Since our last report much has happened – the Trademark Clearinghouse is just opening and a service provider has been found for the URS, among other things. One of the most interesting developments has been the positive impact of ICANN’s new CEO. He started by admitting that the organization was facing a difficult situation getting ready to launch the new TLDS and that its people were at the edge. However, at the same time it was made clear that ICANN did not want to delay the program. His most recent statement was to the effect that ICANN is on track and the program is under firm control.
This article is part of a continuing series dealing with what brand owners need to do to protect their brands. While the best course of action for each brand owner will vary widely, there are some basic steps that should be taken in virtually all cases.
It is unclear what the impact of the new TLDs will be but the prospect of having so many more new domains seems staggering. One view is that with 100 million “.com” names in use it will be very difficult to change the current system. ICANN and others believe that new TLDs are a platform of innovation. The program has been referred to as a wave of change coming to the Internet. No one can predict with complete accuracy what kinds of new products and services might be developed and no one knows what new TLDs will bring. However, numerous applicants have invested substantial sums for the opportunity to take a part in the process.
It seems clear that some new TLDs will fail but others will succeed and begin to change how brand owners carry on business on the Internet. There will be opportunities for those who can find them.
What Was Revealed?
Out of the 1,930 applications, 1,846 were of the standard variety and 84 were community applications designed to operate for the benefit of a defined community.
66 of the applications relate to geographic names such as .Africa, .London, .Paris, etc. and 116 of the applications relate to international domain names (IDNs) not written in the basic Latin alphabet.
230 of the applied- for domain names are the subject of two or more applications and as a result 715 applications are in “contention sets” to ascertain who among the multiple applicants is entitled to the domain name. Included within this category are .app, .home, .art, .blog, .book, .shot and others. There are also applications for similar strings, e.g. .photo and .photos. These applications will also be in contention sets.
Donuts Inc., a newly formed domain name registry has applied for 307 TLDs. Google is seeking to register 101 TLDs and Amazon has applied for 76 TLDs. Presumably applicants of this type are attempting to take advantage of economies of scale relating to the operation of the applied for TLDs.
Some of the domain names applied for by Google will be open to the public to register, but others will be closed for use by Google only. Amazon has indicated that all of the domain names it applied for will be closed and only used for its purposes. This seems surprising and criticism has been directed at ICANN for allowing it to happen. There is a significant continuing debate.
725 of the applications relate to brand names. While the number is not insignificant it seems that many brand owners have adopted a “wait and see” attitude. In addition, some brand owners have applied for generic TLDs that are unrelated to their brand names.
To date at least twenty five of these applications have been withdrawn.
On June 13, 2012 ICANN publicly posted all the new TLD character strings that were applied for, and who applied for each. The list is available at http://newgtlds.icann.org/en/program-status/application-results/strings-1200utc-13jun12-en .
On March 13, 2013, the objection period closed.
On March 23, 2013 ICANN released the initial evaluation results for pending applications.
On March 26, 2013 the Trademark Clearing house was launched
During the period July to September, 2013, ICANN anticipates delegation and release of the new TLDs.
Each application must proceed through an evaluation process before it can be allowed and delegated. Evaluation panels conduct the string reviews and applicant reviews that make up the initial evaluation process.
Delegation and release of the new TLDs will likely occur late in the third quarter of 2013.This projection is subject to the caveat that ICANN will not delegate TLDs at a rate greater than 1,000 per year.
String reviews focus on the following issues
- whether an applied-for new TLD is confusingly similar to an existing TLD, or even another applicant’s TLD;
- whether the new TLD violates a reserved string;
- whether the new TLD contributes to instability of the domain name system (“DNS”); and
- whether the new TLD is a geographic name which is not allowed.
Applicant reviews will consider whether the applicant has demonstrated the appropriate technical, operational and financial capabilities to run a registry. The proposed registry services will also be reviewed to determine whether they might cause DNS instability.
When the initial evaluation period ends ICANN will post the outcome of the initial evaluations. Applicants for new TLDs that failed the initial evaluation can request an extended evaluation.
