Domain names can infringe registered and unregistered trademark rights. The time, expense and loss of business focus is a drain on the resources of many businesses dealing with trademark infringement by domain name holders. The launch of potentially almost 2,000 new genericTLDs (gTLDs) is a nightmare for some brands and has ignited strong opposition from brand owners. TLDs are those letters to the right of the ‘.’ in domain names, such as .com and .org.
Companies who believe they are the victim of cyber-squatting or unfair competition and trademark infringement have no inexpensive remedies. ICANN’s Uniform Dispute Resolution Procedure offers arbitration at a fee of €1,500 for a single member panel up to €4000 for a three person panel (up to 5 domains). That’s before counting the cost to business of filing evidence and submissions. The explosion of new gTLDS potentially multiplies the cost thousands of times over and you can easily picture the fears of many brand owners who are concerned that they may face a concerted aggressive campaign from cyber-squatters. Even dealing with potentially inadvertent infringement by new domain owners is an appalling prospect for these companies.
ICANN’s Trademark Clearinghouse is a peace offering to brand owners but does it offer practical protection or reduced costs in the face of the impending gTLD explosion? Or, is it a step on the way to a trademark like opposition process?
How do new gTLDs work?
ICANN has auctioned the controlling rights of around 1,900 new .com equivalents to private organisations. A few examples of possible new gTLDs are .baby, .retirement, .movie, .music, .search, .buy. At a cost of US$185,000 some big companies bought their own brand domains and are likely to keep them in house or for tightly controlled app developers. Others were bought by companies clearly bent on being profitable domain registrars. As each new gTLD is rolled out by its private operator it will open up the entire range of domains to be re-registered under the new gTLD suffix.
What is the Trademark Clearinghouse?
The Trademark Clearinghouse will (1) allow them priority to apply for new gTLDs called the ‘sunrise’ period for 30 days after each new TLD is launched and (2) a trademark claims service that sends a warning notice of identical listed trademarks issued to applicants for new gTLD domain names and a corresponding notice of the application to trademark holders.
ICANN wants the Trademark Clearinghouse to be the cornerstone of trademark protection against infringement when new gTLDs are released. Will it be?
As a single registration that covers a multitude of gTLDs, the Trademark Clearinghouse offers a road map of future protection of trademarks online.
Some applicants who may inadvertently infringe a trademark with an identical domain name are likely to be put off.
The cost is pitched at a level where many companies that don’t regard themselves as big brand holders can benefit from the benefits of priority registration and the warning mechanism, which some may find more useful. Startegically managed this should help minimise the cost and risk exposure faced by trademark owners.
First, it seams a limited response to the potential expense because of the explosion of domains, re-igniting the similar domain name wars across many new gTLDs.
There are two big potential weaknesses. The first is perhaps that only identical terms are covered. This is not as wide as the scope of trademark infringement which naturally includes similar marks.
Secondly, it does not create legal rights or a process to block registrations or any other means of deciding the issue.
Trademark holders are still faced with the expense of registration and cannot simply block identical domains, let alone similar domains. The number of gTLDs multiplies this potential annual cost significantly.
It must be doubtful that a notification to someone bent on cyber-squatting or counterfeit sales will be put off by that notification. It’s a bit like swatting a fly with a matchstick.
Finally, it doesn’t deal with competing identical marks in different parts of the world. Who will get priority?
If you still haven’t registered your trademark, not only will you pay the cost in providing evidence under ICANN’s UDRP of an unregistered right protectable at common law, but you will not be part of the Trademark Clearinghouse Process.
The cyber-squatters looking for new pay-days…let’s see what happens.
The process would undoubtedly be improved if there was an opportunity to register a block for free or a one off nominal cost or to oppose certain applications to register domain names, like the trademark opposition process. But we are not there yet. Will we get there, not likely after the money for the domain rights rolls in.
If you have any questions on the Trademark Clearinghouse you can call Michael Fitzsimons directly on +353 (0)41 9843534 for advice and information on our Trademark Clearing House registration and management service.