ASPs, WIPO to Set Service Dispute Guidelines

LONDON (05/03/2000) - The ASP Industry Consortium (ASPIC) and the World Intellectual Property Organization (WIPO) will work together to establish guidelines designed to help ASP (application service provider) companies and their clients avoid and mediate disputes, the two organizations announced today.

The organizations are planning to set up an ASP dispute settlement service that would be completely voluntary and not legally binding, representatives of ASPIC and the Geneva-based WIPO, a United Nations (U.N.) agency, said today at a press conference held at the InternetASP Forum in London.

"We will be providing a service for the private sector using models developed by business for business in order to avoid the traditional court systems, " said Francis Gurry, WIPO assistant director general and director of the Arbitration and Mediation Center.

"It's about dispute avoidance first, which is pro-active. We are really, genuinely trying to look out for the end user, the customer, because that is the only way the customer is going to pick up the ASP market," said Traver Gruen-Kennedy, chairman of ASPIC, a nonprofit international advocacy group.

The U.S.-based ASPIC, which was launched in May of last year and has 500 members from technology companies worldwide, is managed by marketing and management company Virtual Inc.

Gruen-Kennedy and Gurry did not say when the ASP dispute resolution consortium would begin taking on cases. "The design principles are abstract at this stage. We still need to give some flesh to the bones of this consortium, " Gurry said.

The ASPIC approached the U.N. agency as a co-regulator based on the success that the WIPO Arbitration and Mediation Center has had in the area of Internet domain name dispute resolution, Gurry said. The dispute settlement mechanism, though tailored specifically for the ASP industry, would be based on the uniform dispute resolution used for Internet domain name disputes, Gurry said.

In January, WIPO settled its first domain name dispute, involving a California resident and the U.S.-based World Wrestling Federation Entertainment Inc.

(WWF). [See "WIPO Tells Cybersquatter to Return Domain Name," January 17.]"The domain name dispute scheme is an example of an international scheme that can work quickly (45 days after people log their complaint onto the Web site) and cheaply, just as what would be needed in the ASP arena," Gurry said.

One of the current problems with service level agreements between small and medium-size enterprises (SMEs) and the ASPs from which they rent Web-based software and services is that they are largely "toothless," ASPIC's Gruen-Kennedy pointed out. For example, in most cases SMEs simply cannot afford to go after ASPs run by large telecommunications companies if there is a dispute, he said.

"It is one of the central issues, and we can't buy dentures for toothless agreements. We need to remap a legal system that meets the needs of a global delivery system that is also cost effective," Gruen-Kennedy said.

One way to do this would be to build consequences into service level agreements such as requiring free service from ASPs for a month if contract agreements are not met, Gruen-Kennedy said.

"Our biggest challenge will be to try to work with the ASP industry to develop a legal security framework which goes beyond national legal environments," Gurry said. But in the long run, both ASPs and customers -- regardless of size -- will see the voluntary dispute settlement body as "an opportunity to create value out of the dispute," Gurry said.

The ASP Industry Consortium, located in Wakefield, Massachusetts, can be contacted at +1-781-246-9321, or at Virtual Inc., located in Wakefield, Massachusetts, can be contacted at +1-781-246-0500, or at The WIPO, located in Geneva, Switzerland, can be contacted at +41-22-733-5428, or at

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