Next Steps After ICANN's Big Reveal: Identifying the .Threats
Reproduced with permission from Electronic Commerce & Law Report, (June 13, 2012). Copyright 2012 by The Bureau of National Affairs, Inc. (800-372-1033) <http://www.bna.com>
NEW TOP-LEVEL DOMAINS
The Internet Corporation for Assigned Names and Numbers will post June 13 a list of over 1,900 applications for new generic top-level domain names, following years of debate and months of delays. BNA interviewed nearly a dozen attorneys in the days leading up to the big reveal, asking what they will be looking for on “reveal day,” and for tips and insights for brand owners of all locations, sizes, and budgets.
Trademark infringement is not the only issue brands will need to watch. Other matters to explore include: Did a competitor apply for a “.industry” domain? If so, can your business register a second-level domain, for a reasonable cost? Will the competitor have access to sensitive information if you decide to register a second-level domain for a yet-to-be-publicized product? Will proposed domains that could attract infringers have adequate WHOIS data verification practices to enable IP owners to identify second-level registrants? What about steps to prevent abuses in provocative domains like the anticipated “.sucks” destination?
By Amy E. Bivins
When the Internet Corporation for Assigned Names and Numbers posts June 13 its list of over 1,900 new generic top-level domain name applications, brands large and small are going to have to quickly evaluate which applications pose threats to their businesses and then plot their response. BNA surveyed nearly a dozen attorneys about what they will be looking for on “reveal day,” and requested tips for sorting through the list and developing a timely defensive strategy.
The Big Announcement
ICANN will release the names of the proposed new top-level domains and the applicants on June 13, at 12 - 4 p.m. GMT/UTC, in London. The event will be streamed live over the internet from http://newgtlds.icann.org/en/.
The new gTLDs program is going to be many companies' first interaction with ICANN, and its unique multistakeholder structure and sea of acronym-heavy processes.
Awareness is growing among businesses, as a general matter, that new domains are on the way. But outside some large companies, most businesses are not yet well-versed in the internal workings of the program, or ICANN. The new gTLDs program has the potential to impact brands of all sizes, budgets, and ICANN experience levels. Knowing what to look for, and the relevant processes, is key for navigating the program's short participation timeframes.
In the weeks leading up to the “big reveal,” many applicants have begun publicizing their applications.
The generic proposals span a wide range of industry and community segments. Some examples include: .law, .lawyer, .med, .church, .app, .free, .game, .bank, .restaurant, and .sucks.
Reveal Day Regimen
The domain name proposals have been revealed. Now what? Attorneys recommended the following steps:
• Sort the applications: brands, generics, community, geographic.
• Check the relevant comment and/or objection deadlines.
• Scrutinize key application answers such as proposed purposes for domain and target community.
• Factor the Government Advisory Committee into your objection strategy.
• Weigh your options, considering your financial resources and each available forum for objections, including the courts.
Comment, Objection Clock Starts Now
When ICANN posts the list, the 60-day public comment period for the applications begins. The posting also starts the clock on ICANN's Government Advisory Committee's 60-day time period for submitting “early warnings” to applicants that a proposed string raises government concerns.
The posting initiates the formal objection period, which will remain open for approximately seven months. There are several different types of objection processes built into the program. The most relevant for brand owners is the legal rights objection process, which will be operated by the World Intellectual Property Organization. There are also processes for “community” and “limited public interest” objections.
ICANN's At-Large Advisory Committee also has its own objection process, as well. A recently named Independent Objector is charged with opposing “highly objectionable” applications on community and public interest grounds, if no other entity files an objection.
ICANN is in the process of batching applications into smaller groups for processing. The batching order is scheduled to be published July 11.
The First Look
ICANN is scheduled to post a list of the 1,900-plus new gTLD applications, who applied for each string, and applicants' answers to the many “public” questions—such as the purpose of the string, plans for rights protection mechanisms, WHOIS policies, and many other factors.
ICANN has not publicized how this huge volume of data will be presented. The list of the application's evaluation questions, alone, is 41 pages long. Not all those answers will be public, but many will be. As a result, this posting is going to generate a significant amount of information to process.
“It's hard to know what we're going to be looking at before it is posted,” Katy Basile, Novak Druce, Cupertino, Calif., told BNA.
An initial concern is IT-related: Attorneys may not be able to quickly determine how to search or manipulate the data on the list, so IT personnel should be on hand, Basile cautioned.
To ease the process, attorneys could sign up for a specialized search tool or pay a provider to review the list, Lena Carlsson, Melbourne IT, told BNA. Carlsson is vice president of domain name strategy at Melbourne IT, a company that offers new gTLD consulting services.
