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ICANN Legal Rights Objections: What’s Past Is Prologue

As of today, panelists at the World Intellectual Property Organization’s Arbitration and Mediation Center have decided 12 trademark-based legal rights objections to a proposed top-level domain under the Internet Corporation for Assigned Names and Numbers’ new gTLD initiative. They rejected every one, almost categorically so.
 
With 53 legal rights objections remaining to be decided, the only surprise the future might hold is the faint prospect that a WIPO panelist might actually rule in favor of a trademark owner.

Legal Rights Objection Rulings to Date


 
The biggest lesson so far has been that the Legal Rights Objection process is wholly ineffective for trademark owners seeking to knock down proposed domains containing generic strings. In many cases, companies owning marks for terms such as EXPRESS, HOME, VIP, LIMITED, MAIL, TUNES have lost LROs to domain applicants with no intellectual property rights in those terms whatsoever. Pinterest’s failed challenge to Amazon’s proposed .pin domain was particularly ominous for mark owners, because Amazon seems pretty clearly to be moving in on Pinterest’s business. Proposed domains for dozens of generic terms (e.g., .academy, .blue, .cam, .coach, .direct, .food, .music, .now, .song) and many others all appear highly likely to emerge unscathed from the legal rights objections process. Law is a “never say never” profession but, seriously, the adverse results in the .express and .mail proceedings ought be be writing on the wall for the remaining trademark-based challengers to generic string domains.
 
The reason for this dour outlook can be found in passages from two early LRO rulings: the first one, Right at Home v. Johnson Shareholdings Inc., No. LRO2013-0300 (WIPO, July 3, 2013); and the second, my favorite, Express LLC v. Sea Sunset LLC, No. LRO2013-0022 (WIPO, July 9, 2013).
 
In Right at Home, panelist Robert A. Badgley offered the first interpretation of key terms in Section 3.5 of ICANN’s New gTLD Applicant Guidebook. The guidebook uses highly qualified language, directing LRO panelists to decide whether the proposed new domain “takes unfair advantage” of the trademark owner’s rights, or “unjustifiably impairs” the value of the mark, or creates an “impermissible likelihood of confusion” between the mark and the proposed domain.
 
In Badgley’s view, this language creates a very high burden for trademark-based objections:

The use of the terms “unfair,” “unjustifiably,” and “impermissible” as modifiers, respectively, of “advantage,” “impairs,” and “likelihood of confusion” in Section 3.5.2 suggests that there must be something more than mere advantage gained, or mere impairment, or mere likelihood of confusion for an Objection to succeed under the Procedure. It seems, rather, that there must be something untoward – even if not to the level of bad faith – in the conduct or motives of Respondent, or something intolerable in the state of affairs which would obtain if the Respondent were permitted to keep the String in dispute. (emphasis added)

Obviously, it is going to be very difficult for any trademark owner to demonstrate that a proposed domain is so fishy it satisfies the “something untoward … if not to the level of bad faith” standard.
 
So far, no panel has challenged Badgley’s interpretation of Section 3.5.2. In fact, his Right at Home decision has been cited with approval in three subsqequent LRO decisions: Canadian Real Estate Association v. Afilias Limited, Pinterest, Inc. v. Amazon EU S.à.r.l, and Defender Security Company v. Lifestyle Domain Holdings, Inc.
 
The second opinion, Express LLC v. Sea Sunset LLC, was one of the better opinions (and I am including the federal court stuff that we wade through every day) I have read in a while. Panelist Frederick M. Abbott carefully summarized the arguments on each side (there are good lessons here for attorneys working on the next round of legal rights objections), and the law that he was required to apply to the dispute. When Abbott turned to the reasoning behind his decision to reject Express LCC’s objection to the proposed .express top-level domain, I got that sense that this panelist was a teeny bit irked that ICANN itself had not made the hard policy choices that the LRO had just dropped in his lap. It’s one thing to ask a panelist to transfer a domain name that might have cost the registrant $10 or so; and it’s quite another to ask a panelist to upset an investment of at least a half-million dollars in a new top-level domain. All based on a trademark registration for a generic term, in a single market, issued by a single government entity. Abbott declined to do it.
 
In Express LLC v. Sea Sunset LLC, panelist Frederick M. Abbott wrote:

The relative interests of trademark owners and prospective users of common terms may be sufficiently nuanced or context-sensitive that automatic or general rules would constantly be in search of exceptions, or that such rules would lead to unintended consequences. Whatever might have motivated ICANN’s approach, it puts this Panel where it is now – with this Panel charged with deciding whether a trademark owner of a common dictionary or generic term used in an arbitrary way should be permitted to prevent an applicant for a new gTLD to secure that common term. The Panel ultimately decides that the trademark owner (Complainant) should not be able to prevent adoption by the applicant (Respondent) of the applied-for gTLD <.express> in the particular context presented here. While Complainant certainly owns rights in the EXPRESS trademark for use in connection with apparel and fashion accessories, and while that trademark is reasonably well known among a relevant segment of consumers in the United States, there are so many common usages of the term “express” that it is not reasonable to foreclose its use by Respondent as a gTLD. (emphasis added)

These two opinions, taken together, look like a terminal diagnosis for trademark owners with rights in generic terms. Right at Home creates a very permissive standard for what constitutes “unfair advantage” by a domain applicant. Express LLC states, almost categorically, that it is “not reasonable” to allow a trademark owner for a generic term to prevent that term from being used as a top-level domain.
 
Looking to the future, it will be interesting to see how these trademark owners will fare in the other rights-protection remedies offered by ICANN.
 
Using EXPRESS as an example, will the owner of this mark have a good claim under the Uniform Domain Name Dispute Resolution Policy to recuperate domains that encroach on the mindshare embodied in its mark? Today, nearly all UDRP cases involve an examination of that part of the domain residing to the left of the dot. Trademark owners such as Express LLC will have to convince UDRP panelists to look at their case a little differently — to pay more attention than usual to the string to the left of the dot. For example, would Express Ltd. have a viable UDRP claim against the registrant of <clothing.express> or <fashion.express> or <shoes.express>? It is easy to imagine many other similar sorts of claims.
 
The Uniform Rapid Suspension System seems unlikely to provide relief here, as does the Trademark Clearinghouse. The URS is not for novel cases, which these would be. And Express LLC doesn’t have trademark rights in CLOTHING.
 
In the end, the most effective course for owners of generic marks could be to play the game the way ICANN wants it to be played: apply to operate a new top-level domain if you feel you must, or register as many of your marks as possible in all relevant top-level domains.

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Brent Donald

This is my collection of some of the things I find interesting from art, design, internet culture, technology and advertising and scoops I get from colleagues and my searches. Internet technology is one of the best technologies that we have been afforded to utilize accordingly.

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