Today is the first day that trademark owners can apply to block valuable brand names from the forthcoming ‘.xxx’ domain name space. Mark owners participating in the 50-day sunrise period will be paying up to $300 per block. For those mark owners who take the risk and forego the sunrise, a post-launch recovery will cost $1,300, plus lawyers’ fees of up to $2,000 or more.

Many trademark managers resent the choice offered to them by ICM Registry, the company behind ‘.xxx’. They have argued in various forums against the controversial adult industry top-level domain. And now that it is going ahead, some attorneys have described the trademark block as extortion. Responding to this criticism in an exclusive interview with WTR, ICM chief Stuart Lawley said: “We have developed the most cost-effective method for members outside our sponsored community to protect their brands. There is no obligation to do that. No one is seriously going to go to ‘www.brand.xxx’ expecting to find the brand itself. This is going to be an issue with every new gTLD launched and I believe we’ve gone the extra mile to offer brands protection.”

While making a marketing splash to advertise its sunrise periods, ICM has quietly published its post-launch trademark protection policy. This outlines how a URS-like process will incur a $1,300 filing fee. According to sources, legal fees on top of that could be around $1,500 to $2,000, meaning that this process could easily cost over $3,000. The full details of the Rapid Evaluation Service (RES), which will be run by the National Arbitration Forum, are available at ICM’s website. (Note: if your company is blocking ‘.xxx’ domains, you may have trouble accessing the policy.) Douglas Thomson, trademark attorney at Marks & Clerk, told WTR that it’s safer to stick with the sunrise. “Once your Sunrise B application is accepted, that is the end of the story,” Thomson says. “If you wait until the dispute resolution kicks in at the end of October and onwards, it is then like everything else. Whenever you go to a court, you’re never certain what the outcome will be.”

But many experts have suggested that a trademark block through Sunrise B will be a waste of money, arguing that cybersquatting is not likely to be a problem in ‘.xxx’. It is a restricted string, so parties outside the adult entertainment industry are barred from registering, and the standard registration fee is set very high, at around $80 – both factors are a severe deterrent to cybersquatters. That said, with regard to the $300 sunrise block, Altius’ Kristof Neefs, another lawyer marketing his services with regard to the sunrise, says: “In the end, it all comes down to the question whether prevention is better than cure.”

Some mark owners will have no choice though: Sunrise B is open only to those with registered trademark rights for identical words for which they apply. Common law rights will not be permitted. Thomson advises: “You’ll have to watch like a hawk because there isn’t anything else you can do under the sunrise rules.”

Meanwhile, some registrars have developed innovative offerings around Sunrise B, especially capitalising on the claim that 50% of sunrise applications contain incorrect data. Crowell & Moring partner Bart Lieben, who has worked on many sunrises in the past, reports: “We’ve seen that, say, in 15% of cases, the trademark information held by the trademark office is inaccurate.” He added that another 35% of cases contain clerical error on behalf of the brand owner.

Given this problem, and that ICM does not allow applicants to amend applications, domain name registrar Encirca is offering a pre-application validation service. “Because we have a trademark background, we’ve spent a lot of time understanding all the rules,” Tom Barrett, president of EnCirca, told WTR. “And we’re guaranteeing that you get your block or your money back.” Applying for Sunrise B through EnCirca, with that handy pre-validation check, costs $245. Barrett admits that with some registrars charging closer to ICM’s wholesale price of $160 rather than the $300 top end, his service is “not the cheapest on the market”. “The extra is our guarantee – and we do offer volume discounts too.”

Comments

Please log in or register to leave a comment.

There are no comments on this article

Share this article