Brand owners need to look at internationalized strings, too. “ICANN has said it will come up with a dashboard to search and sort—hopefully that will help sorting and searching in other characters. That's going to take some IT support, for sure,” Basile said.
The review should not be completed in an IP vacuum, Gina Durham, DLA Piper, Chicago, told BNA. Relevant business stakeholders—likely from marketing, product development, and others—need to collaborate with counsel in order to prioritize concerns, Durham added.
Another area to watch is geography-related names, Jim Bikoff, of Silverberg, Goldman & Bikoff LLP, Washington, D.C., advised. Proposed “.city” and “.country” TLDs could be relevant for clients who do business in those locations,” he said.
When looking at the list, every effort to pare down the list of potential concerns will help, Erin Hennessy, Bracewell & Giuliani, Washington, D.C. and Seattle, told BNA. “Brand owners can begin narrowing the list by looking for applications to remove from the potential ‘concerns' pile,” she advised. “If I am representing banks do I really care about .shoes?”
And at the outset, brand owners should look to see whether an application is a standard application or a community application, Robert Kenney, Birch Stewart Kolasch Birch LLP, Falls Church, Va., told BNA. The objection processes differ. “For community applications, objections must be based on the fact that a substantial portion of the community doesn't support a string,” he noted.
Brands Versus Generics
The applications will fall into two basic categories—brand names and generic or geographic terms. The attorneys said that the review will begin with a first look for brand concerns, and then move on to generic terms that are potentially relevant to their clients' businesses.
“The first thing I will be looking for are applications that contain clients' marks or that are similar to their marks,” Trevor Schmidt, Moore & Van Allen, Morrisville, N.C. told BNA.
In most cases, this will be unlikely because of the registration costs, but it is possible—especially for clients who have marks that are similar to other marks in other fields, Schmidt added.
“Next, I would look for extensions that could be grounds for malicious uses or that would require defensive registrations,” Schmidt said.
IP attorneys should be watching for applications that include a same or similar brand name or a generic industry name—such as .hotel, .airline, .beverage—which a company in a particular industry would not want a competitor to monopolize, Durham remarked. “IP attorneys might also look for extensions that might be used in a fashion that could be dilutive of the goodwill of a brand,” she said.
Clients will want to know who has applied for a generic industry term and what the standards for second level registration will be to determine whether they should object, Bikoff said.
New Top-Level Domains Timeline
June 13. Scheduled posting of new gTLD applications, starting the clock on the 60-day GAC early warning and public comment periods, and the formal objection process. Each of these terms could be extended by ICANN.
June 28. Batching process ends.
July 11. Batching results posted.
July 12. Initial evaluations begin for first batch.
Aug. 12. Deadline for comments on new gTLD applications, and for the GAC to send “early warnings” to applicants.
December 2012. Estimated end of projected five-month initial evaluation period for first batch of applications.
January 2013. Estimated deadline for filing formal objections.
Early 2013. Estimated delegation of first new, uncontested gTLDs to the root.
File Comments First
For generics, one of brand owners' main tools for challenging an application is going to be the public comment period, since a generic will not infringe their marks.
The comment forum will require commenters to associate comments with specific applications and the relevant evaluation panel. In order to be available to the evaluation panels during the initial evaluation, comments must be submitted within 60 days.
The guidebook states that evaluators “will perform due diligence on the application comments (i.e., determine their relevance to the evaluation, verify the accuracy of claims, analyze meaningfulness of references cited) and take the information provided in these comments into consideration.”
Because brand owners have significantly less time to post comments than the seven months they have to file a formal objection, they should file comments first.
Carlsson recommended that brand owners first identify any strings that should be addressed through a legal rights objection. But they should then set those aside briefly and file comments on generics first.
“Smart brands should put any names that fall under this category to one side at the start because you have some time to review the specifics of the case and prepare and file your objection,” Carlsson said. “With only 60 days for comments around whether or not an applicant has met the criteria, brands will have to move fast.”
Brand owners should also keep track of generics that they would want to register in if an application clears the evaluation and objection processes and is delegated to the root.
Application Answers to Watch
The applications will contain a wealth of information that will help inform the decision of whether to file an objection.
They will also detail information about proposed rights protection mechanisms, so will assist brand owners in planning for registering—defensively or otherwise—in a new TLD after it is delegated.
For example, applicant identities are important.
“I will be looking at the applicant,” Hennessy said. “Have we seen the name before?” If the name is familiar—as a registrant encountered with previous cease and desist letters or cybersquatting lawsuits, an application may raise a red flag, she added.
