TMCH turning off some brand-blocking services

The Trademark Clearinghouse is closing down two of its brand protection services after apparently failing to attract and retain registry partners.

The company announced recently that TREx, its Trademark Registry Exchange, will shut down after its customers’ existing subscriptions expire, saying:

The communication that we receive from our agents, resellers, clients and other registries that we have reached out to around improving the product shows that there is currently little appetite for such a service.

TMCH said it may revive the service after the new round of new gTLDs happens.

TREx was a service similar to Donuts’ Domain Protected Marks List and others, whereby trademark owners can block their brands across a multitude of TLDs for a substantial discount on the cost of defensive registrations.

But the TMCH offering was not restricted to one registry’s portfolio. Rather, it consolidated TLDs from multiple smaller operators, including at least one ccTLD — .de — into one service.

It seems to have peaked at 43 TLDs, but lost three when XYZ.com pulled out a couple years ago.

Its biggest partner was MMX, which sold its 22 gTLDs to GoDaddy Registry last year. I’d be very surprised if this consolidation was not a big factor in the decision to wind down TREx.

I’d also be surprised if we don’t see a DPML-like service from GoDaddy before long. It already operates AdultBlock on its four porn-themed gTLDs.

The news follows the announcement late last year that TMCH will also close down its BrandPulse service, which notified clients when domains similar to their brands were registered in any TLD, when its existing subscriptions expire.

Both services leveraged TMCH’s contractual relationship with ICANN, under which it provides functions supporting mandatory rights protection mechanisms under the new gTLD program rules, but neither are ICANN-mandated services.

Floodgates, open! Trademark Clearinghouse now supports .com

The Trademark Clearinghouse has added .com to the roster of TLDs supported by its infringement notification service.

The Deloitte-managed service recently announced the change to its Ongoing Notification Service, which came into effect late last month.

The update means TMCH subscribers will receive alerts whenever a .com domain is registered that contains their trademark, helping them to decide whether to pursue enforcement actions such as UDRP.

Unlike the ICANN-mandated 90-day Trademark Claims period that accompanies the launch of each new gTLD, the registrant herself does not receive an alert of possible infringement at point of registration.

The service, which is not regulated by ICANN, is still free to companies that have their marks registered in the TMCH, which charges an extra dollar for every variation of a mark the holder wishes to monitor.

Such services have been commercially available from the likes of MarkMonitor for 20 years or more. The TMCH has been offering it for new gTLDs since they started launching at the end of 2013.

With the .com-shaped gaping hole now plugged, two things could happen.

First, clients may find a steep increase in the number of alerts they receive — .com is still the biggest-selling and in volume terms the most-abused TLD.

Second, commercial providers of similar services now find themselves competing against a free rival with an ICANN-enabled captive audience.

The upgrade comes at the tail end of the current wave of the new gTLD program. With the .gay launch out of the way and other desirable open TLDs tied up in litigation, there won’t be much call for TMCH’s core services for the next few years.

It also comes just a couple months after the .com zone file started being published on ICANN’s Centralized Zone Data Service, but I expect that’s just a coincidence.

New gTLD registries get $6 million refund

ICANN has offered new gTLD registries refunds totaling over $6 million after allegedly double-charging them for access to the Trademark Clearinghouse.
At the weekend, its board of directors resolved:

to provide a refund of $5,000, as soon as practicable, to the contracted registries or registry operators (including those that have terminated their contracts or whose TLD delegation has been revoked) that have paid to ICANN the one-time RPM access fee

The five grand fee was levied on each new gTLD as a way of funding the TMCH, which handles trademark validation for sunrise periods and other rights protection mechanisms.
But registries pointed out last October that this kind of thing was precisely what their original $185,000 applications fees were meant to cover.
The Registries Stakeholder Group said back then:

All other systems and programs related to the New gTLD Program were funded from application fees. The TMCH should have been no different and there was no reason to “double-charge” registries for this one piece of the program.

