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Wednesday, September 11, 2013

Wine Trade Groups Want .Wine, .Vin Domains Crushed

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Senior legal editor Amy E. Bivins reports on the efforts of wine industry trade associations to block applications with ICANN to add .wine and .vin top-level domains to the Internet. It's a multi-layered story with strong notes of market disruption, opportunism, international trademark law, threatened litigation, and GAC lobbying. Reads well now, should gain further complexity through 2014.

Update: On Sept. 9, ICANN's Governmental Advisory Committee sent a letter to ICANN advising that the .wine and .vin applications "should proceed through the normal evaluation process." In the letter, GAC Chair Heather Dryden explained that the GAC could not reach consensus on the proper handling of geographic indications.  

Wine Trade Associations Oppose .Wine, .Vin TLDs, Push for Added Burdens on Registries

By Amy E. Bivins (@amyebivins) with assistance from Rick Mitchell in Paris.

Sept. 6 -- Trade groups representing Napa Valley and European wine producers are pressing the Internet Corporation for Assigned Names and Numbers to reject proposed .wine and .vin top-level domains (TLDs), at least until ICANN incorporates added safeguards for geographic and origin names at the second level.

New domains for .wine and .vin, if embraced by wine consumers, could have a disruptive impact on wine marketing, particularly the nascent online wine sales business.

Trade groups consulted by Bloomberg BNA said they are concerned that the new TLDs, if approved, will become havens for counterfeiters and cybersquatters.

Applicants Have Big Plans for .Wine

Applicants for the .wine TLD aim for the domain to have a wide reach.

"In 2011, in the U.S. alone, there were approximately 23,000 farms that grew grapes and 6,668 wineries, producing wine to serve a $30 billion industry," Afilias Limited noted in its application.

"This represents a huge industry of wine producers and related businesses, as well as the people interested in finding information about wine products and services," Afilias said. "We anticipate capturing a small percentage of those businesses in the first three years who will quickly realize the intrinsic value of the .WINE TLD and will wish to be early adopters of this opportunity."

Famous Four media said its aim for .wine is to create a blank canvas for online wine resources set within a secure environment.

"The Applicant will achieve this by creating a consolidated, versatile and dedicated space to access wine information and services," Famous Four said. "All stakeholders within the sector will be able to sample reactions to new ideas, or gather thoughts on the improvements of established ones," Famous Four said.

"This will drive innovation and competition, as new channels will be available which are not yet fulfilled by current market offerings, compelling registrants to seek new and varied ways to separate themselves from the competition," Famous Four said.

As more industries learn about new TLDs and the potential implications of new TLDs launching in the not-too-distant future, we will continue to witness increased engagement on ICANN and TLD issues by new industries, David Weslow, Wiley Rein LLP, Washington, D.C., told Bloomberg BNA.

"The recent calls by several wine associations for added mandatory protections in new TLDs are not surprising in that many industries are now engaged in specific planning for new TLDs and through this process have become familiar with, and dismayed by, the status quo," Weslow said.

Afilias Limited, Donuts and Famous Four Media Limited have applied for the .wine TLD. Donuts also applied for .vin.

Trade Groups: Put Domains 'On the Shelf.'

Representatives from wine industry groups told Bloomberg BNA that they are not interested in registering in .wine or .vin.

As a nonprofit trade association representing Napa Valley wineries, Napa Valley Vintners represents over 500 wineries, Rex Stults, government relations director at Napa Valley Vintners, St. Helena, Calif., told Bloomberg BNA.

"This is a whole new battleground for people who would like to counterfeit the Napa name and trade on it illegitimately and confuse consumers and take away from the legitimacy of that name," Stults said.

The group, as a nonprofit, does not have the resources to purchase and operate a TLD, Stults said. The group also does not have the time and funds to monitor new TLDs for infringement, Stults said.

The group has urged ICANN to reject the proposed .wine and .vin TLDs altogether. "Just put .vin and .wine on the shelf," Stults said.

GIs Protected Under TRIPS.

If .wine and .vin are delegated, there should be a system in place to protect geographic indications in the same way as trademark holders are protected, Scott Gerien, IP Counsel at Napa Valley Vintners, told Bloomberg BNA.

Under TRIPS, trademarks are considered to be on an equal footing with geographic indications, Gerien said.

Article 22(1) of the World Trade Organization's 1995 Agreement on Trade Related Aspects of Intellectual Property (TRIPS) defines geographical indications as:

indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographic origin.

Geographic indications, with respect to wine, include names like "Napa Valley," "Champagne" and "Bordeaux."

Under TRIPS, members are required to provide remedies against false and misleading use of a geographic indicator and use which amounts to passing off. Article 23 of TRIPS protects wines and spirits specifically, requiring members to provide remedies against the misuse of geographic indicators for wines and spirits.

The group's TRIPS-related argument for added protection is similar to arguments raised by the International Olympic Committee and Red Cross/Red Crescent. Both groups pushed for, and ultimately obtained, added protections for their names in new TLDs.

The IOC and Red Cross argued that because their names are protected under a variety of international treaties, they should also be blocked from third-party registration in new domains.

Geographic Indicators OK for Trademark Clearinghouse.

Geographic indicators are eligible for registration in the new TLDs trademark clearinghouse, so long as they are protected by a statute or treaty at the time the mark is submitted to the clearinghouse for inclusion.

