STI Comments from EnCirca
January 26, 2010 Re: Comments on STI Report EnCirca is an ICANN-accredited Registrar whose customers represent a diverse set of interests, from trademark owners, to business owners to domain name investors. We support all ICANN-Sponsored TLD's and also provide a map-based directory service for domain name registries. EnCirca supports the majority of the recommendations contained in the Special Trademark Issues Report. We are providing some additional comments in the interest in advancing the discussion of trademark protection mechanisms (TPMs) for new gTLDs. We would like to point out that the beneficiaries of the TPM's should be both registrants as well as trademark owners. Most conflicts occur due to registrant confusion about what constitutes trademark infringement and dilution. We feel more can be done to help registrants avoid potential trademark conflicts. Sincerely, Thomas Barrett President EnCirca, Inc Public Education Opportunity With the introduction of new TLD's, ICANN has the opportunity to educate the public about trademarks and what constitutes trademark infringement. Let's not squander this opportunity! With the proper public outreach, the need for many of the Trademark Protection Mechanisms will diminish over time. The will result in savings for trademark owners and a more stable and secure Internet. The top priority of the TPMs should be to educate the registrant such that, even before they begin the registration process, they have a clear understanding of whether their proposed domain name might infringe the rights of a third party. In order to accomplish this education, the Trademark Clearinghouse (TC) must be freely accessible and searchable to the public, just as the publicly-available Whois databases are. The search results must explain the purpose of trademarks and what rights they do and do not convey to the rights holder. Both Sunrise Periods and IP Claims services should be mandated for new TLDs. IP Claims should continue throughout the life of a TLD, since registrant confusion about possible trademark conflicts can exist not just during land rush, but whenever they attempt to register a domain name. Marketplace-Driven Wherever possible, we should not be overly prescriptive in limiting the function of TC and should instead let the marketplace (i.e. registry operators) decide the functions performed by the TC. This includes allowing the TC to include common law trademarks and other Rights requested by registries. Avoid Creating Monopolies While the TC is necessarily a monopoly provider, the Validation Service Provider should not be awarded as a single-source monopoly. Just as multiple registrars introduced innovation and lower costs for registrants, so too can multiple Validation Providers provide innovation and lower costs for trademark owners. Pricing Differential for use by Trademark Owners While the report recommends that new registries must be required to use the TC, it does not discuss whether trademark owners must use the TC for Sunrise Periods and IP Claims services. So if a registry commences a Sunrise period or accepts defensive registrations, will the registry be required to give a discount for applications submitted via the TC versus submission directly from a trademark owner? If a Sunrise discount is not mandated, then the incentive for the trademark owners to use the TC will be diminished. The URS versus UDRP While we support the concept of a URS, we feel that the proposed URS falls short in protecting the rights of registrants. The proposed URS looks too much like a fast-track UDRP. The URS should not have the same elements as the UDRP and should not rely on any precedents provided by UDRP decisions. There are too many poor UDRP precedents that should be disregarded. The UDRP perpetuates a myth that trademark infringement can occur with the mere registration of a domain name (i.e. bad faith registration). As steward of the Internet, ICANN needs to accurately convey to registrants what a trademark is and is not, as well as what constitutes trademark infringement. ICANN should dispense with the false implication that trademark infringement can occur before there is use of a domain name. "Bad faith registration" is not actually possible and should not even be criterion of the URS, even if the URS rules define that registration alone is not sufficient to find bad faith. Specific Comments 1.1 Trademark Clearinghouse The name of the rights protection mechanism should be the "Trademark Clearinghouse" to signify that only trademarks are to be included in the database. This is fine as a starting point. But there should be a mechanism to allow the TC to be responsive to requests by gTLD registry operators to include other types of Rights to help alert registrants of potential conflicts. 2.1 Separation of Functions The TC should be required to separate its two primary functions: (i) validation of the trademarks included in the TC, and (ii) serving as a database to provide information to the new gTLD registries. Staff should have the discretion to determine whether the same provider could serve both functions, or whether two providers would be more appropriate. We support the separation of the two primary functions. However, staff should not have the discretion to allow the same provider to serve both functions. Nor should staff be allowed to select a single Validation Service Provider. There should be multiple Validation Service providers from the onset of operations to ensure a competitive marketplace for the benefit of trademark owners. 