Trademark Protections in New Top Level Domains

Trademark Protections in New Top Level Domains Marc H. Trachtenberg Winston & Strawn, LLP & J. Scott Evans Yahoo! Inc. Current Landscape The Current State of Affairs: Domains and Brands Why are domain names important to brand owners?  Over $200 billion spent online by consumers in 2008 Over 1.4 billion people online worldwide searching for information about goods and services, brands, and promotions Domain names are essential to this information being found   The Current State of Affairs: Domains and Brands How Domain Names Connect Consumers to Brands  Direct Navigation Consumers assume that they will find information about a brand at BRAND.com Brand = trademark, product name, company name, promotion name, celebrity name, etc. Instead of using a search engine, consumers type a brand (e.g., (e.g., NIKE), a generic term (e.g., shoes), or combination of the two (e.g., (e.g., (e.g., nike shoes) and “.com” into browser address bar Accounts for 50-65% of the time that internet users locate websites 50- The Current State of Affairs: Cybersquatting How does it work?  Cybersquatting Registration of domain names identical to or incorporating brand E.g., E.g., yahooemail.com  Typosquatting Variant of cybersquatting Registration of likely typos of brand domain name E.g., yahooo.com, wwwyahoo.com, etc The Current State of Affairs: Cybersquatting How bad is the problem?     Most widely used technique for exploiting reputable brands 18% increase in cybersquatting in 2008 Almost 1.8 MILLION cybersquatted domains identified in 2008 Brand abuse overall across mainstream industry brands including apparel, automotive, high technology and media continued to grow in 2008, showing an increase of 28 percent over the previous year The Current State of Affairs: Cybersquatting What Do Bad Actors Do With Squatter Domain Names?   Past Ransom domains back to Brand owner Now Monetization through "parked domain names" Fraud - Leverage consumer’s familiarity with the brand to steal personal information or convince them to send money The Current State of Affairs: Informal Solutions in Existing gTLDs Demand letters  not very effective against serial cybersquatters Defensive registration  gTLDs $30-$50 per domain name per year $30- Purchase The Current State of Affairs: Formal Solutions in existing gTLDs The Uniform Domain Name Dispute Resolution Policy (UDRP)        Administrative procedure All registrants must agree to abide by when registering domain Either party can go to court after UDRP if unhappy with result Remedies limited: Transfer or cancellation only; No monetary damages Cost: avg of $5-7,000 $5Advantages Quick – about two months High transfer rate – over 80% Disadvantages Sometimes unpredictable result No monetary damages, injunctive relief available (to prevent future similar conduct) The Current State of Affairs: Formal Solutions in existing gTLDs ACPA  Advantages Intimidation factor (filing often results in capitulation/settlement) Expensive for foreign parties to litigate In rem provision allows suit to proceed even if registrant not subject to jurisdiction of U.S. courts as long as registrar or registry located in U.S.  All current gTLD registrars located in U.S. Finality More predictable results Statutory damages available  Disadvantages Cost   Money Time The Current State of Affairs: Formal Solutions in existing gTLDs Traditional Trademark Infringement Action    Likelihood of confusion, Dilution may have problems showing "use in commerce", "fame" may have jurisdictional issues The Current State of Affairs: Informal Solutions in ccTLDs (.de, .ca, etc) Demand letters    often not effective may be language/cultural issues may violate local law for foreign attorney to send ccTLDs $100-$500/yr $100"Sunrise" periods – limited time before new extension released to public where TM owner has opportunity to register domains identical to its marks getting more and more expensive (registration/processing costs, auctions, etc) Defensive registration   Purchase  expensive/complicated (int'l transaction) The Current State of Affairs: Formal Solutions in ccTLDs (.de, .ca, etc) Administrative proceeding  Some TLDs have adopted UDRP Even if adopt UDRP, may require proceeding in local language  Other TLDs have own procedures Requirements may be different the UDRP  E.g., E.g., in China, must file within two years of domain registration Civil Court  Usually sue under local trademark law Generally no statutory provision directed specifically at domain names   Expensive Results can be unpredictable The “IRT” Implementation Recommendation Team The IRT ICANN Board requests