Over the next few years, trademark owners can expect to see approximately 1,900 new generic top level domains ( “gTLDs”) made available to the public. A gTLD is the suffix portion of a web address which generally addresses the subject matter of that domain. In addition to the more generic terms (.hotel, .auto, .baby, etc.), these gTLDs can include brand-specific terms (e.g., .coke and .bloomingdales). These domains will be released on a staggered basis, with the first domains expected to launch on May 13, 2013. A full list of the proposed new gTLDs is set forth on the website of the Internet Corporation for Assigned Names and Numbers ( “ICANN”), located here.
By introducing the new gTLDs, ICANN aims to open up the system of Internet addresses, when gTLDs such as the ubiquitous “.com” have become increasingly crowded. But one unfortunate downside from the release of the new gTLDs is the likelihood of a significant increase in cybersquatting. Concerns have naturally arisen that third parties could register and establish domain names and websites in the new gTLDs that incorporate the legitimate business names, trade names and trademarks of others, or otherwise cause confusion for consumers. For example, an unscrupulous registrant may attempt to appropriate the well-known Hyatt Hotels name and mark by registering www.hyatt.hotel. In order to help address these concerns and implement protective measures for trademark owners, ICANN has established the Trademark Clearinghouse (the “Clearinghouse”), which will be jointly operated by Deloitte and IBM.
The Trademark Clearinghouse
The Clearinghouse is a centralized repository of validated trademark rights, and provides for a registration and notification system for the benefit of trademark owners, as discussed below. The Clearinghouse will not block registrants from registering domain names, even when those domains contain a trademark owner’s exact mark. It also does not provide an avenue for dispute resolution. Nevertheless, for many trademark owners, the Clearinghouse will be a valuable tool that will afford them an early opportunity to intercede in the registration of infringing or confusing domain names.
In order to record a mark with the Clearinghouse, owners must submit an application and the appropriate fee (discussed below). Recordation is generally only available for text-only marks registered on the U.S. Patent and Trademark Office’s Principal Register (provided that the registration was applied for prior to June 13, 2012), or with another national trademark office. Recordation under certain other limited circumstances is also possible. Marks that have merely been applied-for are not eligible for inclusion in the Clearinghouse.
The Clearinghouse is scheduled to open on March 26, 2013, and will remain open throughout the delegation of the new gTLDs. This could be as early as June 2013, but could possibly last into 2015. In order to take maximum advantage of the Clearinghouse, including the Sunrise periods for the first gTLDs to be released later this spring (discussed below), trademark owners might consider early recordation.
The fees for recording marks with the Clearinghouse depend on the total number of marks recorded, and how long the recordation will last. Although the fee schedule is subject to change, the anticipated recordation costs should be no greater than the following:
Discounts may be available for bulk recordation of multiple marks, but are not anticipated to substantially reduce filing fees.
The Sunrise Period (For new gTLDs)
Once a trademark registration has been recorded with the Clearinghouse, the owner is entitled to participate in the “Sunrise” period for each new gTLD. Each time a new gTLD goes live, its operator must provide a Sunrise period of at least 30 days. During this time, owners will have the opportunity to register domain names consisting of their identical mark before a particular gTLD is opened to the general public. In this way, owners may remove their marks from the pool of possible domain names in that particular gTLD. Each new gTLD conducts its own Sunrise period independently, which means that owners may be forced to participate in a large number of Sunrise periods. If multiple mark owners file for the same domain during the Sunrise period (for example, FORD cars and FORD modeling agency services), the rules adopted by the registry of the new gTLD will apply. It is expected that conflicts of this nature will generally be resolved via an auction.
If an owner chooses to participate in a Sunrise period for one or more gTLDs, it must submit a declaration in support of its use of the mark and a specimen evidencing such use, in addition to the Clearinghouse recordation.
The Trademark Claims Service (For new gTLDs)
For the first 90 days following the date that a gTLD has been made available to the general public, the Trademark Claims Service operates to provide notice to both potential gTLD registrants and mark owners. If a potential registrant attempts to purchase a domain name corresponding to a mark that has been recorded with the Clearinghouse, the Trademark Claims Service will notify the potential registrant of the owner’s rights in its mark. If the potential registrant chooses to proceed with registering the conflicting domain, the Trademark Claims Service will then notify the mark owner of such registration.
