Month: January 2015

Brand Protection in the New gTLD Era

Posted on by Mary Witzel

Take a moment and pull up your internet history from the last week. Look at the domain names listed in the history report. What do these websites have in common? Most sites have similar domain name configurations. Meme.com. News.net. Company.org. The .com, .net, and .org appendages are called Top Level Domains (TLDs), and until very recently, trademark protection strategies focused on acquiring a domain with one of these familiar TLDs (markholdersbrand.com, for example) and monitoring the creation of similar domains to guard against infringement. But the universe of possible TLDs has expanded over the last few years,[1] and trademark protection strategies designed to guard marks in the era of .com, .net, .gov, and .org may no longer be enough to properly protect a mark.

By some calculations, at least 571 websites are added to the internet every minute.[2] The endless creation of content has led to endless consumer confusion. Consumers are faced with the increasingly difficult task of wading through staggering amounts of information to find the results they need when conducting internet searches. The proposed solution to this confusion is a new system of generic Top Level Domains (gTLDs) – TLDs with unique configurations that can be tailored to identify a brand or a service.

A number of trademark owners are already utilizing the system by registering Brand TLDs with clear brand connections such as:[3]

 

.loreal                                      .walmart                      .mcdonalds

.mcd                                         .aarp                              .safeway

.heinz                                       .macys                           .bloomingdales

 

Brand TLDs account for over a third of all new gTLD applications,[4] and more than 600 businesses submitted applications for Brand TLDs in the last three years,[5] making it advantageous to register a Brand TLD as soon as possible. As with the protections afforded by trademark law, mark holders must take affirmative steps to register within the gTLD system in order to sufficiently protect their marks. Reluctance to take advantage of the new gTLD system exposes mark holders to the risk of having a competitor divert customers from the mark holder’s brand by being the first to register a brand-affiliated gTLD.

Notably, the customizability of gTLDs extends beyond the use of well-recognized brand names. A glance at the non-brand gTLDs that have already been registered with the Internet Corporation for Assigned Names and Numbers (ICANN) shows a wide range of products and services:[6]

 

.accountants                            .agency                        .baby

.bargains                                  .beer                            .best

.blackfriday                             .buy                             .core

.careers                                    .charity                       .cheap

.clinic                                       .clothing                      .college

.company                               .coupon(s)                 .contractors

.deal(s)                                    .diet                              .discount

.doctor                                     .earth                          .eco

.email                                       .family                        .fit(ness)

.finance                                   .financial                    .flights

.free                                         .gift(s)                          .global

.gripe                                       .hair                              .health(care)

.help                                        .holiday                        .home(s)

.hotel                                       .house                          .international

.investments                         .kid(s)                          .kitchen

.latino                                      .life(style)                   .live

.living                                      .london                         .luxury

.management                       .market(ing)               .medical

.network                                  .news                            .nyc

.organic                                   .paris                             .photography

.pizza                                        .promo                          .properties

.protection                              .qpon                            .restaurant

.review(s)                                .rocks                            .room

.safe(ty)                                   .sale                               .scholarships

.school                                     .secure(ity)                 .services

.shop(ping)                             .social                          .store

.sucks                                        .supply(ies)                .tokyo

.website                                    .wedding                     .wtf

 

 

In order to properly protect their valuable brands, mark holders must be aware of the different flavor of infringement that can occur with non-brand gTLDs. With Brand gTLDs, a mark holder’s primary concern is being the first in line to secure a gTLD affiliated with the brand. Brand gTLDs registered to the mark holder give the mark holder control over content to the left of the TLD, and thus, Brand gTLD owners can veto the creation of domains such as horrible.markholdersbrand.[7] With more common gTLDs such as the gTLDs listed above, the primary concern is cybersquatting.[8] Trademark infringement can occur to the left of the gTLD in non-brand gTLDs, leading to domain names such as markholdersbrand.sucks, or markholdersbrand.wtf.

Fortunately, the gTLD system is designed to give legitimate mark holders the first bite of the apple. Under the system, all gTLDs have a mandatory “sunrise” registration phase in which mark holders can register domain names corresponding to their marks before registration for those gTLDs is made available to the public.[9] The sunrise phase thus gives a mark holder priority in registering markholdersbrand.store, or markholdersbrand.sale. If a mark holder submits the only application for markholdersbrand.store during the sunrise phase, the gTLD will be allocated to the mark holder. If multiple applications are submitted for markholdersbrand.store during the sunrise phase, an auction is held, and the Brand gTLD is allocated to the highest bidder among the applicants.

