Re: [bc-gnso] FW: New ICA Post on the LRO

[Andy Abrams <abrams@xxxxxxxxxx>]

Thanks to Phil for forwarding us his article - it captures the LRO process
well.  For what it's worth, I'm another trademark attorney that agrees with
J. Scott that the system is actually working well, and brand owners
shouldn't expect to preemptively stop the use of a generic term for an open
TLD prior to any commercial activity.  However, an interesting side-issue
is whether the UDRP and URS panels will start to include TLDs as a factor
in determining cybersquatting at the second level (e.g., cross-dot
trademarks such as federal.express or you.tube).  And if so, perhaps
cross-dot trademarks should be included in Sunrise?

Andy


On Mon, Aug 5, 2013 at 8:08 AM, J. Scott Evans <jscottevans@xxxxxxxxx>wrote:

> Phil:
>
> The remedy provided is not more narrow than that provided under current
> national and international laws.  If trademark owners want an absolute
> monopoly on a term then, yes, they will have to file for a top level domain
> in round two.  Paul McGrady has been saying that the first come, first
> served method of distribution of top level domains by ICANN could lead to
> "permanent string preclusion" for those brands who have a dictionary term
> as a trademark.  He has been saying this since 2008.  Unfortunately, some
> brands don't listen.  Go figure!
>
> j. scott evans -  head of global brand, domains & copyright - Yahoo! Inc.
> - 408.349.1385 - jscottevans@xxxxxxxxx
>
>
>   ------------------------------
>  *From:* Phil Corwin <psc@xxxxxxxxxxx>
> *To:* J. Scott Evans <jscottevans@xxxxxxxxx>
> *Cc:* "bc-gnso@xxxxxxxxx" <bc-gnso@xxxxxxxxx>
>  *Sent:* Monday, August 5, 2013 7:58 AM
> *Subject:* RE: [bc-gnso] FW: New ICA Post on the LRO
>
>  Agree that it’s working as intended, but doubt that most perceived how
> narrow a remedy it would be.
>
> Main takeaway for TM owners is that if you want to control your generic
> brand or product at top level of the DNS you need to submit a defensive
> application in 2nd round.
>
> As for adding LRO to acronym list – well of course!
>
>  *Philip S. Corwin, Founding Principal*
> *Virtualaw LLC*
> *1155 F Street, NW*
> *Suite 1050*
> *Washington, DC 20004*
> *202-559-8597/Direct*
> *202-559-8750/Fax*
> *202-255-6172/cell***
> *  *
> *Twitter: @VlawDC*
>
> *"Luck is the residue of design" -- Branch Rickey*
>
>  *From:* J. Scott Evans [mailto:jscottevans@xxxxxxxxx]
> *Sent:* Sunday, August 04, 2013 11:41 PM
> *To:* Phil Corwin
> *Cc:* bc-gnso@xxxxxxxxx
> *Subject:* Re: [bc-gnso] FW: New ICA Post on the LRO
>
>  That's correct you don't, but the article seems to imply that the LRO
> sets too high a burden or is somehow flawed and, for this reason, trademark
> owners are getting the proverbial "shaft."  I think a LRO would work if a
> trademark owner could prove a likelihood of confusion or some actual harm.
>  I don't think you are sufficiently harmed just because someone plans to
> use the a generic term (that may also serve as someone's trademark) for
> non-infringing purposes.  I would argue to you the the LRO is working
> perfectly, much like the UDRP works perfectly when trademark owners that
> can meet the high burden win.
>
>  In sum, I think the system is working as it was intended.  I know these
> results are making some trademark owners unhappy, but trademark law is
> basically a consumer protection statute, so a complainant should have to
> show some consumer harm or confusion, not the angst of a marketing
> department that was asleep at the wheel since June 2008.
>
>  J. Scott
>
>  *j. scott evans -  head of global brand, domains & copyright - Yahoo!
> Inc. - 408.349.1385 - jscottevans@xxxxxxxxx*
>
>    ------------------------------
>  *From:* Phil Corwin <psc@xxxxxxxxxxx>
> *To:* J. Scott Evans <jscottevans@xxxxxxxxx>
> *Cc:* "bc-gnso@xxxxxxxxx" <bc-gnso@xxxxxxxxx>
> *Sent:* Sunday, August 4, 2013 8:14 PM
> *Subject:* Re: [bc-gnso] FW: New ICA Post on the LRO
>
>   I don't disagree, and never said they were.
