There has always been discord between the domain name registration system (which awards the universal right to a domain name to a singular owner) and the world’s patchwork trademark registration systems. The latter protects a mark solely in national, regional, or treaty-created geographic areas, and only insofar as it is registrable in relation to narrowly tailored classes of goods and services. Recent developments will cause the two worlds to continue to converge or, depending on your viewpoint, conflict.

On March 26th, the Trademark Clearinghouse (TMCH) came into being. Its primary purpose is to protect trademark holders against potential infringement upon the arrival of multiple new generic Top-Level Domains (gTLDs) in the Internet ecosystem later this year. The TMCH is the sole database of validated trademarks under the auspices of The Internet Corporation for Assigned Names and Numbers (ICANN), the California-headquartered institution formed in 1998 that oversees all domain names.

Ninety-six percent (96%) of major consumer brands indicate they believe the new gTLDs present a risk to their online intellectual property, yet twenty percent (20%) of the top 200 consumer brands surveyed as of last month still had little or no awareness of the new domains. This, no question, creates an atmosphere ripe for significant trademark infringement exposure.

The TMCH will perform two primary functions: (1) authentication and verification of contact information and trademark records; and (2) maintenance of those records in a database available to the new gTLD registries to support the provision of “Notifications of Registered Name” (“NORN”). One thing the TMCH does not do is create new rights in the marks or domain names.

Recording a mark in the TMCH provides the trademark holder with the opportunity, during the “Sunrise Period,” to pre-emptively register domain names which match its trademark in advance of general public availability of the new gTLDs. Between sixty percent (60%) and eighty-eight percent (88%) of major consumer brands (depending on the research cited) have expressed an interest in obtaining such registrations.

Sunrise Periods were utilized when new TLDs were introduced 10 years ago to allow trademark owners to pre-empt domain name pirates. The primary difficulty at that time was the registries’ inexperience in verifying the validity of the marks submitted. This time around, more than 100 personnel have been trained to evaluate the validity of marks in many countries.

It is possible that a rightsowner could confront many entries in the TMCH for the same mark when it explores its holdings. Some watching the developments believe that an auction system might be the most equitable way to determine who will be able to register a name during the Sunrise Period.
Additionally, for the ninety (90) days following the launch of each respective new gTLD web extension, a trademark holder with a TMCH registration will receive a warning when any other party registers domain names that match the registrant’s marks. This “Trademark Claims Service” is reportedly in demand and supported by sixty percent (60%) of major consumer brands, but there is concern among commentators that trademark violators may just be under scrutiny for the 90 days, with less challenged infringement occurring thereafter.

Recent proposals thus include a thirty (30)-day notice period before the Sunrise Period and an extension of the Trademark Claims Service timetable. The first thirty (30) non-Latin gTLDs have completed ICANN’s evaluation process. New gTLDs (particularly those domains for which there are no competing applications or objections) could start their Sunrise Period and be introduced to the root zone this summer.

If the TMCH recognizes a conflict, the domain name applicant can still continue with registration, but will have been provided constructive notice of the potential adverse trademark protection. If the domain becomes registered, the trademark rightsowner is notified and can then make an informed election about monitoring the usage and whether to initiate (a) a complaint under established uniform domain name dispute resolution protocol, or (b) a trademark infringement action.

The TMCH does not have any geographical limitation. Fifty-two percent (52%) of brands surveyed are interested in securing geographic domains relating to their trademarks, such as .SCOTLAND or .AFRICA. The opportunity to reach new markets via international domains presented in foreign language scripts is an attraction to sixty percent (60%) of the surveyed brands.

The price of TMCH registration will range from US$95 to US$150 per year per trademark, depending on the number of marks submitted and the length of registration period selected. If another registry provider commenced provision of services to an easy-to-validate segment of the market, the price of registration in developed countries might be reduced while it concurrently rises for applicants in jurisdictions where authentication is more difficult to achieve.

A pricing discount will be offered when one thousand (1,000) “status points” are obtained, which could mean 1,000 registrations in a year or less if the trademarks are registered for three or five years (more status points are given for longer registrations). Establishment of a TMCH record is prerequisite to eligibility for Sunrise Period pre-registration. That said, there is a possibility that registries could also acknowledge pre-registration rights for marks not recorded in the TMCH.

Law firm clients should be advised that having a TMCH registration does not secure the subject mark in every single trademark or domain name registry. Each registry will have its own policy, which may limit registration on the basis of, e.g., presence in a geographic zone or a designated native language or community group.

The Clearinghouse will be jointly operated (but under separate contracts) by IBM and Deloitte, with IBM administering the database and Deloitte providing the authentication services. Later, ICANN may allow competitive parity by permitting trademark owners to choose from a variety of trademark clearing services. With the database of recorded trademarks under direct contract, ICANN has paved the way for opening up competition for the authentication services component of the regime.

Nearly eighty percent (80%) of brands polled believe that the introduction of the TMCH will help protect their intellectual property online. Trademark attorneys and their clients certainly hope that it will.

Survey results cited here are from Deloitte and Vanson Bourne.

More information is available at the TMCH website, www.trademark-clearinghouse.com.

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