INTRODUCTION TO ALTERNATIVE DISPUTE RESOLUTION AND ODR, DOMAIN NAMES WITHIN THE .CZ DOMAIN AND .EU DOMAIN MGR. PAVEL LOUTOCKÝ, BA (HONS) \\flsrv\profiles\210290\Desktop\Domain-Name.png DOMAIN NAME DISPUTES \\flsrv\profiles\210290\Desktop\domain-name-disputes.jpg MAIN PRINCIPLE §First comes – first served §The domain name is immediately registered §What if the holder of domain name is not the one who should own it? §Cybersquatting, typosquatting, etc. § § THE STRUCTURE Top level domain names (TLDs) •Generic .com, .gov, .org, .biz, .edu •National .cz, .uk, .de, .sk, .ru •Specific .eu Subdomains •muni.cz, seznam.cz, google.com Lower Subdomains •law.muni.cz, mail.google.com • • NEW GTLDS New top level domain names (TLDs) from 2013 •https://newgtlds.icann.org/en/ • •List of all generic domain names (more than 1532): •http://data.iana.org/TLD/tlds-alpha-by-domain.txt SQAUTTERS ALLOWED? \\flsrv\profiles\210290\Desktop\maxresdefault.jpg SQAUTTERS ALLOWED? NO! \\flsrv\profiles\210290\Desktop\maxresdefault.jpg HOW TO BE LEGALLY PROTECTED FROM CYBERSQUATTERS? §Competition law? §Trademark law? §Geographical indications? §Commercial name (firm)? §Right for privacy (e.g. EUHR)? § §COURT? §ANOTHER MORE SUITABLE SOULUTION? § §WHAT WOULD YOU DO? EXAMPLE §Someone would register the domain microsoft.cz §He does not use this domain and offers it for sale for €200 000 § §Can the trademark owner claim violation of his rights? §Can the trademark owner claim transfer of the domain name? §What if the owner is based in US, administrator is Czech and squatter Russian? #WWYD ? ALTERNATIVE DISPUTE RESOLUTION WHAT IS ADR? ADR §Out-of-court dispute settlement §Classical tool in history to settle commercial dispute §Evolved into another fields §Less formal than court proceedings §Faster in specific cases §Based on the agreement of the parties ADR §Does not fit for „internet disputes“ §Judicial proceedings are not convinient as well § §EVOLUTION? § ADR IS OLD !! ODR SHOULD BE THE FUTURE !! REASONS? § §Increased volumes of squatting cases §Problems with international element §Insufficient national regulation §Low experience of judges with cybersquatting and IP law in general -> experts are deciding the case REASONS! §Dispute settlement clause in the terms and conditions of registrations §Third parties have the right (not duty) to file a complaint at a selected institution §These clauses are contained in the majority of domain names §Usually it is not arbitration clause, but non-binding ADR clause!!! § THE RULES - TLDS §Uniform Domain-Name Dispute Resolution Policy (UDRP) §Top-level domain names §https://www.icann.org/resources/pages/help/dndr/udrp-en §List of providers: §https://www.icann.org/resources/pages/providers-6d-2012-02-25-en § THE RULES - CCTLDS §National authorities (does not have to be governemental) §Contract with ICANN §In Czech Republic – CZ.NIC §https://www.nic.cz/page/314/pravidla-a-postupy/ THE RULES - .EU §Not an arbitration clause! (again) §Competence of arbitration courts enacted by regulation 874/2004/EC §https://eurid.eu/en/ THE RULES - .EU § § § §Set of eu regulations: §http://ec.europa.eu/ipg/basics/urls/doteu_en.htm §http://www.adr.eu/ ODR IN GENERAL NOT ONLY DOMAIN NAMES BUT ALL KINDS OF DISPUTES The notion that most people want black-robed judges, well-dressed lawyers, and fine paneled courtrooms as the setting to resolve their dispute is not correct. People with problems, like people with pains, want relief, and they want it as quickly and inexpensively as possible. Warren E. Burger Former judge at US Supreme Court BACKGROUND Traditional judicial mechanisms... did not offer an adequate solution for cross – border electronic commerce disputes, and that the solution (providing a quick resolution and enforcement of disputes across borders) might reside in a global ODR system for small value, high volume ... disputes Courts are resolving only a fraction of today‘s legal disputes (especially low - value) – PROBLEM!! WHAT IS ODR? §It is difficult to provide a self - contained definition of ODR §Dispute resolution, which uses electronic communication to exchange every information between the parties §A growing number of cases (especially low – cost cases) are being resolved by online tools and sometimes lawyers and judges are not even involved Definitions: •dispute settlement which may or may not involve a binding decision being made by a third party, implying the use of online technologies to facilitate the resolution of disputes between the parties •dispute resolution carried out by combining the information processing powers of computers with the networked communication facilities of the Internet WHAT IS ODR? § § §ODR is NOT only modified ADR (alternative dispute resolution) §The technology is the fourth party helping to settle the dispute §Triad: §1) online