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Will Uniform Rapid Suspension Be a Substitute for Defensive Domain Name Registrations?

Jean Guillon

Many law firms and Intellectual Property departments in charge of managing brands and domain names for their customers or businesses must have had that same question: "how do I protect a brand online under the ICANN new gTLD program?" The first potential answer that is usually offered up to an enquirer is: "the Trademark Clearinghouse does that".

As time goes by, and the rules under which the Trademark Clearinghouse operates are better defined and understood this answer becomes clearly fallacious.

The Trademark Clearinghouse (TMCH) is not protection mechanism; rather it is a privileged access to registering domain names prior to registry launch.

In other words, the Trademark Clearinghouse does two things for brand owners that have registered their marks in the TMCH:

  1. It allows you to participate in a Sunrise Period to register your trademarked brand as a domain name;
  2. It informs you if someone else has applied to register your exact mark as a domain name for up to 90 days following the start of the Sunrise Period.

Importantly, there is one thing the Trademark Clearinghouse absolutely does not do: namely prevent a third party from registering your mark as a domain name during Sunrise, Landrush or General Availability.

It is important to note, that registering in the Trademark Clearinghouse has a cost (the Trademark Clearinghouse charges $150 per to lodge a registered mark for 1 year) budget at least $200 if going through an ICANN accredited registrar; there is a cost also to registering a domain in a Sunrise Period (the sunrise fee varies from registry to registry). Therefore, the more marks you register in the Trademark Clearinghouse, the more expensive it will be. The more domain names you want to guarantee securing from being registered by a third party, the more domain names you must register in Sunrise Period.

Are brand owners prepared to lodge all their protected marks in the TMCH so that they can defensively register them during sunrise in all available Top Level Domains? It is expected that there will be over 600 commercial sunrise periods where mark owners can register their marks as domain names before the first-come-first served period of General Availability commences. Brand owners must make commercial decisions about a) which if any of their protected marks they should register as domain names in Sunrise b) under which Top Level Domains they wish to register their marks and c) whether or not register non-trademarked but brand specific terms (e.g. www.cheapbrandname.shoes) defensively in Landrush/General Availability phases or to rely on post registration dispute procedures to enforce brand owners' rights.

The new but yet untested Uniform Rapid Suspension process

The Uniform Rapid Suspension (URS) process is a new and much vaunted possible solution to the shortcomings of the older but well tested Uniform Dispute Resolution Process (UDRP) but these processes only operate after the infringement has occurred, when the domain name has already been registered by a third party. It is important to note that undertaking a UDRP or a URS procedure is no guarantee that you will recover a domain name. The costs associated with recovery are typically many times more than the cost of registering the domain name in the first place.

URS will have the benefits of being considerably cheaper and quicker than UDRP. However, URS has never been operated before and there are sure to be a number of corner cases to resolve and a considerable time delay before wholesale adoption by the brand owner community.

Costs associated with UDRP start at $1,500 but are typically nearer $5,000 excluding case preparation fees and other legal costs and with a resolution timeframe of at least 45 days.

Due to the newness of the process, the real costs associated with URS have not yet been able to be measured however the filing fee is estimated to be no more than $500 excluding the case preparation fees and other legal costs, which may be between 2 and 10 times the filing fee depending upon the complexity of the case. Resolution timeframe is expected to be in the region of 20 days.

At very best this indicates that the cost to recover a single domain would be in the region of $1,500. The cost to register a single domain in Sunrise varies from registry to registry but is likely to be in the region of $100 to $150.

If such procedures aren't proven or you can't justify their costs, what other solutions does a trademark owner have to limit brand risk and to guarantee the right level of brand protection?

An alternative to guarantee brands a protection does exist

Some new gTLD applicants have analysed ICANN's proposed Right Protection Mechanisms (RPMs) and have created additional RPMs to help support brand owners' rights and provide a more complete protection suite for brand owners such as:

  1. Domain Name Blocking – allows registrants to purchase a non-resolving domain name based upon proof of trademark. While blocking sounds like a reasonable mechanism to stop others registering domain names which contain protected terms this is purely a defensive mechanism and will not contribute to routing web traffic to your website, nor will it allow the brand owner to realise or grow the asset value of a domain name.
  2. Pre-reservation – allows rights owners to pre-order a group of domains in Sunrise which contain the trademarked term e.g. www.cheapTRADEMARK.book, www.TRADEMARKsecurity.shop or www.TRADEMARKbirmingham.music. These domains will be registered at the start of the General Registration period, and will typically offer a discount on the retail price of a domain in General Availability.

These mechanisms in particular, mean it becomes possible to largely prevent cyber squatters, typo squatters, counterfeiters, detractors and other unscrupulous third parties from registering critical domain names containing your trademarked brand.

The advantage of such solutions is not only their cost effectiveness when compared with after-the-fact rights protection mechanisms such as URS and UDR but also their simplicity:

  1. You can buy a discounted pack in sunrise covering multiple gTLD extensions for your trademarked name.
  2. You can buy a discounted pack of second level domains which contain your trademarked term.
  3. Your job is done: your brand is secured on a complete set of new domain name extensions and no one can come and abuse domains names similar or close to your brand.