"We're really not dealing with a question of standing, or whether these folks will have an option for relief through the trademark clearinghouse or the UDRP," Julia Matheson, Finnegan, Henderson, Farabow, Garrett & Dunner LLP, Washington, D.C., told Bloomberg BNA.

"We're really talking about who should bear the burden of protection and enforcement," Matheson said.

Matheson compared the groups' arguments to those made by the jeweler in Tiffany (NJ) Inc. v. eBay Inc., 600 F.3d 93 (2d. Cir. 2010)(15 ECLR 546, 4/7/10).

"It would be easier for registrars to control who gets access to these .wine domain names than it would be to require this diverse wine industry to watch who registers and go after potential violators on a piecemeal basis," she said, summarizing their arguments.

Awaiting GAC Response on .Wine, .Vin.

ICANN's Governmental Advisory Committee has flagged the proposed .wine and .vin TLDs as domains that raise concerns for governments.

Pascal Bobillier-Monnot, director of the National Confederation of Producers of Wines and Wine Spirits with a Registered Designation of Origin (CNAOC)--the French member of the Brussels-based European Federation of Origin Wines (EFOW)--told Bloomberg BNA that the EFOW has approached the French, Spanish and Swiss governments with its concerns about .wine and .vin. The European Commission was very active in consultations with the GAC in expressing those concerns, Bobillier-Monnot said.

There is a battle between the position of the U.S. government, which sides with Australia, and the EU over whether there is sufficient protection for geographic indicators in new TLDs, Matheson said.

The U.S. government says that existing protections are adequate, and that the burden will be on the wine industry to police new TLDs for infringement, Matheson observed. But the U.S. wine industry and the EFOW contend that the burden is unfair, and that the registries should set limits on who can purchase secondary domains.

"It seems to be extremely political," Matheson said.

This debate surrounding protection for geographic names also arose in the context of applications for .amazon and .patagonia, where the GAC ultimately concluded that ICANN should reject the application for .amazon (18 ECLR 2229, 7/24/13).

If the GAC opposes the delegation of .wine or .vin, or advises the board that additional protections should be put in place, that advice creates a strong presumption that the board will implement the GAC's recommendations.

The GAC advised the ICANN board in the GAC's communique from ICANN's most recent public meeting in Durban, South Africa, that the GAC was taking 30 additional days to consider its position on the domains.

Those 30 business days ended Aug. 29. The GAC has not yet announced any decision on the domains.

ICANN's new TLD board committee is scheduled to meet and again consider GAC advice on new TLDs Sept. 10.

U.S. Government Says Protections Are Adequate.

Napa Valley Vintners has spoken with U.S. government officials about their concerns, including U.S. GAC representative Suzanne Radell, NTIA.

"She was interested in hearing our opinion, and she did listen," Stults said. "I'm not sure what, if any difference, traction, or response we would get from that discussion," Stults said.

U.S. government representatives consulted by Napa Valley Vintners said that existing intellectual property protections in new TLDs are sufficient to protect geographic indicators, Gerien said.

Boycotts Threatened.

If ICANN approves .wine and .vin without added protections, Bobillier-Monnot said that the EFOW will call on its members to boycott the TLDs.

"That will definitely hurt the business model of the candidate companies, because they will sell a lot fewer second-level domains," Bobillier-Monnot said.

Each time a second-level domain misappropriates a registered origin distinction, there will be a lawsuit filed, Bobillier-Monnot said.

"There will be lawsuits everywhere," Bobillier-Monnot said.

Stephane Van Gelder, Stephane Van Gelder Consulting Limited, Paris, former head of ICANN's policy making body, the Generic Names Supporting Organization, told Bloomberg BNA that litigation--against both applicants and ICANN--is likely.

"I think legal action has to be expected in the context of the new TLD program," Van Gelder said. "It may come from arguments about rights, it may come from arguments about who gets which string, or other issues," he said.

Van Gelder would not speculate on the potential success of such litigation.

Letters Might Spur New Policy Work.

Van Gelder noted that current work at ICANN to create new protections for intergovernmental organizations and IOC/Red Cross names were the result of similar lobbying campaigns. He said that this letter-writing campaign could result in a similar process.

"The danger there is that where does it end?" Van Gelder said. "There will always be people that will be unhappy with rights protections in the new TLDs program."

"I have long felt that the IGO response was probably opening a Pandora's Box," Van Gelder said. The new TLDs applicant guidebook did not contain special protections for intergovernmental organization names beyond those applicable to all trademark holders. But following calls from the groups and the GAC, the ICANN board demanded attention to the topic.

There is also nothing to stop an applicant or any other entity from taking ICANN or an applicant to court to request relief that the party was unable to obtain through ICANN directly, Van Gelder said.

New Advocacy Mechanism?

The GAC's recent advice to ICANN "to take better account of community views, and improve outcomes for communities," may provide newly engaged industries with a new mechanism for advocacy, depending upon ICANN's response to the Advice, Weslow said.

The GAC's restatement of this advice in the Durban Communique, after previously articulating the advice in the Beijing Communique, indicates that ICANN's prior reference to the community objection procedure was not deemed by the GAC to alone be a sufficient mechanism for consideration of the views of communities/industries that may be impacted by the gTLD program, Weslow said.

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