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Username: PCIA
Date/Time: Thu, November 2, 2000 at 9:19 PM GMT
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Subject: PCIA Comments on Applications Received by ICANN for Operating New TLDs


PCIA Comments on Applications Received By ICANN for Operating New TLDs and Suggestion for Improving the Process of Protecting Trademark Rights

Personal Communications Industry Association ("PCIA") submits these comments on the applications for new Top Level Domains ("TLDs") received by the Internet Corporation for Assigned Names and Numbers ("ICANN") and offers a proposal for improving the process of protecting trademark rights in the new TLDs.  PCIA is an international trade association dedicated to advancing seamless global communications through its strategic marketing, public policy, expertise, events and educational programs.  PCIA members include a broad base of interdependent mobile convergence players.  PCIA is devoted to the rapid, efficient and cost effective deployment of consumer-driven mobile products and services around the world.  One important factor in securing successful deployment will be the ease and certainty with which consumers are able to identify and find the suppliers of relevant products and services. While PCIA was established to represent the interests of the commercial and private mobile radio service communications industries and the fixed broadband wireless industry, the association believes that the best way to protect the interests of consumers and the trademark interests of its members is to ensure that all trademark owners have adequate trademark protection in any new unrestricted TLD approved by ICANN.

On July 16, 2000, ICANN announced its intention to accept applications from organizations seeking to sponsor or operate new TLDs.  While ICANN did not specify how many, if any, new TLDs would be approved, it adopted a policy for introduction of new TLDs "in a measured and responsible manner."  ICANN Announcement, July 16, 2000.  The exact number of TLDs that will be introduced will depend on the characters of the proposals received.

In its resolution, ICANN stressed the importance of protecting intellectual property rights in connection with the operation of any new TLDs.  Specifically, in its applications forms, ICANN asked each applicant to describe the measures that will be taken "to discourage registration of domain names that infringe intellectual property rights," whether there will be "pre-screening for potentially infringing registration," and if so, "how will the pre-screening be performed?"  The resolution appears to contemplate that existing procedures would be the starting point, not the finish line, for protecting property rights of trademark holders.

During the application period from September 5, 2000, to October 2, 2000, ICANN received 44 applications from organizations wishing to operate as a registry for new TLDs.  PCIA has reviewed these applications and the approaches they take to protect intellectual property rights.  This review has enabled PCIA to formulate a proposal for a practical and effective standard approach to the challenges likely to be faced by trademark owners if new TLDs are created.  We offer this proposed solution in these comments.

The Problem for Trademark Owners

The widespread commercial use of the Internet has been beneficial to both businesses and consumers throughout the world.  It has also brought about significant challenges for trademark owners who have found third parties seeking to capitalize on their goodwill by registering and using domain names based on the owners trademarks.  As a result, trademark owners have been forced to expend extensive resources and time fighting constant battles to protect their intellectual property rights.  These battles must be fought not only against willful infringers, but also against parties whose use of a domain name, while perhaps done without willful intent, nevertheless conflicts with the trademark owners rights.

The adoption of new TLDs threatens to exacerbate this problem.  Simply put, more TLDs offer more opportunities for third parties to adopt domain names that interfere with trademark rights and threaten to confuse the public.  At the same time, more TLDs will increase the effort and resources that trademark owners will need to invest to protect their rights.

The present process by which domain names are registered forces trademark owners to challenge an infringing domain name only after a registration has been granted and, in many cases, after the registrant has commenced use of the offending domain name.  In these circumstances, third party domain name registrants often feel they have acquired a vested interest in the domain name, despite pre-existing trademark rights.  Thus, they are more likely to fight legitimate trademark claims.  The better approach is to protect trademark rights before conflicting domain names are registered.  PCIA believes that, as ICANN adopts new unrestricted TLDs, it must address this problem.  With this submission, PCIA hopes to accomplish the following:

Offer a possible solution to the problems facing trademark owners in new unrestricted TLDs; and

Open a dialog on the question of how best to provide protection for trademark owners which, in turn, can assist ICANN in accomplishing its goal of providing appropriate protection for intellectual property rights in new unrestricted TLDs.

