Trademark Clearinghouse launches to protect brands amid gTLD expansion

Organizations now have a centralized database to enter their brand trademarks for protection against potential infringement, amid the upcoming expansion of several new generic top-level domains (gTLDs) on the Internet.

Officially launched Tuesday, Trademark Clearinghouse (TMCH) is recognized by the Internet Corporation for Assigned Names and Numbers (ICANN) as the sole database for verified trademarks.

Audit firm Deloitte has been tasked to carry out the verification services for TMCH, while IT giant IBM is the database provider. ICANN is the global body overseeing Web domain names and IP (Internet protocol) addresses.

The clearinghouse will defend trademarks and act as the "cornerstone" of IP protection under the new gTLD expansion, said Jan Corstens, partner at Deloitte in a phone interview Monday.

A generic top-level domain (gTLD) is one category of top-level domains (TLDs), and users recognize it as the suffix found after a domain name, or the right side of the dot. In June 2011, ICANN opened up the range of gTLDs beyond the pre-existing 22 which include the familiar .com, .org and .net.

The move meant companies can choose seemingly any word as a gTLD, such as ".shoes", ".food", and ".london", which can also be in non-Latin script such as Chinese or Arabic. Applications for new gTLDs started in January 2012, tagged at US$185,000 each, and closed in May the same year.

According to Corstens, about 1,200 new gTLDs are expected to be approved. The first set of gTLDs is slated to go live later this year, although he said the exact date is a "million dollar question".

How Trademark Clearinghouse works
The whole point behind the gLTD expansion was to allow organizations to diversify themselves in the Internet domain space, said Corstens.

But having thousands of new TLDs also meant opportunistic third parties can register just as many new Web addresses that exploit a company's trademark at the second level, he noted. Second-level domains refer to anything to the "left of the dot", and what the clearinghouse is focused on protecting, he explained.

For instance, an entity or individual that is not Apple could register "apple.tablets"--the trademark "apple" being the second-level and "tablets" the top-level domain. That brings risks of cybersquatting and other abuses. Either the third party buys the domain name as "a piece of real estate" in hopes to sell it later at a profit, or those with the "wrong intentions" buy the domain name and sells counterfeit products online to consumers, Corstens cautioned.

In short, a company's task of protecting their one or more trademarks becomes a "nightmare", requiring even more labor and investment than before the gTLD expansion, he explained.

There needs to be "an organized, centralized way [to go about protecting trademarks]". This is where the benefits of the clearinghouse become apparent, he said.

First, a centralized repository means greater ease and efficiency, because companies no longer need to individually register the trademarks they want protected for each and every TLD. Second, having marks in the database helps safeguard them at the second level, via two services--sunrise and claims.

For example, when the "coke" mark is put into the TMCH database, its owner is entitled to a sunrise period of 30 days once any new gTLD is launched by its registry operator. In other words, trademarks owners get to register new Web addresses incorporating the new gTLD, ahead of wider public availability.

Also, within 90 days of the launch of any new gTLD, trademark owners receive a warning if anyone else registers second level domain names matching their trademark in the TMCH database. So, if someone registers "coke.drinks", he will receive a warning notification from the system, Corstens said.

The notification is significant, he emphasized, although TMCH does not block registrations or create any legal rights because it acts as repository. The third party has been informed and made aware of the fact there is already a domain name in the system identical to the one he is trying to register--which could lead to legal consequences in certain jurisdictions. He will need to acknowledge this should he decide to proceed with the registration. And at this point, the trademark owner will also receive an alert that someone else is registering "coke.drinks".

Not the silver bullet
Asked how cases of trademark clashes would be handled, such as last year's iPad name dispute between Apple and China's Proview, Corstens replied in such scenarios, the companies involved can still register their trademarks into the database. But it is up to the registry operators of the new gTLDs to decide their own sunrise policy, which might be an auction, or giving owners with trademarks from certain geographical markets the priority.

Corstens said it is important to be "realistic" and noted that TMCH was not a "silver bullet" to fully eliminate trademark infringement and dispute in the expanded gTLD realm. "It offers a lot of value, but can it be even more, yes. Hopefully there will be additional things on top to offer even more protection. [For now] it is something that will help IP owners save money and have a centralized and efficient way of getting the protection they need anyhow."

TMCH will remain operational for as long as the release of new gTLDs is carried out. It is open to any trademark holder--individual or company--in any geography, and companies either submit trademarks by themselves or use an agent. TMCH fees are yearly, and range from US$95 to US$150 per trademark per year.

"It's a very low fee [considering] those services on a year's basis. [Without TMCH] most brand owners are doing similar measures and paying lots of money. In my view, TMCH is already more efficient and safer to have the minimum protection of trademark protection on the Internet," Corstens added.