Executive Summary:

Over the past twelve months there has been an in-depth discussion of Chapter Four of the World Intellectual Property Organization (WIPO) report. There appears to be a growing consensus on several key issues; while there remains significant differences on others. In this report, I will attempt to outline the points of agreement and dissension that have emerged since the inception of the Working Group.

Working Group B was created in Berlin last year and tasked with addressing Chapter Four of the WIPO report. Since that time the group has met at each of the last three ICANN regional meetings. There are currently over 120 participants on the Working Group B mailing list. Although the majority of the participants are trademark attorneys and/or brand managers, the remaining participants are scattered among a diverse cross section of the other six DNSO constituencies.

When Working Group B was formed last May, Jonathan Cohen was the designated Names Council Co-Chair and I was the elected Co-Chair. However, after Jonathan’s decision to run for an ICANN Board seat, I functioned as the sole Chair of the Working Group for several months. Last December, the Names Council designated two Names Council representatives, Kathy Kleiman and Philip Sheppard as Co-Names Council Liaison Representatives.

In October 1999, there was a vote among the participants of the Working Group at that time and a consensus was reached (30 out of 42 voters - 71%) that a mechanism was needed to protect famous trademark interests in connection with the domain name system.

Of the ten position papers received, only five offered substantive solutions to the problems confronting the Working Group. A summary of each of these five papers are outlined below:

Non-commercial Constituency Position Paper: This position paper argues that the creation of a list of famous marks which are then excluded from all new gTLDs would greatly expand the existing rights of famous mark holders. It would allow those who hold marks that are famous in one context, to block future domain name holders in the new gTLDs from using words in noncommercial and generic ways that are specifically protected under domestic laws of sovereign countries. It would eliminate the ability of individuals, noncommercial groups and small businesses to register domain names in new gTLDs for protected noncommercial uses(such as "bell" by a school group or "apple" for a children’s noncommercial program) and also for protected generic uses(such as "bell" by a bell manufacturer or "apple" by an small apple farmer). Instead of the WIPO/IPC proposal, the Non-Commercial Paper proposes creation of a .TMK top l! evel domain (others have called it .FAME) for famous marks in which WIPO could create a list of famous marks owners, these famous names would be registered in this new gTLD, and the gTLD would be branded as "the place to be in e-commerce."

Michael Palage Position Paper: This position paper advocated the creation of a famous mark list primarily using the criteria set forth in the WIPO report. However, it also called for the use of additional objective criteria to provide some safeguards from the list growing out of control. The Palage Position Paper would allow for a famous trademark owner to register a number of domain name variations during a sunrise period to protect its sub-string variations. This sunrise period would last for a fixed period of time prior to the top-level domain being opened to the public for registrations.

Eileen Kent Position Paper: This was a paper submitted during the position paper submission period and called for a free market system in which all trademark owners would be able to subscribe to a notification system. This proposal did not call for the creation of a famous marks list.

Harald Alvestrand Position Paper: This paper was also submitted during the position paper submission period and called for the creation of a finite list of famous marks by WIPO of between ten (10) and one hundred (100) marks. This proposal would allow the famous mark owner to register the mark and a small number of identically similar marks, i.e. 's, dashes, etc. If the famous trademark owner did not elect to register the mark, an Internet user would be directed to a default page stating that the domain name is intentionally not being used.

Intellectual Property Constituency Position Paper (version 1) : The original IPC paper essentially adopted the basic principles set forth in Chapter Four of the WIPO report.

Following the publication of these position papers, the Registrar Constituency began to mobilize when several of the position papers advocated the use of filters in connection with the registration process. Prior to the ICANN regional meeting in Cairo, the registrars drafted the following position paper.

Registrar Proposal (version 1): The Registrar Constituency supports the use of a sunrise period to protect the interests of the famous trademark holders. However, in light of the difficulty and controversy surrounding the creation of a famous marks list, the registrars support a sunrise program where all registered trademark owners could participate.

Prior to Cairo, both Names Council Co-Liaisons circulated the following position paper in both Working Groups B and C.

Philip Sheppard/Kathryn Kleiman Compromise Position Paper: Sheppard and Kleiman, co-liasion Names Counsel representatives of WG-B appointed fairly recently by the Names Council, sat down together to try to bridge seemingly unbridgeable gulfs. In a paper drafted by Sheppard and now circulated to WG-B and WG-C, Sheppard and Kleiman propose a new "common ground" based largely on the "Principle of Differentiation" — "that the selection of a gTLD string should not confuse net users and so gTLDs should be clearly differentiated by the string and/or by the marketing and functionality associated with the string." The paper did not explicitly call for chartered domains, but does imply that even open domains should have added value and so be more than imitations of dot com. The authors believe that finding agreement to the specific solutions to trademark concerns will be considerably easier once it is known that domain names ! will be selected on the basis of these principles.