2.2 Use of Regional Expertise The TC Service Provider(s) should utilize regional Marks Validation Service Providers (VSP) (whether directly or through sub-contractors) to take advantage of local experts who understand the nuances of the trademark rights in question. Agreed. This is another reason ICANN should not issue a monopoly to a single company for the Validation Service provider. The TC should be able to issue tenders in the marketplace to find an appropriate VSP that satisfies the requirements of a registry operator. 2.3 Segregation of TC Database The TC Service Provider should be required to maintain a separate TC database, and may not store any data in the TC database related to its provision of ancillary services, if any. This is a front-end interface implementation issue and does not address the concern that users may see co-mingling of data in their queries, which could occur even if the databases were separate. I think the intent could be better captured with a re-wording. 3 Relationship with ICANN 3.1 ICANN Accreditation Agreement for Validation Services The Service Provider(s) providing the validation of the trademarks submitted into the TC should adhere to rigorous standards and requirements that would be specified in an ICANN contractual agreement. The model to be suggested for this contractual relationship would be similar to the detailed registrar accreditation agreement, rather than the minimal accreditation practice adopted by ICANN for UDRP providers (e.g., WIPO, NAF, and others). Agreed. ICANN should assume there will be multiple Validation Service providers to ensure competition. 3.2 ICANN Agreement for Database Services The TC Service Provider responsible for maintaining the centralized database should have formal, detailed contract with ICANN. The contract should include service level agreement metrics, customer service availability (seven days per week, 24 hours per day, 365 days per year), data escrow requirements, and equal access requirements for all persons and entities required to access the TC database. The Agreement should also include indemnification by Service Provider for errors such as false positives for participants, such as Registries, ICANN, Registrants, and Registrars. Agreed. 4 Marks Eligible for Inclusion in the TC 4.1 National or Multinational Registered Marks The TC Database should be required to include nationally or multinationally registered "text mark" trademarks, from all jurisdictions, (including countries where there is no substantive review). (The trademarks to be included in the TC are text marks because "design marks" provide protection for letters and words only within the context of their design or logo and the STI was under a mandate not to expand existing trademark rights.) Agreed. 4.2 Common Law Rights No common law rights should be included in the TC Database, except for court validated common law marks; provided that a new gTLD Registry may elect to have the TC Service Provider collect and verify common law right provided that it conforms to Recommendation 2.3. The TC Service Provider could charge higher fees to reflect the additional costs associated with verifying these common law rights. Disagree. The TC should be responsive to requests by registry operators to collect and verify other types of Rights. This would help alert registrants of potential conflicts with trademark owners. 4.3 Conversion of Mark into TC Database The TC Database should be structured to report to registries strings that are considered an "Identical Match" with the validated trademarks. "Identical Match' means that the domain name consists of the complete and identical textual elements of the Mark. In this regard: (a) spaces contained within a mark that are either replaced by hyphens (and vice versa) or omitted, (b) only certain special characters contained within a trademark are spelt out with appropriate words describing it ( @ and &.), (c) punctuation or special characters contained within a mark that are unable to be used in a second-level domain name may either be (i) omitted or (ii) replaced by spaces, hyphens or underscores and still be considered identical matches, and (d) no plural and no "marks contained" would qualify for inclusion. Disagree. This should be re-worded as a minimum requirement. The TC should be able to be responsive to requests by registries to provide more than just identical matches. Registrants would benefit from awareness about possible conflicts. 5. Mandatory Pre- Launch Use of the Trademark Clearinghouse 5.1 TM Claims or Sunrise Use All new gTLD registries should be required to use the TC to support its pre-launch rights protection mechanisms (RPMs) that should, at a minimum, consist of a TM Claims process or a sunrise process that meets the minimum standards and sunrise challenge grounds as specified in the IRT Report,4 except to the extent that a registry elects not to extend sunrise protection for certain trademarks as described in 5.2 below). There is no requirement that a registry adopt both of these RPMs. Registrants are best protected if both RPM's are mandated both pre-launch and post-launch. 