Proposed Model for Protection of Intellectual Property in new TLDs

Since January 1, 2000, the Uniform Domain Name Dispute Resolution Policy ("UDRP") adopted by ICANN has been a useful tool for trademark owners to obtain or cancel domain name registrations where there have been abusive domain name registrations in .com, .net and .org.  As effective as UDRP has been in providing relief for trademark owners, however, it has been an entirely post hoc remedy, with all the attendant problems of tracking down and dealing with cybersquatters and others who have violated intellectual property rights.  PCIA believes that the UDRP process (or a similar one) can and should be expanded to provide a pre-registration dispute resolution mechanism in order to prevent potential intellectual property violations before they occur.

PCIA recommends two basic procedures for the early resolution of trademark issues and for the protection of trademark rights.  First, each new TLD should be subject to a "Sunrise Period," during which the owners of registered trademarks are allowed to register their trademarks as domain names.  Second, domain name registration requests should be published before they are registered, to permit pre-registration challenges.

1. Sunrise Period

PCIA proposes establishment of an initial Sunrise Period (of not less than 3 or more than 6 months), during which the owner of any national trademark or service mark registration, issued prior to July 16, 2000, will be eligible to register a domain name in the new TLD identical to the textual elements of its trademark.(1)  In addition, provision should be made for anyone who has filed a trademark application prior to July 16, 2000 to secure applicable domain names during the Sunrise Period if such person pays an appropriate fee to reserve the proposed domain name until the trademark registration is issued.  Owners of marks that incorporate designs or stylization would be entitled to register domain names identical to the textual portion of the marks.

PCIA expects that during the Sunrise Period there will be instances in which the owners of identical trademarks will seek to register the same mark as a domain name.  In these instances, we propose that all such owners of identical trademarks be issued the same domain name registration (i.e., TLD), and that the domain be used for a portal site that identifies all of the owners of the identical marks.  Information would be provided in the portal that will enable consumers to click onto the company website in which they are interested.  This portal proposal would avoid the issuance of a domain name on a first-come, first-served basis, which has led to controversy and conflict in the .com, .net and .org domains.  PCIA believes that it is unfair to owners of registered trademarks to deprive them of the opportunity to have their registered trademarks be used as their as domain name.

Any trademark owner participating in the proposed portal, of course, would remain free to bring suit against any other participant in the portal if the first owner believes that another portal participant was violating the trademark laws of the first trademark owners country.  Hypothetically, for example, if company A has a registered trademark for Apex in the U.S. in the financial affairs class and company B has the same mark registered in South Africa in the agricultural class, company A would remain free to sue company B under the trademark laws of the U.S. if company B began to offer financial services under the Apex domain name.  Similarly, if company A has branch operations with trademark rights in other countries, company A would be free to sue company B in those countries as well.  In general, it is important to emphasize that nothing in this proposal is intended to supersede or interfere with national trademark laws.

Following the close of the Sunrise Period, PCIA proposes that a Challenge Period be established during which third parties may challenge Sunrise registration requests on the ground that the registrant did not meet the requirements for Sunrise registration (e.g., the text portion of the trademark owners trademark registration was not identical to the registered domain name or the trademark registration was applied for after July 16, 2000).  Registries granted the right to administer the new TLDs should be required to set up dispute resolution procedures to decide these challenges promptly and to provide appropriate relief, including rejecting the challenge or awarding the domain name to the successful challenger if the latter owns a trademark registration in the identical mark.

2. Public Registration In the New TLD

After the close of the Sunrise and Challenge Periods, new TLDs would be open to the general public for registration of domain names on a first-come, first-served basis.  In order to provide more effective trademark protection, PCIA proposes that the existing UDRP procedures be applied but that they be modified to permit challenges on a pre-registration basis.  A reasonable Challenge Period (we suggest not less than 30 days or more than 60 days) would be established for every registration request.  The new TLD registry would be required promptly to post registration requests on a consistent and frequent basis (e.g., daily or weekly), and all relevant information concerning the applicant must be available on a publicly accessible data base.  A challenger then would have 30 (or 60) days to challenge the registration request utilizing a modified UDRP procedure. 

In order to make its case, a challenger first would need to show a protectable trademark interest in the requested domain name, i.e., that is it is using the mark and that the mark is distinctive.  Second, again in accordance with the existing UDRP process, the challenger would then need to establish that its mark is identical or confusingly similar to the domain name.  As the UDRP decisions have confirmed, this "confusingly similar" requirement is confined to a side-by-side comparison of the domain name and the mark without any necessity of proving likelihood of confusion (which would involve whether the goods or services on which the challengers mark and domain name are used are similar, whether there are similar third party marks, etc.).

