Independent Trademark Clearinghouse Report Gets Mixed Reviews From ICANN Stakeholders

The draft “represents a disappointing wasted opportunity” and “appears to be of questionable value” given the cost of the external consultants used, commented the Generic Names Supporting Organization’s IP Constituency. Failures in the study’s scope and data gathering practices, plus “various apparently unsupported inferences,” make conclusions about various aspects of TMCH “questionable,” the IPC said. The review only partially examined a potential expansion of TMCH’s existing rules, failing to examine a potential expansion’s effect on sunrise periods, the IPC said.

The International Trademark Association (INTA) said the TMCH reviewers “adopted a fairly narrow remit for the review, which could not be considered as ‘comprehensive.’” Any TMCH review “must include an analysis of introducing competition to the monopoly enjoyed by the operator of the TMCH,” INTA commented. “Competition would have the effect of driving down prices and improving service offerings relating to the TMCH.” INTA said it will likely “submit a comprehensive set of comments” on TMCH when the Rights Protection Mechanisms Working Group (RPM-WG) releases its own draft report, which is expected to include a focus on TMCH.

The evaluation “fails to live up" to "wider expectations and the narrower specific questions identified by” the Governmental Advisory Committee, said the European Association of Trade Mark Owners (Marques). The review “is apparently unable to conclude from the data gathered whether the Claims notices have a deterrent effect either on trademark-infringing domain registrations or on registrations in good faith,” Marques commented. “It does not seek the additional data which might permit such a conclusion, despite this being a key consideration for any comprehensive review of the TMCH.” The review “makes no investigation into the cost-effectiveness of the protection for trademark owners generally,” Marques said. “Despite competition in service provider generally being considered to drive cost-reductions, this is viewed as being out of scope ‘our review is focused on the services of the TMCH and not its service providers.’” The review “makes no investigation into the impact that the well-publicised high Sunrise costs in a number of registries may have had on utilisation of this RPM,” Marques said. The review also “ignores third party uses of the TMCH when assessing its value and effectiveness,” including use of the Domains Protected Marks Lists that some registries use, Marques said.

Domain registry Donuts said it agreed with the draft TMCH report’s data and position “that either a Sunrise or a Claims period (not necessarily both) were sufficient for rights protection. The report does not demonstrate that both in concurrence are significantly beneficial to mark holders or are worthy of cost and operational burdens born by stakeholders; it further predicates that TMCH services should not be expanded beyond the current framework for future rounds.” The report shows “the industry should be permitted to choose between Sunrise and Claims, but not be further mandated to provide both,” Donuts commented.

The independent TMCH review’s results “well address the questions and concerns raised by the GAC,” said the Non-Commercial Stakeholder Group’s Policy Committee (NCSG-PC). The final report “should not be edited because there is little to edit -- this is the independent report of an independent group,” the NCSG-PC said. The committee noted the implications of the independent TMCH review’s conclusions about the high abandonment rate of claims service registration attempts, saying “this indicates a huge problem for ordinary registrants, and a further deep and pressing question: when nine of the top ten most accessed trademark strings in the TMCH are ordinary words, opening letters of the English alphabets, and the locations of millions of people -- SMART, HOTEL, ONE, LOVE, CLOUD, NYC, LONDON, ABC, and LUXURY -- should we really be granting monopolies to one or a few companies?”

GNSO’s Business Constituency (BC) said it agrees “it cannot be determined conclusively whether or to what extent the Claims Notice has had a deterrent effect on registrations in new gTLDs." Such determination “would require establishing a baseline registration abandonment rate in the context of” no claims notices, the group wrote. The BC said it agreed data collected in the TMCH review support conclusions about the limited efficacy of sunrise periods, “although additional feedback from brand owners may be informative as to why there have not been more” such registrations. The IPC said it believes the draft report “correctly posits that use of the Sunrise period should be interpreted as an analysis of the overall value to trademark holders of being able to register domain names matching their trademarks in the new gTLDs before the general availability period, as compared to the cost differential between Sunrise registration prices and general availability prices for a given new gTLD.” Preliminary conclusions about sunrise “are meaningless in absence of an analysis of the cost differential,” the IPC said.

The BC also agreed available data show a “very low rate at which trademark owners engage in formal disputes over new gTLD domain names.” The BC said it disagreed “with the assumption that ‘dispute rates are low because trademark holders do not consider variations to be trademark-infringing.’”