Other principles support the goal of "findability" — that coke as a power source and coke as a beverage can coexist as domain names in new gTLDs provided the new gTLDs provide the Internet user with a sense of their different purposes and uses. The paper did not explicity call for chartered domains but does imply that even open domains should have added value and so be more than imitations of dot com. The authors believe that finding agreement to the specific solutions to trademark concerns will be considerably easier once it is known that domain names will be selected on the basis of these principles.

In Cairo the Intellectual Property Constituency (IPC) released the following revised position paper.

Intellectual Property Constituency Position Paper (version 2): This revised position paper advocated the creation of a famous marks list that would be used to preclude the registration of a domain name that is identical to or nearly identical to a famous mark on such list. The creation of a famous marks list would be based on the criteria set forth in paragraphs 284-285 of the April 30, 1999 ‘Report of the WIPO Internet Domain Name Process.’

Following cross-constituency negotiations between the registrars and the IPC in Cairo, the registrars expressed an interest in supporting the creation of a famous marks list by WIPO to be used in connection with the sunrise period, Registrars (version 2). Upon leaving Cairo, the registrars and the IPC expressed a willingness to continue to work together in an effort to forge a common ground. This was reported in my Working Group B Status Report that was submitted to the Names Council last month.

On Friday the 14^th of April, the day before the deadline for my report, the IPC submitted to me a

revised position paper which I have summarized below and included as Attachment #1.

Intellectual Property Constituency Position Paper (version 3): The revised position paper advocates a Sunrise Proposal to be incorporated into the rollout of new top-level domains. During the Sunrise Period, owners of trademarks and service marks (marks) would be able to register their marks as domain names on a first-come-first-served basis in a new top-level domain before that new domain is opened to the general public. In order, to protect their sub-string variations without the need for filters, the trademark owner would be able to register up to 20 variations of the mark.

This proposal is nearly identical to the Registrars’ first Sunrise proposal prior to Cairo. Unfortunately due to the time in which this report was submitted to me and the rest of the Working Group, there was not adequate time for proper discussion among the Working Group B participants.

Despite the recent progress of the IPC and the registrars There remains strong opposition among many members of the Working against any additional protections for trademarks beyond the Uniform Dispute Resolution Policy and national laws such as the U.S. Anticybersquatting Act and the new trademark monitoring services now coming into existence. Many of these viewpoints have been included in the attachment to this report.

In light of the most recent IPC proposal, I am glad to report on the following apparent points of consensus. Due to the lack of time, a formal vote could not be conducted among the Working Group B participants, but the Chair after consultation with the joint Names Council Liaisons believe that the following are accurate points of consensus:

1. There does not appear to be the need for the creation of a universally famous marks list at this point in time.

Comments: The creation of a universally famous marks list was a political hot potato. Issues such as who should create the list, the criteria that should be used, limits on the size of the list, etc. were hotly debated with no clear compromise in sight. The current Sunrise proposal being advanced by the IPC and Registrar Constituency do not require the creation of such a list. However, if and when a universally famous marks list is created, it would be prudent for ICANN to consider whether the list is applicable to the then-existing gTLD registration process.

2. There appears to be a consensus that protection afforded to trademark owners will depend upon the type of top level domain.

Comments: This consensus item is based upon the recognition that a sunrise program is probably not suitable for every new top-level domain, especial certain non-commercial domains. However, this consensus item is conditioned on many tangential issues, i.e. the scope of chartered gTLDs, the enforcement mechanism for charter, etc. Defining the procedures for classifying what constitutes a non-commercial top-level domain, is better left to Working Group C. However, nothing in the consensus item should be construed as creating immunity from the UDRP or other legal proceeding should a domain name registrant in a charted top-level domain violate the charter or other legal enforceable rights.

Working Group B has worked tremendously hard to find some middle ground of practical protection for trademark owners within commercial gTLDs that would be within existing law and within the scope and power of ICANN. The Sunrise Proposal allowing pre-registration for all Trademarks now has strong support in the registrar and IP communities. Some members of the Noncommercial and Small Business Communities also have expressed support for this Proposal, providing clear limitations and safeguards are created and followed.

The basic principle of the Sunrise provision as set forth in the various position papers summarized above, includes a mechanism whereby a trademark owner could pre-register domain names in a select commercial top-level domain prior to its being open to the general public. Additionally, the trademark owner would be eligible to register a limited number of domain name variations that were similar or nearly identical to the registered mark. The Registrars have proposed 5 variations of the trademark; the current Intellectual Property Proposal sets out 20 variations of the trademark.