>
> Philip S. Corwin, Founding Principal
>  Virtualaw LLC
>  1155 F Street, NW
>  Suite 1050
>  Washington, DC 20004
>  202-559-8597/Direct
>  202-559-8750/Fax
>  202-255-6172/Cell
>
>  Twitter: @VLawDC
>
>  "Luck is the residue of design" -- Branch Rickey
>
>  Sent from my iPad
>
> On Aug 4, 2013, at 10:51 PM, "J. Scott Evans" <jscottevans@xxxxxxxxx>
> wrote:
>
>    I am not so sure any of these cases were wrongly decided.
>
> Sent from Yahoo! Mail for iPhone
>
>   ------------------------------
>  *From: *Phil Corwin <psc@xxxxxxxxxxx>;
> *To: *bc-gnso@xxxxxxxxx <bc-gnso@xxxxxxxxx>;
> *Subject: *[bc-gnso] FW: New ICA Post on the LRO
> *Sent: *Sun, Aug 4, 2013 10:05:16 PM
>
>    FYI/BC members may find my latest opinion piece of some interest---
>
>  http://internetcommerce.org/LROlooksDOA
>
>  *LRO Looks DOA*
>  * *
>  The Legal Rights Objection (LRO) mechanism administered by the World
> Intellectual Property Organization (WIPO) on behalf of ICANN is starting to
> look like the reverse FISA Court of domain name system (DNS) rights
> protection mechanisms (RPMs) at the top level. In FISA Court, the
> government always wins – at WIPO, the LRO complainant always loses.
>  The FISA Court is of course the venue in which the U.S. government
> requests a surveillance warrant against a suspected foreign intelligence
> agent and is never denied (well, almost never – since the process started
> in 1979, 11 requests have been denied out of a total of 33,942  received
> through the end of 2012[1] <https://us-mg6.mail.yahoo.com/neo/#_ftn1>).
> FISA Court proceedings are secret and non-adversarial, with only government
> lawyers presenting arguments. In contrast, the decisions resulting from LRO
> proceedings are published, and both complainant and respondent have equal
> ability to present their arguments. Yet, as of Friday, August 2nd all 28
> of the decided LRO complaints, out of a total of 69 filed, resulted in
> losses for the complainants[2] <https://us-mg6.mail.yahoo.com/neo/#_ftn2>.
>
>  The lopsided results arouse suspicions that trademark interests may have
> been fighting the last war and too intensely focused on potential
> cybersquatting at the second level (a concern that we believe is overblown
> due to the low traffic prospects for many new gTLDs). They consequently
> sought and obtained the Trademark Clearinghouse (TMC), Uniform Rapid
> Suspension (URS) RPMs – and also proposed other second level remedies such
> as a Global Protected Marks List (GPML) that ICANN did not grant. Yet they
> may have failed to adequately consider whether top level protections were
> sufficient, and in particular whether the threshold standard for
> successfully prosecuting a LRO was unattainably high.
>  As Thomas O’Toole observed in an excellent analysis recently posted on
> Bloomberg BNA’s E-Commerce and Tech Law 
> Blog[3]<https://us-mg6.mail.yahoo.com/neo/#_ftn3>
> :
>  *[T]he only surprise the future might hold is the faint prospect that a
> WIPO panelist might actually rule in favor of a trademark owner…The biggest
> lesson so far has been that the Legal Rights Objection process is wholly
> ineffective for trademark owners seeking to knock down proposed domains
> containing generic strings. In many cases, companies owning marks for terms
> such as EXPRESS, HOME, VIP, LIMITED, MAIL, TUNES have lost LROs to domain
> applicants with no intellectual property rights in those terms whatsoever.
