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.
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
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
Ex : yahoo.com; goole.com
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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
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
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
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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
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.
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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
Types of ADR :-
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.
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.
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
ABI 304 E-Commerce Law 5
World Intellectual Property Organization Arbitration and Mediation Center
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
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.
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.