Eight months later, ICANN seems to have reluctantly agreed.
It appears that the refunds — which given over 1,200 TLDs would come to over $6 million in total — will be paid from the roughly $80 million in leftover application fees, rather than ICANN’s tightening operational budget.
While $5,000 isn’t life-changing money, it adds up to a substantial chunk of change for large portfolio registries such as Donuts, which stands to receive roughly $1.5 million.

Double-charging claims as registries ramp up new gTLD refund demands

Registry operators have stepped up demands for ICANN to dip into its $100 million new gTLD cash pile to temporarily lower their “burdensome” accreditation fees.
A new missive from the Registries Stakeholder Group to ICANN this week also introduces a remarkable claim that ICANN may have “double charged” new gTLD applications to the tune of potentially about $6 million.
The RySG wants ICANN to reduce the quarterly fixed fees new gTLD registries must pay by 75% from the current $6,250, for a year, at a cost to ICANN of $16.87 million.
ICANN still has roughly $96 million in leftover money from the $185,000 per-TLD application fees paid in 2012, roughly a third of which had been earmarked for unexpected expenses.
When Global Domains Division president Akram Atallah refused this request in August, he listed some of the previously unexpected items ICANN has had to pay for related to the program, one of which was “implementation of the Trademark Clearinghouse”.
But in last week’s letter (pdf), the RySG points out that each registry was already billed an additional $5,000 fee specifically to set up the TMCH.

Your letter states that registry operators knew about the fee structure from the start and implies that changes of circumstance should be irrelevant. The TMCH charge, however, was not detailed in the applicant guidebook. ICANN added it on its own after all applications were accepted and without community input. Therefore, ICANN is very much in a position to refund registry operators for this overcharge, and we request that ICANN do so. Essentially, you would be refunding the amounts we paid with our own application fees, which should have been used to set up the TMCH in the first place.

These additional fees could have easily topped $6 million, given that there are over 1,200 live new gTLDs.
Was this a case of double-charging, as the RySG says?
My gut feeling is that Atallah probably just forgot about the extra TMCH fee and misspoke in his August letter. The alternative would be a significant accounting balls-up that would need rectifying.
RySG has asked ICANN for a “detailed accounting” of its new gTLD program expenses to date. If produced, that could clear up any confusion.
Group chair Paul Diaz, who signed the letter, has also asked for a meeting with Atallah at the Abu Dhabi public meeting later this month, to discuss the issue.
The letter also accuses ICANN of costing applicants lost revenue by introducing policies such as the ban on two-letter domains, increased trademark protections, and other government-requested restrictions that were introduced after application fees had already been paid.
The tone of the letter is polite, but seems to mask an underlying resentment among registries that ICANN has not been giving them a fair chance to grow their businesses.
UPDATE: This story was updated October 12 to correct the estimate of the total amount of TMCH setup fees collected.

NCC sells Open Registry at huge discount

NCC Group has followed through on its promise to divest parts of its domain business, selling the Open Registry collection of companies at a huge discount to the original purchase price.
KeyDrive and a mysterious entity called Terrain.com SA have together acquired the companies for €3.75 million ($3.97 million).
That’s compared to the minimum of £7.9 million ($12 million) NCC originally paid just two years ago.
NCC said in a statement that the sold companies are:

• Open Registry SA, a registry back-end provider with a handful of new gTLD clients.
• ClearingHouse for Intellectual Property SA, aka CHIP, which provides software and billing support for the Trademark Clearinghouse.
• Nexperteam CVBA, a tiny registrar.
• Sensirius CVBA, the original Open Registry company, a new gTLD consultancy.