Other safeguards exist to ensure that no infringing gTLDs are registered in the registration periods that follow the sunrise phase. The Trademark Clearinghouse is a database of verified, registered trademarks designed to assist mark holders in preventing the creation of infringing domain names.[10] Registration of a trademark with the Trademark Clearinghouse gives registrants access to the Trademark Claims Service.[11] The Claims Service notifies other applicants who attempt to register a domain name that matches a mark already in the Clearinghouse, and notifies registrants when domain names are registered that match their marks.[12] Each gTLD is provided with this service during the first 90 days in which a gTLD is generally available to the public.[13] After this 90 day period, Clearinghouse clients can elect to continue receiving notifications indefinitely at no extra cost.[14]

Rights registered with the Clearinghouse must be an identical match to a right already owned by the mark holder, and proof of current use of the mark is required for registration to be granted.[15] The registration fee varies depending on how many years of recordation are sought and how many marks are being registered.[16] The Clearinghouse provides mark holders with registration renewal reminders, and serves to grant mark holders access to Registration Block Lists that list registration with the Trademark Clearinghouse as a prerequisite.[17] These Registration Block Lists provide preemptive blocking services that block registration of domains that match or contain an eligible trademark.[18]

The takeaway? If you have an online presence, or wish to have an online presence, it is no longer enough to register a domain name within the one-dimensional universe of traditional TLDs and patrol .com, .net, and .org domains for trademark infringement. Instead, to properly protect your brands in the new gTLD era, you need a multifaceted strategy that encompasses defensive registration, consideration of the differences between Brand gTLDs and more common gTLDs, active monitoring, and affirmative measures against infringement.

We can assist you in crafting a multifaceted protection strategy by creating an action plan for gTLD registration, guiding you through the registration process, ensuring your mark receives the full benefits of Trademark Clearinghouse registration, and recommending and facilitating the use of Registration Block List services where appropriate. Contact us today to ensure that you get the first bite of the apple and fully protect your brands in the new gTLD era. — Mary Witzel


[1] See New gTLD Statistics, Top Level Domains, http://ntldstats.com/tld (last visited Dec. 16, 2014). [2] Neil Spencer, How Much Data is Created Every Minute? Visual News (June 19, 2012), http://www.visualnews.com/2012/06/19/how-much-data-created-every-minute/ [3] International Trademark Association, Brand Protection and the Trademark Clearinghouse (Dec. 10, 2014), slide 14. [4] Elisa Cooper, Brand Applications Account for One Third of All New gTLD Applications, MarkMonitor (June 13, 2012), https://www.markmonitor.com/mmblog/brand-applications-account-for-one-third-of-all-new-gtld-applications/. [5] Jason Loyer, Brand TLDs: Four Reasons To Move From .COM To Your .BRAND, Neustar (July 11, 2014) http://www.neustar.biz/blog/four-reasons-to-move-from-com-to-your-brand. [6] International Trademark Association, supra note 3 at slide 15. [7] dot.Brand gTLDs – Brand TLD Benefits, New gTLDs, http://www.newgtldsite.com/dot-brand-gtlds-brand-tld-benefits/ (last visited Dec. 16, 2014). [8] Bill Donahue, 4 Tips For Protecting Brands In The New World Of GTLDs, Law360 (Apr. 8, 2014), http://www.law360.com/articles/526203/4-tips-for-protecting-brands-in-the-new-world-of-gtlds. [9] Trademark Clearinghouse FAQs, ICANN, http://newgtlds.icann.org/en/about/trademark-clearinghouse/faqs (last visited Dec. 16, 2014). [10] Id. [11] Trademark Claims Service, Clearinghouse, http://www.trademark-clearinghouse.com/content/trademark-claims-services (last visited Dec. 16, 2014). [12] Id. [13] Id. [14] Id. [15] Trademark Clearinghouse FAQs, supra note 9. [16] Clearinghouse, Fee Structure Summary (Jan. 21, 2013), available at http://trademark-clearinghouse.com/sites/default/files/files/downloads/TMCH_fees_detailed.pdf [17] See Donuts and TLDs, Donuts, http://donuts.co/ (last visited Dec. 16, 2014). [18] See id.

