Lessons From New TLDs Legal Objections: Dictionary-Word Brand LRO Won't Block TLDs

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By Amy E. Bivins  

Sept. 25 --The legal rights objection process for the Internet Corporation for Assigned Names and Numbers new top-level domains (TLDs) program taught some lessons for brand owners--chiefly that brands with even arguably generic names should consider registering their marks as TLDs in the next round if the brand is concerned about another entity registering it--attorneys told Bloomberg BNA.

Brand owners filed 69 legal rights objections against new TLD applicants. Only five prevailed. Four of the five were brought against the brand owner's licensee or competitor. In the fifth proceeding, the registrant defaulted .

Express LLC's objection to Donuts Inc.'s proposed .express fell first . The arbitrator decided that because the term “express” is generic, it would be unreasonable to reject its use as a TLD.

Other panelists followed suit, in proceedings involving dictionary-word brands brought by Limited Stores LLC, Dot Tunes Limited, Pinterest Inc.

Lessons Learned

Each of those cases acknowledged the brand owner's rights in a trademark, but decided that those rights were inadequate to block the registration of dictionary words as TLDs. Those decisions are going to be very impactful in the next application round, Jennifer C. Wolfe, Wolfe Domain, Cincinnati, predicted.

“For any word that is even arguably generic, if a brand wants to obtain it or block the registration the brand will have to apply,” Wolfe told Bloomberg BNA.

Life After LRO

Following WIPO panelists' resolution of new TLD legal rights objections, applicants and brand owners have no formal route to challenge decisions they find unacceptable.

A handful of new TLD applicants have filed requests under ICANN's formal reconsideration process to challenge new TLD objection decisions that the applicants contend are inconsistent and unfair .

The board has not yet responded to these requests. But the board has affirmed the board governance committee's rejection of a reconsideration request from Booking.com, regarding a decision from a string similarity evaluation panel .

The request for reconsideration reached beyond the purpose of the process by attempting to get the board to re-hear the evaluation on the merits, the board said.

Another brand owner has taken a different approach, turning to the courts for relief, Del Monte International GmbH v. Del Monte Corp., No. 13-CV-5912 (C.D. Cal. complaint filed Aug. 13, 2013).

Del Monte International claims that the panel's majority ruling upholding Del Monte Corporation's legal rights objection was based on pure conjecture and was “manifestly erroneous.”

The opinions can also help inform brands' objection strategies in future rounds.

Philip S. Corwin, Virtualaw LLC, Washington, D.C., told Bloomberg BNA that the lessons from all of these LRO decisions looking toward the second application round, whenever it may occur, is that if you want a string, or just to block its acquisition by another party, then you need to file an application. “That's because the objection processes are so narrow as to be generally worthless for a trademark that is a generic dictionary word, and filing an objection is expensive in terms of arbitration fees plus legal counsel,” Corwin said.

The outcome of the objections has attracted trademark holders' attention, Wolfe said. A brand with a dictionary name could consider registering a .brand TLD in the second round--even if only to block a potential rival applicant, Wolfe said. The brand owner could withdraw the application for a substantial refund if no other application is filed, Wolfe said.

But if a company decides to file a gTLD application for a dictionary word, even if it intends to use it as a .brand, the company must be ready to wind up in contention against another applicant with its ultimate settlement through an auction, Corwin said. “That may be problematic because, unless the rules change, ICANN lets the biggest wallet win and performs no qualitative analysis of competing bids or the overall effect on competition in situations where deep-pocketed parties like Google are an applicant,” Corwin said.

Filing a legal rights objection against a TLD application for a string that is a dictionary term and has an open domain name registration model is a waste of time and resources, Brian J. Winterfeldt, Katten Muchin Rosenman LLP, Washington, D.C., told Bloomberg BNA.

“Legal rights objections should be saved for cases where an unauthorized licensee or other business partner has applied for the owner's mark as a TLD or in other cases where the TLD application specifically states that it will be used for related goods and services,” Winterfeldt said.