Missing from that list is Artemis, the new gTLD registry for .trust, which NCC separately acquired from Deutsche Post for an undisclosed sum in February 2014.
NCC is also keeping hold of its data escrow business, which is widely used by gTLD registries to comply with ICANN rules.
It’s not clear how the sold companies are being divided up between the two buyers.
KeyDrive is the Luxembourg-based holding company for the registrars Key-Systems and Moniker and other domain firms.
Terrain.com appears to belong to EuroDNS chair Xavier Buck, who was chair of Open Registry until NCC bought it, but the domain itself doesn’t seem to resolve right now.
NCC said that €2 million will be paid up front and €1.75 million will be deferred for 18 months.

ICANN says “no impact” from TMCH downtime

The 10-hour outage in the Trademark Clearinghouse’s key database had no impact on domain registrations, ICANN says.
We reported earlier this week that the TMCH’s Trademark Database had been offline for much of last Friday, for reasons unknown.
We’d heard concerns from some users that the downtime may have allowed registrants to register domain names matching trademarks without triggering Trademark Claims notices.
But that worry may have been unfounded. ICANN told DI:

The issue occurred when two nodes spontaneously restarted. The cause of this restart is still under investigation. Although both nodes came back up, several services such as the network interface, TSA Service IP and the SSH daemon did not. All TMDB Services except the CNIS service were unavailable during the outage. From a domain registration point of view there should have been no impact.

CNIS is the Claim Notice Information Service, which provides registrars with Trademark Claims notice data.

Concern over mystery TMCH outage

The Trademark Clearinghouse is investigating the causes and impact of an outage that is believed to have hit its primary database for 10 hours last Friday.
Some in the intellectual property community are concerned that the downtime may have allowed people to register domain names without receiving Trademark Claims notices.
The downtime was confirmed as unscheduled by the TMCH on a mailing list, but requests for more information sent its way today were deflected to ICANN.
An ICANN spokesperson said that the outage is being analyzed right now, which will take a couple of days.
The problem affected the IBM-administered Trademark Database, which registrars query to determine whether they need to serve up a Claims notice when a customer tries to register a domain that matches a trademark.
I gather that registries are supposed to reject registration attempts if they cannot get a definitive answer from the TMDB, but some are concerned that that may not have been the case during the downtime.
Over 145,000 Claims notices have been sent to trademark owners since the TMCH came online over a year ago.
(UPDATE: This story was edited May 21 to clarify that it is the TMCH conducting the investigation, rather than ICANN.)

.porn now the biggest new gTLD sunrise

.porn and .adult have taken the crown of the most-subscribed new gTLD sunrise periods to date.
The two ICM Registry spaces opened up for registrations from users of the Trademark Clearinghouse on March 2.
A little over a week later, the company tells DI that both gTLDs have individually exceeded the previous sunrise record holder.
My understanding is that .london was the new gTLD with the most sunrise registrations, selling just over 800 names to TMCH customers during its combined sunrise/landrush, which ended last July.
ICM revealed in a webinar last week that it expected its new gTLDs to have to biggest sunrise numbers to date.
“Both .porn and .adult will have exceeded that [.london] number comfortably,” ICM president Stuart Lawley confirmed to DI today.
.adult is “almost neck and neck” with .porn, Lawley said.
The numbers are still pretty small compared to ICM’s 2003-round gTLD, .xxx, which had over 80,000 sunrise applications in October 2011.
They’re also pretty small compared to the TMCH’s overall number of registrations, which at the last public disclosure was a little under 35,000.
But ICM has another couple opportunities for trademark owners to defensively register that may work out cheaper.
First, from April 6 to April 30 companies that bought non-resolving “blocked” names in the .xxx Sunrise B will be able to block the same strings in .porn and .adult.
ICM says registrars are offering discounts for five-year blocks.
Then, from May 6 to May 31 the Domain Matching program starts. That’s open to any .xxx registrant, defensive or otherwise, but not to those with .xxx Sunrise B blocks.