A Likelihood of Preclusion

Posted on by Mary Witzel

An eighteen-year dispute between B&B Hardware Inc. (B&B) and Hargis Industries Inc. (Hargis) has culminated in the first substantive trademark case[1] to be heard by the United States Supreme Court in a decade.[2] At issue is the relationship between the dual authorities of the trademark world: the Trademark Trial and Appeal Board (TTAB) and federal courts.

The TTAB and federal courts both employ a likelihood of confusion analysis to determine whether similarities between marks are strong enough to cause confusion. The TTAB’s likelihood of confusion analysis takes place at the inception of a mark’s federal recognition – it’s a necessary part of deciding whether to issue federal registration for a contested mark.[3] A federal court’s likelihood of confusion analysis takes place when a mark in real use has been jeopardized – it’s a necessary part of deciding whether a mark has been infringed.[4] Although the timing of the analyses is different, widespread disagreement exists about whether the content of the analyses is the same.[5] Whether and to what degree the likelihood of confusion tests employed by the TTAB and federal courts are similar impacts the key issue in B&B Hardware Inc. v. Hargis Industries Inc.: whether TTAB likelihood of confusion findings should be given preclusive effect in federal district court.

Hargis uses the mark SEALTITE to market self-drilling construction screws.[6]  Its 1996 attempt to register the mark was opposed by B&B, which uses the earlier-registered mark SEALTIGHT to market an aerospace-suitable fastener product.[7]  A 2003 attempt by Hargis to register the mark met with opposition by B&B on the ground that SEALTITE was likely to be confused with SEALTIGHT.  In a subsequent opposition proceeding the TTAB determined that a likelihood of confusion exists between the marks, and denied Hargis’ application.[8]

In 2006, B&B sued Hargis in federal district court for infringement of its SEALTIGHT trademark.  B&B argued that the TTAB’s likelihood of confusion finding has a preclusive effect upon consideration of the issue at the district court level, and alternatively, that the TTAB’s finding should be given deference and  submitted into evidence for consideration by the jury.[9]  The federal district court disagreed with both arguments raised by B&B, determining that the TTAB’s likelihood of confusion findings do not have preclusive effect because the TTAB is not an Article III court, declining to give the TTAB decision deference, and refusing to admit the TTAB decision into evidence.[10]  The jury found in favor of Hargis.[11]

B&B appealed the trial court’s holding to the U.S. Court of Appeals for the Eighth Circuit, raising three questions on appeal: 1) whether the TTAB likelihood of confusion finding was entitled to preclusive effect, 2) whether the TTAB likelihood of confusion finding was entitled to deference by the district court, and 3) whether the district court erred in refusing to admit the TTAB likelihood of confusion finding into evidence.[12]

The Eighth Circuit held that the district court erred in its determination that TTAB likelihood of confusion findings have no preclusive effect.[13]  Although the TTAB is not an Article III court, the Eighth Circuit pointed to Supreme Court precedent to support its statement that decisions of administrative agencies are entitled to preclusive effect when the agency is acting in a judicial capacity, further noting that the TTAB acts in a judicial capacity in opposition proceedings.[14]  However, the Eighth Circuit also specified that the issues sought to be precluded in a lawsuit must be the same issues involved in the original agency determination in order for the decision of an administrative agency to be given preclusive effect.[15]  The circuit court subsequently determined that the same issues were not decided in the TTAB decision and in the district court case, because the two adjudicative bodies employ different likelihood of confusion analyses that consider distinct factors and resolve different issues.[16]  The Eighth Circuit further determined that TTAB decisions are not entitled to deference on the issue of trademark infringement, and held the district court did not err in refusing to admit the TTAB likelihood of confusion finding into evidence, as the differences between the TTAB and Eighth Circuit likelihood of confusion tests could confuse or mislead the jury.[17]  B&B subsequently appealed the circuit court decision to the Supreme Court.

