UPDATE 02/18/2010 12:47pm: We have confirmed these findings to be correct.

It has often been asserted by trademark holders that the new round of gTLDs will have a major and catastrophic financial impact on brands.

But beyond these alarmist statements, is there any empirical evidence to either back this up, or to prove it false?

After examining all UDRP cases done by WIPO and the NAF, sorted by TLD, the evidence shows that new gTLDs play a very minor role in UDRPs, and that to the extent that a TLD matters, .com more prone to infringement than other, newer gTLDs. Infringements, as measured by UDRPs filed (regardless of outcome), show that infringement broadly correlate to the number of domains registered in a TLD zone, and not to the newness or recency of a TLD.

The study also predicts that if 300 new TLDs were created (an estimate made by several observers, including ICANN), there would be 316 new additional UDRPs filed. When combined with the new Uniform Rapid Suspension provisions that will be required for new gTLDs, these cases would result in a total additional cost to trademark holders of $869,000, or less than $.10 per trademark registered worldwide.

The data shows that, for enforcement via UDRP and URS, assertions that brand holders would be faced with enormous costs have been substantially overestimated.

Read the study.

Are there standards which UDRP Panelists are held to?  Is there protection and balance built in to the system that protects both complainant and respondant?

Sure, if a person loses their domain name, no matter the circumstances, it might be expected to hear a cry of foul or vent about it not being fair or being weighted against the respondant.

One might want to initially dismiss these claims, but unfortunately the patern is that more and more frequently there are cases that the panelist appears to be on complainant autopilot.

Case in point.  In Andrew Alleman’s article today on Domain Name Wire entitled UDRP Arbitration: A Case of Laziness? he describes circumstances of some questionable tactics both by the claimant’s selective omissions of activity and a perception of the panelist’s bias that is hard to argue with.

Another panelist has been showing a pattern of finding for the complainant under questionable circumstances, and even in the presence of irrefutable dissent and presence of pattern reverse hijacking on 3 party panels.

Filing UDRP is largely done by intellectual property interest.  There are clear cases and not so clear cases.

Is it the absence of financial consideration that makes panelists operate in a mindset where volume makes up for the fees involved?  Rushing does not improve quality or balance, at least not for the average domain name owner who is challenged with the loss of their domain name while also being hassled with the legal fees and other costs of defense.

Although statistically the percentage of filings versus the number of domains registered has been a declining number, a growing number of UDRP are filed where the complainant is awarded the domain name.  Read this to mean that I am implying the system is broken and biased towards trademark and big business interests.

Built in to the IRT (authored largely by the intellectual property interests that are using the UDRP system to retrieve domain names from registrants) are provisions for an accellerated process for ‘clear cases’, where the filing costs are lower (as little as $2/name).

There is merit to getting illegal activity taken offline as quickly as possible, such as phishing.  Unless there is a balanced component to this new process, panelists who might be statistically inclined to find for the complainant would with greater frequency be sought for these accellerated proceedings.

If unchecked, any bias, when mixed with the low cost per name would drive volume decisions that could have further skew of balance.

CircleID has posted a link to a new WIPO report on UDRP cases the domain name dispute resolution provider handled in 2005. A copy of the report is available here.

“‘Notwithstanding the unique effectiveness of the UDRP as a global remedy against cybersquatting, the fact that WIPO’s caseload in 2005 was the highest in four years and that many of these cases concern recently registered domain names, underlines the need for continued vigilance by intellectual property owners,’ said Mr. Francis Gurry, Deputy Director General of WIPO who oversees the work of the Center. He further noted that, while WIPO’s experience shows that UDRP disputes are heavily concentrated in the .com domain, attention must also be paid to the establishment of robust preventive mechanisms against abusive registration in new gTLDs. ‘If domain names are randomly attributed in new domains, intellectual property owners will be forced to compete with cybersquatters for their own trademarks – unless additional preventive safeguards are introduced,’ he added.”

Two new decisions issued by the National Arbitration Forum:
CarnieWilson.com - Carnie Wilson v. Whois Privacy Protection Service, Inc. a/k/a Whois Agent, NAF Case FA417186 (Mar. 29, 2005).

KarlLagerfeld.com - Asian and Western Classics B.V. v. New York Link, Inc., NAF Case FA422746 (Mar. 30, 2005).

Both domain names have been ordered transferred to their respective celebrity/personal name trademark owners.