NCC buys Open Registry for up to $22.6m — a gTLD registry now owns part of the TMCH

NCC Group has acquired registry back-end provider Open Registry in a deal that could be worth as much as £14.9 million ($22.6 million).
The deal means that NCC, which runs the new gTLD .trust via subsidiary Artemis Internet, now owns a back-end, a registrar and a piece of the Trademark Clearinghouse, in addition to its original core domain business of providing data escrow services to registries.
According to NCC, the acquisition is for a minimum of £7.9 million ($12 million), with the rest to be paid over three years if Open Registry meets performance targets.
Open Registry had revenue of €3.7 million ($4.3 million) in 2014, turning a profit of €15,000 ($17,300).
Its core business is as a back-end provider for new gTLD applicants. It has about 20 on its books, mostly European dot-brands and cities.
Part of the company’s business is CHIP, the Clearinghouse of Intellectual Property, which along with IBM and Deloitte runs the ICANN-sanctioned TMCH, which all new gTLD registries must use in their Sunrise and Trademark Claims launch periods.
It also owns a small registrar, Nexperteam, which has about 8,000 domains under management.
The Benelux company employs eight people.
Open Registry’s founding CEO Jean-Christophe Vignes joined Artemis as head of domain operations in 2013.

ICM will NOT offer free .porn names to .xxx buyers

ICM Registry has reneged on its promise to “grandfather” trademark owners and other .xxx registrants in its forthcoming .sex, .porn and .adult new gTLDs.
While the changes are sure to infuriate trademark owners and .xxx registrants, the company insists that ICANN is to blame for blocking its original plans.
Originally, ICM had promised to reserve every .sex, .porn and .adult domain that matched an existing .xxx domain — if you owned or had blocked example.xxx then example.porn and so on would be reserved.
There was not to be a charge for any of these reservations.
The current versions of ICM’s new gTLD applications are unequivocal — nobody who owns a .xxx name or bought a block will be charged for the equivalent .sex, .porn or .adult names or blocks.
On names “blocked” by trademark owners during the .xxx Sunrise B period, the applications state:

All existing blocked names under the .XXX Sunrise B program… will not need to take any action to have those same names blocked in the new gTLD. All of these matching names will be automatically reserved from registration in the new TLD, free of charge.

On names registered in general availability, the applications state:

all existing .XXX names will be reserved from registration in the new gTLD and only registrants of that .XXX name will be given the opportunity to initially register that corresponding .XXX name in the new gTLD. If the .XXX registrant elects to register the name in the new gTLD, this can be done for a low annual fee. If the .XXX registrant does not elect to register the name in the new gTLD, then the new, matching, gTLD name will be reserved on [ICM’s] registry-reserved list at NO cost.

