Checking in on the New gTLD Objection Processes

Statistical Summary:'Success Rates of Various Objections

Legal rights objections. Of the 70 legal rights objections filed, all by private parties, five settled. WIPO has moved very quickly on the rest, resolving all but one. Of these, six legal rights objections were upheld and 59 were rejected. Legal rights objections were successful on the merits around 8% of the time; if settlements are also counted as “successes,” the overall objection success rate is around 14%.

Community objections. One hundred and twelve community objections were filed, with 14 filed by ICANN's “Independent Objector,” a French international law professor, and the rest filed by private parties. Thirty-one objections have been settled, including seven of the Independent Objector's. There have been comparatively few substantive decisions, with three oppositions upheld and seven rejected. The success rate on the merits is 30%; including settlements as successes and pending disputes as “not-successes” (yet), the overall success rate remains about 30%. The vast majority of returns are still to come.

Limited public interest objections. Limited public interest objections were uncommon ' and intended to be so ' with only 20 objections filed. Of these, 11 were filed by the same ICANN “Independent Objector,” two have settled, and nine remain pending. The rest of the objections were filed by various entities in the financial services industry. Only one has been resolved (via settlement) and none has been substantively decided by panels yet.

String confusion objections. Sixty-five string confusion objections were filed, all by private parties. Of these, only three were settled and 15 remain pending. Eleven objections were upheld and 36 were rejected, resulting in a success rate on the merits for objectors just shy of 25%. Including settlements as “successes,” the overall opposition success rate rises to 28%.

Analysis of Legal Rights Objections

The rights protection mechanism most frequently used by trademark holders and which has the most substantive panel decisions is the legal rights objection.

It is immediately clear that legal rights objections under the new gTLD program are very different than proceedings under the Uniform Domain-Name Dispute-Resolution Policy (UDRP), where about 80% of complainants prevail. See, e.g., WIPO, “Case Outcome (Consolidated): All Years” '(last visited Nov. 6, 2013). And they should be! In UDRP proceedings, particular registrants have registered actual domain names and used them in ways that amount to “ cybersquatting,” or have a pattern of infringing conduct.

In contrast, gTLD legal rights objections are decided pre-delegation. Aside from some public marketing and claims in the ICANN application, there is limited record of the potential registry's conduct, since the registry has not launched yet. Panels have to decide whether the applied-for gTLD string: a) takes “unfair advantage of the distinctive character or the reputation” of the objector's mark; b) unjustifiably impairs the distinctive character of the objector's mark; or c) creates an impermissible likelihood of confusion with the objector's mark. ICANN, gTLD Applicant Guidebook '3.5.2 (Jun. 4, 2012), . The Guidebook sets forth eight relevant factors:

1. Whether the gTLD string is identical or similar to the objector's mark;
2. Whether the objector acquired rights in its mark in a bona fide way;
3. Whether and to what extent the public recognizes the gTLD string as the objector's mark;
4. The gTLD applicant's intent;
5. The gTLD applicant's preparation for bona fide service offerings;
6. The gTLD applicant's rights in the gTLD term, if any;
7. To what extent the gTLD applicant is commonly known by the gTLD term; and
8. Whether the gTLD applicant's intended use would create a likelihood of confusion.

There are a few clear patterns.

Objections based on marks that correspond to a common term were generally unsuccessful. For example: .academy, .bio, .cam, .coach, .diy, .eco, .express, .food, .home, .mail and many more.

These sorts of claims encompassed the vast majority of legal rights objections. The general view is that common words are “difficult to protect outside of [the objector's] channel of trade.” Express, LLC v. Sea Sunset, LLC, WIPO Case No. LRO 2013-0022 (denying an objection to the string ). Unless there is already clear evidence of an intent to play on the complainant's mark under the fourth factor, confusion or dilution arguments will not prevail, and the potential for second-level confusion is insufficient to deny delegation of a string for which many (or most) uses are likely to be unobjectionable. See, e.g., Academy, Ltd. v. Half Oaks, LLC, WIPO Case No. LRO 2013-0003, p. 10 (denying an objection to the string ).

The presence or absence of the sixth and seventh factors are unimportant for most open, un-branded gTLDs, and the eighth factor requires more than possible infringement to favor the complainant.

Objections will not succeed where both parties have rights. The U.S. Merck entity and the German Merck entity, which split during World War One, have a longstanding co-existence agreement but both opposed the other's gTLD applications for .merck; the German entity opposed .merckmsd, and the U.S. entity opposed .emerck. Unsurprisingly, WIPO's panels punted, finding in favor of the applicant in each case.

All the “Merck” panel decisions noted that any confusion resulted from the two companies using the same mark for similar products in different jurisdictions and not from the disputed gTLD string itself. Furthermore, the parties planned to use geo-targeting in an attempt to limit access to their jurisdictions where they each had exclusive rights.

