eResolution, one of the four domain name dispute arbitrators approved by ICANN, has quit the business, accusing its main rival, the World Intellectual Property Organisation (WIPO), of "tilting" the Uniform Dispute Resolution Policy (UDRP) process in its favour.
In a press release, eResolution said: "The ICANN system was originally meant to allow for fair competition between accredited dispute resolution providers. But the accreditation as provider of the World Intellectual Property Organization, a United Nations agency which contributed the draft of the UDRP and whose purpose is to enhance the protection of intellectual property, tilted the balance from the outset.
"The system gave complainants, who invoke intellectual property rights, the privilege to choose the provider. And statistics were soon released showing that complainants tended to win significantly more often with some providers, notably WIPO, than with others, notably eResolution, creating a perception of bias from which the system never recovered."
It continues: "It is but an open secret that lawyers advising their clients in domain name cases have no scruples about quoting the figures and saying that the odds are better with a given provider."
In the press release, Professor Karim Benyekhlef, eResolution's president, criticised the Canadian government (eResolution is based in Quebec) for taking a recent case of 30 domain names to Geneva-based WIPO, at greatly increased cost to the taxpayer.
eResolution's statement concludes: "And that is how the market share of eResolution kept on shrinking to a point where the proceeds no longer covered the costs of maintaining the service. In the end, we were, for all practical purposes, financing the legitimization of a system we knew badly needed change."
The denunciation of the system by one of its main constituents will put still more pressure on ICANN to debate the UDRP rules - something that it has shunned at recent conferences.
eResolution was one of the four organisations, alongside WIPO, the National Arbitration Forum (NAF) and CPRADR, approved by ICANN to decide, following a challenge, which party was most entitled to a particular domain. UDRP - the rules set up to determine the outcome of the arbitration process - has since been widely criticised by all independent reports into the procedure.
One of the main criticisms of the process was the ability of complainants to decide which company heard the complaint, thus providing an incentive for arbitrators to rule in favour of complainants - who are nearly always large corporates or famous people. This is said to have had the effect of making two of the arbitrators, WIPO and NAF, far larger, well-known and subsequently richer. ®
eResolution's press release
Rough Justice: An Analysis of ICANN's Uniform Dispute Resolution Policy by Milton Mueller
Fair.com?: An Examination of the Allegations of Systemic Unfairness in the ICANN UDRP by Michael Geist (pdf format)
The UDRP: Fundamentally Fair, But Far From Perfect by Electronic Commerce & Law Reports
Prof Michael Froomkin's report (Prof Froomkin was on the board which agreed upon the UDRP rules in the first place)