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February 24, 2003, 9:00 AM ET, Alert No. 610.
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Third Circuit Reverses in Domain Name Arbitration Case
2/20. The U.S. Court of Appeals (3rdCir) issued its opinion in Dluhos v. Strasberg, a case involving judicial review of an arbitration award regarding a domain name registration. The Appeals Court reversed a District Court affirmation of an arbitration award in favor of a trademark holder.

Introduction. Eric Dluhos is a pro se cyber squatter from New Jersey. He registered the domain name, thereby invoking the name of the famous acting coach, Lee Strasberg. Strasberg's widow still operates a theatre institute in her deceased husband's name. His estate still holds trademarks. Strasberg, the estate, and theatre institute's web site operator objected to Dluhos' registration, and ultimately instituted a Uniform Domain Name Dispute Resolution Policy (UDRP) arbitration, which they won.

Dluhos has little understanding of law. He sued in federal court, eventually raising numerous spurious claims, such as constitutional claims against non state actors, antitrust violations, and labor law violations. The District Court, among other things, affirmed the arbitration award, after reviewing it under the deferential standards set out in the Federal Arbitration Act (FAA). The Appeals Court reversed and remanded on the basis of an argument not raised by Dluhos -- the interrelation of FAA, the Anticybersquatting Consumer Protection Act (ACPA), and the UDRP. In short, the Appeals Court held that UDRP arbitrations are not mandatory, and therefore not subject to review under the FAA. However, while Dluhos never plead a claim under the ACPA, that is a remedy available to him in this case. The Appeals Court gave Dluhos the benefit of being a pro se litigant, and remanded to the District Court with instructions that it review the arbitration award under the standards set forth in the ACPA. The Appeals Court affirmed the dismissal of all of the spurious claims.

UDRP Arbitration. Eric Dluhos registered the domain name with the domain name registrar, Network Solutions Inc. (NSI), in 1999. The registration agreement required Dluhos to abide by the Internet Corporation for Assigned Names and Numbers’ (ICANN) Uniform Domain Name Dispute Resolution Policy (UDRP). The UDRP provides for arbitration of disputes regarding domain name registrations by an approved dispute resolution service provider.

Lee Strasberg was a famous acting coach. His widow, Anna Strasberg, owns and directs the Lee Strasberg Theatre Institute, and serves as the executrix of the Estate of Lee Strasberg. The Estate owns trademarks, including "The Lee Strasberg Institute" and "Actor by Lee Strasberg".

CMG Worldwide, which represents and manages Internet sites for the Estate, the Institute and Anna Strasberg, wrote to Dluhos demanding that he rescind the registration. He did not. CMG then instituted an arbitration proceeding under the ICANN UDRP.

Dluhos did not contest the arbitration proceeding before the National Arbitration Foundation (NAF), other than to write it a letter stating that he contested its jurisdiction. The NAF issued a decision against Dluhos and directed that the domain name be transferred to the Estate of Lee Strasberg.

District Court. Dluhos filed a complaint in U.S. District Court (DNJ) against the various Strasberg parties, NSI, and CMG challenging, among other things, the constitutionality of the dispute resolution process. Dluhos later filed an amended complaint in which he alleged harassment, breach of contract, Section 1983 violations, and violations of his First, Fifth and Fourteenth Amendment rights. The defendants then filed motions to dismiss. The District Court dismissed the complaint for failure to state a claim upon which relief can be granted. The District dismissed the constitutional and 1983 claims for lack of state action.

The District Court also reviewed the UDRP decision under the Federal Arbitration Act, which provides, at 9 U.S.C. § 10(a), that a District Court may overturn an arbitration award "... (2) Where there was evident partiality or corruption in the arbitrators, or either of them. (3) Where the arbitrators were guilty of misconduct in refusing to postpone the hearing, upon sufficient cause shown, or in refusing to hear evidence pertinent and material to the controversy; or of any other misbehavior by which the rights of any party have been prejudiced. ..." The District Court upheld the arbitration decision.

Appeals Court. Dluhos appealed. On appeal, he raised, for the first time, antitrust and labor law claims. However, Dluhos never raised the Anticybersquatting Consumer Protection Act (ACPA). The Appeals Court reversed the District Court's decision not to vacate the decision of the UDRP arbitrator.