What was successful? Only six legal rights objections prevailed.

.axis. The gTLD applicant, Saudi Telecom Company, failed to file a timely response. Oops.

.delmonte. The gTLD applicant, a regional licensee of the DEL MONTE brand (and owner of several South African registrations for DEL MONTE), applied for .delmonte as a “closed” gTLD strictly for its own use. It was opposed by the DEL MONTE brand's worldwide owner. The license required that use of the mark inured to the benefit of the licensor, which it would not have in the case of a closed gTLD. Various other aspects of the applicant's conduct appeared to breach the license agreement. The panel essentially found that the licensee had acted in bad faith.

.direct. The gTLD applicant is a satellite TV provider, and was opposed by the owner of the DIRECTV brand and other DIRECT-formative marks. The gTLD applicant sought a closed gTLD. The fourth factor was key: The applicant's knowledge of ' and direct competitive proximity to ' the objector's marks led the panel to find that the application was “likely” intended to “target the trademark of a direct competitor.”

.weibo and .??.'??'and its pinyin equivalent WEIBO, were both used as marks and registered by the objector, and which identify a micro-blogging service with half a billion registered users. The gTLD applicant filed for closed gTLDs for the Chinese character string .??'and its pinyin equivalent .weibo, and had used the brand TENCENT??'and registered the mark TENCENT??'T.QQ.COM & Design. Its service gained nearly 400 million users. It opposed the objector's Chinese application for'
??'on the grounds that it was generic for micro-blogging services (pending), and lost oppositions against the objector's Chinese trademark filings for WEIBO & Design. Despite evidence that'??'and its pinyin equivalent WEIBO may have been perceived as descriptive or even generic, the panel found that the first and eighth factors favored the objector enough for it to prevail over the applicant, which had only the fourth factor in its favor, and slightly at that. The Panel especially felt that the fact that the gTLD applicant only had trademark registrations for'??'paired with its house brands militated against giving it exclusive rights to a closed gTLD that was not so restricted.

What Comes Next?

What remedies exist for objectors that lost legal rights objections? They can block key domains in Sunrise periods, secure transfer of problematic domains through UDRPs, and shut down clearly problematic sites for the duration of their registration period using the fast new Uniform Rapid Suspension (URS) system. ICANN, URS Procedure, (Mar. 1, 2013). The first URS decision, taking down facebok.pw, owned by a serial squatter, issued a mere 37 days after the complaint was filed. Facebook Inc. v. Radoslav, FA1308001515825 (Nat. Arb. Forum Sep. 26, 2013).

If any registries actively promote infringing uses (for open gTLDs) or actively engage in infringing conduct at the second level (for open or closed gTLDs), trademark owners will be able to use the Post-Delegation Dispute Resolution Procedure (PDDRP). ICANN, PDDRP. It necessarily focuses on the actual use of the domain by the registry operator and registrants in that gTLD, and requires a high burden of proof ' “clear and convincing” evidence that the registry operator “causes or materially contributes” to misuse in the first level of the gTLD or “clear and convincing” evidence of a pattern of bad faith by the registry operator contributing to profit from second-level infringement. Because flagrant examples of bad faith by the registry operator ' and the registry's refusal to address these concerns when raised by the objector ' are required for a complainant to prevail, PDDRP complaints are likely to be uncommon. It would be no surprise if objectors are very careful in deciding to file, resulting in a higher percentage of successful PDDRP objections than successful pre-delegation legal rights objections.

Conclusion

While none of the four ways that parties could object to new gTLDs prior to delegator have proven particularly favorable to objectors, trademark-based complaints are likely to be much more successful in objecting to trademark misuse on the second level, or where the registry has acted in bad faith after delegation.

Erin Hennessy is an intellectual property partner in Bracewell & Giuliani's Seattle and Washington, DC, offices. Her practice focuses on worldwide trademark matters. She can be reached at [email protected]. Matt Schneller is an associate in the Seattle office. He has particular domain name registration, transfer, and enforcement experience. He can be reached at [email protected]. Jennifer Ashton is an associate in the Seattle office and assists clients in U.S. and international trademark clearance, prosecution and maintenance. She can be reached at [email protected].

The Internet Corporation for Assigned Names and Numbers (ICANN) has been busy reviewing applications for new generic top-level domain name registries (new gTLDs), and the first four new gTLDs were delegated to the Root Zone on Oct. 23, 2013.

In the spring of 2013, third parties were able to object to proposed new gTLDs. Objections could be based on one of four grounds:

1. Prior legal rights, like trademark rights (these objections are handled by the World Intellectual Property Organization (WIPO));
2. Opposition from a significant portion of the community that the gTLD string targets (handled by the International Center of Expertise of the International Chamber of Commerce (ICC));
3. “Limited public interest,” an objection that the gTLD contradicts generally accepted legal norms of morality and public order under international law (also handled by the ICC); and
4. “String confusion,” arguing that the new gTLD would be so similar to a pre-existing TLD or to another gTLD application that confusion would be likely to occur (handled by the International Centre for Dispute Resolution (ICDR)).

