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.XXX Domain Name Launches; Sunrise Period for Trademark Owners and Adult Industry Members Continues until October 28, 2011, Contributed by Erin Hennessy, Matt Schneller and Jennifer Ashton, Bracewell

Wednesday, November 9, 2011

The launch of the new top level domain name .XXX is underway. .XXX domain names are now available for registration by entities in the adult industry through accredited registrars.1 However, the introduction of .XXX matters not only to individuals, businesses and organizations in the "adult" industry but also to all intellectual property holders with trademark rights. For a limited time, brand owners can block their valuable trademarks from being used in connection with .XXX.

Background – The Long, Strange Road to .XXX

Adult content has long been a politically sensitive issue. Even high literature with adult content has been the subject of intense legal and political wrangling – for example, D.H. Lawrence’s 1928 novel Lady Chatterly’s Lover was the subject of landmark trials in the United States,2 Great Britain,3 Canada,4 Japan,5 and many other countries in the forty years following its initial publication. Adult content has proven no less sensitive – if even more ubiquitous – on the Internet. An application to register .XXX specifically for use by the adult industry was filed by the ICM Registry6 during the initial round of sponsored top-level domain name ("sTLD") expansions that was initiated by the Internet Corporation for Assigned Names and Numbers ("ICANN") in 2003.7 After an initial refusal, .XXX moved slowly towards approval, with ICANN approving the .XXX application in principle in June 2005. A last minute flurry of objections from the ICANN Government Advisory Committee ("GAC")8 and from the U.S. Department of Commerce lead to9 ICANN backtracking and refusing to sign a registry agreement with the ICM Registry.10 In response, the ICM Registry submitted a revised draft registry agreement on April 18, 2006,11 but it was quickly rejected by the ICANN Board on May 10, 2006.12 The ICM Registry submitted a request for reconsideration nine days later,13 but withdrew the request in October in favor of renewed negotiations. ICANN and the ICM Registry submitted a revised draft registry agreement and made it available for public comment on January 5, 2007.14 After receiving further pressure from the Government Advisory Committee,15 the Board remained worried that the sponsored community (the "adult industry") was too vague, that the domain space raised public policy issues, and that the domain could raise law enforcement issues related to countries’ widely varying obscenity laws.16 The ICM Registry petitioned for an independent review of ICANN’s decision on June 6, 2008,17 and the Independent Review Panel found that ICANN’s refusals of the .XXX application failed to follow its own bylaws and procedures.18 After extensive consultation, ICANN approved a registry agreement with the ICM Registry for the .XXX domain on April 1, 2011.19

Protections for Participants in the Adult Industry During the .XXX Launch

The .XXX domain is primarily designed for members of the adult industry.20 Adult industry members can submit pre-registration claims based on rights in: (a) essentially identical registered trademarks or (b) identical domain names in other top-level domain names. Adult industry members are eligible to register their marks as .XXX domain names in the "Sunrise AT" (Sunrise A – Trademark) period, running from September 7, 2011 – October 28, 2011 if they own trademark registrations that are "live" on a national or supranational trademark registry, that were registered prior to September 1, 2011, and that are still in use. Adult industry members that own the same pre-TLD string in another top-level domain space that were registered before February 1, 2010 can submit registration requests for the comparable .XXX domain name during the concurrent Sunrise AD (Sunrise A – Domain Name) period.21 If multiple parties qualify under Sunrise AT or Sunrise AD for the same .XXX domain name, an auction will be held prior to December 6, 2011 to determine which should receive the domain name.22

Protections for Brand Owners Not in the Adult Industry During the .XXX Launch

The .XXX registry is providing an opportunity for trademark owners not involved in the adult entertainment industry to apply to opt out of .XXX, and protect their valuable brands from cybersquatting in the .XXX space. This "Sunrise B" period runs concurrently with the Sunrise AT and Sunrise AD periods, and allows trademark owners to block the registration of their brand in the .XXX domain. Trademark owners may reserve names identical to their existing registered trademarks, effectively barring any potential person or entity engaged in the adult entertainment community from registering a .XXX domain name for that particular mark for ten years.23 A registered trademark is required, and submitting an application does not guarantee that the request will be granted by the registry. If a trademark contains special characters or spaces, those characters can be deleted from the domain name as applied for or replaced with a hyphen, and trademarks containing diacritical symbols may replace those symbols with equivalent standard characters.24 A trademark registration upon which a Sunrise AT request is based may have other design elements, but must correspond to the entire text component of the registered trademark. The text component also cannot be disclaimed.25 If two Sunrise B applications are submitted, the domain will be blocked. If there are both qualified Sunrise B applications and qualified Sunrise AT or Sunrise AD applications, the domain name will be given to the adult industry member.26 A successful application to block a .XXX domain name registration will block the domain from the .XXX registry for a period of ten years for $200 - $500, depending on the registry. The blocked domain will then resolve to an informational page stating that the domain has been reserved and further prevent other interested parties in acquiring and/or using it.

