Category: Domain Names

With the Launch of Over 1000 New gTLDs Over the Next Year…Is it Time for Brand Owners to Panic?

As we all know, there are already a handful of generic top-level domain names (“gTLDs”) in existence, such as .COM, .CO, .BIZ, .NET, .ORG, .EDU and .XXX, as well as many country code domains, including .CN (China), .JP (Japan), .PL (Poland) and .EU (Europe).  As you may also know, Internet pirates (a/k/a domain name squatters) seek to plunder the trademarks of others by using them in domain names for monetary gain, including the siphoning of Internet traffic from brand owners’ own websites and holding them for ransom.  Many brand owners have dedicated significant time and expense over the past decade (and continue to do so) to defend against these pirates in an effort to control unauthorized use of their trademarks on the Internet, including use of those trademarks in domain names.  With the imminent launch of over 1000 new gTLDs over the next year (possibly 20 per week), those fights may have only been primers for what is about to come for some brand owners.  

As of today, there have been over 1,900 applications filed by third parties for new gTLDs, including .ACCOUNTANTS, .ART, .CONSTRUCTION, .ENGINEERING, .FURNITURE, .SALON, .TICKETS, .THEATER, .TIRES, and so on.  To see the full list, click here.  

The launch of these new gTLDs has been delayed for several years due to brand owners’ and trademark practitioners’ concerns of rampant trademark hijacking and domain name squatting – and the expense and time to defend against such activities.  In an effort to minimize those concerns, the Internet Corporation for Assigned Names and Numbers (“ICANN”) (the entity created to oversee and coordinate domain names) created, what is known as, the Trademark Clearing House (“TCH”).   

What is the Trademark Clearing House (“TCH”)? 

The TCH is a global trademark registry for brand owners to register their trademarks.  TCH providers will verify trademark rights and data and maintain a database with the verified trademark data. 

Two primary benefits of the TCH are that trademark owners that register with the TCH would receive priority with respect to reserving new gTLDs during sunrise periods and receive claims notifications of third parties seeking reservation of domain names that incorporate their trademarks.   

What Trademarks Are Eligible? 

Trademarks that (1) are nationally or regionally registered, (2) have been recognized and validated through a court or other judicial proceeding and (3) are protected by statute or treaty may be registered with the TCH.   

One important aspect of the TCH is that only exact matches of trademarks may be registered, near exact or phonetically equivalent marks (to protect against “typo squatting”) are not eligible for registration.  

What are the Costs for Registering Trademarks with the TCH?

The cost to record marks with the TCH depends upon how many years the reservation is for and how much an agent charges for the recordal.  For a one-year recordal, the registration fee charged by ICANN is $150 per trademark. 

What are Sunrise Periods? 

Sunrise periods will allow brand owners that have registered their trademarks with the TCH to register new gTLDs corresponding with their marks before reservation periods open to the general public.  The aim of sunrise periods is to allow brand owners to “pre-register” their domain names in an effort to keep them away from domain name squatters.    

If a trademark owner plans to register during a sunrise period, it must first submit proof that the subject mark is currently in use, which includes a signed declaration and a sample of how the mark is actually used. 

Should there be competing domain name requests during a sunrise period, ICAAN ultimately wins as the parties would need to “duke it out” at auction.  Highest bid wins.  

What are Claims Notification Periods? 

Trademark claims notification periods follow sunrise periods and run for at least 90 days.  Anyone seeking reservation of a domain name that incorporates a trademark owner’s mark that has been registered with the TCH will receive notification that the reservation request may violate third-party trademark rights.  If the party proceeds with the registration after such notification, a trademark owner would then receive notification that someone has sought registration of a domain name incorporating its mark.  

Once a trademark owner receives such notification it may decide whether to object to the reservation by utilizing the Uniform Rapid Suspension system, a feature of the new gTLDs system, or take other action. 

What Should Brand Owners Do? 

The first step for brand owners is to review the list of applied-for gTLDs and decide if there are any domain names of interest (at least those that correspond to their industry, i.e., Goodyear.tire). 

If a brand owner intends to reserve certain gTLDs corresponding to certain of their trademarks (i.e., for its actual use or as defensive registrations) it should register those trademarks with the TCH.  Those brand owners should then monitor for sunrise periods corresponding to the interested gTLDs to seek reservation of the subject domain name(s). 

Brand owners not planning to reserve domain names that correspond to the new gTLDs, likely need not file their trademarks with the TCH – although reserving top-tier marks now is probably a good idea in the event those plans change.   

If brand owners are only interested in monitoring third-party reservation of domain names that correspond to their trademarks, a better alternative to registering with the TCH is to order a domain name watch from a qualified service provider.  The domain name watch would monitor for any domain name reservations that not only include exact spellings of watched marks but also misspellings and phonetically similar marks.  A domain name watch is relatively inexpensive – only about $250 per year per trademark. 

Although there is much to consider, it is not time to panic.   

However, it is time to understand that there are pirates ready to plunder the trademarks of others with hopes of financial gain.  Although many trademark owners may have bigger fish to fry than worrying about Internet pirates and new gTLDs, brand owners should still take a moment to consider their strategy for defending against potential online attacks to their valuable treasures (a/k/a/ their trademarks and brands).   

