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How one guy games new gTLD sunrise periods

Kevin Murphy, April 17, 2014, 10:26:54 (UTC), Domain Registries

Wanna buy a SOCIAL brand pen for a dollar? No? How about social.web or cloud.guru or direct.flowers?
pensOne intellectual property lawyer closely associated with a number of new gTLD registries has been using a flimsy online pen-selling business in order to obtain potentially valuable domains during sunrise periods.
Thomas Brackey of Beverley Hills law firm Freund & Brackey has acquired dozens of premium domain names during sunrise periods. He was good enough to share some of the details with DI.
Brackey owns three trademarks on the terms “DIRECT”, “SOCIAL” and “CLOUD”. All three were registered in Switzerland in late 2012, having been applied for in July that year.
All three cover the category “stylos”, or pens.
If you want to buy a CLOUD brand pen, you can do so at pentm.ch, a web site Brackey seems to have thrown up rather quickly using Shopify.
All three marks appear to have been registered via Marcaria.com, which charges $960 for a Swiss trademark registration.
Brackey obtained Trademark Clearinghouse registrations for his three trademarks, which would have cost him at least $150 per mark.
He seems to have used the pentm.ch web site to fulfill the TMCH’s “proof of use” requirement.
With TMCH registrations, he’s able to participate in new gTLD sunrise periods, giving him the first opportunity to register social.tld, cloud.tld and direct.tld for the usual inflated sunrise prices.
The pens themselves, Brackey assures us, are real.
But he makes no attempt to pretend that the pen-selling business was in thriving need of brand protection under the new gTLD program’s brand protection mechanisms.
Brackey told DI:

In the course of preparing new gTLD applications, I came to be pretty familiar with the various policy developments surrounding the creation and implementation of the TMCH.
For the first time mark holders of all stripes, and from every country would be given a pre-emptive right to acquire domain names that had nothing to do with the substance of their brands.
Musing on that, I identified what I believed to be a legitimate opportunity to acquire some domain names in the newTLD landscape. More curious than anything, I decided to put my theory to the test and resolved to try buying some domain names.
I’m not sure what I’m going to do with the domains I’ve purchased. I’ve never been a domain investor before, and not confident I qualify as one now. It’s all a bit of an experiment at this point and is certainly fascinating territory from an IP perspective.
There will no doubt be a number of important international legal developments that arise from the gTLD process — new rules, new policies and new opportunities.

At least two of Brackey’s new gTLD clients — What Box? and Plan Bee, which use Brackey’s law firm as their mailing address — have also registered large numbers of sunrise names using this same method.
He’s even selling Plan Bee’s “CONSTRUCTION” and “BUILD” pens on his web site.
Brackey acknowledged that some people take a “pretty dim view” of what he’s doing.
I’d have to say I’m one of them.
In my view, while Brackey may not be strictly breaking the rules of the new gTLD program, he’s certainly not acting within their spirit.
Members of Intellectual Property Constituency and others fought hard for rights protection mechanisms that would help them protect their or their clients’ pre-existing brands from cybersquatters.
The RPMs were not designed to provide a way for investors to avoid landrush auctions or a mad scramble for nice names on the first days of general availability.
The “proof of use” requirement was added to the rules in order prevent the kind of debacle we saw with the European Union’s .eu launch, where bogus trademarks were used to game EurID’s sunrise period.
But the barrier is tissue-thin, requiring merely a screenshot of a web site to overcome.
Gaming new gTLD sunrise periods may not be cheap — it may not even be profitable — but I have to wonder what kind of reputational impact it will have on new gTLD registries that choose to participate.
If you’re a brand owner, would you be more likely or less likely to trust a new gTLD registry that chooses to participate in sunrise gaming?

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Comments (22)

  1. Acro says:
    April 17, 2014 at 1:52 pm

    Brilliant and ballsy admission. Complainers should take their remarks to ICANN and its ‘multi-steak’ eating meetings.

