The New Generic Top-Level Domain Names: What Trademark Owners Should Do To Prepare

Date: June 5, 2012

Take away: The world of top-level domain names is about to expand hugely, increasing the risk that your trademark will be used in some form. You will need to be on the alert this summer and fall to be aware of possible problems and be ready to use important new procedures to protect your rights.

Discussion: On January 12, 2012, the Internet Corporation for Assigned Names and Numbers (“ICANN”) began accepting applications for its new generic top-level domain (“gTLD”) program.  During the application period, any entity with the financial resources to pay the $185,000 application fee and other associated costs could apply to form and operate a new gTLD registry, which could be brand-specific (e.g., .coke) or generic (e.g., .bank). 

This process has not been without controversy.  A number of associations, businesses and government officials have expressed concern over the new gTLD program due to the excessive cost and potential harm to trademark owners, as well as the likelihood of cybersquatting.  Despite the controversy, the new gTLD program is well on its way to implementation.  What should trademark owners do to prepare?

Public Comment/Opposition Period

Along with the new gTLDs come new rights protection mechanisms.  ICANN recently announced that it will publish on its website all gTLD character strings that have been applied for and the applicant for each on June 13, 2012 (the “Reveal Date”).  Following the Reveal Date, there will be a comment period that is currently scheduled to end on August 12, 2012.  Any interested party will be able to submit comments for the independent evaluation panels to consider during the evaluation of the new gTLD applications. In addition, parties with grounds to oppose will have about seven months from the Reveal Date to file an objection to any application (e.g., proposed gTLD infringes a trademark).

The Trademark Clearinghouse

It is important to note that the objection procedures noted above are applicable only to challenge the “top-level space” (to the right of the dot) during the gTLD application review process.  Another area of concern is what a trademark owner should do to enforce its rights in the “second-level space” (to the left of the dot). The Trademark Clearinghouse (the “Clearinghouse”) is intended to be the central database of trademark holders’ marks.  In order for a trademark owner to be eligible to participate in the Clearinghouse, its mark(s) must meet one of the following criteria:  1) be registered nationally (e.g., federal registration in the US) or regionally (e.g., Community Trademark Registration in the EU); 2) be validated through a court of law or other judicial proceeding; 3) be protected by statute or treaty; or 4) otherwise constitute intellectual property (as determined by the gTLD registry operator and the Clearinghouse service provider).  For marks that are not protected via a court, statute or treaty, the trademark owner will be required to submit evidence of the mark’s use in connection with a bona fide offering of goods or services (e.g., labels, containers, advertising, brochures, or screen shots). 

By submitting their key marks to the Clearinghouse, trademark owners will be eligible for the following mandatory services that gTLD operators are required to implement in connection with the launch of each new gTLD:

  1. Sunrise Service.  New gTLD registry operators must provide this service for a minimum of 30 days prior to the launch of a new gTLD.  This program allows an owner of a mark in the Clearinghouse to pre-register domain names including its marks in a gTLD before registration is generally available to the public.  In addition, notice must be provided to a trademark owner when someone is attempting to register a domain name identical to the owner’s mark during the sunrise period.
  2. Trademark Claims Service.  New gTLD registry operators must provide this service for a minimum of 60 days after launching a new gTLD. This service will notify prospective domain name registrants when there is an identical mark in the Clearinghouse that belongs to another party and require the prospective registrant to represent that, to the best of his or her knowledge, the registration and use of the domain name will not infringe the trademark identified in the notice.  The service will also notify a trademark owner when a domain registration identical to the owner’s mark has been completed.  A trademark owner can then determine whether further action is necessary, such as filing a domain name dispute proceeding under the Uniform Domain Name Dispute Resolution Policy (UDRP) or a lawsuit under the federal Anti-Cybersquatting Consumer Protection Act (ACPA) or other rights protection mechanisms discussed below.

Other New Rights Protection Mechanisms

The Trademark Claims and Sunrise Services are only mandatory for a limited period of time and will not protect a trademark owner’s rights in the long term.  Trademark owners should consider and use other rights protection mechanisms as part of their domain name watch protection strategy.  After the periods for the Trademark Claims and Sunrise Services have closed, trademark owners will have the following new options available to address domain name abuses, in addition to the current remedies available under the UDRP and ACPA mentioned above.

  1. Uniform Rapid Suspension System (URS).  The URS is a new procedure that is intended to be a quick (3-5 weeks) and low cost method to disable an infringing domain name.  This procedure is available only in “clear” cases of trademark abuse.  A trademark owner will have to prove that:  a) the registered domain name is identical or confusingly similar to a word mark (i) for which the owner holds a valid national or regional registration and that is in current use, (ii) that has been validated through a court of law or other judicial proceeding, or (iii) that is protected by statute or treaty; b) the domain name registrant has no legitimate right or interest in the domain name; and c) the domain name was registered and is being used in bad faith.  A successful challenge will result only in the suspension of the domain name for the remainder of the registration period.  Upon suspension, the domain name will be redirected to an informational page to indicate that the domain name was the subject of a URS proceeding. 
  2. Post-Delegation Dispute Resolution Procedure (PDDRP).  The PDDRP is a complaint filed against a gTLD registry operator in circumstances where the operator begins to use a gTLD that is identical or confusingly similar to a trademark owner’s mark in a detrimental manner (e.g., impairing the distinctiveness of the mark) or allows egregious second-level domain name registrations in violation of the trademark owner’s rights.  This procedure is expected to be more time-consuming and expensive (more like litigation).  Available remedies include the costs of the proceeding, suspension of the operator’s ability to accept new domain name registrations, and termination of the operator’s Registry Agreement with ICANN where the operator has acted with malice.

Cybersquatting remains a threat to the value and goodwill of a trademark owner’s trademarks.  At a minimum, trademark owners should carefully monitor new gTLD applications and subsequent second-level domain name registrations with the new gTLDs, file legal rights objections, and utilize other rights protection mechanisms as necessary.  In addition, trademark owners should register their marks with the Trademark Clearinghouse and register key domain names during the sunrise periods of relevant new gTLDs as defensive measures.  Trademark owners should plan ahead to take these additional steps and budget accordingly. Taking proactive steps to prevent cybersquatting and taking legal action where necessary are key to a trademark owner’s trademark and domain name protection and enforcement strategy.