Groups of applied-for strings that are either identical or similar are called contention sets. If an application is identified as being part of a contention set, string contention resolution procedures will not begin until all applications in the contention set have completed all aspects of evaluation, including dispute resolution, if applicable.
Community-based applications have priority over standard applications. If the issues relating to a contention set cannot be resolved by a community priority evaluation, or through voluntary agreement among the involved applicants, an auction proceeding among the applicants will be used to resolve the impasse.
The role of the String Similarity Panels is to assess whether a proposed gTLD string creates a probability of user confusion due to similarity with any reserved name, any existing TLD, any requested IDN ccTLD, or any new gTLD string applied for in the current application round.
ICANN has announced that there are
- 2 Non-Exact Match Contention Sets .hotels & .hoteis and .unicorn & .unicom
- 230 Exact Match Contention Sets
- 754 Total Applications in contention
The Trademark Clearinghouse
The Trademark Clearinghouse is a central repository for information to be authenticated, stored, and disseminated, pertaining to the rights of trade mark holders in word marks. ICANN has entered into agreements with service providers relating to the Clearinghouse which launched March 26, 2013.
The Clearinghouse will provide two primary functions:
- authentication and validation of the trade marks in the Clearinghouse; and
- serving as a database to provide information to the new gTLD registries to support pre-launch Sunrise or Trademark Claims Services.
A sunrise is an initial period of at least 30 days before domain names are offered to the general public. Trade mark owners can take advantage of the Sunrise period to obtain the domain name that matches their trade mark. A Sunrise Period is mandatory for all new gTLDs. However in order to participate a trade mark owner must at a minimum have a validated trade mark entry in the Clearinghouse.
The Trademark Claims service follows the Sunrise. It is a notification service required by ICANN for all new gTLDs that warns the domain name registrant and the trade mark owner of possible infringement. The service works as follows:
- A potential domain name registrant is given a warning notice when attempting to register a domain name that matches a word mark term in the Clearinghouse..
- If, after receiving and accepting the notice, the domain name registrant does continue to register the domain name, the trade mark owner with a corresponding word mark will receive notification of the domain name registration, so they may take any appropriate action.
ICANN requires that each new TLD operator use the services of the Trademark Clearinghouse. The Clearinghouse will be global in nature and avoid the requirement to register marks in separate databases for each new TLD as they are launched.
The Sunrise and Trademark Claims Services required by ICANN in conjunction with the Clearinghouse may not be sufficient to protect well-known brands as they do not extend to similar domain names. While the Straw Man solution as discussed below will help, in many cases it may still be necessary for a concerned brand owner to secure defensive registrations. However with the large number of TLDS this may become prohibitively expensive.
The Straw Man Solution
In the course of discussions relating to implementing the Trademark Clearinghouse a straw man solution was prepared by ICANN in an attempt to balance and address the concerns of affected stakeholders. Much discussion took place and ICANN’s CEO has recently announced that the majority of the provisions of the solution will be implemented. This means:
- a requirement of 30-day notice in advance of each new gTLD sunrise;
- the trade mark claims service will be extended to the first 90 days of general registration;
- trade mark owners will be able to add up to 50 confusingly similar strings to each of their Trademark Clearinghouse records, provided the string has been part of a successful UDRP complaint.
Uniform Rapid Suspension System (URS)
When the new TLDs are launched the URS will be a brand owner’s initial dispute resolution remedy relating to second level domain names, i.e. the domains to be made available to the public by the owners of the new TLDs. The URS is designed to offer trade mark owners a quick and inexpensive procedure to take down infringing websites where rapid deactivation of the domain is essential and transfer to the complainant’s ownership is not necessary. Each claim can contain multiple domains owned by the same registrant (or different registrants if the complainant alleges they are related).
The URS is not intended to apply if there are genuine contestable issues as to whether a domain name registration and use of a trademark are in bad faith. The URS is not intended for use in any proceeding with open questions of fact but only clear cases of trade mark abuse.