> Pinterest's failed challenge to Amazon's proposed .pin domain was
> particularly ominous for mark owners, because Amazon seems pretty clearly
> to be moving in on Pinterest's business…*
>  *The reason for this dour outlook can be found in passages from two
> early LRO rulings: the first one, Right at Home v. Johnson Shareholdings
> Inc., No. LRO2013-0300 (WIPO, July 3, 2013); and the second, my favorite,
> Express LLC v. Sea Sunset LLC, No. LRO2013-0022 (WIPO, July 9, 2013)…*
>  *In Right at Home, panelist Robert A. Badgley offered the first
> interpretation of key terms in Section 3.5 of ICANN's New gTLD Applicant
> Guidebook <http://newgtlds.icann.org/en/applicants/agb>. The guidebook
> uses highly qualified language, directing LRO panelists to decide whether
> the proposed new domain "takes unfair advantage" of the trademark owner's
> rights, or "unjustifiably impairs" the value of the mark, or creates an
> "impermissible likelihood of confusion" between the mark and the proposed
> domain.*
>  *In Badgley's view, this language creates a very high burden for
> trademark-based objections…Obviously, it is going to be very difficult for
> any trademark owner to demonstrate that a proposed domain is so fishy it
> satisfies the "something untoward ... if not to the level of bad faith"
> standard…*
>  *The second opinion, Express LLC v. Sea Sunset LLC, was one of the
> better opinions (and I am including the federal court stuff that we wade
> through every day) I have read in a while. Panelist Frederick M. Abbott
> carefully summarized the arguments on each side (there are good lessons
> here for attorneys working on the next round of legal rights objections),
> and the law that he was required to apply to the dispute. When Abbott
> turned to the reasoning behind his decision to reject Express LCC's
> objection to the proposed .express top-level domain, I got that sense that
> this panelist was a teeny bit irked that ICANN itself had not made the hard
> policy choices that the LRO had just dropped in his lap. It's one thing to
> ask a panelist to transfer a domain name that might have cost the
> registrant $10 or so; and it's quite another to ask a panelist to upset an
> investment of at least a half-million dollars in a new top-level domain.
> All based on a trademark registration for a generic term, in a single
> market, issued by a single government entity. Abbott declined to do it…*
>  *These two opinions, taken together, look like a terminal diagnosis for
> trademark owners with rights in generic terms. Right at Home creates a very
> permissive standard for what constitutes "unfair advantage" by a domain
> applicant. Express LLC states, almost categorically, that it is "not
> reasonable" to allow a trademark owner for a generic term to prevent that
> term from being used as a top-level domain.*
>  O’Toole goes on to speculate that a trademark owner like Express LLC
> will have equally poor chances of success if it attempts to block others’
> use of such hypothetical second level domains as clothing.express,
> fashion.express, or shoes.express using the traditional UDRP or the new TMC
> and URS RPMs -- because all of them focus on the domain name to the left of
> the dot and pay no heed to the gTLD to the right – and because Express
> holds no trademark rights in those hypothetical generic terms on the left
> side. We largely agree with his analysis, and suspect that this could be
> the next big trademark protection issue looming on ICANN’s horizon as
> brands complain about the necessity and cost of registering relevant
> domains at a gTLD that matches one of its trademarks but is operated by a
> third party (and, by the way, it’s not clear that a brand like Express
> would have any special “sunrise” registration priority for potential second
> level domains along the lines of O’Toole’s speculation). Other questions
> arise, such as whether Federal Express should have priority rights to, or a
> potential infringement claim against, federal.express.
>  Of course, no one was reckless enough to pay a $185,000 gTLD application
> fee, plus multiple related legal, consulting, and technical costs, to try
> to “squat’ at the top level on a unique trademark like Google or Microsoft.
> But when it comes to a dictionary word like Express, unless the applicant
> was so clueless as to propose its use solely for fashionable clothing, the
> LRO is essentially useless – and that may be the correct result. Indeed,
> short of halting the program, it’s not really clear how one can have a
> generic word TLD program without allowing the addition of top level domains
> that are identical to someone’s trademark for something; and that alone is
> not sufficient to prove trademark infringement.
>  Domain industry observers such as Andrew Allemann have opined that “The
> LRO is working just fine, thank 
> you”[4]<https://us-mg6.mail.yahoo.com/neo/#_ftn4>,
> weighing in with this analysis:
>  *The LRO was created to assuage fears that someone would cybersquat on a
> top level domain…Objections were filed against .VIP, .mail, and .home. Now,
> you tell me: when you hear these terms, what brand do you think is being
> cybersquatted?*
>  *Many of the objections were filed by competing applicants that engaged
> in trademark frontrunning by obtaining dubious trademarks for the string.
