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Businesses may call for more new gTLD trademark protections

Kevin Murphy, December 31, 2011, Domain Policy

It’s open season on ICANN at the moment, and as the number of letters opposing the new gTLD program flittering between Washington DC and Marina del Rey becomes confusingly voluminous many groups think they’ve found another opportunity to demand last-minute changes.

ICANN’s Business Constituency is now considering making several recommendations for “critical improvements” to protect trademark holders in the new gTLD universe.

While the recommendations are still under discussion, they could include adding the option to transfer a domain name to a brand owner after a successful Uniform Rapid Suspension complaint.

This would prove unpopular among domain investors and others as it would increase the likelihood of the untested URS being used as a replacement for the already controversial UDRP, potentially increasing the risk of reverse domain name hijacking.

The BC is also discussing whether to ask for a “permanent registry block” feature to be added the forthcoming Trademark Clearinghouse, enabling brand owners to block their trademarks from all new gTLDs for a one-time fee in much the same way as ICM Registry enabled in the .xxx sunrise.

The Coalition Against Domain Name Abuse made a similar request to ICANN last week.

The idea is unlikely to find favor because it would essentially grant trademark owners exclusivity over strings, a right not usually given to them by trademark law.

Other BC discussion topics include making the Trademark Clearinghouse permanent (instead of just running for the first 60 days of each new gTLD) and putting a firm date on the opening of the second-round application window, a popular request from brand owners.

Much like 13th-hour requests originating in the At-Large Advisory Committee, the BC’s position is likely to be substantially revised before it is submitted to ICANN officially.

While ICANN chairman Steve Crocker told .nxt this week that there are no plans to delay or rate-limit the new gTLD program, it’s less clear whether the Applicant Guidebook is still open for the kinds of substantial amendments now being discussed by the business community.

But my hunch is that, regardless of the political pressure being brought to bear on ICANN in the US, the new gTLD program is going to launch on January 12 in more or less its current form.

UDRP reform put on hold for four years

Kevin Murphy, December 20, 2011, Domain Policy

ICANN’s cybersquatting rules, including the Uniform Dispute Resolution Policy, will be reviewed and possibly reformed, but probably not until 2016 at the earliest.

The Generic Names Supporting Organization Council voted last Thursday to put the start of UDRP reform on hold until 18 months after the first new top-level domains go live.

The review will also take into account other cybersquatting policies including Uniform Rapid Suspension, which will be binding on all new gTLD registries but has yet to be be tested.

This is the relevant part of the resolution:

the GNSO Council requests a new Issue Report on the current state of all rights protection mechanisms implemented for both existing and new gTLDs, including but not limited to, the UDRP and URS, should be delivered to the GNSO Council by no later than eighteen (18) months following the delegation of the first new gTLD.

An Issue Report is compiled by ICANN staff and often leads to a Policy Development Process that creates policies binding on registries, registrars and ultimately registrants.

Because the first new gTLDs are not expected to be delegated until the first quarter of 2013 at the earliest, the Issue Report would not be delivered until half way through 2014.

After ICANN public comment and analysis, the GNSO Council would be unlikely to kick off a PDP until the first half of 2015. The PDP itself could take months or years to complete.

In short, if UDRP is going to be reformed, we’re unlikely to see the results until 2016.

The Council resolution, which was in line with Governmental Advisory Committee advice, was proposed by the registries, following many months of ICANN public outreach and discussion.

Non-commercial users in the GNSO were most strongly in favor of an accelerated timetable, but a request to reduce the 18-month breather to a year failed to find support.

The Intellectual Property Constituency had proposed an amendment that would have kicked off the process after 100 UDRP and 100 URS cases had been heard in new gTLDs, rather than after a specified time, but the motion was defeated.

Will URS really be as cheap as ICANN says?

Kevin Murphy, September 29, 2011, Domain Policy

I’m having a hard time believing that trademark holders will be able to enforce their rights in new top-level domains for just $300.

The Uniform Rapid Suspension policy (pdf) is one of the new systems ICANN is putting in place to deter cybersquatters from abusing trademarks in new gTLDs.

It’s very similar to the existing UDRP, but it’s quicker and it only deals with the suspension – not transfer – of infringing domain names.

No URS arbitration provider has yet been appointed, but ICANN’s Applicant Guidebook, which spells out the policy, currently estimates a price of $300 per single-domain filing.

At least twice during the newdomains.org conference in Munich this week I heard ICANN representatives quote a price between $300 and $500.

I’m wondering how realistic this is.

Typically, domain arbitration fees are split between the provider, which receives a third, and the panelist, who receives the remaining two thirds.

With a $300 fee, that’s $100 to the provider and $200 to the sole panelist – who must be an experienced trademark lawyer or similar – compared to a $500/$1,000 split with the UDRP.

My question is: how many trademark lawyers will get out of bed for $200?

The URS gives panelists between three and five days to come up with a decision, but I’m guessing that you’d be lucky, for $200, to buy three to five hours of a panelist’s time.

Even I charge more than $200 for half a day’s work.

