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The New TREx Service: the brand owner’s protector or just another blunt instrument?

12 April 2018

The Trade Mark Clearing House (“TMCH”), operated by ICANN, has launched its new Trademark Registry Exchange service (“TREx”). Designed to limit the exposure of trade marks, TREx enables rights owners to have corresponding domains blocked from registration, thereby having a broader reach than a TMCH recordal. But is this the answer to defensive registrations brand owners have been looking for?

Trade marks recorded at the TMCH can now be included in the new TREx service as well. So far, 40 TLDs have signed up to offer the service, which will either block from registration (called the “List Track”), or register and hold as inactive (called the “Registration Track”), those domains which correspond with the recorded trade mark. This is being called ‘Phase 1’ and it is expected that more TLDs will join in subsequent phases to include both legacy gTLDs and ccTLDs, as well as further new gTLDs.

 

What does it mean for the Registry operators involved?

The largest operating Registry to sign up is MMX (formerly Minds + Machines), who are responsible for almost half of those TLDs in Phase 1. For them, and the other Registry operators involved, it will inevitably bolster their registrations, with 26 of them opting for the Registration Track. The domains will be registered by OpenProvider, a registrar chosen by the TMCH who was the successful bidder during a ‘Request for Proposals’ process, and who inevitably stand to make a profit from this process as well. This begs the question whether the Registration Track was necessary, or if the Listing Track would have been sufficient for the purpose.

 

What does it mean for brand owners?

Advantages of the service

On the face of it, the TREx service is a good deal for the brand owner. For the price of $160 USD per trade mark per year they can be safe in the knowledge that their valued brand name is safe from registration by third parties across 40 TLDs. There is no need to register the corresponding domain at each TLD, and then incur the cost of renewal. Nor is there a need to register it defensively when the TMCH notifies them that a third party wants the domain. Then, if at some future point the brand owner decides they would like to own one of the blocked TLDs it can be overridden at no cost from the TMCH. 

As the participating TLDs have already launched, a brand owner may find that their corresponding domain has already been registered by a third party (although a TMCH recordal should have notified them of this). However, the coverage available can be checked before proceeding with the service, so if many of the TLDs have already been registered by third parties then the brand owner may decide that the service is not worthwhile before incurring the cost.

Limitations of the service

The trade mark holder cannot individually select which TLDs they would like to protect because the 40 TLDs come as a package. For some this will not be a problem, but for others this may seem like a costly exercise, especially when they already own the corresponding domain names which would otherwise be blocked, or where the corresponding domains are already owned by third parties.

Additionally, as or when more TLDs are added to the service, the price will increase and the lack of option to pick and choose which TLDs are blocked will become all the more noticeable. On the other hand, a registrant may be able to drop a number of defensive registrations where they align with those signed up to the blocking service. TREx would likely become more cost-effective in such circumstances.

The strength of the brand, and therefore the label, must play a part in consideration of whether the TREx service is of value to a business. Where two parties hold the identical label then that corresponding domain name will be blocked. However, it is open to one of the parties to override the block and convert the block into an active registration. This, of course, defeats the object of the blocking registration and may lead back to the need for defensive registrations. It depends upon the strength of the trade mark: COCA COLA or MICROSOFT are unlikely to come up against a third party with the identical label, whereas POLO (the car, the sweet, the game, the clothing) is far more likely to face this situation.

Some further limitations are:

  • Premium domain names will not be blocked. Therefore a label or trade mark of a more descriptive or generic nature may find the TREx service does not provide as good a protection as it could.
  • No variations of a trade mark will be blocked, only the label exactly as recorded.
  • The TMCH record must also be maintained in order to use the TREx service.

 

What alternatives are available?

‘DPML’ and ‘DPML Plus’

The DPML (or Domains Protected Marks List) service is exclusive to Donuts, the Registry responsible for 238 new gTLDs. The service works by blocking from registration those labels (trade marks) which are blocked with the TMCH, much like the TREx service, but with far broader coverage (still excluding premium domain names however).  The service lasts for five years rather than being renewable annually. The DPML Plus service additionally offers a ten-year block and includes the ability to block three mis-spellings of a label (trade mark) as well. Further mis-spellings can be added for an extra fee, and the Plus service also includes the blocking of premium domains, thereby going beyond those features available under TREx.  

TMCH

Brand holders have their trade mark recorded with the TMCH and they are notified when a third party applies to register a domain containing the exact trade mark. This gives the trade mark owner the opportunity to review the domain and decide whether to allow the third party to register it, or to register it defensively instead. The limitation to this service is that the trade mark holder may have a portfolio of domain names which they are not interested in using commercially, but must register and renew to stop them falling into the hands of a third party.

Legal Action

Can be time consuming and costly to recover a domain name which has fallen into the hands of a third party. Additionally it is not always possible to recover a domain name, i.e. if it is being put to genuine use.

 

Summary

The TREx service has advantages over the current TMCH system. The ability to block domain names which match a recorded label could be invaluable to a brand owner looking to protect and defend their brand without the need for defensive registrations. The service is not without its limitations of course, and the possibility of seemingly endless price increases each time a new TLD joins will be one of the biggest deterrents to the brand owner.

Presently, the service is of limited value however it service remains ‘one to watch’ and if a brand owner is in any doubt as to the present value of the service, they should check back in six months or so to see how it has developed. It is possible that it will become more valuable, provided TREx can attract more registries. Only time will tell.