At oral argument before the Supreme Court on December 2, 2014, Hargis espoused the reasoning employed by the Eighth Circuit.[18] On the issue of preclusive effect, Hargis argued that the same issues were not decided in the TTAB determination and district court case, noting that the TTAB’s likelihood of confusion test is simple, streamlined, and narrowly tailored to determine whether the resemblance between two marks is so strong as to be confusing.[19] Federal courts employ a different test, argued Hargis, one that considers the dense, nuanced, fact-intensive question of whether actual use of a mark will confuse consumers in the marketplace.[20] Hargis argued that different legal standards are employed to analyze different issues in different tribunals, and that the issues sought to be precluded in a district court case would not be the same issues involved in the TTAB opposition proceeding.[21]  Hargis further argued that the very nature of the tribunals – one an Article III court, and the other an administrative agency – makes it inappropriate for a federal court to defer to the findings of the TTAB.[22]

Justice Elena Kagan was skeptical of Hargis’ claim that the likelihood of confusion analyses employed by the TTAB and by federal courts are distinct: “I’m…looking here at the TTAB’s analysis [of this case] and it seems to me it’s loaded with stuff about use.”[23]  B&B underscored the Justice’s statement by arguing that the Lanham Act envisions one likelihood of confusion standard, that the TTAB and federal courts analyze identical factors, and that TTAB decisions are preclusive because both analyses are designed to decide the same issue.[24]  The nature of the tribunal – an expert forum – counsels in favor of deferring to TTAB findings, B&B argued, further arguing that relieving parties of the requirement to re-try likelihood of confusion before a federal court promotes judicial economy.[25]

Yet a number of Supreme Court Justices seemed wary of altering the current dynamic between federal courts and the TTAB.[26]  Chief Justice Roberts and Justice Breyer both toyed with the idea of adopting a moderate approach in which TTAB likelihood of confusion findings can have preclusive effect, but only when the issues considered by the TTAB and a district court are identical.[27]  Other Justices, such as Justice Ginsberg, demonstrated a strong preference for leaving the current dynamic unchanged, and opined that the TTAB and federal court analyses are different because one is designed to resolve issues in registration and the other is designed to resolve issues in use.[28]

Does the Lanham Act envision one likelihood of confusion standard, or two?  To what extent do TTAB likelihood of confusion findings have preclusive effect in federal court?  The Supreme Court’s answer to these questions is forthcoming, and for the time being, both questions remain unresolved.  What is certain is that an intricate, nuanced relationship exists between the TTAB and federal courts, and that the distinctions, or lack thereof, between the TTAB and federal court likelihood of confusion tests can create complex problems in otherwise straightforward trademark cases.  If you need assistance in navigating the complexities of federal registration, trademark infringement matters, or trademark litigation generally, contact us. — Mary Witzel


[1] The case is B&B Hardware Inc. v. Hargis Industries Inc. et al., case no. 13352 before the Supreme Court. [2] See Bill Donahue, Justices Weigh TTAB Preclusion In Rare Trademark Case, Law360 (Dec. 2, 2014, 7:32 AM), http://www.law360.com/articles/598173/print?section=ip. [3] See id. [4] See id. [5] See Anthony V. Lupo et. al, Supreme Court Likely To Mend Circuit Split Over Court Deference To TTAB Findings, Mondaq (July 9, 2014), http://www.mondaq.com/unitedstates/x/326334/Trademark/Supreme+Court+Likely+To+Mend+Circuit+Split+Over+Court+Deference+To+TTAB+Findings. [6] B&B Hardware Inc. v. Hargis Industries Inc., The Oyez Project at IIT Chicago-Kent College of Law, http://www.oyez.org/cases/2010-2019/2014/2014_13_352 (last visited Dec. 3, 2014). [7] See id. [8] See id. [9] B. Brett Heavner, Civil Cases: B&B Hardware Inc. v. Hargis Indus., Inc., 2013 WL 1810614 (8th Cir. May 1, 2013), Incontestable (June 2013),  http://www.finnegan.com/files/upload/Newsletters/Incontestable/2013/June/Incontestable_Jun13_7.html. [10] See B&B Hardware Inc. v. Hargis Industries Inc., supra note 6. [11] See id. [12] See Heavner, supra note 9. [13] See id. [14] See id. [15] See id. [16] See id. [17] See id. [18] See Donahue, supra note 2. [19] See id. [20] See id. [21] See id. [22] See Lupo et. al, supra note 5. [23] See Donahue, supra note 2. [24] See id. [25] See Lupo et. al, supra note 5. [26] See Donahue, supra note 2. [27] See id. [28] See id.