Trademark owners and their attorneys need a new gTLD strategy to help them navigate the chaos that will shortly hit the Internet, says Daniel Greenberg.
In the ‘good old days’ it took effort and money to infringe a registered trademark. Nowadays all you need is a few dollars on your credit card and access to the Internet. In a matter of minutes it is possible to register a domain name, set up a website and start infringing. A relatively cheap, easy and quick infringement could result in a trademark owner incurring a few thousand dollars in expenses to recover the domain name.
To help combat the meteoric rise in domain name disputes, the Internet Corporation of Assigned Names and Numbers (ICANN) introduced the Uniform Domain-Name Dispute-Resolution Policy (UDRP) to provide trademark owners with a relatively simple and cost-effective procedure to recover infringing domain names.
Filing a UDRP case is more cost-effective than taking action in a local court but is not necessarily cheap, since most trademark owners instruct their attorneys to draft such complaints. A trademark attorney could charge between $2,500 and $5,000 to draft a UDRP complaint, excluding the filing fee of $1,300. Extrapolate this amount per recovery, over a period of time, and a trademark owner could spend significant amounts of money on recovering infringing domain names.
“THE SUNRISE PERIOD ALLOWS A TRADEMARK OWNER TO SECURE A DOMAIN NAME MATCHING ITS TRADEMARK BEFORE THE NEW GTLD IS RELEASED TO THE GENERAL PUBLIC.”
To add to the already costly task of recovering domain names, ICANN is increasing the avenues for infringement by introducing hundreds of new generic top-level domains (gTLDs), which will start launching later this year. New gTLDs, including the likes of .app, .africa, .porn, .web, .site and .shop, will create opportunities for many Internet users and enforcement headaches for most trademark owners.
In order to protect trademarks, the Trademark Clearinghouse (TMCH) has been set up. The TMCH will allow trademark owners to submit their trademarks for verification and, once verified, it will allocate them a signed mark data (SMD) file or a verification code. A trademark owner will then use this code when registering a domain name that matches its trademark, during the sunrise periods launched under new gTLD registries.
The sunrise period allows a trademark owner to secure a domain name matching its trademark before the new gTLD is released to the general public. If the trademark owner does not register the domain name during the sunrise period, the domain could be registered by a third party.
If a trademark is not verified by the TMCH it cannot be used by the trademark owner during the sunrise period.
What should trademark owners and their attorneys do to mitigate the risks?
Identify registered trademarks that are worthy of protection within these new gTLDs. The trademarks must be registered and used by the trademark owner. We advise selecting all trademarks that are core to business operations.
Submit trademarks to the TMCH for verification. Th is can be done via two channels: directly with the TMCH or via a TMCH agent. A TMCH agent is a company that submits bulk trademarks for verification, often offering a pre-validation service to ensure that the trademark complies with the TMCH guidelines.
It is recommended that trademark owners and their attorneys use a TMCH agent to eliminate errors and administrative work involved in submitting a trademark to the TMCH. In addition, the TMCH agent will keep the SMD file safe and secure and assist with the declaration of use and proof of use, which are requirements when submitting the trademark to the TMCH.
A trademark can be verified for one, three or five years. The period will only commence when the first sunrise period has launched.
Formulate a new gTLD strategy by selecting the gTLD sunrise periods that are relevant to the trademark and its market. The cost of submitting a sunrise period application is set by the registry that operates the TLD and may diff er from TLD to TLD. It may be advisable to budget in the region of $100 to $200 per sunrise application. The new gTLD strategy will form the basis of a defensive registration programme, with a view to reducing the risk of a third party registering a domain name matching the trademark.
Monitor sunrise period launch announcements, in order to submit an application within the prescribed time. The TMCH agent should notify the trademark owner of sunrise period launch dates.
Implement a ‘watch service’ to monitor the new gTLDs for domain names that incorporate, or are confusingly similar to, the verified trademark.
For a limited time, after the sunrise period of a new gTLD closes, the TMCH will notify trademarks owners when a third party attempts to register a domain name that is identical to a verified trademark or a pre-selected set of variations, chosen by the trademark owner during the verification process. The registrant will also receive a notification that the domain name they intend to register matches a verified trademark.
Opinions differ on the potential success of the new gTLDs, so it is essential that a company’s new gTLD strategy evolves as the programme unfolds, adding and removing TLDs based on market relevance and exposure.
Trademark owners and trademark attorneys should start implementing a new gTLD strategy that will give some direction to the chaos that will shortly hit the Internet. An early submission to the TMCH will avoid a trademark being placed in a backlog queue, which may arise closer to the launch of the first new gTLDs when trademark owners scramble to verify their trademarks.
Daniel Greenberg is a director and in-house counsel at Lexsynergy Limited. He can be contacted at: email@example.com
This article was first published on 01 April 2013 in World IP Review
gTLDs, ICANN, UDRP, trademark clearinghouse