The purpose of the URS is to provide a cost effective and timely mechanism for brand owners to protect their trademarks and to promote consumer protection on the Internet. The URS is not meant to address questionable cases of alleged infringement (e.g., use of terms in their generic sense) or for anti-competitive purposes or denial of free speech, but rather for those cases in which there is no genuine contestable issue as to the infringement and abuse that is taking place.
The URS would only allow a complaining party to “freeze” a domain name for the remainder of the registration term – resolving to a specific error page. The System would not result in the cancellation of the domain name or the transfer of the domain name to the complainant.
Supposedly, if there is any genuine contestable issue as to whether a domain name registration and use is an abusive use of a trademark, the complaint will be denied terminating the URS process without prejudice to further action (i.e., a UDRP or actual lawsuit). “The URS is not intended for use in any questionable proceedings, but only clear cases of trademark abuse.” Moreover, any trademark owners found to repeatedly misuse the URS are supposed to be removed from the system and denied access to the URS for a set period of time.
Finally, both sides would have rights to appeal the decision. If the complaint is denied, the complainant may initiate a proceeding de novo under the UDRP or in a court of appropriate jurisdiction. If the complaint is granted, the Registrant may request reconsideration on the original record by a “URS ombudsman” on the grounds that the decision was “arbitrary and capricious or an abuse of discretion” or may initiate a de novo proceeding in a court of appropriate jurisdiction.
The Report gives the following illustration of how the URS in practice:
For example, if the trademark in question is BRANDXYZ for use in connection with computers and the domain name in question is brandxyzz.[gtld] and is used in connection with an abusive pay-per-click site, the site would be frozen. If the domain name is brandxyzcomputers.[gtld] and the record shows that it is a bona fide retailer who legitimately sells BRANDXYZ computers, the URS complaint would be denied.
For those not interested in reading the IRT report, TheDomains.com has a succinct yet detailed (and somewhat critical--but fairly so in my opinion) review of the proposed URS System.