4 Tips For Protecting Brands in the New World of GTLDs

There's no way to sugarcoat it: Policing online trademark infringement and cybersquatting has gotten tougher for brand owners with the recent release of hundreds of new generic top-level domains. Still, experts say there are best practices that every attorney can follow to make the transition as smooth as possible for clients.

The challenges and choices confronting those clients are quite complicated, but explaining the problem is actually pretty simple.

In November, the Internet Corp. for Assigned Names and Numbers started the process of rolling out hundreds of new domains after decades of just the old .com, .net, and a few others, creating a much larger Internet ecosystem for brand owners to monitor for trademark infringement and cybersquatting. The group eventually plans to release as many as 1,400 new extensions.

Among other things, the expansion is designed to increase competition among registries and allow for non-Latin script domains. But for companies looking to protect their name and brands on this new Web, there's really no way the change won't require more money, more effort, or both.

“We went from about 22 [gTLDs] to more than 1,400. You can imagine that’s going to have a large ripple effect throughout the Internet community,” said Anjali Hansen, deputy general counsel for the Council of Better Business Bureaus, speaking about the new domains last week at the American Bar Association’s Intellectual Property Law Conference in Washington, D.C.

“The cost of enforcement and brand protection will undoubtedly increase under the new gTLDs,”  Hansen added.

Nothing short of going back in time is going to completely alleviate the problem, and experts like Hansen say the best trademark attorneys can do is help rights owners develop a strategy to mitigate the problem in a manner that fits within a company's budget.

“You can’t control it 100 percent,” Hansen said of the problem created by the expansion. “But there are steps you can take to minimize it.”

Get On the "Clearinghouse"

The easiest step for all companies is to register their various brand names on the so-called trademark clearinghouse, a database of legitimate marks created by ICANN as part of the gTLD expansion process.

Registry on the clearinghouse gives companies a variety of benefits, including first dibs at registering URLs under each new dot-extension that ICANN rolls out, allowing companies to lock up potentially worrisome online real estate before its released for public registrations.

It also provides those that sign up with a notification when an entity registers a matching name as a URL on one of the new gTLDs, warns registrants that they might be infringing, and gives members a presumption of having a valid trademark when bringing challenges at ICANN.

“This is something everyone who works within the trademark sphere needs to be aware of and thinking about,” said Hansen, likening registry on the clearinghouse to registering a mark at the U.S. Patent and Trademark Office in terms of necessity.

The new database is no panacea, though. The alerts, for instance, only issue for exact matches — meaning so-called typo-squatting and other imperfect matches will still need to be found manually across hundreds of new registries.

And even with an early chance to buy, many rights holders can't buy up their name on every single new gTLD.

Consider Blocking Services

Many of the companies that are running the new gTLDs will allow mark holders to block use of certain words on the new registry entirely — for a fee.

The most notable is Donuts Inc., which used investment funding to apply for more than 300 new gTLDS — at $180,000 per application, such was no small task. Though a sizeable portion of the company's applications have been temporarily held up due to similar-looking applications, many others, including .bike, .technology, .email and .coffee, have already been released.

The company operates as a registry, allowing potential site operators to sign up for URLs bearing the new extensions through ICANN-approved registrars like GoDaddy. But it also offers what's called the Domains Protected Marks List, which allows brand owners to bar registration of their trademarks across every Donut registry.

The DPML reportedly costs a few thousand per mark for five-year terms, which might come off as a bit of a racket — the company created the new gTLDs and now is requesting payment for blocking names. But it's a quick way to prevent infringement on a big chunk of the new online real estate created by the expansion.

“[Donuts is] one of the low hanging fruits when you're putting together your strategy for dealing with the new gTLDs,” said Leslie A. Nettleford, associate general counsel at AARP and another speaker on the ICANN expansion at the ABA IP Conference.

Use the New Tools When You Can

The new expansion comes with new tools to combat troublesome registrations. The traditional Uniform Dispute Resolution Policy — an arbitration process that allows a challenger to seek to cancel or take over a confusing URL — is still available, but brand owners now have the Uniform Rapid Suspension System as well.

The URS system is designed for obvious infringement and is far faster than UDRP: much shorter petitions, a turn around of just a few days for the review, immediate freezing of the account, and no discovery or hearings.

“The idea here is to give a faster way to address a clear-cut cases of infringing domain names,” said Claudia Ray, a Kirkland & Ellis LLP partner also speaking at the ABA's event. “This is for something that’s so clear-cut you don’t have to go through the even relatively easy UDRP process.”

With greater speed comes lesser remedies, though: URS provides only for account freezing, rather than full cancellation or transfer. And it's really only for obvious cases, not those that require a bit more proof.

Two other new procedures — the Post-Delegation Dispute Resolution Procedure and the Registry Restrictions Dispute Resolution System — both allow brand owners to challenge the registries themselves, but the results are nonbinding recommendations.

Use the Old Tools When You Need To

Brand owners should use the new, cheaper tools at their disposal, as well as develop a strategy for blocking and defensive registrations as the new gTLDs roll out, but if all else fails, the federal courts are still there.

That means infringement, dilution and cybersquatting cases against the owner of the new gTLD or the registrant when the situation calls for it. It'll be far more expensive, but it's also binding and a deterrent to future infringers.

“None of the new mechanisms prevent you from using the old mechanisms,” said Kirkland & Ellis's Ray. “They're still there.”

REPRINTED WITH PERMISSION FROM THE APRIL 8, 2014 EDITION OF LAW360 © 2014 PORTFOLIO MEDIA INC. ALL RIGHTS RESERVED. FURTHER DUPLICATION  WITHOUT PERMISSION IS PROHIBITED