For more information, and links to the full policies underlying and rules governing each type of objection, see, http://newgtlds.icann.org/en/program-status/odr.

Now that ICANN is starting to bring new gTLDs online, it is a good time to review how effective these objection tools have been for opposers. ICANN's database of gTLD objection decisions is available at http://newgtlds.icann.org/en/program-status/odr/determination.

Statistical Summary:'Success Rates of Various Objections

Legal rights objections. Of the 70 legal rights objections filed, all by private parties, five settled. WIPO has moved very quickly on the rest, resolving all but one. Of these, six legal rights objections were upheld and 59 were rejected. Legal rights objections were successful on the merits around 8% of the time; if settlements are also counted as “successes,” the overall objection success rate is around 14%.

Community objections. One hundred and twelve community objections were filed, with 14 filed by ICANN's “Independent Objector,” a French international law professor, and the rest filed by private parties. Thirty-one objections have been settled, including seven of the Independent Objector's. There have been comparatively few substantive decisions, with three oppositions upheld and seven rejected. The success rate on the merits is 30%; including settlements as successes and pending disputes as “not-successes” (yet), the overall success rate remains about 30%. The vast majority of returns are still to come.

Limited public interest objections. Limited public interest objections were uncommon ' and intended to be so ' with only 20 objections filed. Of these, 11 were filed by the same ICANN “Independent Objector,” two have settled, and nine remain pending. The rest of the objections were filed by various entities in the financial services industry. Only one has been resolved (via settlement) and none has been substantively decided by panels yet.

String confusion objections. Sixty-five string confusion objections were filed, all by private parties. Of these, only three were settled and 15 remain pending. Eleven objections were upheld and 36 were rejected, resulting in a success rate on the merits for objectors just shy of 25%. Including settlements as “successes,” the overall opposition success rate rises to 28%.

Analysis of Legal Rights Objections

The rights protection mechanism most frequently used by trademark holders and which has the most substantive panel decisions is the legal rights objection.

It is immediately clear that legal rights objections under the new gTLD program are very different than proceedings under the Uniform Domain-Name Dispute-Resolution Policy (UDRP), where about 80% of complainants prevail. See, e.g., WIPO, “Case Outcome (Consolidated): All Years” '(last visited Nov. 6, 2013). And they should be! In UDRP proceedings, particular registrants have registered actual domain names and used them in ways that amount to “ cybersquatting,” or have a pattern of infringing conduct.

In contrast, gTLD legal rights objections are decided pre-delegation. Aside from some public marketing and claims in the ICANN application, there is limited record of the potential registry's conduct, since the registry has not launched yet. Panels have to decide whether the applied-for gTLD string: a) takes “unfair advantage of the distinctive character or the reputation” of the objector's mark; b) unjustifiably impairs the distinctive character of the objector's mark; or c) creates an impermissible likelihood of confusion with the objector's mark. ICANN, gTLD Applicant Guidebook '3.5.2 (Jun. 4, 2012), . The Guidebook sets forth eight relevant factors:

1. Whether the gTLD string is identical or similar to the objector's mark;
2. Whether the objector acquired rights in its mark in a bona fide way;
3. Whether and to what extent the public recognizes the gTLD string as the objector's mark;
4. The gTLD applicant's intent;
5. The gTLD applicant's preparation for bona fide service offerings;
6. The gTLD applicant's rights in the gTLD term, if any;
7. To what extent the gTLD applicant is commonly known by the gTLD term; and
8. Whether the gTLD applicant's intended use would create a likelihood of confusion.

There are a few clear patterns.

Objections based on marks that correspond to a common term were generally unsuccessful. For example: .academy, .bio, .cam, .coach, .diy, .eco, .express, .food, .home, .mail and many more.

These sorts of claims encompassed the vast majority of legal rights objections. The general view is that common words are “difficult to protect outside of [the objector's] channel of trade.” Express, LLC v. Sea Sunset, LLC, WIPO Case No. LRO 2013-0022 (denying an objection to the string ). Unless there is already clear evidence of an intent to play on the complainant's mark under the fourth factor, confusion or dilution arguments will not prevail, and the potential for second-level confusion is insufficient to deny delegation of a string for which many (or most) uses are likely to be unobjectionable. See, e.g., Academy, Ltd. v. Half Oaks, LLC, WIPO Case No. LRO 2013-0003, p. 10 (denying an objection to the string ).

The presence or absence of the sixth and seventh factors are unimportant for most open, un-branded gTLDs, and the eighth factor requires more than possible infringement to favor the complainant.

