Trademark lawyers and trademark organizations such as the International Trademark Association (INTA) have kept a close eye on ICANN's proposal to allow virtually unlimited new gTLDs and the impact such a move would have on brand owners and the stability of the internet itself. In this interview with INTA Executive Director Alan Drewsen, the Manager of External Relations in Internet & Judiciary Claudio DiGangi and Manager of Communications Matthew Schmidt, the INTA makes the case against the current move to open up the gTLD space, and encourages trademark owners to participate the comment period for the New gTLD Program – Draft Expressions of Interest/Pre-Registrations Model. (You can view the existing comments here or the recommendations to create a Trademark Clearinghouse and Uniform Rapid Suspension procedure here).
Announcer: Today’s program is brought to you by the attorneys at Traverse Legal, PLC, a global law firm specializing in Internet Law, Trademark Infringement, Copyright Infringement, Cybersquatting, Internet Defamation, Non-Compete & Trade Secret Law and Complex Litigation. If you have a legal matter arising on the web, contact one of Traverse Legal’s Internet Lawyers today. Now here’s your host, Damien Allen.
Alan Drewsen: Good morning, Damien, it’s good to be talking to you.
Damien Allen: Could you please tell our listeners a little bit about what ICANN has proposed to do with expanding the generic top level domains and why this is an important policy change for trademark owners.
Alan Drewsen: As you may know, right now there are 21 (gTLDs) generic top level domains, and more than 240 (ccTLDs) country code top level domains such as .us, .de for Germany or .cn for China. ICANN has proposed an unlimited expansion of the gTLDs which poses significant problems for trademark owners, but it’s not just a matter of ICANN and trademark owners. The proposal raises a lot of issues that are of concern to everybody, including stability of the internet and the proliferation of malicious conduct on the internet. But for trademark owners, in particular, the creation of additional consumer confusion and the great costs that will be involved in brand owners protecting their trademarks in the new gTLDs proposed by ICANN is a particular challenge and something that trademark owners, brand owners are very, very concerned about.
Damien Allen: What are some of the concerns on this?
Alan Drewsen: Well, first of all, I think it’s consumer confusion. They have built-up consumer interest and familiarity with their current sites, and to have this tremendous proliferation of new gTLDs when already in the current gTLD space there is significant counterfeiting going on, cybersquatting going on, typosquatting, so the cost involved and the damage to the brand owner-consumer relationship that would occur through this unlimited expansion is really very significant.
Damien Allen: One of the problems that new companies are having is finding a word for their brand which has both trademark clearance and domain name availability. It’s been suggested that ICANN wishes to open up domain name extensions in order to break that log jam. There’s two questions on this. First, do you think there is a shortage of available words for new brands and company names which have both trademark availability and domain name availability? And if so, what advice do you give the companies, large or small, who seek to rollout new brands and struggle finding both a mark and domain name to match?
Alan Drewsen: Well, those really can be two separate issues; the question of clearance for trademark and the availability of domain names. And first of all, and this touches your second questions about advice, it’s always the case that the strongest trademarks are going to be arbitrary or fanciful names; the Kodak’s of the next generations, and anyone interested in a new trademark is best advised to look for something that, as I say, is a fanciful mark. There always are going to be questions of clearance of trademarks, and this is an issue that INTA works on: how do you get the dead wood off the registries of various trademark offices around the world? But to the question of is there an availability of terms, yes, I certainly think so. There’s no indication that the languages involved here are running out of words available for new products and new services, and I really haven’t seen anything that would suggest that that’s the primary reason ICANN is interested in the expansion of new gTLDs. There has been some talk by ICANN that they’re trying to find competition for .com, but they haven’t done any of the necessary economic study that would show that new generic top level domains are in demand, are useful, that are really necessary in this marketplace.
Damien Allen: Do you believe there is a way to rollout new domain name extensions without creating fast new opportunities for the cybersquatters and typosquatters? Is there any rollout of new top level domains which INTA would support?
