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A Fairness ‘Scorecard’ for Trademark Protection Under the New gTLDs

A Quick Recap:

In the last few years, ICANN has made huge strides in Protecting Trademarks within new generic Top-Level Domains (gTLDs). Now much more is being asked. Is it right? Is it appropriate? Will these changes make the new gTLDs unusable for the very communities we most hope will want them: developing countries, developing communities, new businesses, growing organizations and all the people born in the future?

Since the beginning of the new gTLD discussion, protection of trademarks has been a priority, a goal, and an accomplishment. Prior to the new gTLD process, as trademark protection we had:

Uniform Dispute Resolution Policy (UDRP).

Now, with the most recent Applicant Guidebook, we have multiple, new trademark protection mechanisms—far more than have ever existed before in any other context:

Uniform Dispute Resolution Policy (UDRP);

Trademark Clearinghouse—an enormous efficiency mechanism for trademark owners, allowing them to register their trademarks in one location, rather than reaching out to all new gTLD registries individually. The Registries must now work with this single source of trademarks, and ALL must have Sunrise Periods in the New gTLD;

Uniform Rapid Suspension system. The UDRP is much faster and cheaper than courts. But trademark owners wanted a system even faster and cheaper than the URDP. The Internet Community agreed to the URS, which is primarily designed to be faster and cheaper than the UDRP. But in its bottom-up, grassroots policy-making process, the ICANN Community required clear protections for registrants, including a fair time to respond (before a registrant loses its new business, product launch or human rights website).

On demand from trademark owners, ICANN has already slashed response time to 14 days (making responses very difficult for non-English speakers and those without access to legal assistance). Now the current proposals for a “loser pays” model will break the system. Why would registrants even think to register in the new gTLD system when a $400 fee (approximately) could be a life-deteriorating result? This result will drive registrants away from new gTLDs, and the new opportunities they are designed to provide.

Post-delegation Dispute Process—This is the first time, we get to see a dispute resolution policy that will provide trademark owner with the ability to challenge the registry itself for abuse of the TLD.

We, the ICANN Community, negotiated in good faith and at great length to balance the rights of trademark owners with the rights of all in commercial and noncommercial sectors, with the rights of all, now and in the future, to use normal, basic words and common last names, and new combinations thereof.

Here are the problems associated with the existing proposals concerning trademark protection under the new gTLDs.

I. Uniform Rapid Suspension (URS) procedure:

This mechanism is designed to give trademark holders a cost effective, expedited process in instances of clear cut instances of trademark abuse. It was created by a group of trademark attorneys in the ICANN arena organized into a group called the “IRT Team.” It was edited by a group representing all of the constituencies of ICANN, and the At-Large Community (ALAC) called the STI Team (Special Trademarks Issues). The STI accepted the URS concept, but added to it fairer notice and process.

A. What did the STI Team add?

• The STI increased the time of an answer from the registrant to 20 days (from 14). The concern is was that people need time to respond. Emails get lost in spam filters, non-English speakers need time to translate, registrants may need to seek out Counsel or assistance in responding to legal issues. Also, the ability of trademark owners to file their complaint at any time meant that many filings may take place at busy times of the year (Christmas, summer vacation). We hated to see a new businesses, much-publicized product launch, or timely human rights intervention taken down because the registrant did not have adequate time to respond.

• This timing received ‘unanimous consensus’ within the STI and from ICANN’s GNSO Counsel.

• Unfortunately, ICANN staff has since cut the response time to 14 days, which will mean many registrants will “default” and not respond—likely losing their domain name.

Now the current recommendations in the USG ‘scorecard’ propose a Loser Pays Model. This recommendation is problematic for various reasons. First and foremost, the URS is a rapid review process. It is not a full and robust review of the underlying facts. Conclusions are rapid, thus mistakes will inevitably be made. Losing the domain name is bad, but the financial consequences of a URS action on the registrant can be disastrous.

The STI anticipates that a URS action will run about $500—far cheaper than court, and about a third the price of a UDRP action. While this is considered a small amount of money for a large trademark owner, it is an enormous amount of money for a small businesses, an NGO, and an individual in any part of the world. A loss, even for a good faith registration, could be financial disastrous.

The ‘Loser Pays’ is inherently pro-complainant, and would especially favor big brand complainants who can outspend any individual legitimate registrant.

Why transfer of the domain name should not be part of the URS.