communication §2) dipute settlement §3) software assisstance § § WHAT IS ODR? The first ODR forms started to evolve between 1996 and 1997 (software assistance) The first experiments were created at the University of Massachusetts in the USA and Canada Those projects were later transformed for commercial use One of the first official systems providing ODR was The Virtual Magistrate •it never fulfilled expectations of the founders •it was mainly caused by “limited scope of disputes, a lack of advertising and the fact that the project was voluntary so that the case managers had no way to force the defendant to take part in the proceedings or to enforce the decisions.” HISTORY OF ODR ODR METHODS „Non – binding“ dispute resolution 2.1 Automated software negotiation 2.2 Online mediation 2.3 Non - binding arbitration 2.4 Binding arbitration 2.1.1 Assisted negotiation 2.1.2 Blind - bidding negotiation „Binding“ dispute resolution 2.1 AUTOMATED SOFTWARE NEGOTIATION Negotiating software is used to reach the agreement between parties without using any third party (negotiator, mediator) Negotiation can’t discuss the liability, only the final sum of the damages •2.1.1 Assisted negotiation •2.1.2 Blind - bidding negotiation The ODR system helps parties through software to create the most efficient solution for both parties (win – win solution) It tries to calculate the best outcome proposing parties possible solutions The parties should be able to achieve an agreement, if they agree with the solution 2.1.1 ASSISTED NEGOTIATION 2.1.2 BLIND - BIDDING NEGOTIATION The ODR system allows both parties to put bids without seeing the sum offered by other party When these bids reach certain level (amount of money), which approaches to each other, than software automatically reveals those offers and proposes the settlement BLIND - BIDDING •The parties are willing to enter negotiation and to reach the settlement, which is binding between the parties once, they agree so •The process is developed for single issue, monetary claims The highest sum to satisfy the initiator The lowest sum to satisfy the initiator 1st bid The lowest sum The highest sum sued party is willing to pay THE INITIATOR (DAMAGED PARTY) SUED PARTY 2st bid 3st bid 2.2 ONLINE MEDIATION It can be seen as classical mediation using modern technologies and online tools As non – binding solution, it uses cyberspace to communicate between the parties and mediator(s) through email, videoconference, special webpage or particular software Great advantage is seen in dynamic form reacting to the direction of dispute by varying the mediation process 2.3 NON – BINDING ARBITRATION This ODR method is lying on the borders between binding and non-binding ODR Enforcement is secured by private organization using less formalized rules Non – binding arbitration is based on the idea of self - regulating the community with no connection to national legislation and enforcement mechanisms Domian name dispute settlement! C:\Users\Loutocký\Desktop\icann.jpg 2.3 NON – BINDING ARBITRATION Private organization is the only one, who controls the resources valuable to both buyers and sellers traded under certain community Example: ICANN (Internet Corporation for Assigned Names and Numbers) and its UDRP process (Uniform Domain - Name Dispute - Resolution Policy) 2.4 BINDING ARBITRATION Arbitration is a process where a neutral third party (arbitrator) creates a decision which is final and binding It is quasi - judicial procedure - the award replaces a court decision Arbitration is often used to resolve business disputes because it is usually faster than litigation Arbitral awards are usually easier to be enforced abroad comparing to the court decisions C:\Users\Loutocký\Desktop\OnlineArbitration.jpg The result of online arbitration should be binding and ?enforceable? Every requirement of national and international legal framework has to be followed and respected to reach the full possibility to enforce online award 2.4 BINDING ARBITRATION ADVANTAGES AND DISADVANTAGES OF ODR PROS CONS 1. Speed and work with information 1. Obstructions of the process 2. The fourth party 2. Technological limitations 3. Legality 3. Due process 4. Erasing distances 4. Insufficiency of non – verbal communication 5. Asynchronous communication 5. Inequality of the parties 6. Adaptability of the system 6. Security of cyberspace and privacy 7. Liberation from emotions and F2F contact 7. Boundaries caused by lack of F2F communication 8. Quick intercession 9. Saving the costs 10. Use of translation software UNCITRAL WORKING GROUP III. The core legal body of the United Nations system in the field of international trade law A legal body with universal membership specializing in commercial law reform worldwide for over 40 years UNCITRAL's business is the modernization and harmonization