Dot Anything. Brand Owners Should Plan October 20, 2011 Now for - - PDF document

Dot Anything. Brand Owners Should Plan Now for ICANN’s gTLD Expansion

Beginning in January 2012, the Internet Corporation for Assigned Names and Numbers (“ICANN”), the organization responsible for overseeing the world’s domain name system, will introduce new policies that are expected to lead to a dramatic expansion in the top-level domain (“TLD”) system. Generally, a TLD is the portion of a domain name to the right of the period, such as the TLD .com in the domain name example.com. Currently, there are 22 generic Top-Level Domains (“gTLD”), with the most popular being .com, .net and .org. There are also hundreds of country-code Top-Level Domains (“ccTLDs”), such as .uk (United Kingdom), .cn (China) and .tv (Tuvalu). With ICANN’s recently approved new gTLD expansion, any party will be able to apply for and set up, if approved, virtually any possible new gTLD, including extensions consisting of brand names (i.e., .brand), generic terms (e.g., .hotel) or geographic terms (e.g., .nyc) or community designations (e.g., .scot). Under the current schedule, potentially hundreds of new gTLDs will be made available for registration beginning in late 2012 and early 2013. The new gTLDs are being launched after years of debate between ICANN and representatives of governments, business owners and other interests. The negotiations have culminated in an Applicant Guidebook, issued by ICANN in September in final form, which provides the new gTLD procedures. The application process for a new gTLD is complex and costly, with initial application fees to ICANN set at $185,000. Successful applicants will also be subject to annual registry fees as well as technical and other costs associated with running a domain registry. Brand owners are understandably unenthusiastic about ICANN’s decision to expand the gTLD

• landscape. Even with the current field of TLDs, management of trademarks under the domain name

system has never been easy. Yet ICANN’s forecast for this expansion is open-ended: it has only stated that its upper limit for new gTLD setups is 1000 per year. Owners of trademark portfolios are likely to see the stakes rise as trademark owners and domain registrants jostle for position and the need for defensive registrations increases.

How Will the New gTLDs Affect Your Brand?

Brand owners may be affected in two ways. First, a new gTLD extension set up by another party may be identical to or highly similar to your trademark. For example, a user of a similar trademark, potentially in another industry, may apply to set up a gTLD extension consisting of your brand name. Parties may also apply for gTLDs representing generic terms, geographic names, or community designations that may double as or be similar to your brand name. Second, a number of new gTLD registries are likely to offer second-level domain name registrations to the public through ICANN-accredited registrars. Popular gTLDs based on generic terms may generate competition among registrants seeking the same or similar second-level domain names. For example, a hypothetical new gTLD for the generic extension .bank could offer second-level registrations to financial institutions. Under this hypothetical .bank registry, two banks using the term example for their trademarks could simultaneously attempt to register the domain name example.bank. The new gTLDs are accordingly expected to generate competition for domain names and a need for defensive registrations by brand owners. October 20, 2011

Practice Group: Intellectual Property Litigation

Dot Anything. Brand Owners Should Plan Now for ICANN’s gTLD Expansion

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Using the New gTLD Process to Protect Your Brand

Objecting to New gTLD Extensions Before Approval

The Applicant Guidebook provides no pre-registration or reservation period during which trademark

• wners may block or obtain gTLDs. ICANN will not notify trademark owners if a proposed gTLD is

identical to or similar to their brand. Instead, ICANN will publish a list of all applications that have passed an initial completeness check after the submission period has closed. Trademark owners will need to monitor proposed new gTLDs and will be able to file objections several months following the publication of applications by ICANN. The initial round of applications for new gTLDs is expected to follow the timing and process below: New gTLD Application Process

Once submitted to ICANN, applications will pass through multiple stages that may last between 8 and 18 months depending on the complexity of the application and any challenges.

Under ICANN’s schedule, the first application submission period is expected to run from January 12, 2012 to April 12, 2012, with publication of successful new gTLD applications occurring approximately one month after the end of this application submission period. Objections may be based

• n one or more of the following grounds:

 String Objection – the proposed new gTLD is confusingly similar to an existing gTLD or a gTLD applied for in the same round of applications.  Existing Legal Rights Objection – the proposed new gTLD infringes the legal rights of others that are recognized as enforceable under generally acceptable and enforceable principles of law. This ground would be the basis for an objection based upon trademark rights.  Limited Public Interest Objection – the proposed new gTLD is contrary to generally accepted legal norms related to morality and public order.

Applications submitted beginning January 12, 2012

Dot Anything. Brand Owners Should Plan Now for ICANN’s gTLD Expansion

3  Community Objection – the proposed new gTLD is subject to substantial opposition from a community at which the new gTLD is targeted. Objections are not filed with ICANN but with dispute resolution service providers specified for each type of dispute. For example, a brand owner objecting to a proposed new gTLD extension for trademark reasons would file its objection with the Arbitration and Mediation Center of the World Intellectual Property Organization (“WIPO”). The applicable procedure would be the WIPO Rules for New gTLD Dispute Resolution. Fees are set by the service provider at the time the objection is filed, with the objector and new gTLD applicant each paying one half of the fee.

Defensive Registrations and New gTLD Dispute Policies

New gTLDs consisting of generic industry terms, such as .bank or .hotel, or geographic or community designations (e.g., .nyc) are likely to generate competition for second-level registrations among trademark owners, Internet advertisers, and distributors or marketers of products sold under certain

• trademarks. As with the existing gTLDs and ccTLDs, defensive registrations may be required to

protect against cybersquatting and other forms of unauthorized use of trademarks for domain names. The protection of trademark rights was a key issue raised in discussions between ICANN and brand

• wners. All new gTLDs must ensure that second-level registrations are subject to ICANN’s Uniform

Domain Name Dispute Resolution Policy (“UDRP”). In addition, the Applicant Guidebook requires the new gTLDs to provide additional trademark rights protection mechanisms. Currently these additional solutions include the Trademark Clearinghouse and two new dispute resolution procedures, the Uniform Rapid Suspension System (“URS”) and the Trademark Post Delegation Dispute Resolution Procedure (“Trademark PDDRP”).