The original justification of the URS as introduced by the IRT was that the distinct feature of the URS was its remedies. According to the IRT report: “The URS is intended to supplement and not replace the UDRP. They are separate proceedings with distinct remedies. The URS is designed to provide a faster means to stop the operation of an abusive site. The UDRP is designed to result in the transfer of the abusive domain name.”

Seeking to allow the transfer of the domain name under the URS becomes problematic at various levels. First of all, the whole foundation of the URS’s justification (and the way it was ‘sold’ to the Internet community) collapses. Secondly, by allowing transfer under the URS a variety of issues emerge: what will be the compatibility between the URS and the UDRP? What will the differences be between the two mechanisms?

If the URS is not meant to be a process that invites substantive evaluation but rather seeks to examine superficially the alleged infringement, then allowing a remedy that seeks transfer of the domain name is against due process and basic principles of justice.

Finally, transfer of the domain name under the URS was never part of the original IRT recommendation. The STI contemplated on this issue, but decided against it.

III. Trademark Clearinghouse

One thing that deserves attention in relation to the Trademark Clearinghouse was that it was never meant to be characterized as a protection mechanism, at least in the same way the URS is meant to provide relief to trademark owners. The Trademark Clearinghouse was originally conceived as a means to provide efficiency in the domain name registration culture for both trademark owners, Registrars and Registries.

One of the main features of the Trademark Clearinghouse is that it is not meant to allocate trademark rights where none exist in the offline world. Moreover, the Clearinghouse is expected to ‘understand’ and ‘accept’ the differences of trademark law across jurisdictions and respect them to the extent that it will not create more chaos than already exists.

What Trademark + Keyword means: In the STI, we heard about many variations of domain names, and the addition of letters and stings to existing trademarks. The concern expressed was when the addition or removal of a letter changes the entire string—e.g., ENOM (a registrar), add “v” for VENOM (clearly unrelated). Similarly with GOOGLE and GOGGLE, two entirely different and distinct words. We stayed with, what I think was the IRT recommendation, of an exact match.

IV. The Post Delegation Dispute Resolution System (PDDRP)

The PDDRP is a novel and additional tool for trademark owners to protect their marks. The model is designed to allow trademark owners to turn against Registries, which appear to be encouraging or contributing cybersquatting activities.

This new mechanism is extraordinary. It is the first time that we get to experience a mechanism that can potentially terminate an entire business, taking with it both legitimate and non-legitimate users. The PDDRP provides potentially the greatest weapon to the trademark community and, if not implemented and operated carefully, it can upset and work to the detriment of the whole registration culture.

More importantly, though, the PDDRP manifests beyond any reasonable doubt that trademark protection in the Internet is more than secure.

Concluding Remarks

Why the recommendations of the Special Trademark Issues Team (STI) are good.

Originally, the URS was conceived by the Implementation Recommendation Team (IRT) and when the STI was formed, the URS continued to constitute part of the Rights Protection Mechanisms. The STI was a multi-stakeholder group, which also included intellectual property owners and ICANN’s Intellectual Property Constituency (IPC). The recommendations of the STI, therefore, sought to reflect all the various commercial and non-commercial interests and the recommendations it produced constitute a reflection of all the various positions.

ICANN and the ICANN Community listened, and spent more time on this issue than issue than any other one in the new gTLD process. Balances were carefully crafted; interests were carefully weighed. The STI had outstanding lawyers and non-lawyers: from the Intellectual Property and Business Communities, from the Non-commercial and At-Large (individual) Communities, from the Registries and Registrars. We reached a fair and balanced compromise—one dramatically expanding the rights protection of trademark owners, yet balancing their rights with the rights of others. It is the way trademark law has always protecting existing TM owners, without infringing the rights of all who will follow. It is a good and a fair compromise. A way forward that will allow new gTLDs to succeed, not ensure their failure.

It is the job of trademark owners to be vigilant, but it also is the responsibility of governments, ICANN and the entire Internet community to create a friendly environment for new entrants, to respect the fundamental principles of free speech, to provide choices and competition, and open new TLD options and possibilities to developing countries and communities, small businesses and entrepreneurs, and all the new services and products to follow.

By Konstantinos Komaitis, Senior Director, Policy Development and Implementation, Internet Society

The views and opinions expressed here are those of the authors and do not necessarily reflect those of ISOC or its position.

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