5.2 Protection for all Trademarks in the TC New gTLD registries should provide equal protection to all trademarks in the TC for their RPMs, except as follows: (i) Inclusion of a trademark in the Trademark Clearinghouse from a country where there is no substantive review does not necessarily mean that a new gTLD Registry must include those trademarks in a Sunrise or IP Claims Process; or (ii) Registries shall have discretion to decide whether to grant protections to trademarks in the TC. ICANN could allow specialized gTLDs to restrict eligibility for sunrise registrations to fit the purpose of the registry as described in the charter (example, .shoe could restrict sunrise to only trademark registrations in shoe-related class of goods and services). We would agree to this restriction for a Sunrise period or for defensive registrations. However, the restriction should not exist for an IP Claims process, since no rights are being granted to Rights holders to file an IP Claim. Again, the more information we can provide registrants, the better. 6 Voluntary Use of the Trademark Clearinghouse 6.1 Use of TC For Ancillary Services There should be no bar on the TC Service Provider or other third party service providers providing ancillary services on a non-exclusive basis. Such services could include, without limitation, a "marks contained" service, or a TM watch service. In order not to have a competitive advantage over competitors, the TC database should be licensed to competitors interested in providing ancillary services on equal and non-discriminatory terms, and on commercially reasonable terms; provided that the TC Service Provider is not materially advantaged in the provision of such ancillary services by virtue of it being the TC Service Provider. The specific implementation details should be left to Staff to address possible monopoly and competition concerns, and all terms and conditions related to the provision of such services shall be included in the TC Service Provider's agreement with ICANN and subject to ICANN review. As stated in 2.3, if the TC Service Provider provides such ancillary services, any information should be stored in a separate database. Access by the Registrant to verify and research TM Claims Notices shall not be considered an ancillary service, and shall be provided without cost to the Registrant. Agreed. 6.2 Pre-Registration of URS The TC could be used to enable URS Procedures by allowing trademark holders to preregister their trademark information to support a future URS action based on rights in jurisdictions where there is substantive review of trademark registrations. The TC shall provide confirmation of the TM, and its jurisdictions, to the URS Providers for a fee. Agreed. 7 Mandatory Post- Launch Use of the TC 7.1 No Required Post-Launch TM Claims Use of the TC Database to support post-launch TM Claims shall not be required. Disagree. Possible registrant confusion about whether they might be infringing the rights of a third party does not end after the land rush period. The IP Claims service should be mandated post-launch of TLDs to protect registrants and help avoid possible trademark conflicts. 8 Required Elements of TM Claims Notice 8.1 TM Claims Notice to provide clarity to Registrant The TM Claims Notice should provide clear notice to the Registrant of the scope of the trademark holder's rights, in order to minimize the chilling effect on registrants. A form TM Claims Notice that describes the required elements is attached as Annex 5. If feasible, the TM Claims Notice should provide links, or provide alternative methods of providing access, to the registrant for accessing the TC Database information referenced in the TM Claims Notice for a fuller understanding of the TM rights being claimed by the trademark owner. These links shall be provided in real time without cost to the Registrant. The implementation details should be left to ICANN Staff to determine how to easily provide access to registrants to this information. The TM Claims notice should be preferably be provided in the language used for the rest of the interaction with the registrar or registry, but at the very least in the most appropriate UN-sponsored language (as specified by the prospective registrant or registrar/registry). Agreed. 9 Effect of Filing with the TC 9.1 TC is a depository of information and does not create legal rights It should be clearly stated in mandate of the TC that inclusion of a TC validated mark into the Database is not proof of any right, nor does it confer any legal rights on the trademark holder. Also, failure to file should not be perceived to be lack of vigilance by Trademark holders. Agreed: This is why it should be OK to include common law marks as well. 10 Costs of Operating the TC 10.1 Costs of Operating Clearinghouse Costs should be completely borne by the parties utilizing the services. ICANN should not be expected to fund the costs of the operating the TC. The TC should not be expected to fund ICANN from its fees. Agreed.