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ABI 304-Prelim _2

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					ABI 304 E-Commerce Law                                                                          1



I1.   E-COMMERCE AND DISPUTE RESOLUTION


      e-Commerce is a business transaction that occurs in cyberspace. It can include any
      business transaction whether it involves a sale form business to business (B2B) of one
      from business to consumer (B2C).

      For B2B and B2C transactions, cyberspace offer :-

      1.   Buyers convenient market place accessibility 24 hours a day, 7 days a week (24/7).
      2.   Gives sellers access to an enormous customer base.

      This situation presents challenges. Business and Consumers desire the continued
      growth of the new marketplace; they want to avoid the difficulties inherent in
      resolving problems arising out of online transactions.

      Ex : buyers must be confident that they have access to effective resolution procedures
           for problems arising in e-commerce.

      e-Commerce Disputes

      Any dispute that arises in e-commerce can be classified as an e-commerce dispute. E-
      Commerce dispute’ is a disagreement that arises from business conducted in
      cyberspace.

      General Types of e-Commerce Disputes

      1.   Disagreements over the rights to domain names.
      2.   Disagreements over the quality of goods sold over the internet, including
           complaints related to auction web sites.

      To settle these conflicts, ODR is used.       ‘Online dispute resolution’ (ODR) is a
      resolution of a dispute in cyberspace.

      Online Resolution of Domain Name Disputes

      Domain Name is the last part of an internet address.

      Parts of a Domain Name :-

      1.   Top Level (TLD) - part of the name to the right of the period and represents the
           type of entity that operates the site.
           Ex : ‘com’ for commercial; ‘net’ for network; ‘edu’ for educational institution;
                 ‘org’ for organization; ‘gov’ for government; ‘mil’ for military.
      2.   Second Level - put of the name to the left of the period and is chosen by the web
           site owners.
           Ex : yahoo.com; goole.com
ABI 304 E-Commerce Law                                                                   2



     Some Common Types of Domain Name Disputes

     1.   A party’s attempts to profit from the good will of a competitor.
     2.   Offer for sale another party’s domain name.
     3.   use without authorization (infringe on) others’ trademarks (a distinctive mark
          affixed to the goods to identify the goods and their origins).

     Internet Corporation for Assigned Names and Numbers (ICANN)

     In the online world, there is only one area of business - the cyberspace. Disputes
     between parties over which one has the right to use a particular domain name is
     common. To settle such disputes, the ICANN is formed.

     The ‘Internet Corporation for Assigned Names and Numbers’ is non profit
     corporation set up by the US government to oversee the distribution of domain names
     ICANN’s dispute-Resolution Procedure.

     1.   Dispute arises over a domain name.
     2.   Party files a complaint with an ICANN-approved dispute-resolution service
          provider, and a panel is chosen to decide the dispute.
     3.   Opposing party is contacted by the panel and given an opportunity to file a
          response.
     4.   Panel considers the parties’ arguments; requests further statements or documents,
          and issues a decision.
     5.   Appeal, if any, is field in court.
     6.   Steps, if necessary, are taken to implement the decision.

     Elements of Uniform Domain Name Dispute Resolution Policy

     These elements must be roped to have a domain name transferred or cancelled. These
     are :-

     1.   The challenged domain name must be identical or confusingly similar to a
          trademark or service mark (a distinctive mark used in the sale or advertising of
          services) in which the complainant has rights.
     2.   The party against whom the complaint is made must have no rights or legitimate
          interests in the domain name.
     3.   The challenged domain name must be registered and be used in bad faith.

     Sample Case :-

     BLUE MAX TECHNOLOGIES vs COMPUDIGITAL INDUSTRIES

     In 1969, International instrumentation, Inc. began manufacturing computer-related
     products under the brand name “Blue Max” and registered this name as a trademark.
     Over the next 25 years, the product name came to have more widespread recognition
     than the company name. For this reason, in 1998 the firm changed its name to Blue
ABI 304 E-Commerce Law                                                                   3



     Max Technology. Blue Max uses the domain name ‘bluemax.net’ to promote its
     services on the internet.

     Compudigital Industries registered the domain name ‘bluemax.com’ in 1996. In early
     1999, Compudigital used this name to link users to a test webpage for an auction site
     that was under construction. Before the end of the year, Compudigital stopped used
     the name completely.

