Canada: Intellectual Property Alert - June 2011

NEW SPONSORED TOP-LEVEL DOMAIN NAME: MANAGING THE .XXX TRANSITION

According to the board of the Internet Corporation for Assigned Names and Numbers' (ICANN's) approved plan to increase the number of generic top-level domains (gTLD) a new type of Sponsored Top-Level Domain Name (sTLD) is expected to come into effect by the end of 2011.

An sTLD is a type of generic top-level domain (gTLD) but the use of "sponsored" denotes presence in a designated community where rules are in place to establish who may use the sTLD. ICANN plans to introduce .xxx as a new type of sTLD. The .xxx domain names are for use on Internet websites containing adult entertainment content. However, those who offer adult entertainment content on websites are not required to reserve and use an .xxx sTLD and, therefore, those who are not in the adult entertainment industry and who operate websites should be aware of the potential impact of .xxx domains on their trade-marks.

PROTECTING A NON-ADULT ENTERTAINMENT TRADE-MARK

Trade-marks that are not registered cannot be relied upon, even if in use at common law, to obtain a .xxx registration. For that reason, those who adopt trade-marks should actively seek registration in any jurisdiction, as soon as possible, if they wish to ultimately obtain an .xxx blocking domain. Where reliance is placed on a registered trade-mark in order to obtain an .xxx reservation under Sunrise A, B, or AD (noted below), it is the exact and entire word trade-mark, or the complete textual component of a mark comprised of word and design elements that must be reserved.

Registration of .xxx domain names will launch in three phases; Sunrise, Landrush, and General Availability.

LAUNCH PHASE I – SUNRISE

Sunrise A, under which parties who own a trade-mark that is registered anywhere in the world for adult entertainment can elect to become members of the sponsored community and reserve their names. Application for registration under Sunrise A commences September 7, 2011 with 30 days duration.

Sunrise B, under which parties who operate outside the adult entertainment industry and who own a trade-mark that is not for adult entertainment and is registered anywhere in the world, can register such trade-mark as an .xxx domain that will be blocked from live use, that is, a blank page will result from entering the domain name into the internet. Application for registration under Sunrise B commences September 7, 2011 with 30 days duration.

Sunrise AD, under which parties that hold a corresponding domain name under another gTLD (including .biz, .com, .info, .net, and .org) or ccTLD (domains which are reserved for a country, a sovereign state or a dependent territory) and operate in the adult entertainment industry can apply for .xxx domain extension. These pre-existing corresponding domain names must have been registered prior to February 2010 and be in active use, that is not merely for parking or forwarding to other websites. Application for registration under Sunrise AD commences September 7, 2011 with 30 days duration.

LAUNCH PHASE II – LANDRUSH

Landrush under which members of the sponsored community can seek registration of domain names not dependent on existing trade-mark registrations. Application for registration under Landrush commences October 24, 2011 with 10 days duration.

LAUNCH PHASE III – GENERAL AVAILABILITY

General Availability under which the general public can register domain names or purchase .xxx domain names that have been registered and made available for sale. Those availing themselves of this means of acquiring .xxx domain names must agree to abide by the rules of the sponsored community. Application for registration under General Availability commences December 6, 2011.

ADDITIONAL INFORMATION

Owners of registered trade-marks should be aware that the Sunrise or Landrush launch phases will not be carried out on a first-come, first-served basis, given that trade-mark registrations for identical marks exist all over the world for differing goods or services in the hands of different parties. If more than one valid application is received, names will be put into auction. Also, names that are culturally or geographically significant will not be available.

Trade-mark owners should also be aware that pre-registration applications are already being accepted by domain name registrars.

If trade-mark owners themselves do not seek protection for their trade-marks under the blocking provision, there exists the potential for their brands and trade-marks to be used by the adult entertainment industry or cybersquatters to generate revenue, including by registering those brands and trade-marks under the .xxx registration system and then demanding that trade-mark owners purchase those registrations to prevent their use in association with adult entertainment website content. It would appear that dispute resolution will be available in these circumstances but being pro-active could save a trade-mark owner from the expense and time-loss of such proceedings.

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