Trademark Clearinghouse: Hype Or Hope For TM Owners?

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1 Portfolio Media. Inc. 860 Broadway, 6th Floor New York, NY Phone: Fax: Trademark Clearinghouse: Hype Or Hope For TM Owners? Law360, New York (May 31, 2013, 12:20 PM ET) -- This article was submitted in response to the May 8, 2013, Law360 Expert Analysis article "How To Use The New Trademark Clearinghouse." The avalanche of new generic top-level domain names will soon be upon us. Trademark owners will need to contend with the prospect of cybersquatting not only in.com,.org and other familiar top-level domains but also in hundreds more, likely including extensions such as.web,.shop and.app, and even some in non-latin scripts. Some of these new gtlds will be open to the general public, others will be available only to those who meet certain qualifications, and still others will be available only to members of a particular company. The first new gtld will likely be delegated this summer, even though some details of the new system have not yet been finalized. The entire delegation process will likely take a couple of years. There is no way to know precisely when a specific new gtld will be delegated, if at all. Once the process gets rolling, the Internet Corporation for Assigned Names and Numbers believes it can delegate as many as 20 new gtlds per week. Before being overwhelmed by the onslaught of new gtlds like Lucy at the chocolate factory, now is the time for brand owners to decide which new gtlds (if any) they might want a domain name in that matches an existing trademark, and which of their trademarks they might want to simply monitor across all new gtlds in case anyone else registers a domain name based on that mark. To help brand owners protect their marks in the new gtlds, a new trademark clearinghouse has been established, jointly run by Deloitte and IBM. A trademark owner may submit into the clearinghouse (1) registered trademarks (excluding state registrations), (2) court-validated common law marks and (3) trademarks protected by statute (such as "USO") or treaty (such as "Red Cross"). Some new gtlds may have unique protections for other marks that may also be entered into the clearinghouse, such as state registrations or corporate name registrations, but this will likely be rare. The vast majority of trademark owners will have only trademark registrations to submit into the clearinghouse.

2 Once trademark rights are verified by the clearinghouse, this information can then be relied upon for various trademark protection mechanisms in the new gtlds. However, before trademark owners rush to record all their marks in the clearinghouse, they should consider the costs/benefits and options to make an informed decision for their particular situation. What Are the Benefits? The new gtld system incorporates several rights protection mechanisms that directly rely on information in the clearinghouse. "Sunrise" Registrations for New Domain Names in the New gtlds For at least 30 days before domain names in a new gtld become generally available, the registry must first offer a sunrise registration period for "identical matches" of trademarks that are recorded in the clearinghouse that meet whatever other eligibility requirements there may be for the particular new gtld. If a trademark owner wishes to obtain a domain name in a particular new gtld that is an identical match to an existing mark during the sunrise application period, the mark must be recorded in the clearinghouse. The identical match rules are quite strict. There are a few exceptions for marks that include punctuation or the characters & The matching rules do not include plurals or near misspellings. Thus, assuming "Chevrolet" is entered into the clearinghouse and.cars is ultimately approved as a new gtld, General Motors LLC would be entitled to apply for chevrolet.cars but not chevorlet.cars. When relying on a trademark registration to support a sunrise application, the clearinghouse must first verify that the mark is in current use. Proof of use includes a single specimen of use and a declaration from the mark owner. Unlike for U.S. trademark applications, it is not necessary to submit to the clearinghouse one specimen per "class" of goods/services. In addition, under the current version of the applicant guidebook, the trademark application must have been filed before June 13, 2012 (the date ICANN revealed the new gtld applications), and the trademark registration issued on or before the date of the registry agreement for the particular new gtld of interest.[1] During the sunrise period, a notice will be sent to the mark owner if someone else seeks a domain name that is an identical match to a mark recorded in the clearinghouse. If multiple mark owners file for the same domain name during the sunrise period, the rules adopted by the registry of the new gtld apply (often involving an auction, with the proceeds going to the registry). Notice of Claims Service After the sunrise period, domain names will become generally available (subject to the registry s eligibility requirements). For a minimum of the first 90 days after general launch, domain name applicants will receive a notice if their requested domain name is an identical match to a trademark recorded in the clearinghouse. This will give the applicant an opportunity to decline to register the