Objections will not succeed where both parties have rights. The U.S. Merck entity and the German Merck entity, which split during World War One, have a longstanding co-existence agreement but both opposed the other's gTLD applications for .merck; the German entity opposed .merckmsd, and the U.S. entity opposed .emerck. Unsurprisingly, WIPO's panels punted, finding in favor of the applicant in each case.

All the “Merck” panel decisions noted that any confusion resulted from the two companies using the same mark for similar products in different jurisdictions and not from the disputed gTLD string itself. Furthermore, the parties planned to use geo-targeting in an attempt to limit access to their jurisdictions where they each had exclusive rights.

What was successful? Only six legal rights objections prevailed.

.axis. The gTLD applicant, Saudi Telecom Company, failed to file a timely response. Oops.

.delmonte. The gTLD applicant, a regional licensee of the DEL MONTE brand (and owner of several South African registrations for DEL MONTE), applied for .delmonte as a “closed” gTLD strictly for its own use. It was opposed by the DEL MONTE brand's worldwide owner. The license required that use of the mark inured to the benefit of the licensor, which it would not have in the case of a closed gTLD. Various other aspects of the applicant's conduct appeared to breach the license agreement. The panel essentially found that the licensee had acted in bad faith.

.direct. The gTLD applicant is a satellite TV provider, and was opposed by the owner of the DIRECTV brand and other DIRECT-formative marks. The gTLD applicant sought a closed gTLD. The fourth factor was key: The applicant's knowledge of ' and direct competitive proximity to ' the objector's marks led the panel to find that the application was “likely” intended to “target the trademark of a direct competitor.”

.weibo and .??.'??'and its pinyin equivalent WEIBO, were both used as marks and registered by the objector, and which identify a micro-blogging service with half a billion registered users. The gTLD applicant filed for closed gTLDs for the Chinese character string .??'and its pinyin equivalent .weibo, and had used the brand TENCENT??'and registered the mark TENCENT??'T.QQ.COM & Design. Its service gained nearly 400 million users. It opposed the objector's Chinese application for'
??'on the grounds that it was generic for micro-blogging services (pending), and lost oppositions against the objector's Chinese trademark filings for WEIBO & Design. Despite evidence that'??'and its pinyin equivalent WEIBO may have been perceived as descriptive or even generic, the panel found that the first and eighth factors favored the objector enough for it to prevail over the applicant, which had only the fourth factor in its favor, and slightly at that. The Panel especially felt that the fact that the gTLD applicant only had trademark registrations for'??'paired with its house brands militated against giving it exclusive rights to a closed gTLD that was not so restricted.

What Comes Next?

What remedies exist for objectors that lost legal rights objections? They can block key domains in Sunrise periods, secure transfer of problematic domains through UDRPs, and shut down clearly problematic sites for the duration of their registration period using the fast new Uniform Rapid Suspension (URS) system. ICANN, URS Procedure, (Mar. 1, 2013). The first URS decision, taking down facebok.pw, owned by a serial squatter, issued a mere 37 days after the complaint was filed. Facebook Inc. v. Radoslav, FA1308001515825 (Nat. Arb. Forum Sep. 26, 2013).

If any registries actively promote infringing uses (for open gTLDs) or actively engage in infringing conduct at the second level (for open or closed gTLDs), trademark owners will be able to use the Post-Delegation Dispute Resolution Procedure (PDDRP). ICANN, PDDRP. It necessarily focuses on the actual use of the domain by the registry operator and registrants in that gTLD, and requires a high burden of proof ' “clear and convincing” evidence that the registry operator “causes or materially contributes” to misuse in the first level of the gTLD or “clear and convincing” evidence of a pattern of bad faith by the registry operator contributing to profit from second-level infringement. Because flagrant examples of bad faith by the registry operator ' and the registry's refusal to address these concerns when raised by the objector ' are required for a complainant to prevail, PDDRP complaints are likely to be uncommon. It would be no surprise if objectors are very careful in deciding to file, resulting in a higher percentage of successful PDDRP objections than successful pre-delegation legal rights objections.

Conclusion

While none of the four ways that parties could object to new gTLDs prior to delegator have proven particularly favorable to objectors, trademark-based complaints are likely to be much more successful in objecting to trademark misuse on the second level, or where the registry has acted in bad faith after delegation.

Erin Hennessy is an intellectual property partner in Bracewell & Giuliani's Seattle and Washington, DC, offices. Her practice focuses on worldwide trademark matters. She can be reached at [email protected]. Matt Schneller is an associate in the Seattle office. He has particular domain name registration, transfer, and enforcement experience. He can be reached at [email protected]. Jennifer Ashton is an associate in the Seattle office and assists clients in U.S. and international trademark clearance, prosecution and maintenance. She can be reached at [email protected].