Alan Drewsen: I don’t think there is any question that in the long run there will be some new gTLD. It’s certainly true, initially, let me say that, there’s a lot to be said for sponsored gTLDs, rights verified sponsored gTLDs, of which there are some now among the 21 existing. If you take something like .museum and make that available only to museums that satisfy some sort of pre-existing criteria, then that seems to me fine. It, at least, significantly reduces the possibility of cybersquatting and typosquatting and additional phishing threats to users of the internet and that sort of thing. With respect to new gTLDs, it seems to me that the process has been backwards, that ICANN made the decision to come out with gTLDs without doing any of the necessary hard work that would indicate that that was, in fact, necessary. If it were to go back, ICANN, and look at the experiences of their introduction of new gTLDs back in, I think, 2001/2002, and then again in 2005/2006, and did some in-depth, unbiased economic analysis that would demonstrate that this was necessary for the marketplace, that the stability of the internet could withstand the introduction of new gTLDs, that there would be ways of controlling malicious conduct in the new gTLDs, that there would be sufficient protection for trademarks, then fine. In some sort of more gradual disciplined fact-supported basis, I think you would see new gTLDs. But to suggest that you’re going to have an unlimited number without doing any of the work necessary is a big mistake.
Damien Allen: What is some of the malicious conduct that could be an issue with all this?
Alan Drewsen: Well, we’re certainly seeing, we think, an increase, for example, in phishing schemes – that is attempts to separate internet users from their money through various scams seeking their social security number, their bank information, their credit card numbers - so, we see a lot of that. There’s an increase in counterfeiting on the internet, and then the cybersquatting and the typosquatting, while originally cybersquatting may have been undertaken in order to extort money from brand owners who had not yet applied for the domain names that their trademarks would justify them having, now, the cybersquatting, the typosquatting seems to be somewhat more directed toward getting consumers to go to a site that they had no intention of visiting in the first place, and that site could be pornographic, it could be a phishing site, it could be who knows what. These are some of the threats that we see increasing all the time and that’s increasing on the current number of gTLDs, not to mention the ccTLDs. So you can imagine if there were an unlimited expansion of those gTLDs, how those problems would multiply the same way.
Damien Allen: There’s no question that .com is the king. Many of the new top level domains which ICANN sought to rollout had limited success. What does INTA think needs to happen with the next generic top level domains in terms of cybersquatting and trademark protection?
Alan Drewsen: Well, first of all, let’s see the extent to which we need new gTLDs. But if it were determined in an orderly process that some new gTLDs – and it’s hard to imagine that the right answer is an unlimited number – but that some new gTLDs were necessary, then I would say take a look at the experience that brand owners had with the current gTLDs, the protections there were basically prelaunch protection so that trademark owners would be able to go in to the new gTLD and register their trademark as a domain name. Take a look at those prelaunch mechanisms, see how they worked, and then, take a look at some post launch mechanisms that would go further to protecting trademark owners and their customers, and when those adequate protections are in place, and throughout this ICANN process, there have been a number of good suggestions by trademark owners as to what those processes might be once they’re in place, then go ahead and launch. But to launch these gTLDs, as I’ve been saying, without sufficient study, but then secondly, without sufficient protection mechanisms, is just going to throw the whole system badly off balance. Let me add something here, although it’s not directly responsive to your question. ICANN has authorized the implementation of IDN ccTLDs. In other words, international domain names using languages, characters, other than the Latin ones that we all know, so that it would possible for .cn to use Chinese characters, it would be possible for .ru to use Cyrillic characters, and this change which INTA certainly doesn’t oppose - I mean, we think it’s a good idea and a fair idea for the international community - but this change itself puts significant burden on the management of the domain names system. And the idea that you would then add an unlimited number of gTLDs when the system would not have even absorbed these IDN ccTLDs, is also a terrible idea with respect to the overall stability of the system.
Damien Allen: What are some of the stability issues that are upcoming with this?
Alan Drewsen: Well, it goes in to some technical matters that I’m probably not confident to comment on, but the changes that would be necessary from a technical point of view alone solely to accommodate new characters across the board are very significant. ICANN has done its own internal studies. It’s posted some of the results on its website. You can read some of the hesitations and cautions that their own experts have raised with respect to this process, and the IDN ccTLDs and the gTLDs are not the only innovations and changes that ICANN has proposed in the system. There are two or three others all of which together really cannot, it seems to me, be accomplished. They have to be introduced sequentially and in an orderly fashion, and we haven’t seen that yet coming out of ICANN.
