The TMCH phase of new TLDs is here. Which companies should participate, and how should they approach online brand protection in the coming years?Remember when .xxx came out and law firms across the country advised their clients to defensively register domains?
Law firms are now sending notices to their clients about signing up for the Trademark Clearinghouse (TMCH), the new service to help brand owners has hundreds of new TLDs rollout. I saw my first such law firm notice last week.
Given the large number of new TLDs coming to market, I expect the number of submissions to the Trademark Clearinghouse to dwarf the number of defensive registrations of .xxx domains.
It may make sense for companies to participate, but they should also give their online brand protection strategy a rethink.
What the Trademark Clearinghouse does
Brand owners can submit their trademarks to the clearinghouse to get two types of protection.
First, approved submissions help qualify companies to claim domains during the sunrise period of new TLD launches.
Second, there’s a Trademark Claims Service. This alerts consumers if they’re about to register a domain that includes a brand that’s in the TMCH.
For example, let’s say Pepsi is one the marks submitted. If someone tries to register the domain pepsi.blog, the would-be registrant will be alerted that there’s a trademark on the term “pepsi”. This wouldn’t prevent them from registering the domain, but if they do register it then Pepsi will be alerted.
This second feature it rather important. Think about how many times a UDRP respondent (rightfully) claims they had no idea that a trademark in some jurisdiction existed. Now registrants will be “on notice” before they even register the domain.
The trademark claims service lasts for the first 90 days of the general availability of a TLD.
It’s more complicated and expensive than .xxx
Companies that want to protect their brands will need to give a bit more thought to the TMCH than they did when blocking a .xxx domain. It’s a more complicated process and it ultimately costs a lot more.
Mark owners will need to register with the TMCH or an agent. They’ll submit a proof of use of their mark with their submission.
The costs can add up quickly.
Let’s say you’re a fairly small consumer products company that has dealt with cybersquatting and unauthorized sellers over the years. You sell three products and want to submit the names of the products plus your company brand name. In other words, you have four marks to submit.
You can either submit those directly with the clearinghouse or through service providers such as Corporation Service Company. If you just have four names and you submit directly, you’ll probably opt to pay by credit card. The fee is $150 per mark if you submit…
but that’s just for one year.
Which brings up the part of the TMCH that is probably least fair to trademark holders.
You can initially register for 1, 3, or 5 years. There’s a slight discount for longer registrations.
Since the claims service lasts for just 90 days after each new TLD is launched, does it really make sense to pay for five years upfront?
That’s hard to say. You need to guess how long it will take to roll out all of the new, non-brand, non-closed TLDs. Honestly, we have no idea where the new TLD program will be a few years from now. Will litigated and heavily contested strings just be coming to market? Will we be on round 2? You’re guess is as good as mine, and it’s tough to ask a lot of companies to make this sort of guess in the middle of 2013. Granted, registrations can be renewed.
A one year registration doesn’t make much sense unless you want to delay expense; at minimum you’re going to need two years of protection. Unfortunately a two year registration isn’t an option. Three years may be a good bet, which means your cost is $435 per mark.
That’s just to get in the TMCH and doesn’t include the cost of registering domains in sunrise.
Should companies participate in the TMCH?
Companies must fundamentally rethink how they protect their brands in the era of new TLDs.
I’m sure that large companies that fight a number of cybersquatting battles (such as Verizon and Lego) will participate in the TMCH. But will it make sense to defensively register their key brands in all new TLDs?
The large number of new TLDs will force these large companies to rethink their strategy.
On the face of it, there’s no reason to Verizon to register the domain. Think about what would happen if verizon.shoes fell into the hands of a cybersquatter.
First, a parked page at the domain should get no traffic. The phenomenon of type-in traffic is largely limited to .com and ccTLDs.
That could change over the years, but I still don’t see someone typing in verizon.shoes. So Verizon doesn’t have to worry about “lost sales” from a parked page on the domain.
What about a scammer? Someone that sets up verizon.shoes and offers a free pair of Nike’s when someone buys a new mobile phone?
It’s possible, but someone could just as easily pull off that scam on thousands of alternative domains, like VerizonShoes.com or VerizonShoeGiveaway.com.
So defensively registering this type of domain is an exercise in futility.
The impossibility of fully protecting a brand on the internet on a proactive basis will become clear to trademark holders, who will need to rethink how they approach the problem.
To be clear, it has always been impossible to fully protect a brand. New TLDs won’t change that. They’ll just change the way trademark owners approach the issue.