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The Trademark Clearinghouse: Solution or Just Another Problem?

January 9, 2013 0 Comments

Internet lawMany people were watching the sky at the end of 2012 for hints of the possible implosion of the universe as forecast by the Mayan calendar. Meanwhile, closer to home, an entirely new kind of universe expansion was taking place:

ICANN (Internet Corporation for Assigned Names and Numbers), the organization that assigns and maintains IP addresses, began to accept applications for new, unrestricted generic top-level domains (gTLDs). Companies (and people) will soon be allowed to register virtually any URL suffix they could imagine, beyond the popular .com, .net, and .org., and ICANN is expecting the first batch of applicants to go live in 2013.

The Good News

Peter Thrush, chairman of ICANN’s board of directors, promised that the decision would “usher in a new internet age.” Indeed, with near-infinite possibilities, organizations have greater flexibility to utilize their brands online.

Foreign entities now also have greater opportunity to secure their own brands with the ability to register non-Latin character URLs. And, who knows, in a permanently cyber-connected near-future, and at $200,000 per pop, vanity URLs may become the new status symbol of sorts.

The Bad News

As I had warned in Business Insider, back in 2011, what this means for businesses is that it will no longer be enough to monitor potential infringement of BUSINESSNAME.com.

Now they would have to monitor potentially confusing uses of their trademarks on such URLs as BUSINESS.NAME, or BUSINESSNA.ME, etc… The potential for infringement (and losing customers to disingenuous competitors) could be limitless.

The Proposed Solution

ICANN has proposed a Trademark Clearinghouse as a solution to this trademark mess which would give trademark owners a grace period (technically called the “Sunshine Period”) during which to stake their claim in any newly established gTLD suffix.

Meaning, the company that owns BUSINESSNAME.com, let’s call it “Business, Inc.”, could stake its claim to the root URL BUSINESS in the newly minted gTLD .NAME.

But what happens if Business, Inc. fails to monitor the plethora of newly minted gTLDs such as .NAME, .AME, .ME, .E, etc., all of which could be used, with the right combination of root, to dilute its trademark? And what can Business, Inc. ultimately do with limited financial resources when the potential for infringing root-suffix URL combinations will one day be limitless?

The More Things Change…

At the end of the day, the Trademark Clearinghouse will be nothing more than a fad in which the largest and richest companies will partake in order not to seem to be the odd man out. This is because the vast majority of companies will not have the resources or the time to devote to the policing of their brands on an infinite number of gTLDs.

Moreover, it is fairly clear from the history of the internet, that modern users are sophisticated and are unlikely to be confused by a gTLD rather than a traditional .com suffix as the official site of any given company. As such, it is fairly likely that the vast majority of businesses will continue to monitor their trademarks on the popular, “formal”, existing suffixes such as .com, .net, and .org, and will not choose to nor need to waste their money on gTLDs governed by the proposed Clearinghouse rules.

And of course, in cases of trademark infringement, the traditional means of litigation will still be available to combat trademark infringement. And, while litigation would still be more expensive than making a few fillings under the Trademark Clearinghouse rules, it would nevertheless be more cost effective to police the two or three major top level domains via traditional means rather than making constant and virtually infinite fillings with ICANN to patrol the ever-expanding internet.

Question: Have you instructed your general counsel to monitor the Clearinghouse filings for potentially infringing marks? How big does your company need to get before this type of virtually limitless brand monitoring becomes worthwhile (read: cost-effective)?

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