Bikoff expressed a similar view. “We will be looking for a wealth of information—the purpose, whether the applicant has the resources to run the TLD, whether there are sufficient rights protection mechanisms, and for things like an applicant's criminal record or history of cybersquatting.”
Some of these questions could involve digging beyond the application. For example, although ICANN requires applicants to disclose in Question 11 whether they have been the subject of adverse judgments for cybersquatting, the application says that portion of the application is not public.
These are some of the public points of the application that could assist in risk assessment:
• Question 14: This question requires applicants for IDN strings to restate the literal meaning of the string in English.
• Question 18: This question has been emphasized in many IP-related forums leading up to the “big reveal” (17 ECLR 833, 5/9/12).
Not only must applicants list the purposes for their proposed strings, but also steps they plan to take to limit social costs, their plans for price increases and dispute resolution processes.
• Question 19: This is where applicants designate their applications as “community,” and what community the string is intended to serve, and community support for the proposed string.
• Question 26: This question requires applicants to explain WHOIS policies.
• Question 28: This question requires an applicant to describe policies and procedures to minimize abusive registrations, plus more information about efforts to enhance WHOIS accuracy, among other things.
• Question 29: This question requires applicants to detail their planned rights protection mechanisms, including any additional trademark protection the applicant plans to offer beyond the required trademark claims and sunrise services, and the Uniform Rapid Suspension system.
Some entities who have pre-publicized their applications, including ICM Registry's planned .sex, .porn., and .adult domains, have pledged to provide second-level rights protection mechanisms that go beyond those required in the applicant guidebook.
ICM has pledged to automatically “grandfather” in preregistered names in .XXX in its new domains, so brand owners will not have to pay added fees to protect their marks.
Robert J. Kimmer, Rader Fishman & Grauer LLP, Washington, D.C., who filed one of the first rapid evaluation cases in .XXX, told BNA that the impact of information disclosed in this section could impact some, but not all, brands' plans to object.
“Some brands are either too big or too important to cherry-pick on enforcement,” Kimmer remarked. “For these brands, no reasonable RPM will outweigh the benefit of enforcement and an applicant's exact answer to question #29 on RPM is irrelevant,” he added.
“For others the various answers to question #29 will shed some light on the choices to be made and the work that may need to be done to uphold a brand's marketplace integrity,” Kimmer observed.
• Question 30: This question asks about security policies, including augmented security protections commensurate with the nature of the proposed string.
Prioritize: GAC, Others May Object Too
When deciding which applications pose issues that merit an objection, brand owners should remember that the gTLDs program has several other objection processes built in.
Legal rights objections, which will be handled by WIPO, are the main mechanism for brand owners to object to applications that infringe their IP interests (17 ECLR 965, 5/30/12).
But in some cases, the Government Advisory Committee, relevant community, Independent Objector, or At-Large Advisory Committee might object to an application, eliminating the need for an individual brand owner to file an objection.
GAC Early Warning, Advice Process
ICANN's intellectual property constituency will likely raise concerns that fall beyond the scope of legal rights objections with their GAC colleagues, Schmidt predicted. “The IP community has lobbied extensively leading up to this and likely will continue to do so,” he added.
“I think it is going to be fascinating to watch this play out—it's such a big ball of string and there are so many strands,” Basile said.
Governments will be monitoring applications, and brands should pay attention to concerns raised by governments, she added, predicting that trade associations and other constituencies will likely attempt to raise concerns with the GAC.
The new gTLDs program includes a 60-day “early warning” process, through which governments can notify applicants that proposed strings raise potential issues for one or more governments (16 ECLR 1950, 12/7/11). The GAC may also submit official GAC Advice to the Board on specific applications.
“Consensus” advice—defined under the United Nations definition, formal agreement with no formal objection—will create a strong presumption that the Board should not approve an application. The Board may reject consensus advice, but pursuant to ICANN bylaws it must provide a rationale for that decision.
The GAC may also forward advice that certain governments have concerns about a proposed string. That advice does not carry the same presumptions as consensus advice.
Governments will take a close look at regulated industries like .insurance and .bank, Bikoff said.
European banking regulators have already urged ICANN to reject proposed strings for regulated industries like .bank across-the-board (17 ECLR 437, 3/7/12). ICANN told the regulators to raise their concerns with applicants directly, or voice its concerns through the GAC processes (17 ECLR 507, 3/14/12).
