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The TPP and the DNS

On November 5, 2015 the Office of the U.S. Trade Representative (USTR) released the official text of the Trans-Pacific Partnership (TPP). That text consists of 30 separate Chapters totaling more than 2,000 pages, and is accompanied by four additional Annexes and dozens of Related Instruments. Only those who negotiated it are likely to have a detailed understanding of all its provisions, and even that probably overstates reality.

The TPP’s intellectual property (IP) provisions are contained in Chapter 18, which runs for a mere 74 pages. While the majority of these provisions address patents, copyrights, and trademarks, Article 18.28 deals with Domain Names (its full text is reproduced at the end of this article). While of direct relevance to the domain name industry as well as the trademark sector, these provisions were not deemed sufficiently important to merit a single word of explanation in the IP Rights issue paper or fact sheet issued by USTR.

There are twelve signatory nations to the TPP—Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam, and the United States. Article 18.28 requires each of them to do two things with regard to domain names:

  1. Make available for its country code top level domain (ccTLD) a dispute resolution procedure, modeled upon the principles of ICANN’s Uniform Dispute Resolution Policy (UDRP), that is designed to provide expeditious and low cost resolution, is fair and equitable, is not overly burdensome, and does not bar access to judicial redress; and
  2. Provide online public access to a reliable and accurate database of domain registrants in its ccTLD in accordance with each nation’s laws and relevant administrative policies regarding privacy and personal data protection.

Neither of these provisions is earth-shattering, and to some degree they are even positive for the domain sector. Most major ccTLDs already provide access to non-judicial dispute resolution between trademark rights holders and domain registrants, and some even go beyond TPP’s requirements. The .US ccTLD, for example, which had already adopted the UDRP, announced in June 2104 that it was adopting the Uniform Rapid Suspension (URS) procedure which was developed for ICANN’s new gTLD program but is not yet a Consensus Policy applicable to legacy gTLDs. Further, the .US versions of both UDRP and URS require the rights holder to only demonstrate that “the domain name(s) were registered or are being used in bad faith”, while the ICANN versions require evidence of both bad faith registration and use. From a registrant’s point of view, the most positive element of the TPP language is its emphasis on a “fair and equitable” process and its preservation of court access.

As for online access to registrant data, the TPP’s deference to law and policy regarding privacy and personal data protection does not appear to attempt to influence the ongoing attempt by ICANN stakeholders to fashion a new database policy to replace WHOIS. Nor does it require ccTLDs to prohibit the use of privacy and proxy services (which are permitted, for example, by the .AU registry).

So Article 18.28 seems to at least satisfy the “do no harm” standard.

These provisions do not take effect until a signatory nation take the additional steps required under its law to formally adopt the TPP. In the U.S. that requires Congressional approval. President Obama’s November 5th letter to the House and Senate leaders concludes with this statement:

Consistent with the Trade Priorities Act, I am sending this notification at least 90 days in advance of signing the TPP Agreement. My Administration looks forward to working with the Congress in developing appropriate legislation to approve and implement this TPP Agreement.

The TPP faces stiff political opposition within the U.S. Most Democrat members of Congress are opposed to it due to strong resistance from unions and other interest groups.

While we don’t see them as being in the camp of either U.S. political party, the Electronic Frontier Foundation (EFF) recently declared that the publication of TPP’s IP provisions “confirms our worst fears about the agreement, and dashes the few hopes that we held out that its most onerous provisions wouldn’t survive to the end of the negotiations”. EFF took a far more jaundiced view than our own regarding the domain name provisions, observing that it “requires countries to adopt an equivalent to ICANN’s flawed Uniform Domain-Name Dispute Resolution Policy (UDRP), despite the fact that this controversial policy is overdue for a formal review by ICANN” (Note: Such UDRP review is expected to commence in the first half of 2016.)

With the U.S. elections just a year away, U.S. Presidential and Congressional electoral politics are converging to bear on the TPP’s prospects. Presidential Contender Bernie Sanders is a long-time and highly vocal detractor of the pact. His official position states that he:

Opposed NAFTA, CAFTA, permanent normal trade relations (PNTR) with China, the TPP, and other free-trade agreements. These deals kill American jobs by shifting work overseas to nations which fail to provide worker protections and pay extremely low wages.

Meanwhile, Hillary Clinton, who pronounced the TPP to be the “gold standard” of modern trade deals while serving as Secretary of State in the Obama Administration, reversed that stance on October 7th, shortly after the final text was published on WikiLeaks, stating:

As of today, I am not in favor of what I have learned about it. I have said from the very beginning that we had to have a trade agreement that would create good American jobs, raise wages and advance our national security. I still believe that’s the high bar we have to meet. I’ve been trying to learn as much as I can about the agreement, but I’m worried. I appreciate the hard work that President Obama and his team put into this process and recognize the strides they made. But the bar here is very high and, based on what I have seen, I don’t believe this agreement has met it.

That position, alleged by some to constitute a “flip-flop “, caused the Washington Post to opine in an editorial:

Bowing to pressure from the Democratic Party’s ascendant protectionist wing, would-be presidential nominee Hillary Clinton has come out against President Obama’s freshly negotiated Trans-Pacific Partnership (TPP) trade agreement. The most hopeful thing to be said about this deeply disappointing abandonment of the president she served, and the internationalist tendency in Democratic ideology she once embodied, is that it is so transparently political… To be sure, Ms. Clinton salted her anti-TPP statement with qualifiers: “What I know about it.” “As of today.” “I am not in favor of what I have learned about it.” And so on. In other words, there is still a chance that later on, if or when she’s president, and it is to her advantage, she may discover some decisive good point in the TPP that would let her take a different position without, technically, contradicting herself. Cynical? Perhaps, but as we said, that’s the hope.

