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IRTP DRAFT REPORT - Demys' comments

  • To: <irtp-draft-report@xxxxxxxxx>
  • Subject: IRTP DRAFT REPORT - Demys' comments
  • From: "Andrew Lothian" <A.Lothian@xxxxxxxxx>
  • Date: Wed, 6 May 2009 17:04:29 +0100

Dear Sirs,

Please find attached Demys Limited's response to the IRTP draft report.
This has been submitted on 6 May 2009 with the express intention of
making it available to the IRT prior to the initial deadline.  

The response is provided in .pdf letter format and, for your
convenience, in plain text below.

Thank you for your assistance.

Kind regards

Andrew D S Lothian
Chief Executive

Demys Limited
Internet Intellectual Property Management
33 Melville Street
United Kingdom

Tel:    +44 (0) 131 226 0660
Fax:    +44 (0) 131 225 6408
Web:    http://www.demys.com
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DEMYS is a UK registered trade mark, nos. 
2235341 & 2240640

Demys Limited is a company registered in Scotland under number SC197176


Internet Corporation for Assigned Names and Numbers
4676 Admiralty Way, Suite 330
Marina del Rey,
CA 90292-6601

6 May, 2009

Dear Sirs

Comments on Implementation Recommendation Team Trademark Protection
Draft Report

Demys Limited thanks the Implementation Recommendation Team ("IRT"),
ICANN Board and Staff for the opportunity to comment on the Trademark
Protection Draft Report.  The following comments are based upon the
views of Demys Limited Internet Intellectual Property Managers, together
with the results of a poll of a cross section of our clients including
global brand owners, representatives of international celebrities and
nationally well known trade mark owners.

Extent of draft report

The draft report is extensive and wide ranging.  This is fitting given
that the ICANN proposal to introduce potentially hundreds of new generic
top level domains at one time is entirely unprecedented and its effect
upon intellectual property abuses cannot be fully quantified.
Furthermore, ICANN Staff indicated at the Cairo meeting in response to a
question in public forum that at that stage ICANN did not have a vision
for how the namespace would look after, or be shaped by, this important
development.  That comment could equally be applied as much to the
effect upon IP owners as on the namespace in general.  Furthermore,
based upon the abuses which followed the introduction of previous
generic top level domain names, for which a sunrise phase is an
incomplete solution (requiring as it does the registration of multiple
blocking domains on a per brand/trade mark basis) it is clear that the
risks to IP owners could be exponentially greater from the current

Demys considers that the IRT should be commended for what is an equally
unprecedented and very detailed draft response to the Board which
clearly provides a basis for the Internet intellectual property
community to discuss the issues arising with ICANN.  With due respect to
the IRT, however, we and our clients do consider that much further
debate and work is required on this topic if the protection for IP
owners is to be suitably 'front loaded' in the new gTLD process,
something which should be ICANN's goal if it intends to allocate large
numbers of new TLDs at one time.


The draft report was published on 24 April 2009 and is subject to public
comment for the usual 30 day period mandated by ICANN.  Accordingly, the
final date for comments is 24 May 2009.  However, the report itself
provides "...those wishing to have the IRT consider their comments in
connection with its final report should submit comments by 6 May, 2009."
In effect, this has provided the Internet IP community with around seven
working days to canvass their clients and to respond (Monday 4 May being
a public holiday in substantial parts of the UK and elsewhere).  While
responses are still invited until 24 May, it would be unfortunate indeed
if those later than 6 May cannot be scrutinised and commented upon by
members of the IRT who are eminently qualified to do so. 

The ICANN Board resolution from which the draft report follows is dated
6 March 2009.  The IRT has prepared the present draft in the intervening
period and it is to be finalised in time for discussion at the Sydney
ICANN meeting which is scheduled to take place between 21 and 26 June
2009. Demys' clients have a reasonable concern that, however anxious
ICANN and the Internet community may be to progress the introduction of
large numbers of new TLDs, an issue of this magnitude, namely how to
protect IP interests which may be at risk, should not be unduly rushed.

Trade mark law has enjoyed well over a century of development and
refinement.  In contrast, ICANN is anticipating a matter of months for
the development and refinement of Internet intellectual property
protections which have themselves been developed over the last three
months.  That said, Demys would not in any way wish to denigrate the
efforts of the IRT who, in their production of a detailed 50 page paper
in the period allowed, which evidently contains many interesting
thoughts and useful suggestions, have clearly risen to their part of the

The above comments were formulated prior to the publication yesterday of
the ICANN Staff document entitled "Timeline and Public Comment
Concerns".  That said, Demys continues to stand by the thrust of our
comments on timing as the IP component of the new gTLD process is such
an important issue that it inevitably merits extremely careful scrutiny
and should be allocated enough time to allow for this.