3 domain name. If the applicant proceeds to register the domain name, the trademark owner will receive notice that the domain name has been registered. It is then up to the mark owner to take whatever action it deems appropriate, if any. In practice, the deterrence value of notice to domain name applicants will likely be low, as innocent applicants will readily click the box agreeing that their use will not infringe the mark, and cybersquatters will not be deterred by any notice. And because the system is mandatory only for identical matches and only for the first 90 days after general launch, the notice to trademark owners will also be of limited value. While proving bad faith registration and use of the domain name may be marginally easier in any future enforcement action considering that the domain name owner will have received notice of the trademark before registering the domain name, in general the lack of such express notice has not been a major limiting factor in enforcing rights under the existing Uniform Dispute Resolution Policy, and will probably not be an impediment to enforcing rights in the new gtlds either. There have also been exaggerated reports of other purported benefits of recording a trademark in the clearinghouse. In reality: Recording a mark in the clearinghouse does not avoid the chance of infringement it merely provides notice to the domain name applicant of the existence of a mark that is an identical match that was recorded in the clearinghouse (or a match to a previously abused variant), and then provides notice to the mark owner if the domain name is registered anyway (as it almost always will be). It is up to the mark owner to take any appropriate action. Recording a mark in the clearinghouse is not a requirement to use the tried-and-true Uniform Dispute Resolution Procedure. Recording a mark in the clearinghouse is not a requirement to use the new Uniform Rapid Suspension service, though the complainant s mark must be of the type that is eligible for inclusion in the clearinghouse.[2] There must also be proof of use of the mark, which can be submitted with the URS complaint if the mark is not recorded in the clearinghouse, and proving such rights has generally not been a burden under the existing UDRP. If identical trademarks are recorded in the clearinghouse by different parties, it is not the case that an auction or lottery will automatically result rather, it is up to the individual registry of each particular new gtld to decide how to resolve conflicts during sunrise registration, but the mutual recordations alone do not trigger any kind of conflict, and there is no inherent value to being the first to record a mark. What Are the Costs? The fee charged by the clearinghouse to record a trademark varies depending on how many years the recordation is for and whether a third-party agent that qualifies for a volume discount is used. For a one-year recordation, the base fee is $150 per mark. Additional fees charged by agents are typically about $100 per mark.

4 A trademark owner must keep the information in the clearinghouse updated if, for example, a registration is canceled or expires. Failure to keep the information current will result in as yet unspecified penalties." Thus, entering marks into the clearinghouse requires some vigilance on the part of the mark owner and is not without risk. What s a Trademark Owner To Do? The first thing a trademark owner should do is review the list of applied-for new gtlds[3] and decide if it wants a domain name that is an identical match to an existing trademark registration in any particular new gtld. By drilling down into the new gtld application, particularly the answers to questions 18 and 29, you can determine the eligibility requirements and procedures for resolving disputes in case there are multiple qualified applications for the same domain name during sunrise. The mark owner should then monitor the progress of any new gtlds of interest. Once delegated by ICANN, at that point the mark owner can record any trademark registrations it will rely upon for sunrise domain name registration. Each registry must provide at least 30 days advance notice prior to the start of the sunrise registration period, which will give a window of time to record marks as necessary. If a mark owner does not want a sunrise domain name but does want to keep apprised of potential conflicting domain names of others, a private domain name watch service should be considered rather than relying on the claims service provided through the trademark clearinghouse. The annual cost of such a private watch service is typically about $250 or so, roughly comparable to what one would pay to use an agent to record a mark in the clearinghouse, and discounts are sometimes available. The watch will typically last a full year (rather than the minimum 90-day notice period per new gtld for marks in the clearinghouse) and will cover domain names that are beyond mere identical matches (and bad actors often seek to register slight variations of marks rather than identical matches). Thus, a private domain name watch service is likely a much better value for monitoring in the new gtlds compared to recordation in the clearinghouse. Finally, it is notable that the decision not to submit a mark in the clearinghouse cannot be used against a trademark owner in any enforcement action. As stated in the applicant guidebook: Inclusion in the Clearinghouse is not proof of any right, nor does it create any legal rights. Failure to submit trademarks into the Clearinghouse should not be perceived to be lack of vigilance by trademark holders or a waiver of any rights, nor can any negative influence be drawn from such failure.[4] While recordation in the clearinghouse is essentially a requirement for a sunrise domain name registration, mark owners should carefully consider if the other benefit of recordation providing notice only for identical matches and only for as few as 90 days after general launch is worth the cost when compared to other monitoring options that go far beyond identical matches and last far beyond 90 days.

5 --By Keith Barritt, Fish & Richardson PC Keith Barritt is a principal in Fish & Richardson's Washington, D.C., office. The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice. [1] See Section of the trademark clearinghouse portion of the June 4, 2012, applicant guidebook available at [2] See Section of the URS portion of the June 4, 2012 applicant guidebook available at and Section of the March 1, 2013, URS Procedure available at [3] Available at [4] See Section 1.6 of the trademark clearinghouse portion of the June 4, 2012, applicant guidebook available at All Content , Portfolio Media, Inc.