Intellectual Property Constituency to form Implementation Recommendation Team (IRT) March 2009. “Comprised of an internationally diverse group of persons with knowledge, expertise and experience in the fields of trademark, consumer protection, or competition law, and the interplay of trademarks and the domain name system to develop and propose solutions to the overarching issue of trademark protection in connection with the introduction of new gTLDs.” gTLDs.” The IRT Mette Andersen, Lego, DK Jonathan Cohen, Shapiro Cohen, CA 3. J. Scott Evans, Yahoo! Inc., US 4. Zahid Jamil, Jamil & Jamil, PK 5. Caroline Chicoine, Fredrikson & Byron, US (Chair) 6. Stacey King, Richemont, UK 7. Hector Manoff, Vitale, Manoff & Feilbogen, AR 8. Russell Pangborn, Microsoft Corp., US 9. Mark Partridge, Pattishall, McAuliffe, Newbury, Hilliard & Geraldson LLP, US 10. Kristina Rosette, Covington & Burling LLP, US 11. Ellen Shankman, Ellen B. Shankman & Associates, IL 1. 2. 12. David Taylor, Lovells LLP, FR 13. Kiyoshi Tsuru, Morales & Tsuru Abogados, S.C., MX 14. Fabricio Vayra, Time Warner Inc., US 15. Mary Wong, Franklin Pierce Law Center, SG 16. Nick Wood, Com Laude, UK 17. Jeff Neuman, Neustar, Inc., US (Registry representative) 18. Jon Nevett, Network Solutions LLC, US (Registrar Representative) Plus 6 Ex Officio: 4 from IPC including President Steve Metalitz & INTA’s Claudio DiGangi all supported by ICANN staff Identified Problems & Proposed Solutions for New gTLDs Problem One Cost and administrative burden to rights owners of reacting to Sunrise & other potential RPMs Example: 500 new registries could require owner to have same trademark data validated 500 times Registrars could be required to develop 500 different processes Proposed Solution: IP Clearinghouse What is it?  A single database that serves as the sole repository for validated information concerning third party rights What are the propose uses?    Information on Globally Protected Marks List Providing information to Registries/Registrars during prepre-launch period for RPMs For use in filing action under Uniform Rapid Suspension System Proposed Solution: IP Clearinghouse What are the principal features?        Data submitted by TM owners. Validated initially & annually Data licensed to ICANN with right to sublicense for sole purpose of RPMs and URS Database run by outsourced entity not currently under contract with ICANN Available 24/7, 365 days a year Must be scalable (accommodate variety of rights) Must be able to provide data in standard format Cost must be reasonable Proposed Solution: Globally Protected Marks List What is it?  Not famous marks list, but list of mark meeting objective criteria entitled to enhanced protections Who would be eligible?    Marks with a specific number of registrations of national effect for the applied-for GPM that have issued in a minimum number of appliedcountries across all 5 ICANN regions with minimum number of registrations in each region All registrations must have issued by the date that GPML applications are first accepted and must be based on trademark applications filed by November 1, 2008 SecondSecond-level domain for mark’s principal on-line presence must onbe identical to GPM Proposed Solution: Globally Protected Marks List What are the enhanced protections at the top level?   AppliedApplied-for strings for new gTLDs analyzed for confusing similarity against GPMs Identical matches or confusingly similar to GPM should fail Initial Evaluation and do not proceed unless and until applicant participates in Initial Evaluation Reconsideration process and decision rendered in its favor Request for Reconsideration: applicant must demonstrate either Reconsideration: that applied-for TLD string is not sufficiently similar as to be likely, appliedas a matter of probability and not mere possibility, to deceive or cause confusion or that it otherwise has legitimate rights to use the appliedapplied-for TLD and will be contractually bound by all representations Proposed Solution: Globally Protected Marks List What is the enhanced protection on the second level?  