    Reply
    • MD says:
      April 17, 2014 at 3:57 pm

      Agreed. Very clever. I would want an IP attorney who knows the opportunities and weaknesses in my trademark. The TMCH was established to protect trademarks, and he saw it as an opportunity to create one and took the financial risk to do it. “Gaming” makes it all sound so sinister, but isn’t that just a euphemism for clever, well versed in the rules, and indeed ballsy. As Acro stated, complainers should take their complaints to ICANN.

      Reply
  2. Kristina Rosette says:
    April 17, 2014 at 2:01 pm

    For the record, neither Mr. Brackey nor his firm is an IPC member.

    Reply
    • John Berryhill says:
      April 17, 2014 at 3:11 pm

      That’s one. Kristina, correct me if I am wrong. Is the European attorney who filed dozens of bogus .(word) EU registration applications on behalf of new TLD applicant clients, and then was appointed an LRO panelist by WIPO, an IPC member or not?

      Reply
    • John Berryhill says:
      April 17, 2014 at 3:40 pm

      …and the attorney who was unable to use her client’s US registration for “PHYSICS” with the inconvenient disclaimer, and who then obtained a late change in the TMCH rules allowing figurative registrations, so that her client could use a foreign logo registration to obtain the TMCH entry for that word… is she an IPC member, Kristina?

      Reply
  3. Shatners Bassoon says:
    April 17, 2014 at 2:40 pm

    It was all just a bit of an experiment, a learning opportunity, a bit of fun.
    What a load of bollocks, he knows the financial endgame.

    Reply
  4. John Berryhill says:
    April 17, 2014 at 3:37 pm

    An additional punchline to this joke of a system engineered by the IPC for the benefit of the gamers was delivered in Singapore when I asked the TMCH representatives about their challenge procedure.
    They informed me that they had planned to provide an online filing mechanism for challenges, but decided not to do so because they hadn’t received any. Doh!
    They further informed me that there is no basis in their procedure for challenging the sufficiency of the token “proof of use” requirement for which, as you point out, they will accept a photograph of anything with the “mark” printed on it. Their rationale is that the TMCH applicant “has to sign a certification” that they are actually engaged in substantial commerce in the goods/services denominated by the mark.
    There is, of course, no penalty for lying to the TMCH since, unlike the various statutory provisions addressing false statements to government entities, the TMCH doesn’t care if people lie to them. Why should they?
    The TMCH also slipped in a late change to qualifying marks with no public comment, allowing the entry of figurative marks in the TMCH. This was important for another US entity using different jurisdictional rules to game the system.
    For example, the American Physical Society publishes a journal called, naturally enough, “Physics”. Their US registration for the logo used on that publication was required to disclaim the word “Physics”. However, since the EU does not have such a disclaimer procedure, they were able to use the quietly-modified rules allowing figurative registrations into the TMCH in order to use their figurative EU registration 007242977 to get their TMCH entry for the word “Physics” per se. In other words, the trademark registration granted in their OWN jurisdiction would not have permitted entry into the TMCH, but by obtaining a quiet change in the TMCH rules and using a foreign jurisdiction (to them, the AMERICAN Physical Society), they were able to obtain a pre-emptive monopoly on the name of an entire field of science henceforth in new TLDs.
    Now, I was told that although the change allowing figurative marks into the TMCH was done “in consultation with the IPC”.
    The attorney responsible for the APS’s entry of the word “PHYSICS” into the TMCH? Perhaps she might take a break from trying to suggest IPC members are not participating in the fun & games.

    Reply
  5. MD says:
    April 17, 2014 at 3:41 pm

    It is because he knew and followed the rules that he was able accomplish this. With regard to “spirit of the rules,” what exactly is he “not operating within?” I was under the belief that ICANN’s new gTLD program was all about creating new opportunities. Seems to me that is exactly what he did. I also would bet strongly that he is not of the ilk to squat on someone else’s trademark as it would be damaging to his reputation and business as an intellectual property rights pioneer. Clever!

