New gTLDs Program – Defensive Applications and Registrations
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 problem. 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 industry. 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 gTLDs. II. The Need for Defensive gTLD Applications and Registrations. In its request for comments <http://www.icann.org/en/public-comment/newgtlds-defensive-applications-06feb12-en.htm>, 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) (<http://www.icann.org/en/topics/new-gtlds/agv1-analysis-public-comments-18feb09-en.pdf>); * “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) (<http://www.icann.org/en/topics/new-gtlds/agv2-analysis-public-comments-31may09-en.pdf>); * “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) (<http://www.icann.org/en/topics/new-gtlds/summary-analysis-agv3-15feb10-en.pdf>); and * “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) (<http://www.icann.org/en/topics/new-gtlds/summary-analysis-agv4-12nov10-en.pdf >). 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 <http://newgtlds.icann.org/en/applicants/agb/dispute-resolution-procedure-11jan12-en.pdf>. 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 consideration. 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 <http://www.icann.org/en/topics/new-gtlds/irt-final-report-trademark-protection-29may09-en.pdf> in response to ICANN’s 2009 request for recommendations for RPMs. Although ICANN did not accept this recommendation, in Section 220.127.116.11 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. Conclusion 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 www.ncta.com February 27, 2012 Counsel: Mitchell H. 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