Related Trademark Titan Blawg Posts: 

1.  Six Actions Brand Owners Can Take To Prepare For Potential Deluge Of New Generic Top Level Domain Names 

2.  Uniform Domain-Name Dispute-Resolution Policy (UDRP): To Catch a Cybersquatter  (Includes: Domain Name Squatting vs. Domain Name Speculation)    

3.  Study Suggests That Trademark Owners Need Not Worry About New gTLDs 

4.  Ten Essential Rules for Internet Brand Names

The .XXX gTLD Sunrise Period Has Set For Brand Owners: Should Trademark Owners That Opted Not To Participate Be Concerned?

Now that the Sunrise period has set for brand owners to block their respective trademarks from being used in .XXX domain names, what’s next for brand owners that opted not to participate in the Sunrise period and how concerned should they be?

The Sunrise period for members and non-members of the adult community that have verifiable trademark rights or pre-existing exact-match domain names has closed. The next phase for registering .XXX domain names is the Landrush phase reserved only for those members of the adult community. Should there be competing reservations during that phase, those domain names will be auctioned to the highest bidder. That period is set to open on November 8 and close on November 25, 2011. The last and on-going phase will be the General Availability phase, which is set to open on December 6, 2011.

For those brand owners that participated in the Sunrise period to block their respective trademarks, it’s important to note that they were only eligible for blocking domain names that correspond to the exact spelling of their trademarks or pre-existing domain names. Should they decide to reserve defensive domain names for common misspellings of their respective marks – to keep them away from typo-squatters – they must do so during the General Availability phase.

For the past several years the intellectual property trademark attorney community and many brand owners have “sounded the alarm” with respect to the Internet Corporation for Assigned Names and Numbers’ (“ICANN”) proposed plan to launch potentially hundreds of new generic top level domain names (“gTLD”), such as .garden, .books, .cars (and already approved .XXX), because, they argue, such launch would be catastrophic for brand owners since they would need to spend thousands and possibly hundreds of thousands of dollars on useless defensive domain name reservations and enforcement actions against squatters.

Recently, and interestingly, however, I have seen comments by some trademark attorneys that suggest that there may now be an emerging more realistic view on that issue. Those comments concern the new .XXX gTLD and suggest to me that the trademark attorney IP community view on gTLDs might be maturing. Those recent comments concern beliefs that the purpose of domain name sunrise periods is to “bilk” / “fleece” brand owners out of their money and there is no evidence that cybersquatters have any “real” interest in reserving new gTLDs – since those corresponding sites tend to receive less traffic than sites corresponding to .com domain names. That potential “maturing” view may be the result of new business realities and/or an appreciation for taking a business practical approach on the issue and not do what some people say many lawyers do best, “over lawyer.”

If there is growing sentiment among the trademark community that reserving or blocking .XXX domain names that correspond with brand owners’ trademarks may not be worth the expense (unless the marks are famous and/or coined marks or may have a certain connotation within the adult industry), perhaps the trademark community should not be overly concerned with reserving defensive domain names for the anticipated new gTLDs – especially those that would not correspond to a brand owner’s industry. I would certainly think that, for example, an automotive company would be more concerned with the .XXX gTLD than .garden or .pets.

I have blogged about the imminent deluge of new gTLDs, including here and here, and how that may affect the average brand owner. In one of those posts, I wrote:

In my opinion, the concerns raised by brand owners appear to be limited mostly to multi-national, well-known brands that would be most susceptible to domain name squatting issues. Small to medium-sized companies and many non-consumer products companies probably have little to worry about should ICANN’s proposed plan be implemented. All companies should, however, be keeping an eye on the process as it unfolds and, if implemented, be sure to monitor for misuses of their brand names in the new online “wild wild west.”

In another post, I wrote the following:

I cannot recall the last time that I had a client call or complain about a cybersquatter using its trademark or phonetically similar trademark with one of the more obscure gTLDs (i.e., .travel, .jobs). Why? My thoughts are that there is likely not any reason for the average consumer to visit most gTLDs. Would the average consumer think to type in www.xerox.travel when searching for Xerox’s web site? Of course not. If that’s the case, then why would cybersquatters care to reserve domain names that don’t generate web traffic and revenue?

I have also reported the following:

Minds + Machines’ study reports that “Overall, the claims of brand owners that they will be forced to spend significant amounts of money performing defensive registrations in the proposed new gTLDs are not supported by the historical data, which shows that they largely do not undertake defensive registrations in new gTLDs, nor is there any extensive cybersquatting in new gTLDs.”

The Domain Name Wire™ recently reported that the ICM Registry has already received over 42,000 applications for .XXX domain names and has pocketed over 8 million dollars – with the General Availability phase yet to open. Domain Name Wire also reports that:

The sunrise applications are five times as many as ICM Registry anticipated. If trademark holders are like many other businesses, we can expect a flurry of applications before the sunrise period ends this Friday so the numbers will grow.

Domain Name Wire author also comments that:

.XXX has benefited from some savvy (and expensive) marketing, lots of free press, and intellectual property lawyers selling fear to their clients.

I have provided a list of six actions that brand should consider to take now to ready themselves for the potential deluge of hundreds (and some argue thousands) of new gTLDs in my post here.

So what will it be for most brand owners? Take the business practical approach and defensively block and reserve only those gTLD names that make business sense or continue to do what most have done over the past decade plus, be “over-lawyered”?