> Others, such as the United States Postal Service’s objection to .mail, were
> based on stretched interpretations of a trademark (and that’s being
> generous).*
>  Another industry analyst, Kevin Murphy, has just declared that he will
> no longer report automatically on forthcoming WIPO decisions in LRO cases,
> stating[5] <https://us-mg6.mail.yahoo.com/neo/#_ftn5>:
>  *The Legal Rights Objection has, I think, said pretty much everything
> it’s going to say in this new gTLD application round. I’m feeling pretty
> confident we can predict that all outstanding LROs will fail.*
>  *This prediction is based largely on the fact that the 69 LROs filed in
> this round all pretty much fall into three categories.*
>  ·         *Front-running.** These are the cases where the objector is an
> applicant that secured a trademark on its chosen gTLD string, usually with
> the dot, just in order to game the LRO process…*
>  ·         *Brand v Brand.** The objector may or may not be an applicant
> too, but both it and the respondent both own legit trademarks on the string
> in question. WIPO’s LRO panelists have made it clear, most recently
> yesterday in Merck v Merck 
> (pdf<http://www.wipo.int/export/sites/www/amc/en/domains/lro/docs/lro2013-0068.pdf>)
> and Merck v Merck 
> (pdf<http://www.wipo.int/export/sites/www/amc/en/domains/lro/docs/lro2013-0069.pdf>),
> that having a famous brand does not give you the right to block somebody
> else from owning a matching famous brand as a gTLD.*
>  ·         *Generic trademarks.** Cases where an owner of a legit brand
> that matches a dictionary word files an objection against an applicant for
> the same string that proposes to use it in its generic sense. See Express
> v 
> Donuts<http://domainincite.com/13691-donuts-beats-dot-brand-in-fight-over-express-gtld>,
> for example. Panelists have found that unless there’s some nefarious intent
> by the applicant, the mandatory second-level rights protection mechanisms
> new gTLD registries must abide by are sufficient to protect trademark
> rights.*
>   *In short, the LRO may be one of many deterrents to top-level
> cybersquatting, but has proven itself an essentially useless cash sink if
> you want to prevent the use of a trademark at the top level.*
>   *The impact of this, I believe, will be to give new gTLD consultants
> another excellent reason to push defensive gTLD applications on big brands
> in future new gTLD rounds.*
>  * *
>  We largely agree with Murphy’s analysis. There may well be a few cases
> in the remaining objections to be adjudicated by WIPO in which the
> complainant prevails. But we suspect that they will be such unique outliers
> that they will actually reinforce what an exceedingly narrow remedy the LRO
> has turned out to be. That limited utility has already led one disgruntled
> complainant/competing applicant to declare, *“Seems the entire WIPO LRO
> process was set-up to fail by ICANN with the guidelines they gave the
> Panelists.”[6] <https://us-mg6.mail.yahoo.com/neo/#_ftn6>*
>  And, as Murphy observes, filing a LRO with WIPO is not inexpensive.
> Total filing fees for a single objection to a single new gTLD application
> can range from $10,000 for a single-expert panel, and up to $23,000 for a
> 3-expert panel[7] <https://us-mg6.mail.yahoo.com/neo/#_ftn7>. On top of
> the fees there are of course legal costs for the attorney preparing the
> complaint and related expenses for amassing documentation. If the LRO
> continues to be a preordained shutout for complainants then it is unlikely
> that it will be used very much at all in the second round of gTLD
> applications unless significant – and undoubtedly controversial – changes
> are made in the adjudication standard to give complainants a higher
> probability of prevailing.
>  As for the other objection procedure available to third parties, the
> Community Objection[8] <https://us-mg6.mail.yahoo.com/neo/#_ftn8>administered 
> by the International
> Centre for Expertise of the ICC (International Chamber of Commerce), no
> judgment can yet be rendered on its efficacy because the Center has yet to
> issue a single decision on the dozens of 
> cases[9]<https://us-mg6.mail.yahoo.com/neo/#_ftn9>filed with it. However, 
> with standing limited to established institutions
> associated within a clearly defined community objectors first have to
> surmount that procedural hurdle, and then make the string substantive  case
> that there is substantial opposition to the gTLD application from a
> significant portion of the community to which the gTLD string may be
> explicitly or implicitly targeted. Additionally, complaints were voiced at
> the recent Public Forum in Durban that ICC 
> fees[10]<https://us-mg6.mail.yahoo.com/neo/#_ftn10>, which begin at 17,000 
> Euro but can quickly mount given the 450 Euro
> hourly rate for expert arbitrators, are not affordable for many community
> organizations.
>  Summing up, the LRO may well have been an effective deterrent against
> applications for unique trademarked terms but has so far been useless in
> regard to applications for generic word trademarks, regardless of the
> trademark’s strength and legitimacy. Its lack of general applicability also
> seems to be setting up a series of second level domain disputes that may
> well be outside the existing scope of the UDRP, URS, TMC, or other
> available rights protection and prioritization mechanisms. All of this may
> lead to further debate within ICANN on the appropriate scope of trademark
> rights protections– as well as litigation being filed by unsuccessful
> complainants who refuse to take WIPO’s decision as the final judgment on
> their claims.
>  The clear lesson to brand owners of generic word trademarks is this: If
> and when the second round of new gTLD applications commences, if you wish
> to own your trademark at the top level of the DNS (or at least stop others
> from owning it) you had better open your wallet and apply for it. That
> compulsion toward unwanted defensive registrations is almost sure to
> generate further controversy amid charges that ICANN has developed a Midas
> Touch-like mechanism for generating perpetual revenues for application and
> use fees for the protection of dictionary words.