IP Clearinghouse

The novel idea of an IP clearinghouse is interesting.  However, there
are some flaws which are worthy of debate and further consideration.  

In the first place, the report indicates that the clearinghouse would
reduce the cost of sunrise registrations for trade mark owners because
registries and registrars will be able to pull the data from the
clearinghouse or it can be pushed to them.   While this is correct in
part, in that there would be a one-time validation fee rather than
multiple validations, Demys does not believe that the IP clearinghouse
would be effective in reducing sunrise registration costs to any
significant extent.  In the first place, the current proposal will still
require non-GPM owners to make vast numbers of defensive registrations
and there will be nothing to prevent registrars (other than ordinary
competition which has not so far achieved this) continuing to charge
premium prices for sunrise registrations.  

Secondly, it is worth bearing in mind that in the more recent sunrise
periods, where registrars have continued to charge premium prices, the
trade mark validation data has been directly provided by the intending
registrant, often in a strict template format, XML or similar.  This is
no different in technical terms from the data being provided to the
registrar by a clearinghouse.  As such it is difficult to see how this
innovation will reduce registrar charges for non-GPM owners.

In the past, IP owners have been content to pay sunrise registration
fees for defensive registrations in newly introduced TLDs where such
introduction has been staggered; in the present ICANN proposal there may
be hundreds coming on to the market at one time, with widely different
rights protection mechanisms and continued premium per domain prices.
Finally, the introduction of the clearinghouse will still require
registries or registrars to 'tool up' for its introduction whether by
way of pull or push technology.  It would be unfair for such bodies to
pass this cost on to the general registrant in that only IP rights
owners will be receiving the benefit and it is likely therefore that
this in itself will increase sunrise registration costs for at least the
first round of new gTLD introductions. In short, the clearinghouse is
only part of any solution to dealing with the cost issue.

IP Claims Service

The idea of a system which will provide notice to intending registrants
that their proposed domain name is a match for a right held within the
clearinghouse is a good one as far as it goes.  It should not be
restricted to those registries who are not otherwise providing for a
rights protection mechanism such as a sunrise period.  It should
continue to extend to all registrations in the new gTLDs for the
foreseeable future and certainly after initial launch.  However, the
notice currently seems to lack "teeth" in that it is a notice and
nothing more.  Under the current system, if a registrant wishes to
register an exact match of a distinctive mark in a domain name (where
that mark does not necessarily qualify for GPM status in the current
draft report but perhaps is nationally known in the intending
registrant's locality) the chances are that the intending registrant
already knows of the potential for infringement; this has not stopped
registrants in the past.  In particular, the "hard core" of abusive
registrants will simply ignore such notices in exactly the same way as
they ignore post-registration cease and desist letters.

Demys suggest that it might be possible to attach reasonable
consequences to a clearinghouse notice.    The notice should provide
that the registrant is still free to continue with the registration but
if they do so certain consequences will apply; full details of the
consequences should then be provided within the notice itself.  The
following are options which could be considered as consequences:-

1.      A letter in suitable electronic format, such as .pdf, lodged in
advance with the clearinghouse by the trade mark owner could be
automatically supplied to the intending registrant.  While this letter
would not take the form of a cease and desist notice, since there would
technically be no abuse at that stage (and it is only fair to presume
that the registrant is not necessarily contemplating any such abuse in
any case) it would allow the trade mark owner to provide a layman's
guide to the rights held by it.  Such a guide is routinely issued by one
of Demys' clients to the registrants of potentially infringing domains
and its clarity, tone and non-threatening informative nature have often
been praised by the recipients.

2.      A warning to the intending registrant that the notified trade
mark owner may be entitled to apply for a determination under the newly
proposed URS if the domain is registered or used in a way that provides
clear and convincing evidence of abuse (details of the summary nature of
the procedure and possible outcomes could also be advised).  This might
serve to place the issue of IP higher on the agenda of each potential
registrant than it is at present.  For example, it is fair to say that
while the UDRP has now been in force for a decade its incorporation in
the contract of registration and the consequences of transgression are
entirely unknown to the vast body of registrants; its provisions are
typically buried in a lengthy set of terms and conditions through which
an intending registrant merely clicks at high speed.

3.      The period of notice given to the respondent in a URS could be
reduced to seven days for those registrants who have already received
the clearinghouse notice, provided that the URS complaint is filed by a
rights holder who was the subject of the IP Claims notice at the point
of registration.