The Appeals Court first examined whether an UDRP arbitration is an arbitration within the meaning of the FAA. It reasoned that "If a dispute-resolution mechanism indeed constitutes arbitration under the FAA, then a district court may vacate it only under exceedingly narrow circumstances. 9 U.S.C. § 10. ... The net result of a court's application of this standard is generally to affirm easily the arbitration award under this extremely deferential standard -- a result that is squarely in line with the purpose behind the FAA where courts are tasked with reviewing an arbitration decision."

The Court added, "If, however, a dispute-resolution mechanism does not constitute arbitration under the FAA, then a district court has no jurisdiction to review the result absent an independent jurisdictional hook."

The Appeals Court continued that "At issue before us then is whether the nonbinding domain name resolution policy (UDRP) proceeding that shifted Appellant’s registered domain name to the Strasberg defendants constitutes arbitration under the FAA. If this proceeding qualifies as arbitration under the FAA, then the dispute resolution is subject to extremely limited review. If it does not fall under the FAA umbrella, then the district court lacked jurisdiction to examine -- and thus to affirm -- the result under the lax FAA review standards."

The Appeals Court held that, due to the terms of the UDRP, it is does not provide for arbitration that is reviewable under the FAA. The Court held that a UDRP arbitration is not mandatory, for two reasons.

"First, the UDRP obviously contemplates the possibility of judicial intervention, as no provision of the policy prevents a party from filing suit before, after or during the administrative proceedings." The Court also wrote that "The UDRP was intended to ensure that the parties could seek independent judicial resolution of domain name disputes, regardless of whether its proceeding reached a conclusion. ... Indeed, unlike methods of dispute resolution covered by the FAA, UDRP proceedings were never intended to replace formal litigation."

"Second, because the trademark holder or the trademark holder’s representative is not required to avail itself of the dispute resolution policy before moving ahead in the district court, these proceedings do not qualify as the type that would entail a court’s compelling party participation prior to independent judicial review -- thus removing the proceeding from the warmth of the FAA blanket."

The Court also added that a "proceeding settles a disputed proceeding only to the extent that a season-finale cliffhanger resolves a sitcom's storyline -- that is, it doesn't. It is true that the language of the resolution policy describes the dispute-resolution process as ``mandatory,´´ but ``the process is not `mandatory´ in the sense that either disputant's legal claims accrue only after a panel's decision.´´ Parisi, 139 F. Supp. 2d at 751 (quoting Bankers Ins. Co., 245 F.3d at 319). Only the domain-name registrant is contractually obligated to participate in the proceeding if a complaint is filed."

Hence, the Appeals Court concluded that the arbitration award was not subject to review under the FAA, and it vacated the District Court's decision upholding the award under the FAA.

However, the Appeals Court did not conclude at this point. While Dluhos never argued that the District Court should have reviewed the arbitration award under standards set forth in the ACPA, the Appeals Court nevertheless held that it should have. Hence, it remanded to the District Court with instructions to review the award under the ACPA.

The Appeals Court wrote that "Because the UDRP -- a private covenant -- cannot confer federal jurisdiction where none independently exists, the remaining question is whether the Congress has provided a cause of action to challenge its decisions. In the Anticybersquatting Consumer Protection Act, we hold that it has."

It continued that "Under this modern amendment to the Lanham Act, a registrant whose domain name has been ``suspended, disabled, or transferred´´ may sue for a declaration that the registrant is not in violation of the Act, as well as for an injunction returning the domain name."

See, 15 U.S.C. § 1114(2)(D)(v), which provides that "A domain name registrant whose domain name has been suspended, disabled, or transferred under a policy described under clause (ii)(II) may, upon notice to the mark owner, file a civil action to establish that the registration or use of the domain name by such registrant is not unlawful under this chapter. The court may grant injunctive relief to the domain name registrant, including the reactivation of the domain name or transfer of the domain name to the domain name registrant."

The Court added that "we must liberally construe the pro se litigant’s pleadings, and we will apply the applicable law, irrespective of whether he has mentioned it by name."

More News
2/21. The Federal Trade Commission (FTC) announced that it will hold two one day workshops on "the role of technology in helping consumers and businesses protect the privacy of personal information, including the steps taken to keep their information secure". The first workshop, titled "The Consumer Experience", will be on May 14. The second, titled "The Business Experience", will be on June 4. See, FTC release.

