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Loophole gives trademark owners unlimited Clearinghouse records

Kevin Murphy, March 27, 2013, 16:02:21 (UTC), Domain Policy

Trademark owners will be able to add potentially thousands of strings to the Trademark Clearinghouse due to a recently introduced loophole, it emerged last night.

ICANN recently said that it will allow mark holders to add up to 50 strings related to their trademarks to their TMCH records, if the strings have been abused in the past.

It was one of the controversial “strawman” proposals that ICANN decided to adopt earlier this month.

Companies would be able to get protection for “mark+keyword” strings, for example, if a UDRP decision or court ruling had previously found that the strings had been cybersquatted.

The 50-string cap appeared to have been picked rather arbitrarily, but it turns out it’s more-or-less irrelevant anyway.

ICANN confirmed on its webinar for new gTLD applicants last night that the limit is 50 additional strings per entry in the Clearinghouse, not 50 strings per trademarked string.

What this means is that a company that has registered its trademark in multiple jurisdictions will be able to get 50 extra strings for each of those marks it enters into the Clearinghouse.

If Apple had a registered mark for “Apple” in the US and a registered mark for “Apple” in Bolivia, it would be able to submit both to the Clearinghouse and get an additional 100 “apple+keyword” records.

If it had the mark registered in 100 countries, it could put up to 5,000 more strings in the Clearinghouse.

Each string could be used to generate Trademark Claims notices, but not to secure registrations during Sunrise periods.

The apparent loophole and its implications were raised by Reg Levy of Minds + Machines during last night’s ICANN call.

In practice, the number of additional strings mark holders would qualify for would be capped by the number of trademark jurisdictions in the world and/or the number of UDRP decisions they’d won.

Few companies have secured more than a few hundred domains at UDRP to date, meaning it won’t be too difficult for trademark owners to get Trademark Claims protection for basically any previously cybersquatted string.

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Comments (6)

  1. Brad Mugford says:

    ICANN is a joke. They can’t seem to get anything right. They keep digging the hole deeper with moronic decisions.

    First of all UDRP is a kangaroo court.
    Second it also factors in bad faith.
    On top of that there are many awful decisions.

    In one specific case someone might be using a generic term in bad faith. That should not transfer full TM rights for that generic term for any use.

    All it takes is one panelist making a ridiculous ruling at UDRP. Can the party that won Vanity.com also protect Vanity+Word (Vanity Fair for example).

    New extensions are not going to have any domains left to sell if all the generics are basically protected under some absurd TM gaming system.

    Brad

    • Kevin Murphy says:

      Remember that Trademark Claims does not prevent anybody from registering any domain, nor does it gives a trademark owner the opportunity to register the domain before anyone else.

  2. And this is what happens when ICANN decides to go ahead with a proposal without listening to the community. Any wonder why we oppose the unilateral amendment language?

  3. Philip Corwin says:

    The manner in which ICANN made this “50 names” decision was procedurally flawed, contrary to their recent statement on the limits on their own powers (to protect existing legal rights, not create new ones), contrary to staff opinion that this was a policy not implementation, and contrary to GNSO feedback (at Fade’s request) that this was a policy issue deserving further community feedback.

    Besides this unanticipated (or at least previously undisclosed) loophole, many other related questions remain unanswered, such as:
    • What if any documentation will rights holders have to submit to the TMC when they seek to list TM variants claimed to have been recovered in prior UDRP or court proceedings?
    • When a registrant receives a TMC warning will he/she be advised whether the domain being sought is an exact TM match or a variation that was lost in a UDRP or litigation?
    • When the domain was lost in a UDRP, will there be further information as to whether the filing was responded to or was a default judgment – and whether there was an appeal by registrant and, if so, its result?
    • If a registrant proceeds with a domain registration of a TM variation despite receiving the TMC warning will that subsequently be viewed (at least presumptively) as prima facie evidence of bad faith registration in a subsequent UDRP or URS, or will that critical factor remain an open question for panel determination?

    All of these are relevant questions that were not addressed in ICANN’s announcement of last week. The answers are important for all prospective registrants in new gTLDs.

    While it’s true that the warning service does not block registrations, many prospective registrants who receive such warnings will abandon their registration attempt rather than risk a URS or UDRP, even if there is noobad faith intent for the registration or use of a listed typo as a new gTLD domain.

    And let’s not forget that Limited Preventive registration, the blocking method that TM owners want, is still pending out there — and that now that they have gotten other parts of the Strawman in place they can press forward for its unilateral adoption.

  4. Michael R. Graham says:

    As Kevin points out, recording a trademark or a string found abusive through a UDRP or Court decision with the TMCH does not prevent the registration of that trademark or string as a second level domain name. It only triggers a notice mechanism. It also does not give the company that recorded the string the right to register it in Sunrise since only trademarks that are in actual use qualify for that. Otherwise, trademark owners face the same first-come-first-serve domain registration rules as everyone else.

    Philip raises some good questions which do need to be addressed, and which will undoubtedly be by Deloitte and the community. However, the “50 names” extension of recordation rights does provide a reasonable means of identifying possible conflicts that domain name applicants in the nTLDs and trademark owners may have over domains and enabling them to consider and, if necessary, address them before facing either the danger of property rights violations or the expense of UDRP, URS or legal challenges.

  5. tom barrett says:

    All of Phil’s points are valid. the “implementation” of this “implementation” still needs to be detailed.

    But this “loophole” comes at a cost to trademark owners.

    Let’s say “Verizon” is registered in 10 countries. And “Verizon” has 500 confusingly similar strings that have been subject to successful UDRP’s (this is close to reality).

    Their trademark clearinghouse cost for this protection would be:

    10 applications x $150/year = $1500 plus,

    400 extra domains x $1 = $400/year (each trademark is covered for up to 10 domains)

    total = $1900/year to receive claims notices for 500 similar strings during the 90-day claims period.

    And the TMCH likely charges more for these similar strings since more work is required (uploading UDRP decisions, etc.). Maybe they end up being $5/string? This would be $3500.

    Tom
    EnCirca

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