On the Republican side, leading Presidential contender Donald Trump has made his TPP opposition clear, stating inimitably in a November 9th interview, ““The deal is insanity. That deal should not be supported and it should not be allowed to happen.” While Jeb Bush has voiced support for TPP, others vying for the GOP nomination do not appear to be eager to take a hard position that could antagonize an already disaffected and generally anti-establishment voter base, particularly within its “Tea Party” contingent. More establishment Republican corporate interests tend to favor the TPP, but even in that camp there are notable industries and major companies with strong concerns about various aspects of the agreement.

Congress voted in June 2015 to give the President “fast track” trade promotion authority for the TPP, but that does not mean that a vote will come quickly—just that the TPP text cannot be amended by Congress. The earliest Congress might vote on TPP is Spring 2016. But given that 2016 will be a politically charged year with control of the House, Senate, and White House all theoretically up for grabs, neither party is anxious to take a vote that could alienate millions of potential voters. So there’s a good chance that the final decision on TPP will be left to the next President and Congress sometime in 2017.

The TPP’s signatory nations do not include the largest economic power on the western shore of the Pacific, China, and that omission is to some extent meant to deliberately counter that nation’s economic designs for the Pacific Rim. As former U.S. Treasury Secretary Lawrence Summers just described that strategy:

The Council on Foreign Relations, hardly a source of xenophobic or radical ideas, recently issued a report drafted by leading U.S. diplomats condemning this country’s efforts to build up China within the international economic order and calling for a “balancing strategy” that includes “new preferential trading arrangements.?.?.that consciously exclude China.” No small part of the case being made by the Obama administration for the Trans-Pacific Partnership (TPP) trade deal involves the idea that it will promote competitiveness vis-a-vis China and reduce China’s influence in determining global trade rules.

But global investment flows route around trade policies just like the Internet routes around obstacles, and Chinese investors are today taking actions that may elevate the status of domain names in future trade agreements. Domain name registrations have recently been hitting record levels and, as reported in The Domains, most of the demand seems to be coming from purchasers in China who want to diversify out of equities and real estate and now view domains as an asset class with multiple valuable attributes, including good price appreciation potential.

That changing economic role for domains gives hope that, when the next multinational trade pact is under development, the domain investment industry will be well positioned to make its own case that domains must be viewed not just through the prism of potential trademark infringement but as a valuable intangible asset unto itself, and one that is equally deserving of uniform international recognition and protections.

* * *

Domain Name Provisions of the TPP

Article 18.28: Domain Names

1. In connection with each Party’s system for the management of its country-code top-level domain (ccTLD) domain names, the following shall be available:

  1. an appropriate procedure for the settlement of disputes, based on, or modelled along the same lines as, the principles established in the Uniform Domain-Name Dispute-Resolution Policy, as approved by the Internet Corporation for Assigned Names and Numbers (ICANN) or that:
    1. is designed to resolve disputes expeditiously and at low cost;
    2. is fair and equitable;
    3. is not overly burdensome; and
    4. does not preclude resort to judicial proceedings; and
  2. online public access to a reliable and accurate database of contact information concerning domain-name registrants,
    in accordance with each Party’s law and, if applicable, relevant administrator policies regarding protection of privacy and personal data.

2. In connection with each Party’s system for the management of ccTLD domain names, appropriate remedies17 shall be available at least in cases in which a person registers or holds, with a bad faith intent to profit, a domain name that is identical or confusingly similar to a trademark.

17 The Parties understand that such remedies may, but need not, include, among other things, revocation, cancellation, transfer, damages or injunctive relief.

By Philip S. Corwin, Senior Director and Policy Counsel at Verisign

He also serves as Of Counsel to the IP-centric law firm of Greenberg & Lieberman. Views expressed in this article are solely his own.

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Domain name registrations have recently been hitting Frank Bulk  –  Nov 10, 2015 1:03 AM

Domain name registrations have recently been hitting record levels and ... most of the demand seems to be coming from purchasers in China who want to diversify out of equities and real estate and now view domains as an asset class with multiple valuable attributes, including good price appreciation potential.

Do you have some numbers that compare Chinese investment in domain names to hard assets?

I don't know of any comparison of Philip S. Corwin  –  Nov 11, 2015 10:49 PM

I don't know of any comparison of Chinese investments in hard assets versus domains, but the former surely is much larger than the latter. For example, just the other day a Chinese billionaire made the winning bid at Christie's for Modigliani's Nu Coche (Reclining Nude), the second highest price ever paid at auction for a painting.

What it does... John Berryhill  –  Nov 10, 2015 2:57 PM

...is to make every signatory country’s government domain names subject to the UDRP, with the exception of the US, since the US has exclusive use of .gov.

The U.S. also has exclusive use of Philip S. Corwin  –  Nov 11, 2015 10:54 PM

The U.S. also has exclusive use of .mil, and plans to keep sole use of it and .gov after the IANA transition and the end of remaining U.S. oversight of root zone changes. Indeed, Congress ha sought assurance of that continued exclusivity. But neither of those is officially considered a ccTLD, while .us is. That's the privilege that comes with having created the Internet.

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