This compromise would eliminate the need for Registries to filter out domain names that potential infringe a trademark on an ongoing and permanent basis. More importantly, this right of pre-registration would be for a finite time prior to the top-level domain being added to the root and would convey no rights or privileges to the trademark owner after the conclusion of the sunrise period.

Some members of the noncommercial and small business communities have conditioned their support for this Sunrise Period for All Trademarks on its application only to chartered commercial gTLDs (such as a .CAMERA or .AIRLINES) and only for a limited number of new gTLDs introduced in a limited initial period of time (sometimes called "the testbed period"). These safeguards will protect trademarks owners during the early period of time where the new commercial gTLDs might create some chance of confusion, without imbedding a permanent bias in favor of existing businesses.

Some reasons this Agreement seems consistent with the consensus items of this Working Group are:

• it does not create a list of globally famous marks which might or might not be famous in the individual countries of the registries, registrars and domain name holders;
• it does not create a list of globally famous marks which might fall outside the scope and mandate of ICANN;
• it does provide protection for both large and small trademark owners within commercial domains on a first come, first served basis;
• it does protect noncommercial speech and noncommercial use of gTLDs and domain names;
• and it provides protection for the new registries who fear that without clear policies for protection of trademarks in the initial rollout (called the testbed period of new gTLDs) that they will be sued for failure to protect large trademark owners trademarks in new gTLDs..

Thus, this Sunrise Proposal is a pragmatic way to bridge the gap of opinions in Working Group B and to allow the responsible rollout of new gTLDs. We are sure that the details of the Sunrise Proposal need to be worked out by the Internet Community, the Names Council and the ICANN Board, but the proposition itself is the best way to achieve the goal of expanding the name space in a controlled reasonable manner within the next year.

In response to the recent IPC and Registrar proposals advocating a Sunrise Proposal, several participants in the Working Group have criticized this proposal as being technically unfeasible, unfounded in law, and greatly expanding the scope of Working Group B’s original charter. I have attempted to include all of the criticisms of the sunrise proposal received to date as part of the Attachment accompanying this report.

Another point that needs further clarification is how to handle the potential conflicts among trademark owners during the sunrise period. For example, the current IPC proposal calls for a first come first serve model, whereas the original Registrar proposal contemplated a potential expanse of the UDRP to handle conflicting priority claims. Defining the procedures and mechanisms that will be employed to handle trademark disputes during the sunrise period is probably best left to a drafting committee composed of representatives from a cross-section of the DNSO should this proposal be further considered.

One other point of clarification is the contractual language that will accompany the "take down" provision currently embodied in the latest IPC proposal. Although the registrars are currently contractually bound to correct faulty registration data, there may be the need for additional language to shield them from any liability in connection with the take-down provision. Again, this clarification is best left to a drafting committee to resolve should this proposal be further considered. The registration authorities are sensitive to the fact that the take down provision is crucial to the IPC proposal. This is particularly so since there is no requirement for the registrar to verify the existence of a registered trademark prior to registration during the sunrise period. There also appears to be some further consideration as to what happens after a sunrise registration is taken down, i.e. who gets priority in that domain name where there are multiple claimants.

At first blush, the recently proposed IPC Sunrise Proposal and the Registrars’ original Sunrise Proposal on its face appears to greatly expand the scope of protection afforded to trademark owners from just famous trademarks to all registered trademarks. However, upon closer examination, it is my opinion that this potential compromise offers an immediate solution to the protection of trademark interests during the test period for new top-level domains.

In addition to my duties as Chair of Working Group B, I am also the Secretariat of the Registrar Constituency. Although I have not been able to discuss the recent IPC proposal in detail with all the registrars, most of the ones that I have spoken with have expressed a guarded optimism that the Sunrise Proposal can provide a basis for further consensus building efforts. Although there have been several registrars that have questions about implementation and procedure, only one has gone on record as rejecting the IPC latest proposal, see Attachment #5.

Although Jonathan Weinberg has done a yeoman’s job trying to forge consensus in Working Group C, based upon the concerns expressed by some participants in this Working Group the following points need further study by the Names Counsel and ICANN staff in preparing the reports for public comment:

• Is the current proposal for six to ten top-level domains overly ambitious considering we have failed to identify the specific safeguards designed to protect the trademark interests.
• The legal requirements set forth in any proposed charted top-level domain needs to be clearly set forth as well as the mechanism for charter violations.

The Working Group B Report is the product of the hard work of the members of Working Group B and the strong drive of Michael Palage to craft consensus from widely divergent views and needs. The Report now goes to the DNSO Names Council for a public notice period, and then to the ICANN Board for a public notice period, and then a public discussion at the Japan ICANN meeting this summer.

(1) Two Overall Issues for any Working Group Report

The following two questions must be asked of any working group:

(2) Is the Protection of Famous Marks Necessary in New gTLDs?

