Clearing Up Clearinghouse Confusion

FairWinds Partners —  August 14, 2012

In a recent post, we talked about silver bullets – specifically, the belief that new gTLDs would be a magic cure to all search engine optimization quandaries. But after talking with multiple brand owners across a variety of industries, we’ve realized that there is another widely held misconception about a cure-all solution circulating around the business world. This time, it’s about the new gTLD Trademark Clearinghouse, or TMCH for short.

Many brand owners believe that if they register their trademarks in the TMCH, then ICANN will block the registration of all domain names containing those trademarks across all new gTLDs.

Oh, if life were that simple.

The TMCH, in reality, is just a central repository of trademark rights data. Trademark owners can pay $200 a pop to register trademarks in the TMCH and all new gTLD Registry Operators will be able to access this database for the various rights protection mechanisms they will incorporate when launching their gTLDs. Specifically, two mechanisms, the Trademark Claims service and the Sunrise service, make up the minimum rights protection requirements that a new gTLD registry must provide. Some Registry Operators have opted to incorporate stronger protections for trademark owners, while others will only provide these two. So what are these two services and how do they use the TMCH? We explain in more detail below.

Trademark Claims Service

What it Does:

The Trademark Claims service provides domain name registrants with a clear notice when they go to register a domain that is a match to a trademark registered in the TMCH (see a sample notice from the New gTLD Applicant Guidebook here). It also notifies the relevant gTLD Registry Operator that a registrant is attempting to register a domain that exactly matches a trademark in the TMCH.

Where the TMCH Comes In:

Registrants and registries are alerted when the registrant tries to register a domain that is an “Identical Match” to a trademark registered in the TMCH. Meaning if we registered the mark “FairWinds Partners,” we would only be alerted if a registrant tried to register FairWindsPartners.STRING, but not if a registrant tried to register FairWinds.STRING (variation) or FairWindPartners.STRING (typo).

Timeframe:

In each new gTLD, the Trademark Claims service is required to run for 60 days after general registration opens in that gTLD. Some Registry Operators may choose to run it for longer.

Does it Actually Block Infringing Domains from being Registered:

No. When a registrant is notified that he/she is attempting to register a domain that matches a TMCH-registered trademark, he/she must confirm that, to the best of his/her knowledge, the registration and use of that domain name will not infringe on the rights of the trademark holder as described in the notice. Theoretically, this allows businesses with the same name that operate in different verticals to coexist (think Apple Records and Apple computers). But it also opens the possibility that bad actors could proceed with an infringing registration by simply lying about his/her intention. In that case, trademark owners would have to turn to another means of enforcing their rights, such as the Uniform Rapid Suspension or a Dispute Resolution Procedure.

This definitely raises a larger question of whether, at the end of the day, it’s really possible to preempt cybersquatting: can the simple act of reminding a cybersquatter that he/she is about to infringe on a company’s trademark rights really stop the act from happening? Our prediction is that it may stop certain registrants from accidentally registering lesser-known trademarks (how many U.S. Internet users are familiar with P&G’s British “Daz” brand, for example), but ultimately, if cybersquatters are intent on squatting, then the Trademark Claims service will do little more than slow them down.

Some Outstanding Issues:

The Applicant Guidebook is not exactly crystal clear on the details of how the Trademark Claims service will work. One of the biggest areas of ambiguity is how the notice will be presented to registrants. This action is the responsibility of the front-end domain registrars, not the back-end registries. But at this point, ICANN has not laid out specific requirements for how the registrars should fulfill this requirement – perhaps that is because the most recent version of the Guidebook was published before ICANN had selected providers (IBM and Deloitte) to build out the TMCH.

Sunrise Service

What it Does:

Sunrise periods are nothing new to trademark owners, many of whom have gone through the process various times, most recently during the launches of .XXX and .CO. Once the Sunrise period opens, trademark owners can register domains containing exact matches of their trademarks before the general public have a chance to register domains. Essentially, the Sunrise service lets trademark owners get a head start on cybersquatters.

Where the TMCH Comes In:

Like with the Trademark Claims service, the TMCH is the central database for trademark information for the Sunrise service. With multiple new gTLDs potentially launching simultaneously or within rapid succession, the TMCH makes it much easier and faster for new gTLD registries to verify trademark information during Sunrise periods – and trademark owners do not have to go through the hassle of submitting the same trademark information to numerous Registry Operators.

Timeframe:

In each new gTLD, the Sunrise must be offered for 30 days before general registration opens in that gTLD. Some Registry Operators may choose to run it for longer.

Does it Actually Block Infringing Domains from being Registered:

Yes. The Sunrise service allows trademark owners to register domains before cybersquatters have the chance to. However, like with the Trademark Claims service, trademark owners can only grab domains that are an exact match to their registered trademarks during Sunrise – if they want to register variations, misspellings, or combinations of their trademarks and generic terms, they have to wait until the gTLD opens up to public registration and then attempt to beat cybersquatters in a foot race to the variations.

So the bottom line is, while the TMCH is definitely going to make the trademark protection process more efficient in many ways, in and of itself it does not actually do anything to protect owners’ trademark rights. Rather, it facilitates the protection of those marks through other mechanisms. But these mechanisms are only designed to function when the domain is an exact match to the trademark – even then, they do little to actively prevent a third party from registering the domain. For many brand owners, that may be plenty for certain gTLDs that are not critically relevant to their line of business.

But in other gTLDs, as we’ve learned from our years of experience helping brand owners protect their brands and trademarks in the domain name space, it will be necessary for brand owners to register additional domains, including variations, misspellings, or combinations of their trademarks and descriptive terms. In those instances, unless the individual gTLD Registry Operator decides to go above and beyond in the rights protection mechanisms it provides, the TMCH won’t be of much help. So while brand owners should absolutely register their trademarks in the TMCH, it is important that they realize the limitations of the TMCH and what they will need to do to fully protect their marks in new gTLDs.

If brand owners want to block their names from being registered, they will still need to proactively request that their registrars register or block each and every domain they want to take off the market during each Sunrise period. If a brand owner does not request to block a certain name, it will be available to third parties when that particular gTLD registry goes live. Why are we harping on this so much? Because we have heard many companies express very different understandings of the TMCH. And many of those incorrect understandings are informed by representatives of respected industry players. While it would be fantastic for rights holders if registering trademarks in the TMCH would automatically block them from being registered in all new gTLDs, that is definitely not the case.