4.      An answer fee could be introduced which the registrant must pay
in any subsequent URS complaint provided that the complaint is filed by
a rights holder who was notified to the registrant at the point of
registration.  While the IRT have understandably been cautious to
introduce answer fees in the present draft it is submitted that these
are perfectly fair, whether for registrants who are individuals or small
business owners or otherwise, in cases where registrants have proceeded
with a registration in the face of the clear information as to trade
mark rights contained in the appropriate notice yet have gone on to use
the domain name in a manner which is unfairly detrimental to those

It is submitted that the above are fair, reasonable and proportionate
consequences given the stage in the registration process at which notice
would be given.  Care would need to be taken for any of the above
consequences that the notice provided did not contravene the so-called
"groundless threats" provisions of trade mark legislation which are in
force in many different jurisdictions.  That said, such compliance is a
requirement for the notice which the IRT currently proposes under the IP
Claims Service.

Demys does not endorse the suggestions of some commentators that ICANN
should not introduce a service which may be seen to be competing with
the providers of existing commercial watch services.  Demys agrees that
it may be reasonable to provide free access to the data to such service
providers under similar constraints to those applied by certain
registries to the provision of zone file data to the same parties.
However, if ICANN were to abandon the IRT's proposal to private sector
watching services ICANN would ultimately lose the excellent opportunity
to provide a strong notice and consequences scheme as outlined above
which benefits from centrality and from being directly linked into
registry and registrar systems.

Globally Protected Marks "GPMs"

It is submitted that the IRT has set the bar too high for GPMs.  In
attempting to provide a fully objective test for what constitutes a GPM
the IRT would exclude a considerable number of rights owners who would
consider themselves to have a body of rights which should entitle them
to the initial 'white listing' for domains in the second level which is
proposed for GPM owners.  The proprietor of 199 global trade marks will
be excluded.  The proprietor of 200 global trade marks which do not
cover all 5 ICANN regions will be excluded.  The proprietor of 299
global trade marks covering all 5 ICANN regions will be excluded where
another party owns a trade mark registration for the applied-for GPM.
Demys also endorses those comments which have noted the near
impossibility of meeting the threshold based upon the number of
sovereign states in the world and the fact that the current proposal
might require a rights holder to have two or more identical word marks
in several jurisdictions.

Demys suggest that the IRT may have adopted an overly prescriptive
approach in attempting to find a workable objective test.  Demys would
propose that a straightforward yet more challenging mechanism be
introduced whereby any trade mark owner could apply to validate their
rights in a name or term at a higher level than the basic IP
clearinghouse registration.  This application for  "higher protected
mark" status could then follow a process similar to the UDRP in that the
matter could be referred to an independent expert for a carefully
scrutinised, reasoned and public decision.  The fees for this
determination would naturally require to be greater as would the
requirements for evidence of use of the mark.  That said, a rights
holder currently facing the cost of thousands of sunrise registrations
and multiple IP clearinghouse applications would most probably be
prepared to meet a significant, if lower, cost in order to obtain
"higher protected mark" status.  

In awarding this status, it is suggested the expert should not be
restricted to addressing such arbitrary questions as a threshold of
numbers of global trade mark registrations in force.  The expert should
consider use and adopt an approach along the lines of "it's not the
number of marks but what the proprietor does with them that is
important".  While this is clearly a more subjective test and would
require further work to give prospective applicants greater certainty of
the outcome for an application, it is submitted that it is far fairer to
rights owners who have very extensive global rights but would currently
be excluded from GPM status.  Naturally the process could also include
an objections procedure for interested parties which could be invoked
for a period after grant of the status and it is submitted that this
would fit neatly with the processes currently being considered for the
application of the new gTLDs themselves.

It is clear that the IRT has considered and rejected the notion of
successful past enforcement action being a factor in the status of a GPM
(note 7, page 6 of the draft report).  It is strongly urged that this
should be reinstated as one of the criteria for consideration of our
suggested "higher protected mark" status.  The reason for this is very
straightforward.  There are some marks which are subject to greater
abuse online than others.  Such abuse does not necessarily correlate to
whether or not the mark itself matches the IRT's criteria for GPMs.  If
the intention is to prevent abuse, increase consumer confidence in
online brands and, broadly speaking, improve the general user experience
on the Internet then the extent of past abuse of a brand on the Internet
is highly relevant to the "higher protected mark" status.  That said,
Demys does not believe that the expert in our suggested "higher
protected mark" application process should be restricted to a
consideration of successful anti-cybersquatting actions; the extent of
abuse can be demonstrated in many ways of which this is just one.  That
said, should the IRT propose to maintain its current position on the
question of past abuses in its final report it is strongly recommended
that this issue be given greater treatment by way of reasoning than the
present footnote.

