovery or fact-finding process may be

minimized in the ODR process to speed the process of settlement of dispute.

However, in a situation where the facts are disputed, a limited discovery

procedure may serve to limit the fact finding capacity of the adjudicating authority

to discover the true and correct state of facts. Further, limiting or eliminating the

discovery process may offend the due process, causing the courts to strike them

down as they do not meet the minimum requirements of due process.

Publication of proceedings and award: If ODR is to be encouraged as a popular

mode of dispute resolution, details of proceedings and decisions would be

required to be published which ensures transparency. But, this contradicts the very

essence of ODR, which is respecting the confidentiality and right to privacy of the

parties. Thus, the fate of ODR hangs in balance with one school of thought

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demanding absolute secrecy of proceedings and the other school seeking

publication of proceedings and the decisions. As a matter of practice, currently, all

ODR providers keep the proceedings confidential and release information only if

both the parties agree to publish the decision.

Difficulty in enforcement of online awards: Like ADRs, in the case of online

arbitrations, once the decision has been rendered, the same has to be enforced in

the appropriate court. In several jurisdictions, including India, the orders in

execution are subject to appeals and this serves to protract the process of

execution. Going by this principle, unless the parties are assured of the

enforcement and implementation of the decisions, disputants may not have much

faith in online proceedings. Further, enforceability of foreign decisions

pronounced after completion of ODR proceedings is also an issue which must be

considered while agreeing to an ODR clause.

Challenging an award: Since ODR proceedings are conducted online, another

issue requiring clarity is the intervention of a court during or after the completion

of the proceedings and/or pronouncement of the decision. This will again raise the

question of: (a) the enforcement of the decision of the court in the country where

the opposite party operates/resides; and (b) appeals against the decision of the

court and enforcement of the said decision.

VII.6.c. Suggestions to Improve Online Dispute Resolution

Mechanism

In the absence of an enforceable international regulatory regime, the following

suggestions are proffered to establish ODRs as an effective mechanism of dispute

resolution:

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Creation of national and international body

By an international treaty of the community of nations, an international ODR

body needs to be created which would establish its own substantive and

procedural law. Every member country should have a national body conducting

ODRs, providing the infrastructural facilities and the panel of

arbitrators/mediators, based upon the guidelines set out in the treaty to which the

country is a signatory/member. This international body should be independent and

should be vested with appellate powers. Hence, in case the disputants wish to

challenge the decision, they can only have recourse to this appellate forum and not

to the national civil court system. Further, the decisions should be final and

binding upon the parties and the said international body should also have the

power to enforce the award.

“Due process” and “fair play”

To be a successful means of resolving disputes, ODR must satisfy all

requirements of “due process” and “fair play,” such as the appointment of an

unbiased decision maker to settle disputes by allowing parties to choose from a

panel of arbitrators or mediators, which may be made available on the website of

the ODR provider; providing background information of arbitrators or mediators

to facilitate the process of selection; and pronouncing a reasoned decision.

Security technology

ODR providers should be certain that they adopt security mechanisms to

ensure the safety of the parties information, such as, allow only authorized access

to their websites and adopt the latest security technology available and update it

regularly. ODR providers should also mandate that parties use digital signatures in

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their online communications. The purpose of such digital signatures is two-fold:

(a) it encrypts the online message or document, thereby providing security to the

transmission; and (b) it allows the receiver to verify the authenticity of the

message.

Owing to the adaptable nature of ADR, traditional forms can be modified

to resolve most online disputes. While there are several challenges to ODRs

becoming a viable mechanism of dispute resolution, it is only a matter of time

before these challenges are overcome. Further, the rapid growth of ODR providers

in the last few years is evidence that ODR is a far more effective mechanism for

resolving online disputes than traditional ADR or litigation. A concerted effort by

the governments, consumer groups, and the online industry could go a long way

in facilitating the establishment of speedy and economical resolution of disputes

employing the ODR mechanism.

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