2/21. Federal Trade Commission (FTC) Chairman Timothy Muris issued a statement regarding passage of HR 395, the Do Not Call Implementation Act. He said that "The President has signed the Omnibus appropriations bill into law, providing funding to allow the Federal Trade Commission to begin to develop a national Do Not Call registry. Additional authorizing legislation for the registry is expected to be signed shortly. I am delighted that the FTC can now respond to consumers' pleas to end unwanted telephone intrusions into their homes, and I appreciate the support and confidence of the Congress and the President and the efforts of my fellow Commissioners to make the Do Not Call registry a reality. During the next few days, the Commission will start building the Do Not Call registry. Consumers will have the opportunity to sign up for the registry sometime this summer, and the registry should be fully functional and available to telemarketers by September. By fall, consumers should begin to notice fewer unwanted telemarketing calls."

2/21. The Department of Justice's (DOJ) Antitrust Division issued its evaluation recommending that the Federal Communications Commission (FCC) approve Qwest Communications' application under Section 271 to provide in region interLATA service in the state of Nevada. See, DOJ release. The DOJ recommended approval of Qwest's long distance application for the states of New Mexico, Oregon, and South Dakota on February 20. See, DOJ release and Qwest release. On October 22, 2002, the DOJ recommended approval for the states of Colorado, Idaho, Iowa, Montana, Nebraska, North Dakota, Utah, Washington, and Wyoming. See, evaluation. The FCC approved that application on December 23, 2002. See, order [PDF]. Also, Qwest has not yet received approval to offer long distance services in the states of Arizona and Minnesota.

2/18. The U.S. Attorneys Office (CDCal) charged Alan Giang Tran by criminal complaint with intentionally causing damage to a protected computer, and recklessly causing damage by intentionally accessing a protected computer. The USAO stated in a release that Tran was previously employed as the network administrator for a company whose servers he accessed without authorization. The USAO further stated that he changed passwords, and deleted programs, thereby shutting down the company's operations.

2/19. The Electronics Industry Association (EIA) announced its legislative and policy agenda. It includes supporting several tax related legislative proposals, such as "accelerated depreciation schedules and first-year bonus depreciation, enhancement and permanence of the R&D tax credit, tax relief for overseas profit repatriation, elimination of FICA tax on severance and a broadband tax incentive." It also includes several trade related items, including support for the Export Administration Act. The EIA also stated that it will submit comments to the USTR regarding free trade agreements "to ensure that high tech and business priorities are included". Also, with respect to broadband, the group will support "passage of strong deregulatory legislation". See, EIA release.

Bush Criticizes Democratic Filibuster of Estrada
2/22. President Bush devoted his weekly radio address to judicial nominations, and particularly, the nomination of Miguel Estrada to be a judge of the U.S. Court of Appeals (DCCir). Senate Democrats are filibustering. Bush said that "We face a vacancy crisis in the federal courts, made worse by senators who block votes on qualified nominees. These delays endanger American justice. Vacant federal benches lead to crowded court dockets, overworked judges and longer waits for Americans who want their cases heard."

He elaborated that "Regional appeals courts have a 15 percent vacancy rate, and filings in those courts reached an all-time high again last year. Since taking office, I have sent to the Senate 34 qualified, mainstream nominees for the federal courts of appeals. To date, only half of them have received a vote in the Senate, and 12 of the remaining 17 nominees have been waiting more than a year for a floor vote."

Bush said that "a handful of Democratic senators, for partisan reasons, are attempting to prevent any vote at all on highly qualified nominees. One of these nominees is Miguel Estrada, my selection for the D.C. Court of Appeals. I submitted his nomination in May of 2001, and Miguel Estrada has been waiting ever since. That's almost two years, and that's a disgrace.

"Miguel Estrada's credentials are impeccable. He has served in the Justice Department under Presidents of both political parties. He has argued 15 cases before the U.S. Supreme Court, and he has earned the American Bar Association's highest mark, a unanimous rating of well qualified", said Bush.

Monday, February 24
The Senate will return from its one week recess at 12:00 NOON. The House is in recess until February 25. The Supreme Court will return from the recess which it began on January 27.

10:15 AM. Treasury Secretary John Snow will speak at the Credit Union National Association's Government Affairs Conference. Location: Hilton Washington, International Ballroom, 1919 Connecticut Ave., NW.