Domain Registrations and Trademark Concerns After the Sunrise Period

Once the Sunrise periods end, all members of the adult sponsored community will have the ability to register .XXX domains in a "Landrush" period for adult industry members only.27 If a domain remains unregistered after the Landrush, trademark owners that were ineligible for Sunrise B (such as those with common-law rights, marks only registered on the Supplemental Register, or pending applications) can apply for any unregistered, un-blocked domains at the start of the General Availability period. Rights holders will be able to block domains during the General Availability period, but doing so may be slightly more expensive than blocking during Sunrise B.

Trademark-Related Disputes in .XXX

The .XXX registry will have two arbitration-based paths for rights holders to protect themselves – the Uniform Dispute Resolution Policy ("UDRP") and the Rapid Evaluation Service ("RES"). The UDRP is familiar to trademark owners and IP attorneys, and will apply to any .XXX domain name.28 Prior to the launch of .XXX, arbitration panel decisions under the UDRP have consistently held that use of a domain name that is confusingly similar to a mark for pornographic images (assuming the user does not have trademark rights in the mark for adult content and that the term is not generic for or descriptive of adult themes) does not create rights or legitimate interests in the domain name and is an indicator of bad faith.29 The underlying assumption is that the domain registrant has used the mark to divert traffic looking for the trademark owner to the pornographic images. This assumption may hold true in some top-level domains, like .com or .de. It is less clear that a web user that types in a .XXX domain name has the same expectation – arguably, that user expects to receive adult content. It will be very interesting to see how the early UDRP panel decisions for .XXX domains reinterpret prior decisions in this unique new sTLD. The .XXX registry also adopted a new arbitration procedure, the RES.30 It is limited in scope, applying only to "objectively clear abuse of well-known, distinctive registered trademarks" that are in use in commerce or personal names.31 Unlike the UDRP, which permits the prevailing party to have the domain name transferred to it or cancelled, the RES permits only deactivation – but, usefully, and unlike the UDRP, the deactivation appears to be permanent.32 Recognizing the differences in remedies, a relief under the RES does not preclude a later claim under the UDRP.33 The RES is self-described as a procedure that will provide quick relief for clear cut infringements – very similar in purpose to the Uniform Rapid Suspension system that will apply to domain names registered in new generic top-level domains when ICANN launches its expansion program in 2012.34 It seems that the RES procedure will not be particularly rapid, in part because the RES is structured almost identically to the UDRP. It includes some useful new evidentiary guidelines– requiring panels to consider the strength of the mark claimed, whether the mark is a common word relevant to the domain owner’s use or to its geographic location, and so forth – but these factors are, where present, taken into account under the UDRP anyway. Presumably agreeing that the RES and the UDRP are incredibly similar, the official RES arbitration provider charges the same for RES and UDRP complaints.35

What Should Trademark Owners Do?

Brand owners in industries other than the adult industry have a strong incentive to be sure that their valuable marks are not associated with a popular .XXX domain name. Proactively participating in the Sunrise periods appear likely to be the most cost-effective and pro-active approach. While additional remedies may be available for domain names that are registered by others and become problematic, taking action after the fact is almost invariably more expensive, and any public relations damage will have already occurred. Erin Hennessy is an intellectual property partner in Bracewell & Giuliani’s Seattle and Washington, D.C. offices. Her practice focuses on worldwide trademark matters. Ms. Hennessy can be reached at erin.hennessy@bgllp.com.Matt Schneller is an associate in the Seattle office. He counsels clients in the U.S. and internationally on patents, trademarks and copyrights. Mr. Schneller can be reached at matt.schneller@bgllp.com.Jennifer Ashton is an associate in the Seattle office and assists clients in U.S. and international trademark clearance, prosecution and maintenance. Ms. Ashton can be reached at jennifer.ashton@bgllp.com.
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