Canada: Online Brand Protection Strategies: New gTLDs And The Trademark Clearinghouse

Last Updated: May 1 2013
Article by Catherine Lovrics

What are the new gTLDs?

ICANN received over 1,900 applications for new Generic Top-Level Domains ("gTLDs") and it is estimated that at least 500 will launch, with the first launches beginning late this summer (at the earliest). We do not know which gTLDs will launch first, and at this point, it is hard to predict which, if any, will be successful. Applications have been filed for a wide range of gTLDs, everything from .buy, .shop, .save, .coupon, to .book, .music, .film, .movie, .art, to .cloud, .search, .download, .data, to .dot. The full list is here:

What is the Trademark Clearinghouse?

The Trademark Clearinghouse (TMCH) is a centralized system that verifies the existence of trademark rights for all new gTLDs. Trademark owners that have their marks recorded in the TMCH:

  1. can register identical domain names on new gTLDs during "sunrise" periods before the general public;
  2. will have notice of their registered marks given to anyone trying to register an identical domain name on a new gTLD warning of possible infringement. ( Click here to see a sample notice.); and
  3. will receive notice if the identical domain name is registered. The notice system (which is called a "claims service") does not prevent or block registration of domain names.

What is the sunrise service?

The sunrise service enables trademark owners to register domain names that are identical to their registered trademarks during "sunrise" periods when new gTLDs launch. When a new gTLD launches, the registry is required to offer a minimum 30-day "sunrise" period for trademark owners to register domain names before the gTLD is open to the general public. Trademark owners can only register domain names that are identical to the marks recorded in the TMCH. For example, if the EXAMPLE mark is recorded in the TMCH, EXAMPLE.newgtld could be registered during a sunrise period, but not EXAMPLES.newgtld or EXAMPLEPLUS.newgtld etc.

The TMCH verifies that the trademark owner has rights to a mark, provides information about those rights, and is intended to confirm marks are actually in use for sunrise periods. To participate in a sunrise period, a trademark owner needs to prove the mark is currently in use by filing:

  1. a declaration of use, signed by the trademark owner; and
  2. a single sample of proof of use (for example, a photocopy of a labels, tags, or containers for a product).

Proof of use is not required for the claims service. So, the declaration and sample of use are not required unless and until a trademark owner wants to register a domain name during a sunrise period.

There may be additional requirements to participate in a sunrise period for certain gTLDs. For example, the registry may require the trademark owner have rights in a particular jurisdiction, or with a particular class of goods and services, or be part of a particular industry. Marks can be recorded in the TMCH as needed to respond to such requirements. There will be a sunrise dispute resolution procedure for third parties to challenge sunrise registrations for not meeting the requirements (e.g. if a domain name is not identical to the recorded mark, or if the recorded mark is not registered as of the Registry Agreement for the new gTLD or is not in use, or is otherwise not eligible for recordal or participation in the sunrise).

Should I register a domain name during the sunrise period for all new gTLDs?

Domain names can be registered to be actively used with a website (for marketing etc.) or defensively to prevent others from registering them.

There is an emerging 'don't feed the beast' attitude among some trademark owners that recommends against registering domain names for purely defensive reasons, unless there is an acute risk. Trademark owners can instead rely on watch services and enforce on a case-by-case basis, rather than investing in maintaining a portfolio of defensive domain name registrations that were proactively registered, and are not used. On the other hand, some trademark owners have signaled their intention to defensively register their primary marks as domain names on most, if not all, new gTLDs, regardless of whether they anticipate using the domain names.

When deciding whether or not to defensively register domain names on a particular gTLD, the following may be considered:

  1. the overall budget and economics of maintaining the registration, compared to the likely risk of cybersquatting and possible marketing benefits or fallout;
  2. relevance of the gTLD string to your industry, goods and marketing initiatives;
  3. the search frequency of words in the gTLD string (to help predict relevance to your customers, as well as possible SEO);
  4. the possibility that certain gTLDs may rank higher;
  5. marketing cache or sensitivies, and geographic importance; and
  6. the risk of abuse and likelihood of successful enforcement in view of the inherent distinctiveness, strength and reputation of the mark.

Using the TMCH for the sunrise period is recommended if a trademark owner wants to use a domain name identical to the recorded mark on a new gTLD to direct traffic to their website, and where defensive registrations will be pursued either because there is a clear or historically proven reason to pursue them or to protect key marks as domain names. With respect to primarily defensive registrations, it is possible that some gTLDs will become popular among consumers (and critics), such as .sucks, .wtf, or .adult. However, the ability to tie up all but the most obvious of these suggests that trying to register many of these domain names simply to prevent use by others, which might, in any event, be seen as a way of exercising free speech, could be an expensive and very imprecise way to prevent your trademarks appearing in the domain names for critique sites.

What is the claims service?

The claims service warns applicants of domain names that are identical to marks in the TMCH of the possibility of infringement (see example linked here), and notifies the trademark owner if the domain name is registered.

During at least the first 60-days after a new gTLD goes live, anyone applying to register a domain name that is identical to a mark in the TMCH will receive a notice warning of potential trademark infringement. The notice will NOT stop the domain name from being registered. Rather, the notice will outline the particulars for the registered mark recorded in the TMCH, warn of the possibility of infringement, and ask if the domain name applicant wishes to proceed with registration of the domain name. If the applicant proceeds to register the domain name, the trademark owner will in turn receive notice of the domain name having been registered. The notice service only applies to domain names that are identical matches to the marks in the TMCH – plurals, variants, typos, and the mark plus another word, etc. are excluded. For example, a TMCH recordal for EXAMPLE will only give notice to applicants of EXAMPLE domain names, and not provide notice to applicants for EXAMPLES, EXAMPLEPLUS, or other variations. Upon receipt of notice, the domain name applicant may reconsider – or it may not. The trademark owner can then consider its options, which could include dispute resolution under the rules of that particular gTLD, a lawsuit, discussions with the owner regarding the nature of use, or simply "do nothing".

