The next wave in the domain name business will be providing specific domain names to trademark owners interested in purchasing them.
Trademark owners that have spent a great deal of time and money building value in their mark are likely to also want to control the use of that mark as a domain name. For example, instead of shopping at AMAZON.COM, consumers can simply go to .AMAZON. If a random company owns .AMAZON, it is likely to create confusion for consumers expecting to find AMAZON.COM products and services on the site. The goodwill associated with the AMAZON.COM mark will suffer. Thus, an outlet for potential cybersquatting has materialized.
This system poses new opportunities as well as new challenges for trademark owners. According to the ICANN Factsheet for gTLDs, the organization has given great consideration to protecting trademark holders and has outlined a 4 part process: (1) “an objection-based process will enable rightsholders to demonstrate that a proposed gTLD would infringe their legal rights,” (2) applicants for new gTLDs will be required to describe in their applications the rights protection mechanism they propose for second-level registrations, which must be made public,” (3) all new gTLDs must ensure that second-level registrations are subject to ICANN’s Uniform Domain Name Dispute Resolution Policy (UDRP),” and (4) “ICANN has been working closely with the trademark community to find additional solutions to potential issues for trademark holders in implementing new gTLDs.” (http://www.icann.org/en/about/learning/factsheets)
ICANN has set up a Trademark Clearinghouse (TMCH) to assist trademark owners as the domain name system (DNS) expands. The body handles all applications, conflicts and objections through a system composed of various timelines.
A Sunrise Period of at least 30 days, and up to 60 days, has been opened in which trademark owners are encouraged to submit applications to TMCH for a desired gTLD of their particular mark. Deloitte is currently the only company working with the TMCH, and will be tasked with authenticating all applications, compiling a database of the applications and providing that information to registries and registrars. Once they have been added to the database, owners will be informed when a gTLD matching their trademark becomes available.
The Trademark Claims Period follows the Sunrise Period. Applications are accepted in a number of languages and all parties with matching or conflicting marks are notified when a conflict arises. This period runs for up to 90 days. In order to be eligible, marks must fit into one of the following categories:
- “Nationally or regionally registered word marks form all jurisdictions
- Word marks that have been validated through a court of law or other judicial proceeding
- Word marks protected by a statute or treaty in effect at the time the mark is submitted to the Clearinghouse for inclusion
- Other marks that constitute intellectual property may be recorded in the Clearinghouse by arrangement with a registry” (http://newgtlds.icann.org/en/about/trademark-clearinghouse/faqs)
Following the Trademark Claims Period is a Land Rush Period in which registration is open to anyone.
When an application period ends, the applications are published on the ICANN website for objection. There is a 60 day window for public commentary and a 7 month window for objections. If no objections exist, the registration will be completed following this period.
The Uniform Domain-Name Dispute Resolution Policy, UDRP, was adopted in 1999 as a way to provide an “alternative to costly litigation for resolving disputes concerning cybersquatting in gTLDs.” All registrars are required to abide by this policy as it is included in their contracts. To date, over 30,000 complaints have been filed.
Trademark-based domain name disputes will be resolved by agreement, court action or arbitration. Following a decision, the registrar can be advised to cancel or suspend a domain name or transfer the domain name to the successful complainant.
Decisions through the UDRP have been very inconsistent making it difficult for lawyers to advise clients on their likelihood of success. Complaints must adequately prove that the opposing party is a cybersquatter or used the domain name in bad faith.
The big question with all of these changes is how will the consumers respond? Will they readily adopt these new advances? Will the companies that have invested receive an adequate return on investment? Registrars have outlined marketing campaigns that they intend to implement in order to encourage consumers to use these new gTLDs. But it will be some time before we can rule on whether or not the system is a success.
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