The Trademark Clearinghouse: Expansion of Generic Top-Level Domains and How to Protect Your Trademark Rights

In 2011, the Internet Corporation for Assigned Names and Numbers (ICANN), the governing body of the domain name system, formally approved a plan to open the door to new generic top-level domains (gTLDs). The introduction of these new gTLDs (which range from generic names such as ".pharmacy" to geographical locations such as ".nyc" to particular brand names) will drastically change the manner in which the Internet is navigated, providing both benefits and challenges to consumers and trademark owners. ICANN is currently evaluating over 1,900 new gTLD applications and plans to introduce the first new gTLDs later in 2013.

Rights of Trademark Owners: Trademark Clearinghouse

The introduction of new gTLDs will likely provide "cybersquatters" with ample opportunity to appropriate brand names by registering second-level domain names (e.g., www.brandx.pharmacy) that may be available on a much larger scale than before.

To mitigate this risk, ICANN has established the Trademark Clearinghouse (www.trademark-clearinghouse.com) to help trademark owners protect their rights during the expansion of the domain name system. The Trademark Clearinghouse, set to accept registrations starting March 26, 2013, will serve as a centralized and verified repository for registered trademarks. An attractive feature of the Trademark Clearinghouse is that it allows trademark owners to deposit their trademark data with one centralized source (for a fee), rather than with each new gTLD registry. The fee is US$150 per registration per year, with marginal discount pricing available based on longer terms and volume of registrations (which can add up if you wish to register a number of trademarks).

The Trademark Clearinghouse will help trademark owners protect their brands by providing the following services:

• Sunrise Service. The Sunrise period is a mandatory pre-launch phase providing trademark owners with a 30-day period to register gTLDs that match their trademarks before registration of that gTLD is generally available to the public. Trademark owners taking advantage of the Sunrise Service will be required to submit proof of use of the trademark(s).
   
• Trademark Claims Service. The Trademark Claims Service is a notification service that is available after the Sunrise period for 60 days following the general registration of a new gTLD. The Service notifies (a) a prospective domain name registrant of a potential conflict with a trademark in the Clearinghouse; and (b) a trademark owner if the domain name registrant continues to register the domain name.

How the Trademark Clearinghouse Will Work

The Trademark Clearinghouse will accept only those trademarks that are nationally registered, validated through a court of law or protected by statute or treaty. Trademarks that are currently the subject of an opposition proceeding or those that have had their registration invalidated or cancelled will not be accepted by the Trademark Clearinghouse. Further, the Clearinghouse will accept only word marks or the word portion of design trademarks.

The two services described above will flag only those domain names that are an identical match to the trademarks in the Trademark Clearinghouse. An identical match means that a domain name must consist of the complete and identical textual elements of the trademark. Special characters used within a trademark that cannot be used in a domain name will be either omitted or replaced by a hyphen. Special characters "@" and "&" contained within a trademark may also be spelled out with the appropriate words in a matching domain. For example, possible matches for the fictional trademark for DOMAIN & COMPANY would be (1) DOMAINCOMPANY, (2) DOMAINANDCOMPANY or (3) DOMAIN-COMPANY. However, domain names containing plural versions of the mark or different variations of the spelling will not be flagged. For example, the following domain names would not be considered an identical match to the fictional trademark DOMAINSITE: (1) DOMAINSITES or (2) DOMAINSIGHTS.

Other Rights Protection Mechanisms

Trademark owners may challenge a domain name through the following dispute resolution mechanisms:

• Uniform Rapid Suspension (URS). URS is a quick mechanism intended for clear-cut cases of trademark abuse, with the only remedy being a temporary suspension of a domain name for the duration of the registration period (the domain name, however, is not transferred).
• Post Delegation Dispute Resolution (PDDRP). PDDRP is a more complex mechanism by which a trademark owner must assert and prove that the operator of the new gTLD registry is infringing on the trademark owner’s rights, either by the gTLD registry itself (e.g., "brandx" or ".brandx") or by a bad faith pattern of allowing infringing second-level domains (e.g., "brandx" or www.brandx.pharmacy).

New Reality and Costs for Trademark Owners

Similar but not identical domain names registered under new gTLDs will not be flagged by the Trademark Clearinghouse. Further, the Clearinghouse only provides notice – it is not a rights-protection mechanism. Therefore, the onus rests on trademark owners to develop a budget for a trademark monitoring and enforcement strategy to deal with the new gTLDs. Such a strategy could involve only registering certain trademarks with the Clearinghouse and relying solely on the notification mechanism. Alternatively, the strategy could take the form of a more aggressive approach, which would include monitoring domain name registrations in important new gTLDs for confusingly similar registrations, or even  filing defensive registrations during the "open" registration period for variants of important trademarks to possibly circumvent a cybersquatter issue.

Given that there will likely be an increase in the instances of cybersquatting and Internet fraud, trademark owners must be diligent in ensuring that their rights are protected in light of these changes.

To discuss these issues, please contact the author(s).

This publication is a general discussion of certain legal and related developments and should not be relied upon as legal advice. If you require legal advice, we would be pleased to discuss the issues in this publication with you, in the context of your particular circumstances.

For permission to republish this or any other publication, contact Janelle Weed.

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