Grounds for Complaints
A URS complaint is based on the following grounds:
- the registered domain name is identical or confusingly similar to a word mark:
- for which the complainant holds a valid national or regional registration and that is in current use; or
- that has been validated through court proceedings; or
- that is specifically protected by a statute or treaty in effect at the time the URS complaint is filed;
- the registrant has no legitimate right or interest to the domain name; and
- the domain was registered and is being used in bad faith.
A non-exclusive list of circumstances that demonstrate bad faith registration and use by the Registrant includes:
- Registrant has registered or acquired the domain name primarily for the purpose of selling, renting or otherwise transferring the domain name registration to the complainant who is the owner of the trademark or service mark or to a competitor of that complainant, for valuable consideration in excess of documented out-of pocket costs directly related to the domain name; or
- Registrant has registered the domain name in order to prevent the trademark holder or service mark from reflecting the mark in a corresponding domain name, provided that Registrant has engaged in a pattern of such conduct; or
- Registrant has registered the domain name primarily for the purpose of disrupting the business of a competitor; or
- By using the domain name Registrant has intentionally attempted to attract for commercial gain, Internet users to Registrant’s web site or other on-line location, by creating a likelihood of confusion with the complainant’s mark as to the source, sponsorship, affiliation, or endorsement of Registrant’s web site or location or of a product or service on that web site or location.
The complaining party must own a word mark: (i) for which the complainant holds a valid national or regional registration and that is in current use; or (ii) that has been validated through court proceedings; or (iii) that is specifically protected by a statute or treaty in effect at the time the URS complaint is filed.
The URS Provider
The National Arbitration Forum has been appointed as the first administrator of the URS.
The URS was intended to deal with blatant opportunistic cybersquatting by providing rights holders with a cost effective and swift remedy to minimize harm to the public and trade mark owners. It serves a different purpose from that of the UDRP and suspension is the only remedy.
There are concerns relating to the URS and its effectiveness including the following matters:
- In order for the URS to apply, the complainant must own a word mark unlike the UDRP which applies to any trade mark or service mark;
- The complainant bears the burden of proving the grounds set out in the complaint by clear and convincing evidence unlike the UDRP where decisions are made on a preponderance of evidence;
- It may be difficult for a trade mark owner to prove by “clear and convincing” evidence that the registrant lacks a “legitimate interest” in the domain name since this requires proving a negative;
- Since the domain name is not transferred under the URS to the complainant and the period of suspension is limited, a third party may register the domain name once it becomes available again.
Steps Brand Owners Should Take Now
It is clear that all brand owners should monitor developments very carefully and take the steps necessary to protect their brands.
a) Monitoring and New Strategies
First, brand owners should review the status of the pending applied for TLDs to assess the challenges they may face in protecting their brand. In addition, consideration should be given to whether the brand should be marketed in that new TLD. A new Internet strategy may need to be developed that focuses on specific new TLDs.
Second, brand owners should monitor the activities taking place or likely to take place in the marketplace. A brand owner should closely follow the activities of its competitors as there may be situations where the use of a new TLD may result in a competitive advantage. In addition, brand owners should consider the potential impact of the use of generic TLDs.
Third, brand owners need to monitor ICANN’s activities and how the process is unfolding. The timing of previously announced events and the nature of the implementation of the elements of the program may change.
Finally, it seems inevitable that online branding and internet navigation will change as a result of so many new TLDs. The impact of these changes will need to be taken into consideration by brand owners in developing new Internet strategies.
b) Trade Mark Registrations
It will assist a brand owner if its trade mark portfolio is in good order. Revision and updating of contact information and transfers, if required, should be dealt with. It would also be useful to review whether existing registrations are supported by appropriate trade mark use.
In addition, since only trade mark registrations for word marks will be included in the Trademark Clearinghouse, brand owners should ensure that they own word mark registrations for important brands.
c) Existing Domain Names
Since it is quite likely that new registrations of key brand names will need to be obtained at the second level for the new TLDs, it makes sense to review existing domain registrations and to develop criteria for determining what brand names to protect and how this will be done. Because there will be so much ground to cover domain name portfolios need to be rationalized.