“For many of these, governments are probably the best ones to object,” Bikoff remarked. He predicted that governments will also raise concerns about recently publicized applications like .adult, .sex, or .porn, similar to their concerns about the recently launched .XXX (16 ECLR 456, 3/23/11).
However, brand owners should not assume that the GAC or some other entity will file an objection, Hennessy cautioned.
“If an application is a serious concern, I wouldn't want to rely on a hunch that the GAC or someone else might want to raise an objection,” she said. A brand owner might start preparing an objection and wait to see if anyone else objects before deciding to file, or talk with industry partners about collaborating on an objection. But it should be prepared to file an objection, if needed.
GAC Uproar Spurs Advice Edit
ICANN amended the applicant guidebook June 4, eliminating a statement that the Board must explain any decision not to follow consensus advice from the GAC on a proposed string.
The guidebook now mirrors the GAC's proposed language on GAC advice, submitted to the Board in their Oct. 27, 2011, communique to the Board from the ICANN meeting in Dakar, Senegal.
ICANN modified that language to add a sentence stating that the Board must explain any decision not to follow the GAC's consensus advice. The sentence mirrored the Board's obligations for disagreeing with GAC advice under the ICANN bylaws.
The GAC raised serious concerns about the language, however, at the March ICANN meeting in San Jose, Costa Rica, Kristina Rosette, Covington & Burling LLP, Washington, D.C., told BNA.
ICANN staff updated the language “for consistency with the formulation of GAC advice,” ICANN staff noted in their summary of the change.
Steve DelBianco, NetChoice, speculated that the language was deleted as a concession to the GAC.
ICANN announced in May that Prof. Alain Pellet will serve as the independent objector, charged with acting “solely in the best interests of the public who use the global internet (17 ECLR 940, 5/23/12).
Pellet is a professor at the University Paris Ouest, Nanterre/La Defense, and a former chairperson of the International Law Commission of the United Nations.
The guidebook states that the IO may not be affiliated with any new gTLD applicant. He will carry out its duties for a single round of applications.
Pellet's budget will be funded from the proceeds of new gTLD applications, and will include salaries and operating expenses and dispute resolution costs.
The independent objector may only file objections on limited public interest and community grounds. He may file objections against “highly objectionable” gTLD applications if no other objection has been filed on that ground. For example, if a community objection has been filed, the IO may file a limited public interest objection, and vice versa.
The IO may consider public comment when making an independent assessment whether an objection is warranted. It shall not object to an application unless at least one comment opposing the string has been posted.
The International Chamber of Commerce will administer disputes brought on limited public interest and community grounds.
Community objections may only be filed by “established institutions associated with clearly delineated communities.” The community must be strongly associated with the applied-for string.
Factors associated with being an “established institution” include global recognition, the length of time the institution has been in existence, and public historical evidence of its significance, such as: evidence of a formal charter or national or international registration; validation by a government or intergovernmental organization.
The institution must not have been established solely with the gTLD application process.
To demonstrate the required community relationship, an objector might show the presence of mechanisms for participation; institutional purpose related to the community's benefit; performance of regular activities that benefit the community; and the level of formal boundaries around the community.
To prevail on a community objection, the objector must show substantial opposition from a significant portion of the community to which the string may be targeted, through these steps:
• the community must be clearly delineated;
• community opposition must be substantial;
• there must be a strong association between the community and the applied-for string; and
• the application must create a likelihood of material detriment to the rights or legitimate interests of a significant portion of the community.
ICANN's At-Large Advisory Committee supports global participation in ICANN by individual internet users. The ALAC has standing to object to a new gTLD application on “limited public interest objection” grounds and “community” grounds.
It can also file comments on applications.
The applicant guidebook contains few details about the process for the formal objections that will originate in ALAC, other than to say that funding from ICANN for objection filing fees and advance payment of costs is available to ALAC.
Funding will be contingent on publication by ALAC of its approved process for considering and making objections.
“At a minimum, the process for objecting to a gTLD application will require: bottom-up development of potential objections, discussion and approval of objections at the Regional At-Large Organization level, and process for consideration and approval of the objection by the At-Large Advisory Committee.”
An ALAC working group presented a draft proposal for the ALAC objection process to ALAC March 11.
The proposal notes that ALAC may comment on any application for any reason, including on legal rights and string confusion grounds.
During the comment period, the working group will decide whether to draft a formal comment on a proposed string based on comments ALAC receives. If it decides to do so, the comment will go through a drafting-and-comment process before ALAC votes to submit it. Those comments will then be submitted to ICANN as formal comments, the proposal added.
