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April 17, 2014

Internet Corporation for Assigned Names and Numbers (ICANN) Publishes Pricing for Trademark Clearinghouse

As ICANN moves toward its expansion of Internet top-level domains, trademark owners should consider strategies to protect their brands.

The Internet Corporation for Assigned Names and Numbers (ICANN) has announced the fee structure for the Trademark Clearinghouse, a centralized repository for authenticated information pertaining to the rights of trademark owners. The Trademark Clearinghouse will be established in connection with ICANN's new generic Top-Level Domain (gTLD) program.[1]

Role of the Trademark Clearinghouse

The Trademark Clearinghouse has not been created as a rights protection mechanism per se, but it will be integral to many of the mechanisms that ICANN has adopted to mitigate the risks that the new gTLD program may pose to trademark owners. For example, many expect that the introduction of 1,000 or more new gTLD extensions will give rise to increased cybersquatting, counterfeiting, and Internet fraud.

In particular, the Trademark Clearinghouse will facilitate the "Sunrise Period" for each new gTLD registry. Sunrise Periods are required under ICANN's program and will provide trademark owners with the first opportunity to register domains that correspond with their marks in each new gTLD. The Trademark Clearinghouse will validate all applications for domain registrations submitted during these Sunrise Periods. It appears that only trademarks recorded with the Trademark Clearinghouse may be eligible for early registrations during Sunrise Periods.

In addition, the Trademark Clearinghouse will be essential to the operation of ICANN's Trademark Claims Service, a notice system that each new gTLD registry must offer for at least 60 days after the mandatory Sunrise Period has expired and its registry is open for general registration. If someone registers a domain name that corresponds directly with a mark that has been recorded with the Trademark Clearinghouse, the Trademark Claims Service will provide automated notice to the applicable trademark owner and the registrant for the domain. The domain name registrant will also be required to represent that its registration and use of the requested domain name will not infringe the trademark owner's rights. The Trademark Claims Service will not block the registration of a potentially infringing domain name by an unauthorized party. Instead, it will notify the applicable trademark owner and the registrant of the potentially infringing domain name, so the trademark owner can consider taking action.

Recording Trademarks with the Trademark Clearinghouse

A trademark may be recorded with the Trademark Clearinghouse if it is registered, protected by statute or treaty, validated by a court or a judicial proceeding, or otherwise constitutes intellectual property in any jurisdiction. Trademarks that are the subject of pending applications or invalid or cancelled registrations may not be recorded. Further, only word marks and the textual elements of design marks may be recorded with the Trademark Clearinghouse, as only words may be reflected in a domain name.

The Trademark Clearinghouse will charge trademark owners $150 to record an eligible mark for one year. Multiyear recordation is also contemplated, with a charge of $435 per mark for three years and $725 per mark for five years. Although trademark owners may record their marks directly with the Trademark Clearinghouse, the Trademark Clearinghouse's payment procedures may impede individual action because credit card payments are limited to 10 trademarks per card and all other payment options require a $15,000 minimum deposit to the Trademark Clearinghouse. Accordingly, some trademark owners may wish to have agents record their marks with the Trademark Clearinghouse and, therefore, will likely be subject to additional fees.

Implications

It remains unclear when the Trademark Clearinghouse will begin accepting applications from trademark owners. ICANN is currently evaluating more than 1,900 new gTLD applications on a rolling basis and plans to announce the results of its review beginning in late March 2013, with an expectation that the first new gTLD registries will open for business before the end of 2013. Therefore, the Trademark Clearinghouse may commence operations within the next few months absent further delays.

With this current announcement, trademark owners should begin to strategize on how best to protect their portfolio of marks given the imminent introduction and exponential expansion of gTLDs. Trademark owners should also consider which of their marks they plan to record with the Trademark Clearinghouse to (1) facilitate the registration of corresponding domain names in one or more new gTLD extensions during the relevant Sunrise Periods and (2) take advantage of the benefits of the Trademark Claims Service. Similarly, trademark owners should review the list of applied-for new gTLD extensions and begin to consider the relevance of any of these new gTLDs to their businesses or for implementing defensive measures.[2]

These actions all involve increased costs for trademark owners. Although these costs still remain difficult to quantify with certainty, trademark owners are likely to experience increased costs in 2013 and beyond due to these upcoming developments.


[1]. For more information regarding ICANN's new gTLD program and the limited protections afforded to trademark owners by this program, view our September 9, 2011, LawFlash, "Decision Time: Trademarks and the New World of Domain Names," available here, and our June 13, 2012, LawFlash, "ICANN Publishes List of New gTLD Registry Applications," available here.

[2]. View the list of gTLD extensions here.

Copyright © 2014 by Morgan, Lewis & Bockius LLP. All Rights Reserved.

About the Author

Partner

Karen A. Butcher is a partner and a practice group leader in Morgan Lewis's Intellectual Property Practice. Ms. Butcher's practice focuses on business transactions and strategic counseling regarding brands and related intellectual property.

202-739-5526

About the Author

Partner

Ron N. Dreben is a partner in Morgan Lewis's Intellectual Property Practice.Mr. Dreben focuses on integrated brand advertising, sponsored entertainment, and technology, as well as all areas of trademark, copyright, trade secret, licensing, and related intellectual property law.

202.739.5213
Partner

Rochelle D. Alpert is a partner in Morgan Lewis's Intellectual Property Practice and a member of the Trademark Copyright Advertising Group. Ms. Alpert focuses her practice on trademark, copyright, advertising, rights of publicity, unfair competition, defamation and libel, and Internet and e-commerce issues. She regularly addresses these topics in a broad spectrum of industries, including online and traditional retailing, clothing and accessories, beverages, computer hardware, computer software, semiconductors, pharmaceuticals, telecommunication, and financial...

415-442-1326

About the Author

Associate

Dana S. Gross is an associate in Morgan Lewis's Intellectual Property Practice. His practice focuses on a variety of intellectual property matters, including trademark clearance and prosecution; trademark counseling and enforcement; and domain name acquisition, management, and protection. Mr. Gross also assists clients with the intellectual property aspects of corporate transactions and negotiating and drafting licenses, assignments, and other related documents. In addition, he has litigated trademark, unfair competition, and counterfeiting actions,...

202-739-5151

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