     Blue Max contacted Compudigital and was told that they (Compudigital) was not
     using, and did not plan to use the name. Blue Max offered up to US$10,000 for the
     name. Compudigital refused the offer and forced blue Max into a bidding war with
     another party. Blue Max filed a complaint with an ICANN approved dispute-
     resolution service provider. Despite notices sent by mail, e-mail, and fax,
     Compudigital did not respond. Blue Max asked the dispute panel to order the domain
     name ‘bluemax.com’ transferred to Blue Max.

     According to the Panel :-

     The complainant must prove each of the three elements of the Uniform Domain Name
     Dispute Resolution Policy to support a claim that a domain name should be cancelled
     or transferred :-

     1.   Identical and/or Confusingly Similar

          The complainant, Blue Max, has rights in the mark BLUEMAX. The
          respondent’s, Compudigital’s, domain name is identical to the complainant’s
          mark.

     2.   Rights of Legitimate Interests

          The domain name is question is not a mark by which the respondent is
          commonly known. Rather, the respondent is associated with the domain named
          Compudigital Industries. The respondent has not argued that it is using the
          domain name in connection with a bone-fide offering of goods and services or is
          making a legitimate non-commercial or fair use of the site. Failure to respond to
          the complaint permits the inference that the use of the complainant’s mark is
          misleading and respondent has no rights or legitimate interests in the domain
          name in question.

     3.   Registration and Use in Bad Faith

          The respondent used the domain name to attract users to the auction site prior to
          1999. Attracting users to a website or other online location by creating a
          likelihood of confusion with the complainant’s mark as to the source of the
          website is evidence of bad faith registration and use.
ABI 304 E-Commerce Law                                                                      4



          The respondent also is now passively holding the domain name with use. The
          respondent admitted that the domain name was not in use and was not to be used
          in the immediate future. This is evidence of bad faith.

          The respondent used the domain name for a profit by offering it for sale to the
          complainant and the complainant’s competitors for valuable consideration in
          excess of out-of-pocket expenses.

          Based on the above, the panel concludes that the respondent registered and used
          the domain name in bad faith.

          The Decision :-

          Haying established all three elements, it is the decision of the panel that the
          requested relief be granted.

          Accordingly, for all of the foregoing reasons, it is ordered that the domain name,
          ‘bluemax.com’ be transferred from the respondent to the complainant.

          Alternative Dispute Resolution (ADR)

          It refers to the various methods by which disputes are settled outside the court
          system.

          Types of ADR :-

          1.   Negotiation

               It is process in which parties attempt to settle their disputes without going
               to court, with or without attorneys to represent them. It is one of the
               simplest forms of ADR.

          2.   Mediation

               A method of settling disputes outside of court by using the services of a
               neutral third party, called a ‘mediator’. The mediator acts as a
               communicating agent between the parties and suggests ways in which the
               parties can resolve their dispute. Mediation is the oldest form of ADR.

          3.   Arbitration

               It is the settling of a dispute b submitting the issue to a disinterested third
               party (other than a court), who renders a decision. The decision may not be
               legally binding.
ABI 304 E-Commerce Law                                                                     5



          World Intellectual Property Organization Arbitration and Mediation Center
          (WIPO)

          The WIPO Center is part of the International Bureau of the World Intellectual
          Property Organization. Since 1994, the WIPO Center has arbitrated and
          mediated international commercial disputes between private parties. The WIPO
          Center focuses particularly on the resolution of disputes involving cyberspace
          and e-commerce. This includes disputes that arise from the use of domain names
          and other conflicts involving intellectual property.

          WIPO Center’s Four Dispute-Resolution Services

          1.   Arbitration

               A service of the WIPO Center in which the outcome is binding (final) on
               the parties. There may be one arbitrator on a team of arbitrators. Once the
               party agrees to arbitration, a party cannot unilaterally withdraw.

          2.   Expedited Arbitration

               It is a speedier, ICSS expensive form of arbitration, with a single arbitrator
               and condensed proceedings.

          3.   Mediation

               It involves a neutral third party who helps the disputing parties to resolve
               their differences but who cannot impose a settlement. Any party may
               withdraw at any time.

          4.   Mediation followed by Arbitration

               It requires the parties to attempt a resolution through mediation within a
               certain time. If no settlement is reached, either party can refer the dispute
               to arbitration for a binding decision.

				
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