    Reply
    • John Berryhill says:
      April 17, 2014 at 3:53 pm

      No, the “proof of use” requirement is understood by any US trademark practitioner to exclude what is known as “token use” – in other words a use of the mark which is not representative of actual and substantial commercial activity, but is a feigned use conducted merely for the purpose of attempting to satisfy the “use” requirement. e.g. Paramount Pictures Corp. v. White, 31 USPQ2d 1768, 1774 n. 8 (TTAB 1994), aff’d, 108 F.3d 1392 (Fed. Cir. 1997).
      Yes, one can be a “pioneer” by lying to the TMCH about whether one is actually in the line of business signified by the mark. The TMCH doesn’t care. Mr. Brackey is not in the pen business, and he signed a certification to the TMCH that his in the pen business. Yes, I can obtain a custom imprinted pen with the word “idiots” on it, obtain a quickie TM registration for “idiots”, and then get a TMCH entry for the word “idiots” by showing them the pen and the registration.
      I would not actually do that, however, since I wouldn’t want to impair the TMCH’s impressive efforts to obtain a dominant reputation in that mark.

      Reply
  6. Konstantinos Zournas says:
    April 17, 2014 at 4:34 pm

    Yes he’s an asshole.
    Building a fake website with fake products after I posted my article doesn’t make his fake trademarks real.
    Just give me a single pen, charm, bracelet or whatever sale before I posted my article.
    .scam

    Reply
  7. Konstantinos Zournas says:
    April 17, 2014 at 5:35 pm

    Well, the website name says it all.
    It should have been fakepentm.ch.

    Reply
  8. Acro says:
    April 17, 2014 at 6:50 pm

    I don’t see what the fuss is all about. He exploited the system, being aware of how there are no repercussions. So the challenge here, is to fix the system. Complain to ICANN loud and clear, instead of biting the ‘multi-stakeholder’ fanfare and other distractions from the real issues. Otherwise, the system will remain broken for further exploitation, and I doubt that when it’s changed there will be any retroactive amends to this fine example of lawyering.