For objections, the working group will decide whether to draft a formal objection based on comments it receives. Each of the regional at-large organizations will vote on objection statements. If three or more of the five RALOs approve an objection, the ALAC will notify ICANN of its intent to file an objection, in coordination with ICANN to pay the applicable fees.
How Much Is This Going to Cost?
A party pursuing a legal rights objection must provide documentation of existing legal rights, including either registered or unregistered trademarks. Intergovernmental organizations may also file legal rights objections if their names are protected by an international treaty and if they are widely considered to have independent international legal personality.
Under WIPO's rules, objections may be consolidated—either multiple objections against the same application by multiple objectors, or one objector's objections to multiple applications. WIPO may consolidate objections, and parties to an objection can request consolidation, too.
The objector must pay the filing fees directly to WIPO when filing. The objector and applicant may be responsible for added fees later in the process.
WIPO's DSRP fee is $2,000 for a single-expert panel, or $3,000 for a three-expert panel.
Its base panel fees are as follows:
• single expert panel for a single objection to a single application: $8,000
• three expert panel for single objection to single application: $20,000
• single expert panel for multiple objections to a single application: $4,800 per objection
• three expert panel for multiple objections to a single application: $12,000 per objection
• single expert panel for multiple objections by same objector: $6,400 per objection
• three expert panel for multiple objections by same objector: $16,000 per objection
The fees could be higher, depending on the circumstances of the case. WIPO may require additional advance payments.
WIPO's rules state that in determining whether additional advance payments shall be required, WIPO, in consultation with the panel, may consider the following non-exclusive factors: the number of applications and/or objections to the TLD, the number of parties, the complexity of the dispute, the anticipated time required for rendering an expert determination, and the possible need for hearings, phone or video conferences, or additional pleading rounds.
WIPO's rules do not say what will happen to these fees when the objection is resolved. But the applicant guidebook says that the dispute resolution service shall refund advance payments of costs to the prevailing party.
Community objections filed with the International Chamber of Commerce must be accompanied by a nonrefundable registration fee of €5,000. The expert's hourly rate will be €450 unless the ICC decides otherwise after consultation with the parties. The rules state that the ICC's fees shall normally not exceed €12,000 for a one expert panel and €17,000 for a three expert panel.
Within 10 days of constituting the panel, the ICC will estimate the total costs of the procedure and invite advance payment from both the objector and the applicant. At the end of the procedure, the ICC will refund costs paid in advance to the prevailing party.
$150 Per Trademark Clearinghouse Submission
Looking ahead, ICANN projected June 1 that registration in the trademark clearinghouse should cost less than $150 per submission.
IBM and Deloitte have been selected as the trademark clearinghouse service providers (17 ECLR 1032, 6/6/12).
The clearinghouse will function as an information repository, offering authentication and validation services for trademark data. Trademark holders and gTLD registry operators will rely on it to support new gTLD rights protection mechanisms. It is designed to be available globally, with capabilities for validating trademark data from multiple global regions.
Deloitte will serve as the authentication/validation service provider, and IBM will provide technical database administration services.
ICANN is in the midst of seeking feedback on a draft implementation model for the trademark clearinghouse (17 ECLR 983, 5/30/12). The draft implementation model incorporates recommendations from the implementation assistance group, which ICANN convened to provide advice regarding how the trademark clearinghouse, sunrise registration, and trademark claims services should operate (16 ECLR 1793, 11/2/11).
Other Options: Lawsuits
If an application raises a clear legal concern—trademark or otherwise—there is always the option to file a lawsuit, either instead of or in addition to ICANN's processes.
The objection processes are new and untested, so there is no certainty of what the results will be, Durham said. “This is why it is important to think outside the ‘ICANN formal objection' box in situations of serious concern,” she added.
Kenney agreed. “If an application raises serious concerns, given the choice between filing an objection or a lawsuit, it may be wise to do both,” he said.
At least one lawsuit among gTLD applicants is already brewing. In March, a business that has a trademark application for the “.ECO” mark filed a lawsuit in the U.S. District Court for the Central District of California, contending that two other gTLD applicants infringe its mark, Planet.Eco LLC v. Big Room Inc., No. 12-1812 (C.D. Cal. complaint filed 3/2/12)(17 ECLR 714, 4/18/12).
The court is in the process of considering one of the defendant's motions to dismiss for lack of personal jurisdiction. A jury trial has been scheduled for Feb. 5, 2013.
The ICANN dispute resolution processes should minimize the difficulties typically associated with cross-border legal disputes, Durham added.
For More Information
The applications will be posted on the ICANN website at http://newgtlds.icann.org/en/program-status/application-results.