Trademark Clearinghouse

The Trademark Clearinghouse will provide a centralized source of information that new gTLD registries must use for, at a minimum, support of either a preferential “Sunrise” registration period for trademark owners, or a “Trademark Claims” procedure providing notice of trademark rights to prospective domain registrants. Brand owners will submit information regarding their trademark rights to populate the Trademark Clearinghouse. Inclusion in the Trademark Clearinghouse will require (i) nationally, or multinationally registered word marks, (ii) any word mark validated through judicial proceeding, (iii) any word mark protected by statute or treaty, or (iv) other marks that constitute intellectual property. The Trademark Clearinghouse will validate and authenticate marks for use under “Sunrise” or “Trademark Claims” services. Importantly, marks subject only to a claim of common law trademark rights or design marks without corresponding word mark registration will not be eligible for inclusion in the Trademark Clearinghouse, unless the word marks are either court-validated, protected by statute

• r treaty, or can meet the qualification of “other marks that constitute intellectual property.” ICANN

does not appear to have provided guidance on the definition of “other marks that constitute intellectual property,” but this category may allow validation of rights by the Trademark Clearinghouse where some other source of substantiation of rights can be provided by a trademark owner. The service provider, specific procedures and level of costs to be borne by brand owners for the Trademark Clearinghouse have not been identified as of the date of this writing. “Sunrise” pre-launch services have been a feature of past gTLD launches. Essentially designed to provide trademark owners with early registration opportunities, the Sunrise services offered under the

Dot Anything. Brand Owners Should Plan Now for ICANN’s gTLD Expansion

4 new gTLDs will only be required to recognize nationally or regionally registered word marks for which proof of use was submitted to and validated by the Trademark Clearinghouse, or word marks that have been either court-validated, or which are protected by statute or treaty in effect prior to June 26, 2008. The new gTLD’s Sunrise pre-launch service must also use a specialized Sunrise Dispute Resolution Policy. As an alternative to Sunrise-type procedures, new gTLD registries may use a Trademark Claims

• service. Under this procedure, the registry will send an applicant for a second-level domain

registration an electronic notice consisting of information about a trademark and its owner listed in the Trademark Clearinghouse. Recognition of registered word marks is slightly broader under the Trademark Claims service. A registry using a Trademark Claims service is required to recognize any nationally or regionally registered word mark. Unlike the Sunrise service, no validation of use is

• required. In addition, a registry using a Trademark Claims service must recognize word marks that

have been either court-validated, or which are protected by statute or treaty in effect at the time the mark is submitted to the Trademark Clearinghouse.

New gTLD Dispute Resolution Procedures

The UDRP, familiar to many trademark owners, will be available under the new gTLD registries. In addition, for purposes of the new gTLDs, ICANN has introduced the URS procedure, which is intended to provide a faster and less expensive process for resolving clear-cut cases of infringement involving second-level domain names. Relative to the UDRP, the URS incorporates an expedited administrative review, registry operator lock of the domain, and accelerated notice and response

• schedule. The legal bases for a successful URS complaint are similar to a UDRP complaint, but a

finding in favor of a URS complainant requires clear and convincing evidence with no genuine contestable issue. A successful determination in a URS proceeding results only in suspension of the registration, rather than the transfer permitted under the UDRP. ICANN has also developed the Trademark PDDRP under which a brand owner may challenge a new gTLD registry after it has been set up, either because the top-level extension is confusingly similar to a trademark or where the registry operator has engaged in registration of infringing domain names. The Trademark PDDRP responds to brand owner concerns that registries may sponsor cybersquatting

• activities. Support for a PDDRP complaint requires more than the presence of infringing domain

names in a registry. A complainant must show that the registry systematically encourages infringing registrations or acts as the actual registrant or beneficial user of infringing domain names.

What Should a Brand Owner Do?

The new gTLD launch raises challenges for brand owners not present in past instances where individual gTLD registries have been launched. K&L Gates can assist in any of the following areas:  Businesses should immediately consider the benefits, risks, and costs for establishing their

• wn gTLD extension, whether based upon their trademark or an industry generic term. A

gTLD based on a generic term could become the focal the point for your industry, potentially supplanting customers’ use of websites at .com and similar extensions.  Monitor competitors’ and other third parties’ plans with new gTLDs. A competitor could decide to invest in the setup of a new top-level extension based upon a generic industry term before you do. Alternatively, a third party may apply for a gTLD based upon a trademark identical to yours in an unrelated industry or a jurisdiction where you do not operate.

Dot Anything. Brand Owners Should Plan Now for ICANN’s gTLD Expansion

5  Use the Trademark Clearinghouse. Submit trademark information prior to any gTLD launch to provide defensive protection for your marks.  Track publication of new gTLD applications. File objections to new gTLD strings if necessary. In the case of new gTLDs consisting of generic or geographic terms, develop plans for defensive

• r necessary business registrations prior to registry launch.

Authors:

Britt L. Anderson britt.anderson@klgates.com +1.650.798.6746 David J. Byer david.byer@klgates.com +1.617.261.3115 Pallavi Mehta Wahi pallavi.wahi@klgates.com +1.206.370.6648