Benefits of Recording in the Clearinghouse
There are significant defensive registration and notice benefits for owners who record their marks in the Clearinghouse. Owners will have the first opportunity to reserve their mark-specific domain names during the Sunrise periods for the new gTLDs. In addition, during the Trademark Claims Service period, a third party attempting to register a domain in the new gTLDs that is identical to a mark will be warned about the owner’s rights in the mark before registration is granted. Ideally, the registrant would abandon its efforts to register the domain name once it learns of the owner’s claim to the mark. However, if the registrant proceeds with registering its domain, the Clearinghouse will notify the owner of the mark to inform it of the registration, but will not take any adverse action against the registrant on the owner’s behalf. This additional notice might also prove useful in infringement suits or other enforcement actions by the mark owner against the registrant.
Limitations on Recording in the Clearinghouse
The registration process only allows for registration of and protection against new domain names that are identical to registered marks. Due to the identical match requirements between marks and the domains, owners will have no Clearinghouse protection against prospective registrants seeking to register domains consisting of commonly misspelled versions of the marks.
Moreover, if a third party attempts to register a domain that is identical to an owner’s mark and proceeds with the registration process after being notified of the owner’s rights, the Clearinghouse will not take any adverse action against the registrant. The mark owner remains solely responsible for challenging the domain registration via the Uniform Rapid Suspension (the “URS”) system (discussed below) or ICANN’s Uniform Dispute Resolution Policy (the “UDRP”). Again, the Clearinghouse is a registration and notification system, and does not create any legal rights or provide dispute resolution services.
In addition, since trademarks from many jurisdictions can coexist in the Clearinghouse, it is possible that conflicts will arise between legitimate mark owners with rights who have met the Clearinghouse recordation guidelines through different avenues.
Finally, the fees for recording marks with the Clearinghouse and participating in Sunrise periods could be substantial, particularly if an owner has numerous protectable marks. There is no substantial discount for recording multiple marks in the Clearinghouse, and recordation fees must be paid upon each renewal period, whether the mark is recorded for one year, three years or five years. For example, imagine that a software developer has ten distinct, federally registered text-only trademarks for its software products, and wishes to record each of the marks in the Clearinghouse for a period of three years. The costs for recordation alone would total $4,350 under the current anticipated fee schedule. Now imagine that the owner wishes to participate in Sunrise periods for two separate gTLDs — .app and .software. — which will require the payment of additional fees to the gTLD operator. If another legitimate owner wishes to register the same domain name, the operator could hold an auction to decide who will own the domain, raising fees even further. In this way, it is easy to see how Clearinghouse recordation can cost thousands of dollars, with no guarantee that an owner can defensively register a particular domain name in any gTLD.
Trademark owners who choose not to record their marks with the Clearinghouse will still be able to police their brands and avail themselves of the traditional dispute avenues, such as ICANN’s UDRP, in order to combat cybersquatters. Additionally, owners can utilize the URS system in order to challenge infringers.
The Uniform Rapid Suspension System (the “URS”)
In order for a mark to receive protection under the URS, it must have been eligible for inclusion in the Clearinghouse, and the owner must be able to provide proof of its use of the mark. There is no requirement for a mark to have been recorded in the Clearinghouse in order for the owner to utilize the URS.
Owners bringing a complaint under the URS must establish bad-faith registration and use of the domain — the same factors required in UDRP proceedings, which are an expedited avenue for addressing disputes arising from abusive registrations of domain names, and can result in the cancellation, suspension or transfer of the domain to the rightful trademark owner. However, URS proceedings entail a greater “clear and convincing” burden of proof than UDRP proceedings.
If a mark owner’s URS complaint is granted, the infringing domain will be suspended for the life of the registration, plus an optional additional year. Unlike UDRP proceedings, no transfer of ownership of the domain to the mark owner will occur. If a default judgment is entered against a domain registrant, the registrant may still file a response to the URS judgment up to one year after the judgment in an effort to regain control of the domain.
The fee for filing a URS complaint has been estimated at $300–$500, although no official fee schedule has yet been announced.
Considerations for Trademark Owners and Timing
Trademark owners will be able to apply to record their marks in the Clearinghouse beginning on March 26, 2013. ICANN’s plans for deploying the new gTLDs are ongoing and are subject to change. Trademark owners may want to pay close attention to the ongoing news releases regarding the gTLDs and their Sunrise periods, and consider filing relevant Sunrise applications in gTLDs as well as defensive domain name registrations.
If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:Johanson-David
This article was originally published by Bingham McCutchen LLP.