In terms of pricing and logistics here is why such solutions should be highly considered by brand owners:

  1. The minimum cost of lodging a URS procedure is around $1,500 for one domain name;
  2. Registering in the Trademark Clearinghouse + Sunrise Registration for one domain name:
    • Registering one brand in the Trademark Clearinghouse costs approximately $200 (at the service provider);
    • Registering one domain name in a Sunrise Period costs approximately $130;
    • Total: $330 for one domain name in a Sunrise Period.
  3. Pre-ordering say 100 domain names containing a trademarked term registered in Sunrise will cost say $10 per domain.

Therefore:

  • The cost of registering 101 domains defensively will be approximately $1,330 compared to $1,500 for the cost of one URS action.
  • Putting microsite webpages on 101 domains will invariably drive traffic to core website.
  • Search engines can index and rank 101 websites pushing down other less authentic domains in the listings, further reducing brand risk.
  • The asset value of domain names will increase rapidly with the right combination of content, indexing and promotion.

Conclusion

It is too early to quantify exactly what the costs will be to solve abusive domain name registrations under the new gTLD program. However, it is fair to say that:

  • URS is likely to cost a minimum of $1,500 per action and multiple actions are likely to be necessary.
  • URS is unproven; success is not guaranteed and URS does not create added value to brand owners.
  • Domain Name Blocking may provide a partial answer to online domain abuse.
  • Defensive domain name registration can be cost effective, traffic generating and can increase domain name portfolio asset values.
By Jean Guillon, New generic Top-Level Domains' specialist
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Related topics: Domain Names, ICANN, New TLDs, UDRP
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Is the trademark clearinghouse as currently defined just the beginning? Enrico Schaefer  –  Oct 17, 2013 10:15 AM PDT

Jean:

Interesting take on the trademark clearinghouse. I like your alternative proposals for registries and perhaps ICANN moving forward.  We have been conflicted as to the merits of the trademark clearinghouse. In its current form, the clearinghouse is but a small step forward for trademark owners. I have posted my thoughts about the trademark clearinghouse here.

Ultimately, we decided to recommend our clients that they register their most important trademarks with the clearinghouse. We further decided to become an authorized agent for the clearinghouse so that we can assist our clients in a more comprehensive way as new registries come online.  The most important factors which affected our recommendation were as follows:

1.  Right now, the trademark clearinghouse is all we have to pro actively protect trademarks from cybersquatting.  While the value of the clearinghouse remains to be seen, the risk of not being registered in the clearinghouse is greater. 
2.  With major industry players such as Google and Microsoft participating and supportive new gTLds's, we believe this sucks excessive these new registries is much more likely.
3.  The amount of money being invested by gTLD applicants is much greater then anticipated.  Again, this suggests that the money could be there to affect consumer behavior in domain registrations.
4.  Registries get to make their own rules. Some registries are providing additional protection to companies who register their trademarks in the trademark clearinghouse. Donuts is The obvious example at this juncture.The approaches you recommend above could be adopted by any registry.
5. We believe that the trademark clearinghouse will expand to provide more trademark protection as time goes on, within the clearinghouse system and by outside providers.
6. The clearinghouse provides best notice of sunrise periods and new gTLD launches, and information about new gTLD launches and trademark protection. There is value in this alone. 

In the end, we had to decide whether we were going to remain on the sidelines or jump in to the trademark clearinghouse concept. As we get closer to new registry launch, we decided we had to jump in. We think many of our clients with high-value trademarks will as well.

The TMCH cannot be avoided Jean Guillon  –  Oct 18, 2013 1:11 AM PDT

Hello Enrico,
The TMCH will not protect yout trademarks from cybersquatting unless you register all domain names in all new gTLDs during Sunrise Periods, which is something you will probably not do. If you register in the TMCH and don't apply in a Sunrise, the role of the TMCH will just send you an email once it is already too late. It will not block your Trademark to be registered as a domain name by a thirs party.

The problem of the TMCH is that, as a Law firm, you don't have the choice not to recommend your clients to register their Trademarks.

No word ownership Kathy Kleiman  –  Oct 20, 2013 6:47 PM PDT

Hi Jean, I often agree with your views, but not this time. What you seem to forget is one company's trademark is another's animal (e.g., fox) and one company's hamburger restaurant is another's last name and clan name (e.g. McDonald).

Very few trademarks are coined and fanciful terms (e.g., Xerox) and most trademarks are normal words used in ways that allow them to be trademarked for a given category of goods or services.

When we constructed the URS (and here I am speaking of the work of the STI, a working group created by the GNSO), we did so with a very strong sense of the limits and balances of trademark law.  Basic words belong to everyone.  Infringement is always viewed in the context of use.  Co-existence of multiple companies, organizations and individuals using the same term is the norm, not the exception.  Thus Delta Airlines and Delta Faucets coexist with delta river valleys, delta the 4th letter of the Greek alphabet, and delta the symbol of change in mathematics.

In the new gTLD system, we left open room for people, organizations and companies to use ordinary words in ordinary ways now and in the future. We also left open opportunity for future companies to name new goods and services, and for future entrepreneurs to name new companies --- all using the same dictionary words that belong to everyone.

The rules for the TMCH and URS were considered to be part of a balanced and fair protection of both trademark rights and expression rights/noncommercial rights. Before we bemoan their failures and seek new remedies favoring one group over the other, let's work to see if the system works. I look forward to the success of a system shaped so carefully by so many people — and reflecting the effort, time, insight and work of leaders in all stakeholder groups of the GNSO and ALAC.

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