In the event that, as some commentators have noted, it becomes
impossible to agree objective or broader subjective criteria as noted
above for a higher protected mark, Demys suggests that the IP Claims
service notice could again be brought to bear on the issue.  Upon a
notice being triggered, and if the registrant proceeds with the
registration, the domain name could immediately be placed into
quarantine ie. removed from the available pool of domains but with a
neutral WHOIS status and a completely inactive delegation.  The
registrant could then discuss with the IP rights owner(s) whose rights
were disclosed by the notice the intended use of the domain name; in the
event that agreement cannot be reached as to whether this will or will
not be an infringing use the matter could be referred for expert
determination where both parties pay for a decision.  This approach
could not be regarded as prejudicing private individuals, sole traders,
small business owners and the like since they would have engaged in no
development of the domain name prior to an issue being disclosed.
Likewise, commentators have added that the focus on exact matches seems
too restrictive.  While Demys acknowledges that it might be difficult to
add effective typo-squatting or string comparison criteria, Demys would
endorse the proposal that this be done if it is technically possible.


Demys and its clients are broadly in agreement with these proposals and
in particular the default provisions.  As noted above, Demys believes
that it would be convenient to give the IP Claims Service some teeth
which could have reasonable consequences for URS cases subsequent to a
Claims Service notice.  Furthermore, it seems sensible to combine the IP
clearinghouse functions with those of the pre-registration for frequent
use of the URS - it should be an option for rights holders to make both
applications for their marks and for the URS pre-registration at the
same time.

As noted above, Demys does not believe it is necessarily unfair to ask
registrants to contribute to the cost of a URS proceeding provided that
this is proportionate.  It should be noted that many judicial systems
provide for filing fees for defence documents which a defendant or
respondent must meet and this is not generally regarded as unfair.
Should ICANN wish to radically improve fairness for registrants while
ensuring that IP complainants do not require to bear the whole cost of
proceedings it might be reasonable to consider applying a standard
charge for responding to a URS or indeed a UDRP proceeding (however
modest) while applying a proportion of the proceeds of such a charge to
a 'hardship fund' to which suitably qualified respondents could make
application for assistance in the preparation of their response (showing
probabilis causa as is expected in such cases).  

Securing a payment from the typical registrant would serve to
concentrate the mind of that party to the importance of the matter,
which in most cases would be highly beneficial; meanwhile, applying the
proceeds to a fund which would support registrants in certain cases
would serve to address some of the concerns regarding small businesses
and individual registrants suggested by the IRT.  Finally, it might be
feasible for ICANN to introduce a specific IP rights levy on
registrations in the new gTLDs of, say, 5 USD which could either
contribute to the hardship fund or be used to reduce the cost of the URS
for complainants who cannot reach the GPM standard with all the benefits
that this brings (on the current IRT proposal).

Finally, on the subject of the Answer fee, Demys notes that the IRT asks
for community comments on the level of domain names which would put an
answerer into the category whereby an Answer fee will be charged,
currently proposed at 10-25 domains.  As will be noted from the above
comments, Demys considers that it would be perfectly proper to apply a
charge across the board but with suitable safeguards as indicated.
However, if the IRT were to proceed with the current suggestion, Demys
believes that the threshold for an Answer fee should be set much lower,
for example, no more than 5 registrations.  That said, it should be
noted that a large number of UDRP cases do not involve multiple
registrations and the logic of applying this fee only to multiple domain
cases is unclear - the IRT state that the intention is to prevent
'gaming' of the URS process by registrants but it is not apparent as to
why gaming will only occur in the case of a registrant abusively
targeting a trade mark via multiple domains or why the registrants of
multiples should be specifically singled out at all.

In closing, may we repeat that we appreciate the opportunity to comment
and that we found the initial draft report to be an extremely useful and
carefully presented body of work.  While our clients' opinions have been
canvassed so far as time allowed, the opinions and proposals in this
letter should be treated as ours alone and should there be any errors or
lack of understanding the same applies.  In the latter case we would ask
for your indulgence and would point to the urgency of response required
in order to reach the IRT by the initial deadline.

Yours faithfully, 

Andrew DS Lothian
Chief Executive

Attachment: ICANN comments trade mark 06-05-2009.pdf
Description: Adobe PDF Document

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