of rules on international business C:\Users\Asus\Desktop\Cyberspace 2012\uncitral.jpg Model law for online dispute resolution relating to cross-border electronic commerce transactions, including business - to - business (B2B) and business - to - consumer (B2C) transactions Rules of different ODR providers should be harmonized http://www.uncitral.org/uncitral/commission/working_groups/3Online_Dispute_Resolution.html C:\Users\Asus\Desktop\Cyberspace 2012\uncitral.jpg UNCITRAL WORKING GROUP III. •Scope of application: –low-value –cross-border –e-commerce •Language will be the one employed in the contract •Multi-step process 1.Negotiation 2.Facilitation 3.Arbitration •Enforcement of outcomes through online arbitration process C:\Users\Asus\Desktop\Cyberspace 2012\uncitral.jpg UNCITRAL WORKING GROUP III. DRAFT PROCEDURAL RULES Preambule Draft article 1 - Scope of application Draft article 2 - Definitions Draft article 3 - Communications Draft article 4A - Notice Draft article 4B - Response Draft article 4C - Counterclaim Draft article 5 - Negotiation Draft article 6 - Facilitated settlement Draft article 7 - Recommendation by a neutral Draft article 8 - Settlement Draft article 9 - Appointment of neutral Draft article 10 - Resignation or replacement of neutral Draft article 11 - Power of the neutral Draft article 12 - ODR provider Draft article 13 - Language of proceedings Draft article 14 - Representation Draft article 15 - Exclusion of liability Draft article 16 - Costs C:\Users\Asus\Desktop\Cyberspace 2012\uncitral.jpg EU INITIATIVE Statistical background: •1 in 5 consumers in the EU encountered problems when buying goods or services – loss estimated at 0.4% of the EU’s GDP •More than 750 ADR entities in the EU •Diverse not only in different EU states but also within countries •50% of the existing ADR entities are notified to the European Commission by national authorities as meeting the quality criteria set out in the Commission Recommendations •The level of access to dispute resolution is differentiated •No recognized ADR entities (e.g. Slovakia, Slovenia) •Very limited access to ADR entities (e.g. Cyprus, Romania) C:\Users\Loutocký\Desktop\european_flag_01_resized.jpg EU INITIATIVE Directive on alternative dispute resolution for consumer disputes (ADR) •The directive should ensure that consumers can turn to quality alternative dispute resolution entities for all kinds of contractual disputes •It doesn‘t matter, what they purchased (excluding disputes regarding health and higher education) and whether they purchased it online or offline, domestically or across borders •It does not apply to traders’ complaints against consumers (such as claims for payment) or to trader-to-trader complaints C:\Users\Loutocký\Desktop\european_flag_01_resized.jpg EU INITIATIVE Regulation on online dispute resolution for consumer disputes (ODR) •The regulation is setting up EU-wide online platform •For the disputes that arise from online transactions •The platform will link all the national alternative dispute resolution entities and will operate in all official EU languages •Establishment of a free, interactive website through which parties can initiate ODR in relation to disputes concerning online transactions (offline transactions are excluded) •National ADR entities will receive the complaint electronically and seek to resolve the dispute through ADR, using the ODR platform exclusively if they wish C:\Users\Loutocký\Desktop\european_flag_01_resized.jpg CONSUMER DISPUTES IN THE SINGLE MARKET ADR Entities ODR Platform -All ADR entities electronically registered with platform -Information on ADR entities -Complaint form in all EU languages Resolution of the consumer dispute Defines information of complaint form Submission of a complaint (ODR Reg. Art. 7) Put in contact the parties Proposes 1/+ competent ADR entities Processing of a complaint (ODR Reg. Art. 8) Transmission of a complaint (ODR Reg. Art. 8) If agreement by parties, automatic transmission of complaint ADR entity apply its own RoP Dispute resolution within 30 days (ODR Reg. Art. 9(b) ) Network of ODR facilitators Complainant accesses platform’s website EU REGULATION SCHEME EU INITIATIVE Problems? There are some.. •1) Missing presence of online negotiation under ODR platform •2) Misleading reference to the use of ODR platform •3) Language issues •4) Forum shopping C:\Users\Loutocký\Desktop\european_flag_01_resized.jpg EU INITIATIVE More problems? •5) Unsatisfactory legal basis of ADR and ODR regime in EU •6) General issues relating to the functionality of the ODR platform •7) The absence of evaluation and incentive for the parties to settle dispute •8) Non-existing interconnection of the ODR with the •small claims procedure • Attempt to offer quick and easy solution to the consumers (did it