URS, Trademark Clearinghouse Flaws Called Out in Responses to ICANN TM Rights Report

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By Joseph Wright

May 4 — Rights protection mechanisms (RPM) designed to protect trademark owners in the new generic top-level domain program have seen limited participation due in part to their inherent weaknesses, comments on an Internet Corporation for Assigned Names and Numbers draft report suggest.

The Rights Protection Mechanism Review report released Feb. 2 provided an initial assessment of, and sought community feedback on, several mechanisms created as part of the new gTLD program — particularly the Uniform Rapid Suspension System (URS), the Trademark Clearinghouse (TMCH), sunrise registration period and the trademark claims service.

Limitations of URS

In a comment submitted May 1, Google Inc. senior trademark counsel Andy Abrams provided an assessment echoed by a number of other commenters, saying that the URS process has been under-utilized because it lacks teeth. The URS was designed to be a quicker alternative forum to the Uniform Domain Name Dispute Resolution Policy (UDRP), allowing trademark holders the option to seek suspension of a domain name based on a clear and convincing showing of infringement. Successful UDRP claimants, by contrast, receive transfer of the infringing name.

“Suspension of a domain is not the optimal remedy in the vast majority of domain name infringement cases,” Abrams said. “It is unsurprising, therefore, that the URS has been minimally used to date, and trademark owners continue to rely on the UDRP because of its more effective remedy.”

ICANN's Business Constituency suggested evaluation of several additional URS remedies, including a longer suspension, a right of first refusal for successful complainants at the end of the registration period or a complainant option to purchase the domain within a specific time period after a URS decision. The Intellectual Property Constituency additionally proposed considering lowering the evidentiary standard in URS proceedings to a preponderance of the evidence, requiring losing registrants to pay the cost of proceedings and covering domain names used in bad faith regardless of whether they were initially registered in bad faith.

Conversely, the Non-Commercial Stakeholders Group, advocating on behalf of registrants, said they may not have the information available to promptly respond to URS complaints, especially the rapidity of the process and the special defenses available.

TMCH Merely a Gateway

The use and purpose of the TMCH and the related trademark claims process also came under fire. Registrar Com Laude and its new gTLD consultancy affiliate Valideus said their clients only used the TMCH because it was a prerequisite for another RPM, sunrise registration periods. Sunrise periods permitted brand owners to purchase domain names in new gTLDs in advance of their general availability.

Sunrise periods have not been as effective as they could, however, because of premium pricing practices and reserved names, Valideus Head of Legal Policy Susan Payne said.

“Holders of TMCH-verified trade marks report that they frequently found that Sunrise registrations were being offered by registry operators at prices significantly higher than those for general availability, often prohibitively so,” Payne said.

Many in the ICANN community — with the IPC at the forefront — have questioned the practices of Vox Populi, the .sucks registry. Many comments cited Vox Populi's practice of offering registered trademarks for nearly $2,500 per year during the sunrise registration period as a predatory practice, but the IPC agreed that the practice is more widespread.

“Although the .sucks registry pricing practices are particularly egregious in this regard, a number of other new registries have adopted premium pricing policies targeting brand owners as a way to generate substantial additional revenue,” the IPC said.

Registrar GoDaddy agreed, saying while it understands ICANN's reluctance to be involved in setting new gTLD domain name prices, sunrise prices should not exceed general availability prices except by an amount to cover additional processing costs.

Valideus also said that because registries may reserve an unlimited number of names, some registries have reserved brand names during the sunrise period only to release them during general availability. In such circumstances, those brand names are not subject to any supplemental sunrise period. Valideus suggested permitting brand owners to challenge their designation as premium or reserved names.

Trademark Claims Mostly Working?

Several comments expressed general satisfaction with the trademark claims process. That process requires registries to warn registrants during the first 90 days of general availability if they are attempting to register a mark listed in the TMCH. Such registrations are not blocked, but would-be registrants may be dissuaded by the knowledge that brand owners will be notified of their registrations, and that the trademark owner may be able to upend their registration.

The initial report noted that over 25 million claims notices have been issued, and all but 96,000 of those would-be registrants did not proceed.

“Based on this data, the Claims notice appears to be working effectively to deter trademark infringement,” Abrams said.

The New gTLD Registry Stakeholder Group (RySG) was not as sanguine in its comments, saying the data are insufficient and could support several very different conclusions.

“The high ratio of Claims notices to registrations could be an indication that legitimate registrants with no intent to infringe are being confused or intimidated by the notices, or that the notices are discouraging abuse or that the notices reflect some automated process more interested in harvesting data than producing registrations,” the RySG said.

Failure to Anticipate .sucks Controversy

The U.S. Chamber of Commerce's Global Intellectual Property Center said the entire RPM review process was misguided in that it was ICANN staff-driven rather than arising from the multistakeholder process. As such, the report drew broad, “foregone” conclusions about process rather than engaging brand owners about their RPM concerns.

The Chamber's comment specifically mentioned ICANN's failure to foresee the .sucks controversy raised serious policy concerns.

To contact the reporter on this story: Joseph Wright in Washington at jwright@bna.com

To contact the editor responsible for this story: Alexis Kramer at akramer@bna.com