ICANN Trademark Clearinghouse: Preregistration Rights Only For Those Who Pay?

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Starting today, trademark owners from around the world will be able to have their rights recorded in the Trademark Clearinghouse of the Internet Corporation for Assigned Names and Numbers (ICANN). Designed to help trademark owners manage the flood of new internet domains being launched by ICANN, it’s an open question whether they will be satisfied with it.

The Trademark Clearinghouse (TMCH), active on 26 March at California-based ICANN, was created in an effort to prepare for a wave of new top-level domains (TLDs) expected to go live over the coming years. More choice for users from hundreds of new address zones like .web, .paris or .xinwen could result in chaos for trademark owners, Jan Corstens, partner at Deloitte, the chosen provider for the TMCH, told Intellectual Property Watch.

Having their data recorded in the Clearinghouse, Deloitte consultant Jonathan Robinson explained to Intellectual Property Watch, “does not secure them their name in every single registry. Every single registry will have its own policy.” One registry policy might limit registration in a zone to entities based in Africa, for instance, while another might only be open to a certain language or community group.

At the same time, where registration is open to everybody, a rights owner might face a long list of records in the TMCH for the same mark. Auction, the experts say, might in the end be the fairest way to decide about who will be able to register the name during what is called the sunrise phase.

Clearinghouse No Fix for Mismatch

Sunrise phases were introduced for the first launches of new TLDs 10 years ago to allow trademark owners to run first and stem the tide of domain grabbers and name pirates – but it came at a huge difficulty for the registries inexperienced in checking the validity of marks. Deloitte has trained over a hundred experts to be able to check the validity of marks in (nearly) every country on earth, Corstens said, though, “Will I get marks in Urdu and from Ethiopia in different scripts?,” he did not know.

Checking the validity of the mark and allowing nationally or internationally (and court-) registered trademarks to sit in a global database which is managed under a separate contract by IBM is the core service of the TMCH. The Clearinghouse “does not create new rights,” Robinson underlined. It is, so to speak, no fix for the fundamental mismatch between the domain name system which secures universality for one domain name owner only and the trademark system that allows for protection in national or regional areas and under different classes.

What the Clearinghouse offers is validation and additional services in a special environment which do not come with classical trademark rights, Corstens said. Besides the sunrise service, there is a trademark claims service – a kind of early warning system to a registrant aiming at registering a trademarked name not taken earlier.

The registrant after acknowledging he has been notified – with a dispute ongoing if IP addresses for this session can be stored by the registrars under strict EU data protection legislation – can still continue with registration, but cannot claim anymore to not be aware of the protection. If the domain is registered, the right owner is notified and can choose what to do, the experts said.

Trademark owners would have liked to extend this kind of service indefinitely, but ICANN CEO Fadi Chehade just announced that while ICANN will extend the claims service 90 days into the general registration phase, the organisation would let go an extended “Claims 2” provision.

A possible result, said Torsten Bettinger, domain and trademark law expert and WIPO Uniform Dispute Resolution Procedure (UDRP) panellist: “Violation of the trademark right will then happen after 90 days.” Bettinger expects no further changes in the short run, if not governments will step up for more protection yet again. Changes to trademark services in the future are possible, said Robinson, who also acknowledged that some trademark owners might never be fully satisfied “to that extent that there is a group of people who always want more.”

Obliged to Pay for Trademark Protection?

Reaction to the TMCH services from rights owners is not yet clear. How many will record their marks and pay US$145 per domain?

A discount is offered when 1000 “status points” is reached, which could mean 1000 registrations in a year or earlier if the trademarks are registered for 3 or 5 years (more status points are given for longer registrations, according to the clearinghouse website) [clarified]. Robinson said that the records are obligatory to be eligible for sunrise pre-registration.

It is still up to interpretation, said Johannes Lenz-Hawliczek, spokesman for dot.berlin, if registries could also acknowledge pre-registration rights for non-TMCH recorded marks. “We think you can provide for that in your registration policy,” he wrote in reply to questions from Intellectual Property Watch.

On the other hand, the registration policy also could make TMCH validation a pre-condition for sunrise rights, Bettinger argued. “The whole issue is, ICANN left it to the registries, what they will do,” he said.

A question also addressed down the road will be whether ICANN will allow trademark owners to choose from a variety of Trademark Clearing Services and have competition in the field. ICANN’s management retroactively settled for a hard split between the service provider (Deloitte) and the database provider (IBM), negotiating a separate contract with IBM. With the database of recorded trademarks under direct contract, ICANN has paved the way for opening up competition on the service level, even if it is still very much open if the organisation will go for it.

Deloitte Partner Corstens points to the need to first evaluate the potential impact on consistency of validation and integrity of data if there is are more validating agencies. Also the currently capped flat-rate pricing would have to be reconsidered, Corstens said. If another provider for example only offered services to an easy-to-validate niche, Deloitte could be compelled to reduce the price in the developed countries, and raise the price for more cost-intensive developing countries, something ICANN tried to avoid in the first place.

In the short run, all parties seem to be looking for some stability in the ever-moving target of the new gTLD process. Chehade appealed to the community not to challenge the latest proposals he made with regard to the process, including a 30-day notice period before sunrise and the extension of the trademark claim service to abuse names. With the first 30 non-Latin TLDs just through the ICANN’s general evaluation report, the first TLDs could be introduced to the root zone in early summer, according gTLD Director Christine Willet.

So will a lot of TLDs start their sunrise phase soon? Yes, said Willet, if there are no competing applications and the string is “in contention,” if it does not have any objection and if it was not a recipient of GAC advice, they could go on to pre-delegation testing and contracting with ICANN. These are some ifs to consider.

What an “if” could look like can be seen in the first list of the “Legal Rights Objection” that is being addressed at the WIPO Arbitration and Mediation Centre where the globally operating pharmaceutical companies Merck KGaA (Germany) and Merck & Co. (US) are trying to get their names as a TLD respectively.

 

Monika Ermert may be reached at info@ip-watch.ch.

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