Third, since this would be a pre-registration procedure, the proposed modification of the existing UDRP process would eliminate the requirement that the challenger prove that the domain name had been registered and was being used in bad faith.  As a practical matter, the elimination of "bad faith registration and use" will not constitute a significant change since the cases decided by UDRP panels suggest that a domain name that essentially copies anothers mark will be ordered transferred to the challenger unless the registrant can establish a legitimate reason for using the name.(2)  In any event, we propose adding good faith plans to use the domain name as a defense to a challenge.

The defenses available to a domain name applicant under the proposal would be the same as under the existing UDRP process:  (1) that the challengers mark is not protectable; (2) that the proposed domain name is not confusingly similar; (3) that the domain name applicant is proposing to make a legitimate noncommercial or fair use of the domain name; (4) that the applicant commonly has been known by the domain name; or (5) that, before notice of the challenge, the applicant used or had made demonstrable preparations to use the domain name in connection with a bona fide offering of goods and services or had good faith plans to use the domain name in connection with a bona fide offering of goods or services.

Once the Challenge Period has expired or the domain name applicant has defeated the challenge, the domain name would be registered.  Thereafter, the existing UDRP process would be in effect.
A Review of Applications Received By ICANN
A number of applications submitted to ICANN include trademark provisions which are beneficial to trademark owners in protecting their intellectual property.  However, none of the applications for an unrestricted TLD provide for pre-registration dispute resolution for all domain name applications (during the Sunrise Period and thereafter during public registration) as proposed by PCIA.  Further, while some applications provide for a Sunrise Period, none of these provide appropriate protection for intellectual property.
For example, one of the applications includes a Sunrise Period for owners of trademarks to register domain names identical to their trademarks, but only on a first-come, first-served basis.  As set forth above, PCIA believes that it is unfair to owners of registered trademarks to deprive them of the opportunity of having their trademarks also registered as domain names. Another application includes a similar Sunrise provision for registering trademarks as domain names but then resolves any conflict between the owners of identical trademarks by means of an auction, with the domain name awarded to the highest bidder.  PCIA has proposed a portal arrangement to resolve such a conflict, rather than a winner takes all auction, in the belief that a trademark owner who has spent substantial time and money in establishing a protectable trademark should not be required to expend additional money to obtain the trademark as a domain name.

Other proposals for protecting trademark owners require that an affidavit be filed with the new registry to the effect that an international trademark search has been conducted and no conflict was found with any registered trademark.  Such a search requirement would provide maximum protection for trademark owners, and would be appropriate in a restricted TLD whose registrants, in all likelihood, would be firms with the financial means to conduct a large scale international trademark search.  In an unrestricted TLD, however, such a search requirement would be a financial barrier to a significant number of potential domain name registrants.  For that reason, PCIA has not included a search requirement in its proposed model for a new unrestricted TLD.

Finally, several applicants have proposed special protections for "famous" trademarks.  While it has made no separate provision for "famous" marks, PCIA believes that its proposed model provides effective protection for all trademark owners, including owners of "famous" marks, without the need to undertake the difficult task of determining what constitutes a "famous" mark.

Possible Opportunity for Further Consideration of Trademark Issues

PCIA appreciates the effort that ICANN has undertaken to ensure that new TLDs protect the rights of trademark owners.  The proposals filed by the applicants offer a number of suggestions.  PCIA, in these comments, has offered a simple, practical process that addresses the concerns of trademark owners.  In light of the importance of the issue, PCIA suggests that ICANN use these comments, and the others addressing trademark issues, to establish a standard for trademark protection that applicants will be required to meet before their TLD is approved. 

Respectfully submitted,

Robert L. Hoggarth
Senior Vice President
Government Relations

Of Counsel:
Hugh Latimer
J. Timothy Hobbs
Bruce G. Joseph
1776 K Street, N.W.
Washington, D.C.

Dated:  November 2, 2000

(1) July 16, 2000 is the date ICANN announced its new TLD policy.  We have selected this date to avoid giving Sunrise benefits to those who sought bad faith trademark registrations in anticipation of a possible Sunrise period.

(2) See Telestra Corp. Ltd. v. Nuclear Marshmallows, WIPO D 2000-0003 (registrant had done nothing but register the name, but bad faith found because the registrant could not use the name without violating the challengers rights under Australian trademark law).      


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