One thing all Internet domain names (e.g., yourbusiness.com) have in common is the necessity of a top level domain, or “TLD,” such as .com, .net, .us, or any of over 250 other country-code and generic TLD extensions. As of September 2011, a new TLD, .xxx, has been added. The new .xxx TLD is, as the name suggests, a TLD dedicated to Internet-based adult entertainment. It is a “sponsored” TLD, meaning the public at large cannot register .xxx domain names, only members of the “Sponsored Community,” namely, persons and entities affiliated with providing Internet-based adult entertainment content. But this by no means guarantees that a trademark owned by a non-adult entertainment provider is safe from becoming part of a .xxx domain name. The same force that has driven piracy of domain names for years—the ability of high value trademarks to draw Internet traffic—will no doubt drive adult entertainment providers to try to register high value trademarks as .xxx domain names. An adult entertainment provider might thus try to register a .xxx domain name featuring your valuable trademark simply because of its notoriety, hoping to co-opt the fame of your mark into increased traffic to its website. Cognizant of this risk, ICANN, the governing body for Internet domain names, has placed additional conditions on the initial allocation of .xxx domain names. Chief among these is the opportunity for non-adult entertainment providers to reserve their trademarks during a “sunrise” period that is presently underway or, failing that, to register them later as non-resolving domain names incapable of linking to websites. In either instance, you can act now to decrease the likelihood that your trademarks will appear in .xxx domain names and thereby link your mark and your company to adult entertainment.
Rules for .xxx Domain Name Initial Allocation
The initial allocation of .xxx domain names will take place over the next several months, divided into a “sunrise” phase and a “landrush” phase. The sunrise phase, which began September 7 and closes October 28, consists of a “Sunrise A” for adult entertainment providers and a “Sunrise B” for trademark owners who are not providers of adult entertainment and who wish to reserve the .xxx domain name forms of their trademarks to prevent unwanted registrations. Stated differently, Sunrise A is for registration requests from providers of adult entertainment, whereas Sunrise B is for reservation (i.e., blocking) requests by owners of trademarks who are not adult entertainment providers. If an adult entertainment provider registers a domain name, it becomes the listed owner. If a non-adult entertainment provider reserves a domain name, it removes that domain name from the pool of potential .xxx domain names (subject to an exception discussed below). The cost of reserving a domain name runs between $200 and $300 (not including attorney fees), depending on the registrar providing the service. You can choose from any of the multitude of registrars listed at the .xxx registry operator’s website, www.icmregistry.com.
If you pursue a Sunrise B reservation, you should understand your rights and those of the competing Sunrise A applicants. To register a .xxx domain name, a Sunrise A applicant must (1) be a provider of adult entertainment and (2) own either (i) a registered trademark or (ii) an existing and commercially active domain name under another TLD (e.g., .com, .net, etc.). In other words, during the Sunrise A period, an adult entertainment provider cannot register a .xxx domain name for which it does not already own a trademark or commercially active domain name. In contrast, a non-adult entertainment provider cannot reserve / block a .xxx domain name unless it already owns a registered trademark for that name. The trademark registration can be a registration anywhere in the world, but use of a commercially active domain name is not enough. The framework of this process gives rise to serious potential for conflict because all Sunrise A and B applications are being processed together, not in order of application. At the close of the sunrise period, October 28, conflicts will be assessed and announced to the concerned parties. Registration conflicts among adult entertainment providers will go to auction. Conflicts between non-adult entertainment providers reserving domain names will result in the domain being reserved, or blocked, from registration. Neither reserving party will receive a refund in this instance but everyone will still receive what they paid for, namely the blocking of the .xxx domain name version of their trademark. Importantly, a successful reservation by a non-adult entertainment provider does not result in a domain name registration, only a reservation, so there is no “Whois” information identifying the reserving party as the owner of a .xxx domain name. Rather, the domain will resolve to a site that advises that the domain is reserved from use as a .xxx domain, and the Whois information will reflect that of the registrar or the registry operator. This provision allows trademark owners to block registration without having their marks associated with a .xxx domain.