Damien Allen: What kind of trends is the INTA seeing on the internet in terms of trademark infringement and online brand protection, and what do you think the biggest challenges are for brand owners for the years to come?
Alan Drewsen: I’ve mentioned some of them. The increase in counterfeiting, the increase in phishing, the misuse of trademarks through typosquatting and other sorts of activities that are attempting to direct traffic away from the website that the consumer was trying to reach; these challenges will continue. The bad actors will figure out some new ones that we’re not yet contemplating, and the challenges in magnitude will depend on how quickly and to what extent some of these ICANN proposals are put in place. So, the pressure on trademark owners, and on their customers, can be expected to increase no matter what, but increase exponentially if these new gTLDs are put into place the way ICANN currently contemplates it.
Damien Allen: ICANN has set up a solicitation process for all of this which requires people that are interested in getting these new generic top level domains to pay some form of a fee. What’s going on with this program, and what’s your opinion of the whole thing?
Alan Drewsen: Well, I think the comment period ends on the 26th or the 27th, and we’ll certainly put in our comments, but the bottom line is that we think this is, once again, not a good idea. It appears to be an attempt by ICANN to justify, after the fact, the proliferation of new gTLDs by seeking expressions of interest from potential applicants. And in fact, it puts brand owners in a very difficult position the way it is structured because there may be brand owners – and this is not a real example - but I mean, take INTA. INTA could, I suppose, apply for and get .inta, and so in this process, which is called (EOI) expression of interest that ICANN has put out, INTA would have to decide whether or not to say they were interested if in fact this program went through as ICANN planned. It doesn’t give any play for INTA in my example to say, I think this is a terrible idea. Now if it goes through, I might be interested, but my first belief is that it is a terrible idea and shouldn’t go forward at all. So, it’s certainly possible that ICANN is going to get expressions of interest from companies who really hope the thing doesn’t go through at all but are saying, well, if it goes through, then I better show some interest. So, I think the inquiry itself is flawed. There have been comments received already which are minable, actually, compared to the community that’s out there that are split kind of 50/50 on whether they think this is a good idea, but INTA’s position will be that it’s not a good idea.
Damien Allen: Registration for these expressions of interest is costing thousands of dollars if this doesn’t go through. Are these monies refundable or has this just gone into the general ICANN fund?
Alan Drewsen: Claudio, do you know the answer to that?
Claudio DiGangi: There is, out of the draft model that is being proposed, the possibility that you would receive a refund if the new gTLDs were not in fact launched within 18 months, so, that would be available, but no refunds for changes to the applicant guidebook, so that with basically any changes there will basically have to be absorbed by the applicant.
Alan Drewsen: So that means there is a great deal of complexity in the process, and for some of these corporations the money that they’re being asked to put up with this expression of interest, for some of the larger ones, is not significant. I think the threat here is that it will appear that there is some interest when in fact there’s significantly less than this EOI process will demonstrate.
Damien Allen: Well, there’s definitely a lot of information to be discussed on this particular topic; a lot of issues going on. Any closing thoughts, Gentlemen.
Alan Drewsen: INTA has been encouraging it’s members, and trademark owners in general, to provide comments to ICANN, and so I would use this as a further opportunity to tell our members to make sure that they comment. I mean, ICANN is interested in hearing from associations like INTA, but they also say that they want to hear from the individual brand owners, so on the EOI and on the gTLD proposal in general, it’s a good opportunity for brand owners to comment. And other than that, I guess I would go back to what I said at the very beginning, and even though this discussion has been in terms of concerns of brand owners, the proposal has much broader ramifications and in fact implicates the stability of the internet and the behavior of users and the possibility that they are going to face more schemes and scams that will try to take their money from them.
Damien Allen: Well thank you very much for joining us today and shedding a little light on ICANN’s proposal on the generic top level domains, Gentlemen.
Alan Drewsen: Thank you, Damien, for having us.
Damien Allen: We’ve been speaking with Alan Drewsen, Claudio DiGangi, and Matt Schmidt of INTA. You’ve been listening to Traverse Legal Radio. My name is Damien Allen, everyone have a great afternoon.
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