News

This year will see the launch of a new .XXX top-level domain (TLD) directed to the online adult entertainment industry. The launch has been touted as one of the most significant events since .COM was launched in 1985. Tens of thousands of domain names already have been reserved by adult entertainment website owners. However, not everyone is welcoming the addition of this TLD. Trademark owners outside the adult entertainment industry have long opposed its launch due to concerns over their brands being registered as .XXX domain names.

Fortunately, the ICM Registry, the organization charged with the administration of the .XXX TLDs, instituted a process to address these concerns. Starting September 2011, trademark owners who are not part of the adult entertainment industry will have a brief window of opportunity to "opt-out" of .XXX and prevent their trademarks from being registered as .XXX domain names (e.g. "mytrademark.xxx"). Opt-out will be available to trademark owners during the "Sunrise Phase" for a one-time fee of $200-$300 per mark.

Key Points

• During the Sunrise Phase, trademark owners will be able to submit an opt-out application to a participating registrar to block the registration of their marks as .XXX domain names
• The ICM Registry is now accepting applications to reserve registered marks for Sunrise applications at no cost
• The Sunrise Phase begins in September 2011 and will last for approximately 30 days
• The one-time cost set by individual registrars for Sunrise applications will likely be around $200-$300 per trademark

Pre-Launch Rights Protection Mechanisms
The Sunrise Phase begins in September 2011 and continues for approximately 30 days. Two groups are eligible to participate during this phase: Sunrise A and Sunrise B. The Sunrise A group consists of those within the adult entertainment industry who are able to establish prior rights in the desired .XXX domain name.

The Sunrise B group consists of those outside the adult entertainment industry. Starting September 2011, this group will have approximately 30 days to “opt-out” of .XXX by submitting an application to block the registration of their trademark as a .XXX domain name. While the specific mechanics of the application process have not yet been made available, we do know that to apply, a Sunrise B applicant must: 1) own a current trademark registration of national effect; 2) in a jurisdiction where the party conducts bonafide commercial activities under the mark; and 3) the trademark registration must have issued prior to the Sunrise Phase. Owners with only common law trademark rights cannot participate in Sunrise. In addition, the mark in the opt-out application must correspond exactly to the entire text of a registered text mark, or the textual component of a registered graphical mark.

A successful Sunrise B opt-out application will be designated a “reserved-trademark” and will be removed from the pool of available names. Those attempting to access the site for a reserved domain name will see a page indicating that the domain name is not available for registration.

Competing Applications
If there are competing claims to a mark by a Sunrise A and Sunrise B applicant, the Sunrise A applicant will be given an opportunity to withdraw the application. If the Sunrise A applicant does not withdraw its application, the application will proceed and the Sunrise A applicant will waive its right to claim lack of notice in any subsequent adversarial proceeding.

Remaining Phases
The Landrush and General Availability Phases follow the Sunrise Phase. During the Landrush Phase, those within the adult entertainment industry will be allowed to apply for .XXX domain names without any showing of prior rights. After the close of Landrush, .XXX domain names will continue to be registered during the General Availability Phase on a first-come, first-serve basis.

Conclusions
Trademark owners are advised to take advantage of the brief window of opportunity provided during the Sunrise Phase and submit an opt-out application. The $200-$300 cost of this pre-emptive application is far less than an enforcement proceeding, and is one effective way to protect a brand from unwanted associations with the adult entertainment industry. Trademark owners also are advised to secure registrations for their marks. While it is too late to secure a registration before Sunrise, a registration may nevertheless be necessary to take full advantage of ICM’s post-launch protection measures, such as a proposed rapid takedown service modeled after the Digital Millennium Copyright Act. For additional information, please contact your COJK attorney.