Sunrise A vs. Sunrise B
If there is a conflict between registration by an adult entertainment provider and reservation by a non-adult entertainment provider, notice of the conflict will be provided to both. The adult entertainment provider will be given priority and may choose to proceed with its registration. From a practical point of view, however, the adult entertainment provider will be deemed to have notice of the conflicting mark. The fact of notice to the adult entertainment registrant can be significant. If the owner of the trademark decides to proceed against the adult entertainment provider under the Uniform Dispute Resolution Policy (UDRP) to recover the domain name, the fact that the adult entertainment provider knew of the existence of the trademark makes it more likely that the non-adult entertainment provider will be able to prevail. Under the UDRP, an adult entertainment provider who registers a domain name that is identical or confusingly similar to your trademark can be forced to transfer that domain name to you upon proof of bad faith registration and use, and if the adult entertainment provider does not otherwise have any colorable, legitimate interest in using the mark. Notice of the trademark goes a long way to proving the requisite element of bad faith registration and use. In other words, if you are not successful in reserving your trademark during the Sunrise B phase as a result of a conflict with a Sunrise A applicant, you will have an improved likelihood of prevailing against that same applicant under the UDRP. As a practical matter, however, this situation probably will not arise unless your registered trademark is identical or very close to a registered trademark or domain name belonging to an adult entertainment provider prior to its application for a .xxx domain name for that same mark.
Landrush – Non-Adult Entertainment Providers Sidelined
The Sunrise phase is open to members and non-members of the Sponsored Community. The subsequent Landrush phase (November 8 through November 25, 2011) is open only to members of the adult entertainment community. Unlike the Sunrise A phase, Landrush is open to all adult entertainment providers regardless of whether they hold trademarks or domain names for the mark sought to be registered. Non-adult entertainment providers are prevented from participation in the Landrush and Sunrise A phases by requiring applicants to proceed through a multi-step membership application entailing telephones calls, PIN numbers, and various attestations, including attesting to participation in the provision of online adult entertainment. This procedure is intended in part to prevent the mischievous or malicious registration of trademarks, celebrity names or public figure names as .xxx domain names for the sole purpose of defaming them by association with pornography. Landrush applications are not processed in order of receipt and conflicts are resolved by way of auction.
General Availability – Your Opportunity to Register if You Missed Sunrise B
December 6 2011 begins the General Availability phase. It differs from the previous phases in that applications are processed in the order received, just as is the case with registering domains for any ordinary TLD. Only adult entertainment providers can apply for “resolving” domain names, i.e., domain names that actually access adult entertainment. Non-adult entertainment providers can apply to register non-resolving domain names, i.e., domain names that will not link to adult entertainment content. While Sunrise B was limited to non-adult entertainment providers having proof of issued trademarks, during the General Availability phase non-adult entertainment providers may register any term, regardless of whether they have a trademark for that name, with the caveat that the resulting domain name will be incapable of resolving to an active website.
Rapid Evaluation Service (RES)
Finally, the .xxx domain registry will be implementing a first-of-its-kind Rapid Evaluation Service (RES) under which domains constituting clear violations of famous marks or personal (i.e., celebrity) names will be suspended pending further action by the parties. This is something that may become more prevalent as other new TLDs come online, but it is yet unknown how it will play out in practice.
Whether you have a single registered trademark or an entire portfolio, it makes sense to look into reserving your marks during the initial sunrise period. An ounce of prevention is worth a pound of cure, as the saying goes. As with all new regulatory schemes, there will undoubtedly be some surprises and unforeseen issues that will need to be worked out. Nonetheless, the rules have been set and the most prudent course for now is to follow them as written. In this way you will have done everything you can on the front end to prevent your trademarks from becoming .xxx domain names.