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China Law Insight

IP

The Use of Trademark Protection Mechanisms under New gTLD System

Posted in IP

By Ding Xianjie  King & Wood Mallesons’ IP Legal Group

I. Generic Top-Level Domain and the New Gtld

gTLD (generic Top-Level Domain, “gTLD”) is one of the top-level domains (TLD) managed by the Internet Corporation for Assigned Names and Numbers (ICANN). Under the current gTLD system, there are only 22 gTLDs available (not including the TLDs representing 200+ countries and territories, such as the .cn). These TLDs are generic terms representing the nature of the industry, such as, .com means commercial organizations (but unrestricted), .edu refers to educational establishments, .gov refers to U.S. government entities, .net originally refers to network infrastructures (now unrestricted). The frequently used ones are .com, .edu, .net, .org, .info, .biz, but the most commonly used and the most popular one is undoubtedly .com.

A complete gTLD name comprises a character or a string of characters on the left of the delimiter “.” and a TLD on the right, such as “kwm.com”. These are also called second-level domain names.

As the number of Internet businesses grows exponentially, domain name resources become tight. ICANN thus launched the new gTLD program, and applications are accepted since June 2011. Under this program, the new gTLD system will be undergoing major changes. New gTLD system will not limit the TLD terms to the generic industrial terms. Therefore, it can be predicted that in addition to the new industrial terms TLDs (for, “.camera”, “.clothing”, “.equipment”, “.groups” ) and other everyday-word TDLs ( for example , “.singles” , “.I love you” ), there will also appear brand-named TLDs, for example , “.acer”, “.weibo”, “.baidu “. In fact, these examples have all been applied for, and some have already been approved. The first batch of domain name registered under the new gTLD system, with nine new TLDs, will be made available by Donuts, Inc. on October 29, 2013. According to ICANN, more than 1,000 new TLDs will be officially available for registration in the next two years.

II. The Impact to Brands under the New gTLD System

As mentioned above, the new gTLDs of “.ANYTHING” appear to bring unprecedented opportunities to brand owners. It is reported that “.brand” gTLD has received 917 applications made by the large brand companies. Currently, you will often see in the lower part or the corner of a brand brochure the website of a brand, such as: www.sony.com. Under the new gTLD system, brands and domain names will be integrated into one thing because of the efforts made by brand promoters trying to combine the brand name with a suitable domain name. Therefore, it can be easily depicted that internet users will not need to remember the brand and domain name separately after the new gTLDs enter into force. When we want to access the TV page of SONY Company, just type “television.sony”, or if we want to learn the information on SONY TVs, just type “sony.television”. Therefore, in the future we may see “CAMERA.SONY” as an advertisement.

While the new gTLD system brings new opportunities for the promotion of brands, it also brings more challenges to brand owners.

Under the traditional domain name system, the domain name structure is often “brand.com”. The common type of cybersquatting happens when a company or a product brand is registered by others as a second-level domain name. However, under the new system, while the traditional gTLD may be registered by the brand’s owner, the new industrial gTLDs and the everyday-word TLDs may be registered by others. The brand owners will have to monitor more than the existing 22 TLDs, and the monitoring works will increase dramatically. According to the information from the International Trademark Association (INTA) In-House practitioners Committee’s recent discussions, “brand companies “could receive hundreds of watch notices per day”.

It is subject to debate whether a brand company should catch the new wave under new generic top-level domain system. The participants in the above INTA discussions noted “if .com becomes a passé, and a brand only has a .com, it risks being perceived as behind the times. This thinking has brand owners the world over spending lots of money on the new gTLDs. But at this early stage, without any of the gTLDs having gone live yet, it is difficult to know which of the new .brands will be successful. Currently, there is too much uncertainty and people are mostly holding the wait and see attitude. No one is sure whether it is better to consider the new gTLD system only as a legal issue, or to treat it as a business issue. While this issue may have to wait, there are no doubts that the new system brings unprecedented challenges for trademark protection.

III. Trademark Protection Mechanism under the New gTLD System

Cybersquatting emerged worldwide, as a result of ICANN opening the registration for the new gTLDs. At the same time it created a trademark information exchange center to protect the legitimate interests of brand owners (Trademark Clearinghouse, referred to as TMCH). According to ICANN, “TMCH is a one-stop solution for protecting your mark in the new gTDL era”. We believe this might be a bit exaggerated. TMCH hired Deloitte to review the trademark registration and to manage the database. Trademark owners can register their trademarks in the TMCH’s recording system, where they can select a record duration from 1 to 5 years. During the Sunrise period after the new gTDLs are made available for application, the domain name registrar will ensure that trademark owners who have recorded their trademarks in the TMCH enjoy the priority to register under the new gTDL system; moreover, during the record duration period, once someone files an application to register a domain name that corresponds with the recorded trademark, TMCH will immediately give notice of the relevant trademark information to the applicant. If the applicant continues to proceed, TMCH will notify the trademark owner so that appropriate and timely action can be taken.

Although TMCH is not an arbitration institution for dispute solution, for trademark owners, as long as the trademarks have been filed with TMCH, he or she will receive timely notification of possible cybersquatting. Although TMCH is created only for the new gTLD system and has not been extended to the existing gTLD system, its active defense capabilities have attracted a large number of brand owners to register their trademarks on TMCH record. Therefore, for brand owners who do not know this tool, an evaluation of this tool should be undertaken in time and proper actions must be taken.

For a company owning a large number of trademarks, how they should select the trademarks to be filed on the TMCH record may pose a problem. Core brands are the trademarks that most people would choose to file on the record, but in order to avoid customer confusion under the situation of “brand – domain name” integration, one cannot ignore the trademarks used during the marketing and on the internet as well. Also, since the TMCH registration process may take a long time, the filing should be carried out as soon as possible. With the new gTLDs open for enrollment, a new round of cybersquatting may take place. TMCH is just an early warning tool. Conflicts will arise regarding the trademark rights and the right to the domain names and will be more intense than before. Meanwhile, as domain names and trademarks integrate, brand owners should expect that trademark law will become directly applicable to the domain names under the new generic top-level domain name system.