[wg-b] Position Paper of Deborah Shelton from ArentFox

["Michael D. Palage" <mpalage@ipwarehouse.com>]

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Response to Working Group B's Call for Comments
Regarding Protection of Famous Marks on the Internet

This paper responds to the questions presented by the chair of Working Group
B regarding  protection of famous marks in the domain name system.  Owners
of famous marks have been forced to expend considerable time and money in
dealing with a large number of domain names that contain their famous marks.
Most of these domain names had no valid basis for incorporating the famous
marks.  Rather, the names appear to have been picked with the hope that they
would either generate traffic for a particular site or would result in a
payment of money from the famous mark owner.  In some cases, owners of
famous marks have decided to pay significant amounts of money to obtain such
domain names.  This, combined with news stories of other domain names being
sold for large sums of money, has created an industry of persons who
register numerous domain names apparently for speculative purposes.
This creates at least two problems that would in part be addressed by an
exclusion of famous marks.  The first problem is the drag on the development
of Internet commerce that is occasioned by companies having to spend their
resources to combat the proliferation of domain name infringements and the
attendant monitoring of domain name registrations.  The other problem is the
rush for names that would accompany the opening of any new gTLD.  Having
some form of exclusion should reduce the infringement problems and more
importantly it should resolve the problem of having hundreds of applicants
trying to be the first to register famous marks in any new domain that is
opened.
These are two very real concerns.  If ICANN does not take steps to address
them, it is highly likely that famous mark owners will jointly seek the
intervention of the United States government in the ICANN process to insure
greater protection of famous marks.  To avoid such intervention it is
imperative that ICANN adopt an exclusion for famous marks.  Such an
exclusion will benefit the Internet by actively promoting its continued
development as a commercial tool.
Issue #1:   Should the factors used to determine what constitutes a famous
mark be (1) objective (i.e., trademark registrations in X number of
countries, X number of documented cybersquatting incidents, etc.); (2)
subjective (i.e., the criteria as currently contained in the WIPO report);
or (3) a combination of both objective and subjective criteria?
Response: Both objective and subjective criteria should be used in
determining whether a mark is famous.
While some objective factors may be helpful in assessing the fame of a mark,
the ultimate determination of whether a mark is famous necessarily relies on
subjective factors.  For example,  objective factors such as the number of
trademark registrations and cybersquatting incidents associated with a
particular mark are indicators of fame, but those factors should not be
solely determinative of what constitutes a famous mark because there are
other primary indicators of fame, such as public recognition, which may be
more difficult to objectively measure.  Therefore, subjective factors such
as those adopted by WIPO's Standing Committee on the Law of Trademarks,
Industrial Designs and Geographical Indications (WIPO SCT), and listed in
the Final Report of the WIPO Internet Domain Name Process, should be used in
conjunction with objective factors to determine whether a mark is famous.
An application form for requesting an exclusion for a famous mark could be
developed that asked for information supporting various factors such as: (1)
the degree of public recognition of the mark, which might be established by
the submission of survey evidence or the like; (2) the duration, extent and
geographical area of any use of the mark, which might include sales
information, history of the mark, and similar use information; (3) the
extent of use of the trademark in advertising and promotional efforts and
dollars spent on these efforts;(4) the record of successful enforcement of
rights in the mark, including decisions by courts or other agencies that the
mark at issue is famous; (5) the efforts taken to register and protect the
mark, including effort to register the mark in various countries; and (6)
the scope of domain name infringement problems involving the mark at issue.
The body appointed to determine fame on a case-by-case basis should also be
charged with the task of determining the criteria for evaluating famous mark
claims.  If a competent body is selected to make the determination, it
should be acceptable to allow that body to determine an evaluation criteria
and mechanism that could then be approved by the ICANN Board.

