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New gTLDs Program – Defensive Applications and Registrations

  • To: "'newgtlds-defensive-applications@xxxxxxxxx'" <newgtlds-defensive-applications@xxxxxxxxx>
  • Subject: New gTLDs Program – Defensive Applications and Registrations
  • From: "Stabbe, Mitchell" <MStabbe@xxxxxxxxxxxxxxxxxx>
  • Date: Mon, 27 Feb 2012 18:39:10 +0000

The National Cable & Telecommunications Association (“NCTA”) appreciates the 
opportunity to submit the following comments on the need for defensive gTLD 
applications and registrations and on steps that could help alleviate the 
Introductory Statement
The National Cable and Telecommunications Association <http://www.ncta.com/> is 
the principal trade association representing the cable television industry in 
the United States.  Its members include cable operators serving more than 90% 
of the nation’s cable television subscribers, more than 200 cable program 
networks, and suppliers of equipment and providers of services to the cable 
NCTA’s program network members have invested literally billions of dollars to 
establish and promote some of the best-known and most trusted brands nationally 
and internationally in cable programming and broadband content.  Moreover, the 
cable operator members of NCTA are the nation’s largest providers of high-speed 
Internet access.  From 1996 to 2011, the cable industry invested over $185 
billion (and $12.8 billion in 2011 alone) to build out a two-way interactive 
network with fiber optic technology.
Numerous products resulting from the efforts and investments by members of the 
cable industry provide the means by which the new gTLDs will operate.  
Accordingly, NCTA’s members have a special expertise that enables them to 
appreciate many of the issues that would be presented by ICANN’s proposed New 
gTLD Program (the “Program”).  NCTA’s members also share the concerns of other 
trademark owners about the impact of the Program.
I.          Summary of Comments by NCTA
As a result of the New gTLD Program, many trademark owners find themselves in a 
quandary.  Consistent with their view that there was no need for a significant 
expansion of available top level domains and considering the costs that will be 
incurred in applying for a gTLD and operating a registry, they generally do not 
see the business justification for making an application.  Nevertheless, there 
are numerous scenarios where a third party might apply for a gTLD that is 
identical or similar to a valuable trademark.  In such an event, the use of 
that gTLD may adversely affect trademark owners’ trademark rights and damage 
the goodwill associated with their marks.  Moreover, it is quite possible that 
a new gTLD, which would not be considered confusingly similar to any of their 
marks, might block a subsequent application to register their mark as a gTLD.  
Thus, trademark owners are faced with the dilemma of risking damage to a 
valuable asset or filing a defensive application for a gTLD that they neither 
want or need.
There is no perfect solution that resolves this problem, but there are various 
options that would substantially addresses the concerns of trademark owners 
without harming the interests of other members of the Internet community.  One 
option is to establish a mechanism barring any application for a new gTLD that 
is identical or confusingly similar to one of a limited group of trademarks.  
Another option is to allow an applicant for a particular string to withdraw its 
application at the end of the Initial Evaluation Period and receive a refund of 
its application fee if no other applications have been filed for the same or a 
similar gTLD.  The latter proposal would have the added benefit of providing an 
answer to the question of whether there is a widespread need or desire for new 
II.        The Need for Defensive gTLD Applications and Registrations.
In its request for comments 
 ICANN said that various parties have stated their “perception” that they will 
need to file defensive gTLD applications in order to protect their trademarks.  
ICANN has asked for public comment on the sources of this “perception.”  NCTA 
believes that the reasons that trademark owners might need to take such steps 
is self-evident.
The numerous comments submitted to ICANN during the development of the new gTLD 
Applicant Guidebook showed that many, if not most, trademark owners 
consistently stated that they viewed any potential business benefit of an 
expansion of gTLDs to be far outweighed by the costs of policing their marks in 
these new electronic forums and by the potential for fraud.  Indeed, from the 
outset of the process, concerns about the need for defensive applications have 
been raised and discussed repeatedly, as reflected in ICANN’s summaries of the 
comments, including the following:

  *   “Many commenters emphasized that the new gTLD program will impose on them 
the necessity of expending resources to submit multiple defensive registrations 
to protect their trademarks, an especially negative cost impact given the 
global economic recession.”  New gTLD Draft Applicant Guidebook:  Analysis of 
Public Comment at 68 (Feb. 18, 2009) 
  *   “The immense cost and efforts that will be required to register gTLDs 
defensively and to defend existing IP rights against any new gTLD that 
infringes or harms those rights” calls for a reconsideration of the launch of 
new gTLDs.  New gTLD Draft Applicant Guidebook – Version 2:  Analysis of Public 
Comment at 37 (May 31, 2009) 
  *   “We are extremely disappointed that ICANN rejected the IRT’s proposal for 
a GPML.  It would protect consumers and significantly reduce defensive 
registrations.”  New gTLD Draft Applicant Guidebook Version 3 - Public Comments 
Summary and Analysis at 26 (May 15, 2010) 
  *   “We do not consider it possible to reconcile the conflict between 
territorial trademark rights and the global nature of the Internet.  It is for 
this reason among others that BBC has opposed and maintains its opposition to 
ICANN’s proposals.  ICANN needs to adopt a solution which genuinely lessens the 
need for defensive registrations and the administrative and financial burden on 
trademark owner.”  New gTLD Draft Applicant Guidebook Version 4 - Public 
Comments Summary and Analysis at 31 (Nov. 12, 2010) 
One reason that trademark owners may consider a defensive registration 
necessary relates to the function and role of trademarks.  Trademarks identify 
the source of goods and services to consumers.  The public benefits because 
they may rely on use of a trademark as an indication of quality.  Trademark 
owners benefit as well because trademarks serve as an indication of the 
reputation and goodwill that they have developed among consumers.