fail?) C:\Users\Loutocký\Desktop\european_flag_01_resized.jpg (YES?) BINDING / NON – BINDING ODR C:\Users\Loutocký\Desktop\Obrázek1.jpg BINDING / NON – BINDING ODR The possibility to „enforce“ the outcome of ODR is one of the key factors Binding ODR •Enforcement by public authorities Non – binding ODR •Acceptance of the decision by participating parties and enforcement solely by private mechanisms ODR highly increases access to justice in low - cost (or repetetive) cases C:\Users\Loutocký\Desktop\Obrázek1.jpg BINDING ODR New York Convention is the most important tool to recognize and enforce binding arbitral award It is the key to enforce online binding decisions adjudicated in contractual states Legality of online arbitration •Online arbitration agreement •Online arbitration proceedings •Online arbitration award •Online arbitration enforcement •Appeal and revision BINDING ODR Problems: •Outdated mechanisms for enforcement of online awards •Traditionalism of some legislations with recognition and enforcement of online arbitral award (e.g. identification of the arbiters, localization of the arbitration, agreeing by parties on the arbitral agreement) •National rules of protecting the consumer •Slowness of using New York Convention mechanisms •Trust by the users into the online tools and binding enforcement mechanisms NON – BINDING ODR Enforcement is secured by private organization using less formalized rules especially in small – value B2C, C2C transactions Non – binding arbitration is based on the idea of self - regulating the community with no connection to national legislation and enforcement mechanisms Private organization is the only one, who controls the resources valuable to both buyers and sellers traded under certain community Only very few online buyers and sellers are willing to go to court to enforce their decisions under national and international rules (especially in low – value cases) NON – BINDING ODR Problems? The rules are created ad hoc and ODR systems are fragmented, which can lead into decreasing users‘ confidentiality in solving their disputes using non – binding methods It is impossible to decide the damages of the dispute Non – binding ODR enforcement mechanisms are fully workable when the transactions are repeating Convincing online businesses to finance ODR systems, thus to use ODR mechanisms BINDING OR NON – BINDING ENFORCEMENT OF ODR: THE OUTCOME? Binding ODR •International framework with NYC and national rules are the most convenient tool to be used in nonrecurring (single - shot) higher value especially in B2B transactions • Non - binding ODR •Contract binding, does not establish res iudicata •The significant usability mainly in repeated (multiple – shot) B2C, C2C low – value, high - volume cases •1) reputation •2) escrow/chargeback • ICANN & UDRP (SOMETHING IN BETWEEN) • •In the beginning, when the party registers the domain name, it agrees to undergo an online dispute settlement if someone files a complaint about his registered domain name in the future •ICANN as the organization securing top – level domain names is the only one responsible for enforcing the rules in this area using UDRP (Uniform Domain-Name Dispute-Resolution Policy) • •THE ENFORCEMENT •If the complainant loses, the holder of the domain name remains the owner •If the complainant wins, the domain name is transferred by ICANN to the complainant •The court proceeding are possible, but rarely used. The court however follows previous decision made by UDRP arbitration process. C:\Users\Loutocký\Desktop\icann.jpg STAY SOBER (ODR WON‘T SAVE THE WORLD) •Modern technologies help with access to justice, but it can‘t be overrated •The dispute can still be decided also without using modern technologies •Full utilization of online communication, online file management, etc. isn‘t absolute condition to decide the case •However all those tools significantly speed up the process and help the parties to solve their case FUTURE? Lex informatica – development, existence? Necessary investment Possible application not only in e – commerce, but also in other smaller disputes: •Telecommunications, energetics, etc. ODR tools can be applied in court proceedings FUTURE OF ODR - EJUSTICE •Multi-step process: •1) negotiation •2) mediation •3) binding decision-making process • •The courts would manage whole process, transfer available information to the next stages, and ultimately process the court's decision when linking non-binding decision-making to the judicial system → the courts would be shielding whole process and offer whole technologiacal environment and tools) BACK TO UDRP What is it? What it serves for? Why is it binding (or is it)? UDRP VS NATIONAL SOLUTION OR .EU? Did you understand how it works? What is the relationship? Please discuss.. Obrázek1.jpg QUESTIONS? THANK YOU FOR YOUR ATTENTION!