Limited Window to Exempt Brands from New Adult-Themed Domain

September 6, 2011 Advisory
Beginning September 7, 2011, owners of a registered trademark have a limited window during which they can apply to register or reserve a domain name in the new .xxx sponsored top level domain (sTLD). The .xxx sTLD will provide a recognizable, but not exclusive, on-line home for members of its "sponsored community," which consists of providers of online, sexually-oriented adult entertainment (and their representatives and service providers).

The .xxx sTLD will be introduced to the public in three phases: Sunrise (beginning September 7th), Landrush (beginning November 8th), and General Availability (beginning December 6th). Sunrise is divided into two concurrent phases. Sunrise A allows members of the sponsored community to register a .xxx domain that corresponds with a trademark registration or top level domain owned by the applicant. Sunrise B, on the other hand, allows non-members of the sponsored community to "reserve" a .xxx domain that corresponds with one of its trademark registrations, which will prevent others from registering and using that domain. The Landrush phase allows applicants who do not qualify for or participate in Sunrise A to place claims on unreserved .xxx domains prior to the opening of the General Availability phase, at which time applicants can register any unregistered and unreserved .xxx domains on a first-come, first-served basis. Domains with multiple claims during the Sunrise A and Landrush periods will be subject to auction proceedings administered through a third-party appointed by the registry.

For many, the most important phase of the .xxx sTLD roll out is Sunrise B. During this fifty-day window, trademark owners have the opportunity to exclude their trademarks from being used on the .xxx sTLD by reserving their trademark as a .xxx sponsored top level domain. The "reservation" of a domain name will result in the domain resolving to a standard information page indicating the domain name is not available for registration in the .xxx sTLD. The reservation can be effective for at least ten years.

In order to qualify under Sunrise B, the applicant must be the owner of a registered trademark issued prior to September 1, 2011 that is of national or regional international effect. Most U.S. brand owners will be eligible as a result of owning a federal trademark registration on the Principal Register. Trademark owners must apply for reservation with an accredited registrar (and not a proxy service), and can expect filing fees, which are set by the individual registrars, to run on the order of $200-300. Only domains matching the exact text of the registered trademark are eligible to be reserved during Sunrise B.

Brand owners should be aware that Sunrise B does not guarantee that its trademark will be reserved from use on the .xxx sTLD, as Sunrise A applications will be given priority over Sunrise B applications. This means that a qualifying Sunrise A application will trump a qualifying Sunrise B application, and Sunrise A applicants will be permitted to register and use the applicable .xxx domain despite a Sunrise B applicant's attempt to block its use. For purposes of any subsequent dispute proceeding, however, the Sunrise A applicant will be deemed to have notice of the Sunrise B applicant's claims in and to the domain name.

Despite these limitations, and though traditional remedies (such as a UDRP proceeding) will be available after the close of Sunrise B and other avenues may still be developed for the new .xxx sTLD, the Sunrise B reservation is considered by many as a cost-efficient alternative to such proceedings (the .xxx sTLD registry, ICM Registry, LLC, describes it as a "prevention is better than cure approach"). As a result, most brand owners who are reluctant to have their trademarks used as a .xxx sTLD should seriously consider taking advantage of the Sunrise B reservation process.

Any interested brand owners should consult with its legal and technology advisors about the new .xxx sTLD and the opportunities available to trademark owners during Sunrise B. In addition to being limited to a fifty-day window, all reservation requests will be considered final submissions, so any defects in the application may result in the applicant losing its opportunity to participate in the Sunrise B, even if its application is otherwise timely filed.