Significantly, however, trademark rights are territorial in nature.  The use or 
registration of a mark in one country generally neither creates nor protects 
any rights in the mark in other countries.  Consequently, under trademark law, 
the identical mark for the same goods or services can be used and owned in 
different countries by different entities.  There are a number of well-known 
examples of such marks.  For example, the SCRABBLE mark for board games is 
owned by one company in North America and by another in the rest of the world.  
In addition, the HEALTHY CHOICE trademark for frozen dinners is owned by 
different companies in the United States and Australia.  Undoubtedly, there are 
many more examples involving marks that are not well known.  Historically, 
however, there has been little, if any, potential for confusion or damage to 
one company’s mark and accompanying goodwill because of the geographic 
limitations on where trademark owners can use their marks.  The development of 
the Internet has altered that long-established protection.
Moreover, under trademark law, the identical mark can be used and owned by 
different companies within the same country for unrelated goods and services 
without confusion, even if one or both marks are well known or famous.  In the 
United States, examples include YALE for higher education services and YALE for 
locks, LIFE for cereal and LIFE for a board game, and DELTA for airline 
services, DELTA for dental services and DELTA for faucets.  These marks can 
co-exist because the differing goods or services offered under the mark are 
immediately apparent to consumers who will not assume that, for example, an 
airline is also in the business of manufacturing faucets.
If a company’s mark is registered as a gTLD by another owner of the same mark 
in another country, however, the use of that gTLD will not be limited 
geographically.  In addition, if a company’s mark is registered as a gTLD by 
another owner of the same mark in the same country, there is nothing intrinsic 
to the gTLD that will readily inform consumers whether the gTLD is associated 
with one brand or another.  In both situations, a trademark owner will be 
unable to police the use of its own mark in its own territory to avoid 
confusion, as it is required to do under trademark law.
Furthermore, even if a trademark owner can safely assume that there is no other 
entity using the same mark with the resources to apply for the corresponding 
gTLD, the manner in which ICANN will determine string similarity may 
nevertheless put the trademark owner at risk of being unable to register the 
corresponding gTLD in the future.  Two marks that differ only slightly, even by 
only one character, may nevertheless make wholly different commercial 
impressions.  In that situation, the owner of each mark can use it without 
infringing the rights of the other.
Nevertheless, the owner of a mark who plans to apply for the corresponding gTLD 
in the future has no assurance that the algorithm 
<https://icann.sword-group.com/icann-algorithm/Default.aspx> adopted by ICANN 
to evaluate string similarity will characterize a then-existing TLD as being 
sufficiently similar to raise it as a potential bar.  For example, the 
algorithm found similarity levels well above the 30% threshold for the 
following marks: NCTA and NCAA (71%), LEXIS and LEXUS (78%), CANON and CANNON 
(82%), ABC and BBC (91%), REDBOOK and REDHOOK (94%), and RICHMAN and RICH MAN 
(99%).  Although the ultimate issue of similarity will be decided by a String 
Similarity Panel, the expertise, reasoning and criteria of such panels is and 
will remain unknown until long after the Initial Evaluation Period closes.  
Clearly many trademark owners recognize that they run the risk of being blocked 
from obtaining a BRAND TLD due to another BRAND TLD even though, under 
trademark law, the two brands would not be considered confusingly similar.
There are undoubtedly many other examples of uncertainty and risk that a 
trademark owner may face that could lead it to apply for a gTLD that it would 
not otherwise want, seek or use.
III.       The Sufficiency of Existing Legal Rights Objections.
In its request for comments, ICANN suggested that a trademark owner who is 
concerned about an application for a BRAND TLD can file an Existing Legal 
Rights Objection 
  Such an objection must be based on the ground that “the string comprising the 
potential new gTLD infringes the existing legal rights of others that are 
recognized or enforceable under generally accepted and internationally 
recognized principles of law.”  Under the circumstances described above, 
however, it is extremely unlikely that a trademark owner would prevail on an 
Existing Legal Rights Objection because there would not be any infringement.  
