Despite all signs pointing to a launch of the new generic Top-Level Domains (gTLDs) program in Singapore, it seems like ICANN could not help poking the Government Advisory Committee (GAC) in the eye one last time. In the latest installment of how a California not for profit technical coordinating body knows best, we have the ICANN Evidence of “Use” Requirement for Trademark Protection document. Although this document was provided to the GAC on 9 June 2011, it does not yet appear to have been publicly posted on the ICANN website.

This document was produced in response to the GAC communication dated 26-May2011, in which the GAC asked for written documentation in connection with ICANN’s refusal to adopt its’ advice calling for the removal of the use requirement for inclusion into the Clearinghouse because “it is inconsistent with trademark laws in many jurisdictions, burdensome for business, disproportionate and discriminatory.” However, ICANN in this four page memo doubles down on its position that only those trademarks with proof of actual use should be included. In this article I explained how the ICANN Board is caught between a rock and a hard place and why the path they have outlined in their memo is the worst of two evils.

The Flaws in ICANN’s Argument

Probably the first place to begin in understanding the flawed logic in the ICANN memo is its articles of incorporation which state in clear and unequivocal terms the following:

ICANN shall “pursue the charitable and public purposes of lessening the burdens of government and promoting the global public interest” and “operate for the benefit of the Internet community as a whole, carrying out its activities in conformity with relevant principles of international law and applicable international conventions and local law and, to the extent appropriate and consistent with these Articles and its Bylaws, through open and transparent processes that enable competition and open entry in Internet related markets. To this effect, the Corporation shall cooperate as appropriate with relevant international organizations.”

Given these requirements hardcoded into the ICANN articles of incorporation one would reasonably think ICANN would provide heightened deference to GAC members that consulted with their national trademark offices, as well as the the World Intellectual Property Organization, which is an observer to the GAC, given its status as the United Nations agency entrusted with the global coordination of patent, copyright and trademark treaties. Not ICANN. Instead, a technical coordinating body decides to reject GAC advice based on national trademark law on the primary ground that the proposed advice of the GAC is subject to gaming.

Strike One

While ICANN went to great lengths to question the integrity of the .EU Sunrise process, no doubt earning itself new friends with the European Commission, ICANN failed to stop and ask itself the question of whether its proposed rules were subject to gaming. Ironically if ICANN would have taken ten minutes to do a search of the United States Patent and Trademark online database they would have uncovered that nine of the ten “generic” marks listed as examples of potential gaming were actually registered trademarks that had already met the highlighted substantive use requirement. See for example SEX, Registration No. 2683821 for magnets, namely decorative refrigerator magnets; HOTEL, Registration No. 3455147 for bar services; JOBS, Registration No. 3787868 for business consultation and management, etc.

Strike Two

In trying to sweep the inconvenient truth under the rug that ICANN’s proposal is basically discriminating between how national trademark registrations will be treated in the Clearinghouse, a non negotiable non starter for the GAC and its members, ICANN points to how these national trademarks can be included in the Clearinghouse with an accompanying affidavit and evidence of use. However, given that the Clearinghouse mechanism has been touted as a low cost mechanism that should cost no more than a couple of hundred dollars it is hard to envision how a substantive review process will be able to identify potential fraudulent documentation.

Strike Three

In trying to proactively address the shortcoming in the Strike Two analysis above, ICANN stresses how there will be severe consequences for individuals or organizations that file fraudulent statements or evidence of use for inclusion into the Clearinghouse. However, ICANN fails to peer beyond the horizon to see how this action opens up its own separate Pandora’s Box of issues, further calling into the question the legitimacy of ICANN’s narrow technical coordinating mandate. One thing that I have learned in over twelve years of experience in the domain name industry is the resourcefulness of certain parties to operate on the penumbra of the rules to maximize their own financial interests.

Therefore it does not take a rocket science to envision turn-key solutions within the industry to provide a web portal using the domain name in commerce, and providing the trademark owner with metrics and pay-per-click revenue statistics to support their bona fide usage claim. The scary part is that instead of ICANN admitting that its own anti-gaming rules have been gamed, it will likely double down yet again and ask its designated vendor to develop rules/regulation of defining bona fide under trademark laws. Of course this substantive legal action in connection with trademark laws taken by a technical coordinating body is a non-starter for the GAC.

ICANN’s Concerns are Not Without Merit

To be fair to ICANN, the concerns they have raised about potential gaming are not baseless. As the original author of the Sunrise concept and based upon hand-ons experience in launching several TLDs that have incorporated a Sunrise component, I have had a front row seat into how a preferential right to register valuable domain names will be gamed for economic benefit. The purpose of this article, however, was to help in ICANN choosing between the worse of two evils.

Choosing Between the Worse of Two Evils

While not wanting to appear too pessimistic, both the ICANN and GAC proposals are highly subject to potential gaming. However, if given between two non-optimal solutions , I believe the most prudent course forward is to choose the one recommended by the GAC. My reason is rather simple and straight forward. By choosing the GAC solution, when/if potential gaming is identified during the propagation/operation of the Clearinghouse database, ICANN and other stakeholders can approach the GAC and ask how to proactively address the concerns that were previously raised and which appear to be manifesting. Given that ICANN adopted their recommendation, the GAC would appear to have a vested interest to make sure there is an optimal launch with minimal gaming.

The alternative is for ICANN to ignore GAC advice and move forward with their own proposal that is also subject to gaming scenarios. The difference in this scenario is that while the GAC still has an obligation to provide public policy advice to address potential harm, there is less of an urgency when ICANN ignored their original advice.