It is important to note that the October 1999 vote in favor of famous mark protection passed by only one vote, and the deciding voter immediately tried to change her ballot. YJ Park, of the Noncommercial Constituency, found the language of question to be vague and misleading. When she properly understood the question (after the votes were cast), she should to reverse her ballot to Oppose the protection. It was too late. Starting from this shaky basis of one vote, the support for famous mark protection in new gTLDs is lukewarm at best.

A question for those who will comment on this Report: Particularly, in light of the success of the Uniform Dispute Resolution Policy and the strong US Anti-Cybersquatting Act (protections not in existence when WIPO drafted its reports and particular the Chapter 4 Famous Mark protections), is special trademark protection still needed in the new gTLDs?

1. If trademark protection is needed, how should it be structured?

If you agree that the trademark protection being proposed in the Sunrise Period is a good one, at least for a limited testbed period to get us over the hump of initial confusion as new commercial gTLDs are rolled out, then please help us further define some key issues:

- How long should the testbed period last?

- To what gTLDs should it apply (all commercial gTLDs, only the chartered or limited use gTLDs, other?)?

- To what trademarks should the protection apply (all trademarks, only trademarks older than 1 year, other)?

- Should the Sunrise Period advance registration apply to variations of trademarks, and if so, what type of variations and how many should be allowed (e.g., punctuation, plurals, any addition of any number of letters, other)?

2. How do We Protect Noncommercial Speech and Activity in new gTLDs?

There is general agreement, even consensus (since it crosses constituency lines), that the Sunrise Period’s advance registration of trademarks should not apply to noncommercial gTLDs. This is a good agreement, and consistent with national and international law. There is not consensus, however, on how to define Noncommercial gTLDs. Further, there are a variety of different proposals (none final) that would create special exposure to noncommercial domain name holders and unfortunately allow much easier revocation of their domain names.

The Internet Community, and particularly the Noncommercial Community’s comments, would be very useful on the following points:

- How do you expect to use Noncommercial gTLDs (now and in the future)?

- Does the Noncommercial Community need undifferentiated (unchartered) gTLDs as well as chartered gTLDs?

- How can ICANN (or whatever approving body it creates to approve new gTLDs) recognize a new Noncommercial gTLD?

- Should Noncommercial gTLD domain names be given less protection than domain names in commercial gTLDs?

- Under what circumstances and procedures should a Noncommercial gTLD domain name be subject to challenge and possible revocation?

- How does existing law in your country protect noncommercial speech (and also noncommercial use of domain names)?

3. How do We Protect the New Registries Who Will Introduce the New gTLDs?

One of the main reasons for the creation of trademark protection within the new gTLDs is the fear that trademark owners will sue new registries. This fear drove Network Solutions, Inc., in 1995, to create a domain name dispute policy, which equated domain names with trademarks. The policy had no basis in the traditional protections and limits of trademark law; it was designed solely to protect Network Solutions from lawsuits. It resulted in the loss of thousands of domain names of individuals, noncommercial organizations and small businesses (through the NSI process and also from intimidating letters and threats), which was not consistent with law or equity.

How do we protect Registries without endorsing a position that goes beyond the bounds of existing protection for trademark owners. We need your comments! In your country, are Registries who choose not to get involved in trademark/domain name disputes protected by national laws or by court decisions? Do you think a policy from ICANN urging the neutrality and immunity of gTLD Registries help them to avoid suits and to win suits that might be brought in your country? What protections of new Registries do you think lie within the limited scope and mandate of ICANN?

(6) Final Note — A Hearty Thanks to Michael Palage.

Working Group B’s Chairman, Michael Palage, has set a new precedent for hardworking working group chairs. He participated in online and in person meetings worldwide, attended an untold number of official and unofficial forums, acted as mediator, listed to all sides, and rallied the troops. He saw his job as bridging the gaps (chasms, actually), which divided the working group and have halted the rollout of new gTLDs for over four years. Michael helped everyone to see the needs of the Registrar Community, from which he hails, but also the needs of the other Constituencies and Internet communities. No one can count the hours, days or nights that Michael has decided to this effort. He has my thanks, gratitude and admiration. His work now turns over to you — the Internet Community!

Respectfully Submitted,

Michael D. Palage

See the accompanying 20000417.NCwgb-attachments.html attachment for the following documents:

Attachment #1 — The Intellectual Property Constituency Sunrise Plus 20 Proposal

Attachment #2 — Office of Advocacy — US Small Business Administration

Attachment #3 — Open Root Server Confederation (ORSC)

Attachment #4 — Ellen Rony Personal Comments

Attachment #5 — TUCOWS Comments

Attachment #6 — Consumer Project on Technology

Attachment #7 — Professor Froomkin’ Personal Comments

Attachment #8 — Mark Langston’s Personal CommentsChair Working Group B