Clearly, for many trademark owners, an Existing Legal Rights Objection will not 
offer an alternative to filing a defensive application for a new gTLD.  
Moreover, in order to avoid the needless expenditure of time, effort and 
expense, it would certainly be preferable to address the problem early in the 
application process, rather than after applicants have filed their applications 
and ICANN has completed its initial review.
IV.       Suggested Solutions.
One solution that would address a substantial number of the likely situations 
where a trademark owner might otherwise feel compelled to file a defensive 
application would be to remove a limited number of strings from consideration 
as a new gTLD.  Specifically, NCTA supports the adoption of a “white list” of 
strings that would not be available because they are identical to a mark on the 
list.  In addition, applied-for gTLD strings would be analyzed for confusing 
similarity to marks on this list, just as they will be compared to existing 
TLDs, reserved names and other gTLD or ccTLD strings that are under 
The adoption of some variation on this type of Rights Protection Mechanism 
(“RPM”) has been proposed by numerous commenters in response to the various 
versions of the New gTLD Applicant Handbook.  Notably, the adoption of a 
Globally Protected Marks List (“GPML”) was the first recommendation of the 
Implementation Recommendation Team 
 in response to ICANN’s 2009 request for recommendations for RPMs.  Although 
ICANN did not accept this recommendation, in Section of the current 
version of the New gTLD Applicant Handbook, ICANN has already approved a list 
of reserved names to block any applied-for gTLD string that appears on the 
list.  Accordingly, ICANN has implicitly recognized that it is appropriate to 
block some strings from being awarded based on their similarity to certain 
established names or marks.  Notably, one of the top-level reserved names is 
ICANN.  If ICANN is entitled to such protection, like consideration should be 
given to qualified trademark owners.
Administratively and conceptually, such a list would be much like the blocking 
procedure put in place for trademark owners during the Sunrise B period for 
.xxx domain names.  Unlike prior Sunrise Period procedures, owners of marks 
registered at the national level were not simply given the first option to 
register defensively a second level domain name that matched one of its marks.  
Rather, such owners could block others from registering such a domain so long 
as the current registry remains as the entity contracting with ICANN to operate 
the .xxx TLD.  Although the blocking option was not perfect, it demonstrated 
that there is a way to protect trademark owners from domains that match (or are 
confusingly similar to) their marks other than defensively registering such 
domains, simply to keep them out of the hands of others.
NCTA is mindful that there is likely to be some disagreement about what types 
of marks should be protected, e.g., any mark that is eligible for registration 
with the proposed Trademark Clearinghouse, any mark that is registered at the 
national level and is in use, only marks that are famous, or are famous 
internationally, or are globally protected, and the criteria for determining 
whether a particular mark qualifies for protection.  Nonetheless, this solution 
offers great promise and some time should be allowed to reach a consensus 
before the application period closes.
If ICANN is not willing to consider the adoption of some version of a blocking 
list, NCTA proposes the following alternative:  At the end of the Initial 
Evaluation period, if there is only one qualified application for a gTLD string 
or a similar gTLD string, that applicant should be allowed to withdraw its 
application and receive a refund of its filing fee.  Although a trademark owner 
that filed a gTLD application solely as a defensive measure will still have 
incurred substantial effort and expense, it would not need to continue to 
pursue a gTLD in which it simply has no interest.  At this stage, as ICANN will 
only have reviewed the application for completeness and the filing fee is 
intended to cover ICANN's costs 
<http://newgtlds.icann.org/en/applicants/customer-service/faqs/faqs-en> of 
reviewing an application, ICANN would not suffer any financial loss by 
refunding the filing fee.  Of course, if substantially all of the applicants 
do, in fact, seek to operate a gTLD registry, then very few, if any, 
applications would be withdrawn under this option.
NCTA and its members appreciate the opportunity to provide their comments to 
ICANN on the forces that may compel a trademark owner to file a defensive new 
gTLD application and, more importantly, to put forward solutions that will 
substantially address the problem and make the menu of Trademark Protection 
Mechanisms adopted by ICANN far more effective in meeting their goals while 
balancing the interests of the various affected constituencies.
Respectfully submitted,
/s/ Jill Luckett
Senior Vice President, Program Network Policy
National Cable & Telecommunications Association
25 Massachusetts Avenue, N.W.
Suite 100
Washington, D.C. 20001-1431
February 27, 2012
Mitchell H. Stabbe
Edwards Wildman Palmer LLP
1255-23rd Street, N.W., Eighth Floor
Washington, D.C.  20037
(202) 478-7378 (p)
(866) 320-9766 (f)

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