‘Trademark Clearinghouse’ for New gTLDs to Open March 26 – What Does It Mean for You?
The avalanche of new generic top-level domain names will soon be upon us. Trademark owners will need to contend with the prospect of cybersquatting not only in .com, .org, and other familiar top-level domains but also in hundreds more, likely including extensions such as .web, .shop, and .app and even some in non-Latin scripts. Some of these new gTLDs will be open to the general public, others will be available only to those who meet certain qualification standards, and still others will be available only to a particular company. A list of the more than 1,400 unique new gTLDs that have been applied for (but not all of which may be approved) can be found at ICANN’s new gLTD web page.ICANN has announced that the first new gTLD may be delegated as early as late April, 2013, even though some details of the new system have not yet been finalized. The entire delegation process will likely take a couple of years. There is no practical way to know precisely when a specific new gTLD will be delegated, if at all. Now is the time for brand owners to decide which new gTLDs (if any) they might want a domain name in, and which of their trademarks they might want to simply monitor across all new gTLDs in case anyone else registers a domain name based on that mark.
To help brand owners protect their marks in the new generic top-level domains, a new Trademark Clearinghouse has been established, jointly run by Deloitte and IBM. The Clearinghouse goes live on March 26, 2013. A trademark owner may submit into the Clearinghouse (1) registered trademarks (excluding state registrations), (2) court-validated common law marks, and (3) trademarks protected by statute (such as USO) or treaty (such as RED CROSS). The vast majority of trademark owners will have only trademark registrations to submit into the Clearinghouse. Some new gTLDs may have unique protections for other marks that may also be entered into the Clearinghouse, but this will likely be rare.
Once trademark rights are validated by the Clearinghouse, this information can then be relied upon for various trademark protection mechanisms in the new gTLDs. However, before trademark owners rush to record all their marks in the Clearinghouse, they should consider the costs/benefits and options to make an informed decision for their particular situation.
What Are the Benefits?
The new gTLD system incorporates several rights protection mechanisms that directly rely on information in the Clearinghouse.
“Sunrise” Registrations for New Domain Names in the New gTLDsFor at least the first 30 days before domain names in a new gTLD are launched, trademark owners may apply for a domain that is an “identical match” to a mark that is in the Clearinghouse. There are a few exceptions to the matching rules for marks that include punctuation or the characters & and @. The matching rules do not include plurals or near misspellings. Thus, assuming MICROSOFT is entered into the Clearinghouse and .software is ultimately approved as a new gTLD, Microsoft would be entitled to apply for microsoft.software but not micorsoft.software. Learn more about the matching rules for your “sunrise” registration.Sunrise domain name application periods will occur over time as ICANN delegates the various new gTLDs. When relying on a trademark registration to support a Sunrise application, the Clearinghouse must first verify that the mark is in current use. Proof of use includes a single specimen of use and a declaration from the mark owner. Unlike for U.S. trademark applications, it is not necessary to submit to the Clearinghouse one specimen per “class” of goods/services. In addition, the registration must have been applied for prior to June 13, 2012, and issued on or before the date of the registry agreement for the particular new gTLD of interest.
During the Sunrise period, a notice will be sent to the mark owner if someone else applies for a domain name that is an identical match to a mark recorded in the Clearinghouse. If multiple mark owners file for the same domain name during the Sunrise period, the rules adopted by the registry of the new gTLD apply (often involving an auction).
“Claims/Notification” ServicesAfter the Sunrise period, domain names will become available to others in a particular new gTLD. For the first 60 days after general launch (which may be expanded to 90 days), domain name applicants will receive a notification if their requested domain name is an identical match to a trademark recorded in the Clearinghouse. This will give the applicant an opportunity to decline to register the domain name, though how often applicants will be deterred from proceeding is an open question. If the applicant proceeds to register the domain name, the trademark owner will receive notice that the domain name has been registered.
Uniform Rapid Suspension ServiceIn addition to the existing Uniform Dispute Resolution Policy that has been in place since 1999, domain names in the new gTLDs are also subject to a new Uniform Rapid Suspension service. There is no requirement for a mark to be recorded in the Clearinghouse in order to be protected under the new URS, but the mark must be eligible for inclusion in the Clearinghouse, plus there must be proof of use. The URS rules may be modified to allow the mark owner to rely on information in the Clearinghouse as proof of use of rights in a mark, though proving such rights has generally not been a burden under the existing UDRP.The filing fee for a URS complaint was originally targeted to be $300-$500, though the lone provider named thus far, the National Arbitration Forum, has not announced a fee schedule. The URS will utilize a form complaint with a 500-word maximum for free text (2,500-word limit for a response). The same UDRP factors of bad-faith registration and use of the domain name apply, but there is a greater “clear and convincing” burden of proof. If the URS complaint is granted, the domain name will be suspended for the life of the registration (plus an optional additional year) rather than a transfer of ownership occurring. The domain name owner may file a response up to one year after a default judgment and recover control of the domain name.
What Are the Costs?
The fee charged by the Clearinghouse to record a trademark varies depending on how many years the recordation is for and whether a third-party agent that qualifies for a volume discount is used. For a one-year recordation, the fee varies between $95 and $150 per mark. Additional fees charged by agents will also likely apply if the mark owner chooses that path. The Clearinghouse has announced that it will limit a single credit card to recording a maximum of 10 marks, which may force some mark owners to rely on agents. Review the pricing structure for more information about the costs.
A trademark owner must keep the information in the Clearinghouse updated if, for example, a registration is canceled or expires. Failure to keep the information current will result in unspecified “penalties.” Thus, entering marks into the Clearinghouse requires some vigilance on the part of the mark owner and is not without some risk.
Should I Record My Trademarks in the Clearinghouse?
New gTLDs must offer a Sunrise domain name registration period for “identical matches” of trademarks that are recorded in the Clearinghouse (though apparently there is no express prohibition against allowing others to participate in Sunrise.) Thus, if a trademark owner wishes to obtain a new gTLD domain name that is an identical match to an existing mark during the Sunrise application period, before domain names in the particular new gTLD become available to others, the mark should be recorded in the Clearinghouse, including proof of current use of the mark. Accordingly, for some marks, the decision will be easy.
In the absence of interest in a Sunrise application for a particular mark, a trademark owner should consider a private domain name watch service. The annual cost of such services has traditionally been about $100 or so higher than the $150 or so for recordation in the Trademark Clearinghouse, but the watch will last a full year (rather than the 60-to-90-day notice period for marks in the Clearinghouse) and will cover domain names that are beyond mere identical matches. The price of such watching services may be coming down as well. Please contact your Fish & Richardson attorney or the attorney below regarding your monitoring options.
If you wish to maximize the deterrence of registration by others of domains that are an identical match to your marks, then recording marks in the Clearinghouse may be prudent, though notice to applicants of an identical match lasts for only the first 60-to-90 days after general launch, and bad actors often seek to register slight variations of marks rather than identical matches. Thus, the deterrence value of recording marks in the Clearinghouse may be limited. To maximize the effect, you could record trademark registrations from multiple countries for the same mark. For example, a domain name applicant in Japan may be dissuaded from proceeding if he knows the mark is registered in Japan rather than in the United States. However, one should consider the cost of recording marks in the Clearinghouse against the rather limited deterrence benefit.