The notice provisions have been largely criticized for only being in place for a short period after launch of a new gTLD, and only covering identical marks.

Is there any reason to rush to record marks in the TMCH?

There is no apparent reason to rush. The TMCH opened last Tuesday, but no gTLDs are presently scheduled to launch, and the first launch is not expected until late summer (which may itself be an optimistic prediction). We do not know which gTLDs will launch first. Some have anticipated that the Internationalized Domain Names ("IDN") are likely to launch first because they were given priority in the evaluation process. We note one possible benefit of registering marks in the TMCH sooner would be if two trademark owners compete for the same domain name during a sunrise period, and the registry gives priority to the trademark owner with the earlier registration in the TMCH. However, to our knowledge, no registry has indicated that it will adopt this approach.

What should I consider when developing a strategy for new gTLDs, including the TMCH?

Trademark owners, particularly with large portfolios, should be selective with the marks they record in the TMCH, and with defensive registrations, considering the overall budget for domain name enforcement. The importance of domain name watch services is likely to increase with the launch of new gTLDs, and there will likely be separate trademark protection services that will be offered by large registries, like Google and Donuts. These services may prove more useful than the TMCH, with time, and should be considered when budgeting.

The TMCH may turn out to be of limited value to online enforcement. First, it protects only the exact registered mark (e.g., if the registered mark is EXAMPLE, it would provide protection for the identical domain name EXAMPLE, but not EXAMPLES or EXAMPLEPLUS). Second, the claims service is only in place the first 60 days after a new gTLD launches (unless the registry voluntarily agrees to extend it). Third, upon receipt of notice that the domain name is a registered mark, the domain name applicant may research the trademark owner's rights, and be dissuaded from proceeding with the domain name registration. On the other hand, such notice may have no impact at all. The notices are likely to have little or no impact on cybersquatters, since the existence of someone else's trademark rights is the precise reason the domain name is being registered. These registrants, by definition, already know of the trademark rights before proceeding. Bad actors are likely to remain bad actors. Second, if someone has plans to use a domain name for a legitimate purpose, the notice is unlikely to "illegitimize" that purpose unless the use of the domain name overlaps or relates to the trademark. Further, the notice states that the registrant may have a right to register the domain name for noncommercial or "fair use" purposes, so is likely to be ineffective against someone registering a domain name for a fan or criticism site. The most tangible benefit of a recordal in the TMCH is having clear and readily available proof that a domain name registrant knew of the trademark owner's rights prior to registering the domain name.

It seems unlikely that a trademark owner's position will be significantly enhanced if multiple registrations, in many jurisdictions, are recorded in the TMCH for the same mark. To participate in a sunrise period, only one mark must be recorded in the TMCH, and if there are specific eligibility requirements, additional marks can be recorded as needed. Likewise, if a gTLD raises a concern of cybersquatting in a particular jurisdiction, a registration for that jurisdiction also can be recorded as needed.

This is not to say that the TMCH should be ignored, but it may be overkill to record the same mark in the TMCH for multiple jurisdictions. Likewise, if you have multiple registrations for the same mark in the same jurisdiction for different wares/services, it may not be necessary to record all but the registration that covers the most relevant wares/services to your business. As new gTLDs launch, companies can consider recording additional marks, either because they want to register a domain name identical to that mark during a sunrise period, or because there is a specific enforcement concern raised by the gTLD that warrants adding a mark to the TMCH. For example, if the IDN launches for онлайн (Russian for "online"), a trademark owner may then consider registering a Russian registration in the TMCH. Also, after receiving notice of a particular domain name registration, a trademark owner has all available options for disputing the registration of the domain name, and should not be prejudiced in not having first registered any particular trademark registration with the TMCH.

One possible downside of "cherry picking" jurisdictions (i.e. covering only a few jurisdictions in the TMCH) is that a domain name registrant located in another jurisdiction may argue that the notice of other foreign TM registrations was irrelevant to its adoption of the domain name. This would undercut proof that the domain name registrant had actual notice of rights in the registrant's jurisdiction prior to registering the domain name. For example, if only a US registration is recorded in the TMCH, and a domain name registrant is located in Europe, that registrant could argue that it did not have notice of rights in Europe, and therefore did not register the domain name in "bad faith". That said, in the online world, location is not, by itself, determinative. The notice is most relevant under the Uniform Domain Name Dispute Resolution Policy ("UDRP") and the new Uniform Rapid Suspension procedure ("URS") (versions of which will be in place for new gTLDs) that focus on the intent of the registrant when the domain name was registered. The notice proves that the registrant had actual knowledge of the trademark rights at issue prior to registering the domain name. The domain name issues of bad faith differ from infringement proceedings, where the intent of the infringer is largely irrelevant. If a company does, in fact, have trademark rights in a particular jurisdiction, whether or not the domain name registrant received prior notice of those rights is unlikely to be relevant to trademark infringement. Further, panels under the UDRP already find the requisite bad faith registration where trademark rights are in one jurisdiction and the registrant is in another, particularly given the "worldwide" impact of website activity. Finally, upon receiving notice of the domain name having been registered by a third party, a trademark owner would have the ability to weigh the impact of the domain name, and can always try to contact the domain name registrant with information on the full list of its international trademarks. The challenge with this approach, however, is that many registrants may use privacy shields or otherwise obfuscate their contact information so follow up may not be straightforward. Conversely, the TMCH notice is sent automatically prior to registration of the domain name, so there is presumptive evidence of notice under the UDRP, or other dispute resolution policies.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Catherine Lovrics
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