The Rapid Evaluation Service recently introduced by ICM Registry, which serves essentially the same purpose as URS but for the .xxx gTLD, costs $1,300 in National Arbitration Forum fees.

Like URS, the RES is designed for a speedy turnaround – just three days for a preliminary evaluation – of clear-cut cybersquatting cases.

Like URS, complaints submitted using RES have a tight word-count limit, to minimize the amount of work panelists have to do.

With that in mind, it seems to me that a $300 fee for URS may be unrealistic. Even the $500 upper-end ICANN estimate may be optimistic.

It will be interesting to see if ICANN’s negotiating clout with likely URS providers is better than ICM’s and, more importantly, to see whether $200 is enough to buy consistent, reliable decisions from panelists.

Don’t rush to defensively register .xxx domains

Trademark owners trying to figure out how to protect their brands in the .xxx top-level domain should wait for ICM Registry to reveal its full suite of anti-cybersquatting measures before deciding whether to defensively register a large portfolio of domains.

With registrar prices for sunrise trademark blocks currently hovering around the $300 mark, an especially aggressive enforcement strategy could rack up six-figure bills for large brand holders.

But it may turn out to be more cost-effective to use ICM’s post-launch enforcement mechanisms to fight cybersquatting.

So far, all we’ve seen from ICM is a white paper, prepared by its partner IPRota, that outlines the policies that will be in place during the pre-launch sunrise period.

But the company plans to have some of the most Draconian post-launch IP rights protections mechanisms of any new TLD to date.

If, as a registrant, you think the Uniform Rapid Suspension policy ICANN plans to enforce on new TLDs is tough, you’ll likely have a bigger problem with Rapid Takedown.

Rapid Takedown is expected to be modeled on the Digital Millennium Copyright Act. It will use UDRP experts, but will only take 48 hours to suspend a domain name. ICM has described it like this:

Rapid Takedown
Analysis of UDRP disputes indicates that the majority of UDRP cases involve obvious variants of well-known trademarks. ICM Registry does not believe that the clearest cases of abusive domain registration require the expense and time involved in traditional UDRP filings. Accordingly, ICM Registry will institute a rapid takedown procedure in which a response team of independent experts (qualified UDRP panelists) will be retained to make determinations within 48 hours of receipt of a short and simple statement of a claim involving a well-known or otherwise inherently distinctive mark and a domain name for which no conceivable good faith basis exists. Such determinations will result in an immediate termination of resolution of the domain name, but will not prejudice either party’s election to pursue another dispute mechanism. The claim requirements will be modeled after the Digital Millennium Copyright Act.

It remains to be seen how much this will cost complainants (assuming there is a cost), and there are other unanswered questions such as the duration of the suspension, the ability of the complaint to have the domain transferred and the registrant’s right of appeal.

But it’s clear that trademark holders will very likely have cheaper options than UDRP, which can cost as much as $1,500 for a single domain name.

In addition, ICM plans to permanently ban cybersquatters that are “found to have repeatedly engaged in abusive registration”. Abusers will lose their .xxx portfolios, even their non-infringing domains, and will not be able to register any more.

Combined with Rapid Takedown, and the high price of .xxx domains ($75 a year minimum so far), this will likely make cybersquatting a much less attractive proposition in .xxx than .com.

Trademark holders should wait for their full range of options to be revealed before panicking about high sunrise fees.

It may turn out to be more cost-effective to block just a few primary brands, and leave enforcement of other brands to post-launch mechanisms.

Lego launches attack on new TLDs

Could little yellow plastic men be the death of the new top-level domain process?

Toymaker Lego has filed a scathing criticism of ICANN’s latest Draft Applicant Guidebook for prospective new TLD registries, saying it ignores trademark holders.

Lego, one of the most prolific enforcers of trademarks via the UDRP, said that the latest DAG “has not yet resolved the overarching trademark issue”.

DAG v4 contains new protections designed to make it easier for trademark holders to defend their rights in new TLD namespaces. But Lego reckons these protections are useless.

The Trademark Clearinghouse is NOT a rights protection mechanism but just a database. Such a database does not solve the overarching trademark issues that were intended to be addressed.

Lego also says that the Uniform Rapid Suspension service outlined in DAG v4 is much weaker than it wanted.

“It doesn’t seem to be more rapid or cheaper than the ordinary UDRP,” Lego’s deputy general counsel Peter Kjaer wrote.

Lego thinks that a Globally Protected Marks List, which was at one time under consideration for inclusion in the DAG, would be the best mechanism to protect trademarks.

ICANN still seems to ignore that cybersquatting and all kinds of fraud on the internet is increasing in number and DAG 4 contains nothing that shows trademark owners that ICANN has taken our concerns seriously.

The comment, which is repeated verbatim in a letter from Arla Foods also filed today, is the strongest language yet from the IP lobby in the DAG v4 comment period.

Rumblings at the ICANN meeting Brussels two weeks ago, and earlier, suggest that some companies may consider filing lawsuits to delay the new TLD process, if they don’t get what they want in the final Applicant Guidebook.

ICANN’s top brass, meanwhile, are hopeful of resolving the trademark issues soon, and getting the guidebook close to completion, if not complete, by the Cartagena meeting in December.