>  Of course, the inflow of defensive applications for generic word
> trademarks could be a mere trickle compared to the potential surge of
> defensive and offensive applications for non-trademarked generic words if
> ICANN ultimately spurs the Governmental Advisory Committee (GAC) advice to
> prohibit “closed generic” gTLDs unless they satisfy a high public interest
> standard. In that scenario, every company of any heft will have to
> seriously consider gTLD applications for the major language words
> describing its key activities and products, lest a competitor do so first
> and lock them away. But that’s an issue falling outside any trademark
> protection debate and a discussion for another day.
>  [1]http://en.wikipedia.org/wiki/FISA_Court
>  [2]http://www.wipo.int/amc/en/domains/lro/cases/
>  [3]http://www.bna.com/icann-legal-rights-b17179875369/
>  [4]
> http://domainnamewire.com/2013/08/01/the-lro-is-working-just-fine-thank-you/
>  [5]http://domainincite.com/13949-thats-all-folks-no-more-lro-news
>  [6]
> http://www.thedomains.com/2013/07/31/constantinos-roussos-of-dotmusic-limited-the-entire-wipo-lro-process-was-set-up-to-fail-by-icann/
>  [7]http://www.wipo.int/amc/en/domains/lro/fees/
>  [8]
> http://www.iccwbo.org/products-and-services/arbitration-and-adr/expertise/introduction-to-icann-new-gtld-dispute-resolution/
>  [9]http://www.iccwbo.org/WorkArea/DownloadAsset.aspx?id=19327354883
>  [10]
> http://www.iccwbo.org/products-and-services/arbitration-and-adr/expertise/icann-new-gtld-dispute-resolution/costs-and-payments/
>
>
>  *Philip S. Corwin, Founding Principal*
>  *Virtualaw LLC*
>  *1155 F Street, NW*
>  *Suite 1050*
>  *Washington, DC 20004*
>  *202-559-8597/Direct*
>  *202-559-8750/Fax*
>  *202-255-6172/cell*
>  * *
>  *Twitter: @VlawDC*
>
>  *"Luck is the residue of design" -- Branch Rickey*
>
>
>    ------------------------------
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>  ------------------------------
>   [1] <https://us-mg6.mail.yahoo.com/neo/#_ftnref1>
> http://en.wikipedia.org/wiki/FISA_Court
>   [2] <https://us-mg6.mail.yahoo.com/neo/#_ftnref2>
> http://www.wipo.int/amc/en/domains/lro/cases/
>   [3] <https://us-mg6.mail.yahoo.com/neo/#_ftnref3>
> http://www.bna.com/icann-legal-rights-b17179875369/
>   [4] <https://us-mg6.mail.yahoo.com/neo/#_ftnref4>
> http://domainnamewire.com/2013/08/01/the-lro-is-working-just-fine-thank-you/
>   [5] <https://us-mg6.mail.yahoo.com/neo/#_ftnref5>
> http://domainincite.com/13949-thats-all-folks-no-more-lro-news
>   [6] <https://us-mg6.mail.yahoo.com/neo/#_ftnref6>
> http://www.thedomains.com/2013/07/31/constantinos-roussos-of-dotmusic-limited-the-entire-wipo-lro-process-was-set-up-to-fail-by-icann/
>   [7] <https://us-mg6.mail.yahoo.com/neo/#_ftnref7>
> http://www.wipo.int/amc/en/domains/lro/fees/
>   [8] <https://us-mg6.mail.yahoo.com/neo/#_ftnref8>
> http://www.iccwbo.org/products-and-services/arbitration-and-adr/expertise/introduction-to-icann-new-gtld-dispute-resolution/
>   [9] <https://us-mg6.mail.yahoo.com/neo/#_ftnref9>
> http://www.iccwbo.org/WorkArea/DownloadAsset.aspx?id=19327354883
>   [10] <https://us-mg6.mail.yahoo.com/neo/#_ftnref10>
> http://www.iccwbo.org/products-and-services/arbitration-and-adr/expertise/icann-new-gtld-dispute-resolution/costs-and-payments/
>
>
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> Checked by AVG - www.avg.com
> Version: 2013.0.3392 / Virus Database: 3209/6545 - Release Date: 08/02/13
>
>
>


-- 
Andy Abrams | Trademark Counsel
*Google* | 1600 Amphitheatre Parkway, Mountain View, CA 94043
(650) 669-8752 <https://www.google.com/voice#phones>