3:00 PM. The Federal Communications Commission's (FCC) Federal State Joint Conference on Accounting Issues will hold a public meeting. See, FCC notice [MS Word] and list of panelists [MS Word]. Location: FCC, Commission Meeting Room (Room TW-C305), at 445 12th Street, SW.

Deadline to submit comments to the The National Telecommunications and Information Administration (NTIA) regarding the state uniform commercial code exception to the Electronic Signatures in Global and National Commerce (E-SIGN) Act. The Act provides, at §101, for the acceptance of electronic signatures in interstate commerce, with certain enumerated exceptions. §103 of the Act provides that the provisions of section 101 shall not apply to "the Uniform Commercial Code, as in effect in any State, other than sections 1-107 and 1-206 and Articles 2 and 2A". The Act also requires the NTIA to review, evaluate and report to Congress on each of the exceptions. The E-SIGN Act is codified at 15 U.S.C. § 7001, et seq. The exceptions are codified at 15 U.S.C. § 7003. See, notice in the Federal Register, December 24, 2002, Vol. 67, No. 247, at Pages 78421 - 78423.

Tuesday, February 25
The House will return from its one week recess at 2:00 PM. It will consider several non tech related measures under suspension of the rules.

TO BE DECIDED WITHOUT ORAL ARGUMENT. 9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Rice v. FCC, No. 01-1474. Judges Ginsburg, Sentelle and Randolph will preside. Location: 333 Constitution Ave., NW.

12:15 PM. The FCBA's Cable Practice Committee will host brown bag lunch. The speakers will be House Commerce Committee counsel. RSVP to Wendy Parish at Location: NCTA, 1724 Massachusetts Ave., NW, 2nd Floor Conference Room.

3:00 PM. The House Homeland Security Committee will hold its organizational meeting. Press contact: Kate Whitman at 202 225-5611. Location: Room 2359, Rayburn Building.

3:00 PM. Treasury Secretary John Snow, Homeland Security Secretary Tom Ridge, and Deputy Attorney General Larry Thompson will speak at an event titled "Law Enforcement Day Celebration". See, notice. Location: The George Washington University, Lisner Auditorium, 730 21st Street, NW.

Wednesday, February 26
The House will meet at 2:00 PM for legislative business; it will consider several non tech related measures under suspension of the rules.

10:00 AM. The House Commerce Committee's Telecom and Internet Subcommittee will hold a hearing titled "Health of the Telecommunications Sector: A Perspective from the Commissioners of the FCC". See, notice. Location: Room 2123, Rayburn Building.

10:30 AM. U.S. Trade Representative (USTR) Robert Zoellick will testify before the House Ways and Means Committee about the administration's trade agenda. See, notice. Location: Room 1100, Longworth Building.

12:15 PM. The FCBA's Online Communications Practice Committee will host a brown bag lunch. The topic will be "Patent Licensing: Surprising Revelations About the True Currency of a Technology Based Economy". The speaker will be David Martin, CEO of M.CAM. RSVP to Beatriz Zaloom at Location: Kelley Drye & Warren, 1200 19th St., NW, Suite 500.

Day one of a three day conference titled "Third Annual Privacy Summit" hosted by the International Association of Privacy Officers.

Thursday, February 27
The House will meet at 10:00 AM for legislative business.

9:30 AM. The U.S. Court of Appeals (DCCir) will hear oral argument in Z Tel Communications v. FCC, No. 01-1461. Judges Ginsburg, Sentelle and Randolph will preside. Location: 333 Constitution Ave., NW.

10:00 AM - 4:00 PM. The Federal Communications Commission (FCC) will hold a hearing pertaining to its "review of broadcast ownership regulation". See, FCC notice [MS Word] and agenda [MS Word]. Press contact: Rosemary Kimball at 202 418-0511 or Location: Greater Richmond Convention Center, 403 N. Third Street, Ballroom Building, Level 1, Meeting Room 15AB, Richmond, VA.

11:00 AM. The Senate Governmental Affairs Committee will hold a hearing on several nominations, including Janet Hale (to be Under Secretary for Management, Department of Homeland Security), and Clark Ervin (to be Inspector General, Department of Homeland Security). Location: Room 342, Dirksen Building.