Issue #2:  Should there be substring protection?
Response: Only to the extent that the substring includes minor modifications
such as hyphens or a number following the famous mark, e.g. KODAK1.com.  For
other domain names containing a famous mark there should be an opportunity
for the famous mark owner to object to the domain name before it becomes
active.  Optimally, a famous mark owner should be made aware of potentially
detrimental substring use.  However, substring protection presents a severe
administrative burden.  Accordingly, a simple notice mechanism should be
employed to alert famous mark owners of substring use.  The mechanism could
consist of giving notice through publication before the domain name becomes
active much like notice is currently provided in many countries by
publishing trademark applications before the actual registration issues.
Owners of famous marks could then review the published domain names and
utilize the Uniform Dispute Resolution Policy (UDRP) if it found a domain
name containing the famous mark to which it objected.
To allow the domain names to be used before the famous mark owners know
about them will only encourage the continued practice of obtaining domain
names with will known marks in order to generate traffic to a particular
site.  Even if such as domain name can be used for only a few weeks or
months before the famous mark holder can stop it, that short period of use
attracts enough traffic to make it will worth the $70 investment in
obtaining the domain name.
Issue #3: Should there be an exclusion process or a right of first refusal
involving famous marks and new domain names?
Response: As noted in the response on substring protection, the process
should include an exclusion for the famous mark and a publication-based
notice system for substrings containing the famous mark.  An exclusion
should be given for the identical mark, which exclusion should include minor
modifications to the mark such as hyphens or the letter "www" before the
mark.  Further, there should be a notice period during which famous mark
owners can object to domain names containing the famous mark as part of the
domain name before the domain name is activated.
Owners of famous marks should not be required to register their own marks as
domain names in order to prevent others from taking advantage of the
trademark owner's goodwill in the famous mark. This is the only way to
prevent what would otherwise be a rush by hundreds, if not thousands, of
people to register numerous famous marks with the hope that they can sell
them to the famous mark owner when new gTLDs are opened.
Both the interests of consumers and the interests of famous mark owners
would appear to be bolstered by an exclusion process.  With particular
regard to famous marks, consumers grow to expect to receive a certain type
of quality of product or service in connection with a mark.  Accordingly,
when consumers access a site by a particular domain name, the consumer
assumes the area and the goods or services offered there meet these
expectations.  When a consumer is instead taken to a site offering products
or services of lesser quality standards, or in many cases offering services
offensive to the consumer, the consumer has been unfairly deceived, and the
reputation of the famous mark owner unfairly damaged.
Issue #4: How should costs be allocated involving third-party challenges to
famous trademark applications, exclusions, or right of first refusals?
Response: Trademark owners should bear their own costs for establishing that
the subject mark is famous.  The fee should be reasonable but substantial
enough so that the demands for exclusions for famous marks will not severely
overburden the determining body.  Challengers should bear their own costs of
bringing a challenge and be required to show a reasonable interest in
seeking to deny the subject mark a famous mark exclusion.  For example, a
reasonable interest would be that the challenger also uses the mark at issue
legitimately as a trademark or as a domain name currently.  This would
discourage baseless challenges to an application for an exclusion.
As with any fee, it will take some experience with the process to determine
the actual costs of processing exclusion requests and the objections
thereto.  However, it should be a relatively easy task to review those costs
and adjust the fees as necessary.
Issue #5: Should WIPO serve as the centralized administrative authority to
handle famous trademark classifications?
Response: WIPO is an acceptable organization for this task. WIPO is an
international body that carries sufficient expertise to handle this
evaluation.  Further, because it is a UN related body, it will have a
greater likelihood of being neutral and not swayed by country or industry
affiliation.
Issue #6:  If an exclusion model is adopted, does the ultimate
responsibility rest with the registrar or the registry?
Response:  The registry should have ultimate responsibility as it is the
entity responsible for maintaining the master database for a top level
domain.  The registry can simply "bounce" any applications that are for an
excluded domain, with an attached message stating that the name is on the
list of excluded famous marks.
Issue #7: Should there be a test-bed period for the roll-out of one new
commercial gTLD to see how any proposed famous trademark safeguards work?
Response:  Yes; there should be a test-bed period to ensure the efficacy of
the adopted safeguards.  If, after the roll-out of the new gTLD, it appears
that changes in the domain name policy are required to protect famous marks,
while at the same time ensuring the continued development of the Internet,
no other commercial gTLDs should be introduced until changes to the
safeguards are implemented and further evaluated.
Issue #8: Should the non-retroactivity provision contained in Paragraph 276
(of WIPO's Final Report) impact transfer between third parties?
Response: While it would be problematic to retroactively impose an exclusion
on existing domains, it also appears to be unfair to allow a potential
"cybersquatter" to either profit from or acquire what would have been an
excluded domain name through transfer.  Thus, transfers between unrelated
parties of such domain names should be prohibited.