Initial blocking of domain names that are an identical match to a GPM Applicant can register name if participate in dispute resolution process and demonstrate that its use of the appliedapplied-for domain name would not violate the trademark rights of the GPM owner recommend application of standard from Paragraph 4(c) of UDRP to demonstrate has right or legitimate interest  Proposed Solution: Minimum RPMs for pre-launch pre- IP Claims Service  Registry provides notices to: Potential registrants of domain names that are identical matches to marks contained in IP Clearinghouse Owners of marks contained in IP Clearinghouse that are identical matches to applied-for domain names applied-  Registrant can opt to proceed with registration after receiving notice if it makes certain representations and warranties and acknowledgements Standard set of minimum eligibility requirements Standard Sunrise Dispute Resolution Policy Standardized Sunrise Eligibility Requirements   Problem Two Cybersquatting increases exponentially, consumers misled, UDRP & Courts take time and money Examples:     cnnporn.com facebook.ie (competitor) nike.sport lowes.eco Proposed Solution: Uniform Rapid Suspension System Overall purpose/process –address the substantial number of current UDRP cases that go unanswered Neutral URS provider(s) appointed by ICANN Possible pre-registration of rights via IP Clearinghouse preUpon initiation of process, domain name frozen to prohibit transfers (note – website still resolves) Examiners use a much higher burden of proof than the UDRP (“clear and convincing evidence that there is no contestable issue”) Upon decision by Examiner in favor of complainant, domain name “frozen” at the registry, the DNS record associated with the domain name is updated to re-direct web traffic to a website with a standard URS process page; redomain names are NEVER transferred under a URS decision Proposed Solution: Uniform Rapid Suspension System Protections against misuses by complainant       URS can only result in takedown NOT transfer (no risk of reverse hijacking) Notification required by email AND certified letter (fax being examined) All complaints are reviewed by an examiner –even if the registrant does not answer Complainants must agree to indemnify third parties based on the representations in the complaints Complainants subject to one-year ban from system for filing onethree abusive complaints Process includes rights of appeal, which requires unlocking of domain name pending disposition of appeal Problem Three Preventing Bad Actor Registry Operators  What to do with Registry operator who acts inconsistently with representations or has bad faith intent to profit from systemic cybersquatting Example: .apple, new gTLD for apple growers, begins to allow registrations for domain in breach of “charter”:    computers.apple software.apple mac.apple Proposed Solution: Post-Delegation Dispute Mechanism Post- Applicable Disputes  Manner of operation or use of a TLD is inconsistent with the representations in TLD app and such operation or use of the TLD is likely to cause confusion with the complainant’s mark; or Breach of rights protection mechanisms in its Agreement and such breach is likely to cause confusion with complainant’s mark; or   Manner of operation or use of the TLD exhibits a bad faith intent to profit from the systemic registration of domain name registrations therein, which are identical or confusingly similar to the complainant's mark, that: (a) take unfair advantage reputation of the complainant's mark, or (b) impair reputation of complainant's mark, or (c) create impermissible likelihood of confusion with complainant's mark Proposed Solution: Post-Delegation Dispute Mechanism Post- Decisions    Panel can find for complainant or registry operator and provide a remedy Balance: Concept of a complaint deemed as being “without merit” (i.e. an abuse of procedure to harass the registry operator) Complainant barred from further filings if found w/o merit on 3 occasions Enforcement Tools   Panel recommends to ICANN: Monetary Sanctions and Suspension pending cure Group Liability: for serial misconduct by registries when affiliated with other registries and registrars Fees (model proposed for high amounts)  Balance: Penalty fee: Key here is meaningful amount to deter abusive claims, refunded to complainant if successful Problem Four No single source availability of data Example:  .com "Thin registry model"   Only technical data maintained by official registry Authoritative ownership information stored by individual registrars  Some "bad actor" registrars do not keep up to date records Proposed Solution: Thick Whois for all new gTLDs Thick Whois*  Whois data kept a registry level .biz Example  *with a suggestion that ICANN revitalizes an initiative for a centralized Whois Problem Five ICANN algorithm for top level string comparison  Considers visual appearance only Example:  .tel could block .hotel Proposed Solution: Broader Analysis Algorithm + aural and commercial impression  Use algorithm to identify strings for which similarity in sound and meaning should be considered Makes process more fair with more terms passing Thank you