4:00 PM. Michael Meurer (Boston University School of Law) will present a paper titled "Sharing Copyrighted Works". For more information, contact Robert Brauneis at 202 994-6138 or Location: George Washington University Law School, Faculty Conference Center, Burns Building, 5th Floor, 720 20th Street, NW. This event had been scheduled for February 18, but was postponed due to snow.

Friday, February 28
9:00 AM - 1:30 PM. The American Enterprise Institute (AEI) will host an conference titled "Prospects and Politics of a U.S.-Taiwan Free Trade Agreement". The scheduled speakers include Rep. Tom DeLay (R-TX), William Kristol, Deanna Okun, and Therese Shaheen.

12:15 PM. The FCBA's Mass Media Practice Committee will host a brown bag lunch. The speaker will be Ken Ferree, Chief of the FCC's Media Bureau. RSVP to Wendy Parish at Location: NAB, Conference Room, 1771 N Street, NW.

2:00 NOON. Deadline to submit comments to the Office of the U.S. Trade Representative's (USTR) interagency Trade Policy Staff Committee (TPSC) regarding the operation and implementation of the World Trade Organization's (WTO) Agreement on Technical Barriers to Trade (TBT). See, notice in the Federal Register, February 3, 2003, Vol. 68, No. 22, at Pages 5327-5328.

Extended deadline to submit reply comments to the Federal Communications Commission's (FCC) regarding the Report [73 pages in PDF] of the FCC Spectrum Policy Task Force (SPTF). The report recommends that "spectrum policy must evolve towards more flexible and market oriented regulatory models." See, original notice [PDF] and notice of extension [PDF].

EXTENDED TO MARCH 11. Deadline to submit reply comments to the Federal Communications Commission (FCC) in response to its Further Notice of Proposed Rulemaking, (FNPRM), released last month, regarding whether providers of various services and devices not currently within the scope of the FCC's 911 rules should be required to provide access to emergency services. This is CC Docket No. 94-102 and IB Docket No. 99-67. See, notice in the Federal Register, January 23, 2003, Vol. 68, No. 15, at Pages 3214 - 3220. See also, notice of extension.

Deadline to submit to the Copyright Office (CO) claims to royalty payments for digital audio recording devices and digital audio recording media, collected during 2002. Such claims are made in accordance with Chapter 10 of the U.S. Copyright Law and Part 259 of the Copyright Office regulations. See, CO notice with links to online claim submission forms.

Deadline to submit comments to the Federal Trade Commission (FTC) regarding its Agreement Containing Consent Order with Educational Research Center of America, Inc. (ERCA). On January 29 the FTC announced that it filed an administrative complaint against ERCA alleging violation of the FTC Act. The complaint states that the ERCA "collected personal information from high school and middle and junior high school students through surveys ..." It further states that it "represented, expressly or by implication, that information collected from students through the Surveys is shared only with colleges, universities, and other entities providing education-related services. ... In truth and in fact, information collected from students through the Surveys is shared ... also with commercial entities for marketing purposes." See, FTC release and notice in Federal Register, February 4, 2003, Vol. 68, No. 23, at Pages 5640-5642.

Monday, March 3
10:00 AM. The U.S. Court of Appeals (FedCir) will hear oral argument in Intellectual Property Development v. UA Columbia Cablevision, No. 02-1248, an appeal from the U.S. District Court (SDNY) in a patent case. Location: Courtroom 402, 717 Madison Place, NW.

Deadline to file FCC Form 477 with the Federal Communications Commission (FCC). All providers of local telephone service that serve 10,000 or more voice grade equivalent lines, or wireless channels, in a given state must file this form. Also, facilities based providers that serve at least 250 one-way or two-way broadband (defined here as in excess of 200 kilobits per second) service lines, or wireless channels, in a given state (or have at least 250 customers for such service in a given state) must also file. This form provides the FCC with the data that it uses for its twice per year report on the growth in use of broadband services. See, FCC notice [MS Word].

Deadline to submit comments to the Copyright Office (CO) in response to its Notice of Proposed Rulemaking (NPRM) relating to proposed regulations that set rates and terms for the use of sound recordings by preexisting subscription services for the period January 1, 2002 through December 31, 2007. For more information, contact David Carson (General Counsel) or Tanya Sandros (Senior Attorney, Copyright Arbitration Royalty Panel) at 202 707-8380. See, notice in the Federal Register, January 30, 2003, Vol. 68, No. 20, at Page 4744-4747.

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