While neither application has been amended yet, neither of these statements are any longer true, ICM has confirmed.
Instead, the company’s new Domain Matching Program anticipates an extra launch phase between Sunrise and general availability. Under ICANN rules, it’s a Limited Registration Period.
During this month-long phase, anyone who owns a .xxx domain or block will be able to purchase the matching new gTLD names, unless it has already been registered in the Sunrise period.
What does this all mean…
For regular .xxx registrants?
If you own a .xxx domain, you no longer get a free permanent reservation on the matching .porn, .sex and .adult names while you make up your mind whether to buy them.
Instead, you’ll have to buy it during the 30-day DMP window.
ICM’s fee for DMP and Sunrise will be the same as for general availability, ICM CEO Stuart Lawley told DI.
Also, if there’s a trademark in the Trademark Clearinghouse that matches your second-level string, that trademark’s owner will be able to register the matching names before you get a chance.
Remember, not all TMCH users are legitimate brands. Some are domain investors gaming the system.
For premium .xxx buyers?
The changes may also concern registrants of “premium” .xxx names, many of which may have assumed they’d get the matching .porn, .sex and .adult reservations free of charge.
Porn site operators Really Useful and Barron Innovations, which have spent millions apiece on premium .xxx names such as teen.xxx and sex.xxx, have both said in ICM press releases that the grandfathering program formed an important part of their decision-making.
“We look forward to enjoying the benefits of ICM’s unique Domain Matching Program, which gives .XXX holders an opportunity to secure matching .XXX domain names in .PORN, .ADULT and .SEX,” Barron spokesperson Shay Efron said when the $3 million sale of sex.xxx was announced.
“We will be speaking individually to each premium name holder who purchased premium names after we had announced the original grandfathering plan,” Lawley told us.
It seems that the premium string will be registry-reserved, however, so there’s no chance of them being snapped up during Sunrise.
For brands?
If you’re a brand who bought a .xxx block during the Sunrise B period back in 2011, you no longer get grandfathered into a free permanent reservation in .sex, .adult and .porn.
Instead, you’ll have to buy your names as usual either during Sunrise, DMP or — if you feel like taking a risk — general availability.
The problem is: you only qualify for Sunrise if you’re registered in the TMCH, and most Sunrise B buyers are not.
Something like 70,000 names were registered during the .xxx Sunrise B period three years ago, but there are only 33,000 marks registered in the TMCH today.
The owners of more than half of the Sunrise B blocks, who may have thought their blocks would carry over to ICM’s three new gTLDs free of charge, currently do not even have the right to buy their names in Sunrise.
If you have a .xxx Sunrise B block AND are in the TMCH, you may find yourself competing with other trademark owners with matching marks during the .porn, .adult and .sex Sunrise periods.
Any Sunrise B match not registered during the Sunrise and DMP phases will be up for grabs during GA, just the same as any other domain.
Lawley reminds us that the .xxx Sunrise B predated ICM’s new gTLD applications by many months — nobody bought a block in 2011 thinking it would be enforced in all four gTLDs.
He added that ICM has “recently secured a unique offer through the TMCH that will enable trademark owners to register with the TMCH for one year, at a reduced fee.”
Why did ICM make the changes?
The changes put the registry on a collision course with the Intellectual Property Constituency of ICANN, which looks out for the interests of trademark owners and is not a fan of porn-themed TLDs.
“The IPC is going to collectively shit a brick,” one IPC member told us.
But the IPC, which has been unshakable when it comes to the strict enforcement of ICANN’s mandatory new gTLD rights protection mechanisms, may have shot itself in the foot to an extent.
According to ICM, it’s ICANN’s fault, and indirectly the IPC’s, that it’s had to abandon free grandfathering.
In a statement sent to DI, the company said:

Throughout the ICANN approval process, ICM pursued multiple pathways to try and ensure its original “grandfathering plan”. However, due to technological concerns and strong trademark protection policies that ICANN’s intellectual property community requires in all new gTLDs, ICANN flatly rejected ICM’s grandfathering plan.

The mandatory new gTLD rights protection mechanisms enforced by ICANN means that no domain names may be set aside before trademark owners have had a crack at the Sunrise period, ICM said:

Those rights protections require that TMCH-validated Sunrise Holders get the first priority for names in any new gTLD and also contain certain prohibitions on all registries from earmarking domain names for third parties.

However, ICM has still managed to set aside an unknown number of names as part of its Premium Domains Program — those names will be immune from registration during both Sunrise and the DMP.
It’s also going to reserve, free of charge, a bunch of “culturally sensitive” names — these are strings that members of the ICANN Governmental Advisory Committee asked to be reserved in .xxx.
Names related to child abuse material will also be registry-reserved at no cost to the child protection agencies that requested the blocks when .xxx launched.
Plenty of stuff is getting reserved, just not Sunrise B blocks.
ICANN’s rules against “earmarking” domains may have prevented ICM offering matching domains to regular .xxx registrants, but it’s hard to see how that would prevent a .xxx block carrying over to .porn. Blocks are not assigned to a specific registrant; they belong to the registry.
The .adult and .porn gTLDs are set to start their 30-day Sunrise periods March 1, 2015. The 30-day DMP for both will begin April 15.
The .sex gTLD was contested, so it’s running a little behind. ICM expects to launch it later in 2015.