    Reply
    • John Berryhill says:
      April 17, 2014 at 8:32 pm

      I could go either way, Acro. Personally, I’m thinking of ramping up a “one stop shop” for this kind of thing to automate the process.
      Why bother imprinting things, for example? Register some general domain like WeSellStuff.com, and then for a single fee run a sript that: (a) fills out and files a Benelux trademark application for “STRING”, (b) have string.wesellstuff.com activate a script that generates a “catalog page” of a picture of something with “STRING” overlaid onto some piece of crap available for order for some ridiculous price, and (c) fills out the XML template for the TMCH submission when the Benelux TM is granted. The result: TMCH entry in under one week for one low fee, and all the client needs to be able to do is to type a word and pay.
      For example, take a look at the “specimen of use” submitted to obtain US TM Reg. No. 3778825. The mark is for “.XXX” for “crayons”, and the TM was obtained in a lame attempt to extort ICM Registry a few years back. You can find the specimen under “Specimen” on the “Documents” tab here:
      http://tsdr.uspto.gov/#caseNumber=77510626&caseType=SERIAL_NO&searchType=statusSearch
      We actually tracked down the imprint shop where you can buy those blank imprintable crayon boxes, and I have bunch of them (although I donated most of the crayons to an elementary school).
      That case was prosecuted by a fairly well known firm in the adult content legal services segment of the profession, and if you really want some chuckles, read their response to the initial refusal wherein they say, in so many words, “Oh, this has nothing to do with adult XXX content, and kids just think ‘.XXX’ is a fun name for crayons.”
      Then, after getting it, they seriously thought they could turn it around and threaten ICM with it.
      The IPC types, who are given extra credence in the ICANN policy process on these types of issues due to their presumed “expertise” know perfectly well the sorts of shenanigans that go on, which is why they wanted to lock down the TMCH data under a veil of opacity. The only other alternative is that they are so well-intentioned and naive that they assume everyone else is – like the TMCH folks saying, “but they sign a certification when they submit their proof of use”.
      It’s pretty easy to expose bullshit like US TM Reg. No. 3778825 because the records are accessible, despite the efforts of the IP lobby several years ago to fight tooth and nail against the USPTO putting its data online. While they lost that fight more than a decade ago (after a philanthropic effort was organized to purchase the USPTO data products and put them online for free anyway), they’ve been able to win it in the ICANN arena relative to the TMCH which is a black-box system run on the proposition that “IP attorneys are all honest”.
      And, sure, if one is of the relatively ignorant mindset that what national trademark offices do is hand out official documents granting monopolies in words, then it is certainly understandable, as some of the comments here indicate, that this gaming is all well and good. In other words, there are of course people whose understanding of “intellectual property” refers to a piece of paper with an official seal on it. But that’s not the point. The point is that the paper is intended to be a recognition of goodwill that exists *in the minds of consumers* of branded products – it’s not a question of “can you file a bunch of stuff and write a check”. In fact, without underlying actual use in the jurisdiction in question – even in Europe – that piece of paper does not signify a valid right.
      That is why, for example, Procter & Gamble was called out by a UDRP panel for lying their asses off during a proceeding in which they simply made up sales figures for a product of which they never sold a single unit in Europe, despite their ability to buy a trademark registration from a party who themselves had never used it for anything. All to get a domain name.
      These “responsible brand owners” do this crap all of the time. Take US TM Reg. No. 2822004 which issued in 2004 to Equifax – the private company in the US which pretty much determines whether millions of people can or cannot get loans – for the mark “EFX.COM” for “Educational services, namely, providing seminars relating to credit and money management via the global computer information network. FIRST USE: 19750228”.
      Imagine that! Equifax swore, through their attorneys Kilpatrick & Stockton (now Kilpatrick Townsend) that they were using EFX.COM on the Internet, some ten years before “.COM” even existed. It must have been quite lonely for them. Now, they were called out on it when their representative – also a UDRP panelist – tried to enforce that transparently fraudulent piece of crap, but the beauty of the TMCH is that the games being played with it elude the type of scrutiny to which public records are subject. And that is why the IPC fought tooth and nail to make sure the TMCH database, and the paper trail for getting into it, are not accessible. They want to be able to lie without detection, consequence and recourse, and they will fight to keep it that way.

      Reply
      • Acro says:
        April 18, 2014 at 2:45 pm

        John, I understand your frustration and for the record, I’m not condoning this practice. All I’m saying is that those that game the system point to the direction of a flawed system that receives the blessings of those overseeing it.

        Reply
  9. Andrew Grill says:
    April 20, 2014 at 10:36 pm

    Kevin, great piece and now the reason I could not grab social.pics is revealed.
    When I signed up for social.pics I was hit with the trademark warning over the “stylos” use of the social trademark – then someone else managed to grab it – and is simply parked at Gandi.net – what a waste.
    I blogged about this at http://lc.tl/gtlds and I decided to grab http://alt.pics for my picture site.

    Reply
    • Konstantinos Zournas says:
      April 21, 2014 at 1:00 pm

      No this wasn’t the reason. Probably you didn’t pre-register the domain because of the trademark warning and that was a bad move.
      The person that got the domain is not the fake trademark holder and he got after general availability and not sunrise.

      Reply
      • Andrew Grill says:
        April 21, 2014 at 2:20 pm

        I did pre-register the domain, and my registrar Gandi said it was available. When it was time to complete the order, I clicked through the trademark warning (ie accepted the warning) and then the ordering process started as if I was buying it (no warning that it was not available and someone else had it already).
        Later I was told the order had “failed” because someone else got it (presumably the pen guy was earlier due to being able to grab it during sunrise) and he also grabbed it via Gandi.

        Reply

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