CLIENT ALERT - Could Your Trademark Become .XXX Rated?

Most trademark owners would likely prefer that their trademarks not be associated with the pornography industry. With the launch of the new .xxx domain name space later this year, the risks of such an association are increasing. Fortunately, trademark owners have a window of opportunity to prevent that from occurring.

As early as September 2011, the new .xxx top level domain space will begin taking applications for new domain names. Under the system announced in late May 2011, trademark owners who wish to prevent domain names equivalent to their registered marks from being granted will have a limited opportunity to block such domains. However, such blocking is not guaranteed, and trademark owners should be vigilant to ensure that their reputations are not tarnished in this new “adult” arena.

Although the specific details are not yet available, beginning in September the .xxx top level domain space will offer a 30 day “sunrise” period, during which trademark owners may “opt-out” and place their registered trademarks on a “reserved” list preventing most others —€“ but not all —€“ from obtaining a domain name equivalent to the word portion of the mark. The exception is for a domain name applicant in the “adult entertainment industry” who owns either (a) a trademark registration for the equivalent mark or (b) an equivalent actively used domain name issued prior to February 2010. However, such an owner will receive notice that another party has requested a block of the domain name, preventing the domain name owner from later claiming he was unaware of the other party’s rights.

To rely on a trademark registration to seek to block domains, the registration must be of national effect and issued at the time of the “sunrise” period by a jurisdiction in which the owner conducts bona fide business activity. Thus, mere state registrations will not suffice, nor will quickie registrations in jurisdictions like Tunisia where the owner does not conduct any business.

The cost to block registered trademarks from becoming domain names in the .xx domain space has not been firmly established, but it is anticipated to be in the $200 – $300 range. Also not specified is how long a block will last, though it appears ten years will be the minimum duration.

After the “opt-out” period during the initial 30 day “sunrise” period is over, trademark owners are essentially on their own to defend their rights in .xxx, relying primarily on existing systems to combat cybersquatters and infringers, though there will be a system for rapid take-down of domain names based on well-known or inherently distinctive marks for which no good faith use could possibly exist. There may also be a new system implemented in 2012 to block domain names based on newly acquired trademark rights.

If you own trademarks that are currently not registered but that you wish to prevent from becoming .xxx domain names, it is not too late to seek to register in a jurisdiction in which you conduct bona fide business activity that moves relatively quickly. Registering a trademark in the United States often takes a year or longer, and thus filing new U.S. trademark applications with the hope that the resulting registrations could be used to block new .xxx domain names during the sunrise period may not be a successful strategy.

We will continue to provide updates as the system develops and please contact your Fish attorney with any questions.