As the fall of 2012 begins the implementation of rights protection mechanisms (RPMs) for new gTLDs is reaching a critical stage –

• The Trademark Clearinghouse (TMC) is far along to detailed implementation but certain aspects are now being reconsidered as registries, registrars, and other parties raise issues of practicality and workability.
• Implementation of Uniform Rapid Suspension (URS) is finally commencing after more than a year of needless delay.
• Brand interests continue to press for the reopening of basic substantive elements of both RPMs.

Given the half year interval between the upcoming Toronto ICANN meeting and the following Beijing meeting in April 2013, it is highly desirable, and perhaps essential, that community discussion in Toronto result in a clear consensus on how RPM implementation should proceed if new gTLDs are to launch without further delay and if potential registrants are to perceive them as acceptable platforms for speech and commerce.

It is within this present context that the Internet Commerce Association sets forth the following dozen principles by which it will review both implementation details for these RPMs as well as any proposals to make fundamental alterations of substance to them at this late date:

1. Our starting point is the fundamental principle that domains constitute a bundle of valuable intangible rights similar to trademarks and other forms of intellectual property, and that a reasonable balance must be struck between the respective and legitimate rights of domain registrants and trademark owners. We know that many domains have substantial value because the secondary market tells us so; likewise, any erosion of the legitimate rights of domain registrants represents an unjustified transfer of wealth from the domain sector to the trademark sector. Therefore, while we oppose any intentional infringement of trademark rights, we likewise reject the notion that the historical development of trademarks prior to the rise of the Internet confers upon trademarks any automatic entitlement to prevail over domains when a dispute arises between these two species of intangible rights. In our digital era the two rights must respectfully co-exist.
2. While RPMs must be effective against bad actors, their design and implementation must recognize that the vast majority of domain registrants are good actors and deserve adequate substantive and procedural due process – and that some complainants can and will attempt to abuse any dispute resolution process. The most recent annual data indicates that UDRP arbitrations involve less than one two-hundredth of one percent of all registered domains; even if UDRPs understate the total of actionable cybersquatting claims by a factor of one hundred, that would still leave 99.5 percent of all domains as non-infringing. UDRPs have been steadily shrinking as a percentage of total domains for years, and this trend is likely to continue even as new gTLDs are introduced – with the percentage of arbitration cases likely to be even smaller for them. In this regard, the repurposing of various ccTLDs to be more general in nature (e.g., .md, .tv, .co, .ws, .bz, .to, .cc, .so, is, and .me) is instructive as it has not resulted in substantial new abusive registrations, and this is a highly relevant precedent for the likely usage of new gTLDs.  It should also be noted that the potential for typographical cybersquatting at new gTLDs will on the whole be greatly reduced as they are unlikely to receive much in the way of natural type-in traffic. Finally, the record number of findings of attempted reverse domain name hijackings in 2012 UDRP cases demonstrates that some complainants will seek to abuse any dispute resolution system and that registrant rights deserve adequate sanctions to deter such attempts.
3. The number of new gTLD applications received by ICANN in the first round of the program (1900, of which 1400 are unique) is in and of itself insufficient justification for material alterations of the RPMs. At the time that the ICANN Board approved the Applicant Guidebook (AG) and the incorporated RPMs, it was widely anticipated within the ICANN community that total first round applications would be in the range of at least 500-1,000, and possibly higher. Further, the RPMs are meant to and do scale – the TMC operates in relation to, and the URS is available for use against, domains at every new gTLD. Proposals for any material RPM alteration must be grounded in genuinely unanticipated factors that have arisen since their approval and not simply on the total number of first round applications.
4. ICANN’s bottom-up, consensus-driven, multi-stakeholder policy development process must be respected; and, further, there must be some finality to ICANN policy decisions. The existing RPMs represent more than two years of community discussion, debate, hard work and compromise and were adopted unanimously by the GNSO Council and the ICANN Board. They should not be lightly reopened in advance of the launch of new gTLDs and actual experience with both the true incidence of cybersquatting within them and the effectiveness of the new RPMs. Since the mid-2011 approval of launching the new gTLD program ICANN’s Board has already degraded URS-related registrant rights twice under brand-generated pressure — by cutting one week from permissible response time, and by halving the number of domains targeted in an action giving rise to ‘loser pays’ liability – and yet the brand sector continues to press for further RPM revisions. The time has come to bring finality to the process and lock in these RPMs absent extraordinary and unanticipated developments.
5. The RPMs should enforce and protect existing trademark rights, but not create new rights. A trademark is limited to specific classes of goods and services, and the vast majority are not global marks but are also geographically circumscribed; therefore, the use of a trademark as or within a domain name cannot automatically confer preemptive power as to all goods and services or all locales in the context of a global Internet. Setting limits on the scope of trademark rights in the DNS is particularly important where the trademarked word(s) is of the generic dictionary variety and overly expansive rights could stifle e-commerce competition and innovation. We note and strongly approve the recognition of this principle in the letter recently sent by new ICANN CEO Fadi Chehade to U.S. Congressional leaders: “It is important to note that the Trademark Clearinghouse is intended be a repository for existing legal rights, and not an adjudicator of such rights or creator of new rights. Extending the protections offered through the Trademark Clearinghouse to any form of name (such as the mark + generic term suggested in your letter) would potentially expand rights beyond those granted under trademark law and put the Clearinghouse in the role of making determinations as to the scope of particular rights. The principle that rights protections “should protect the existing rights of trademark owners, but neither expand those rights nor create additional legal rights by trademark law” was key to work of the Implementation Recommendation Team, a group of experts in the ICANN community who initiated intense work to recommend rights protection mechanisms in new gTLDs.” We are generally opposed to the ‘mark + generic term’ proposal referenced in Mr. Chehade’s letter as creation of a new right beyond that conferred by trademark law, as well as degradation of the purpose of the TMC as an authoritative repository of trademarks meeting certain high standards for inclusion. In addition, because many potential combinations of marks plus generic terms would likely be non-infringing, such an expansion would result in an ordinate number of trademark claims service “false positive” warning notices to innocent potential registrants who, lacking sophistication in trademark law, would be unjustifiably deterred from completing the registration process.
6. Any alteration of one RPM must be reviewed for its potential spillover effect on registrant rights in the other. Any modification of the TMC must be analyzed for its impact on registrant rights in the URS. For example, while ignoring  a claims service warning for an exact match to a mark might appropriately serve as evidence of bad faith registration in a subsequent URS action, granting it such evidentiary weight in a ‘mark + generic term’ context would be thoroughly inappropriate.
7. The URS implementation process must be open to participation by all interested members of the ICANN community, and must be transparent in its operation. The multi-stakeholder process and attendant transparency and accountability must be maintained for the process to have credibility and for ICANN to receive continued support from netizens. While ICANN appears to have made a commitment to this principle we shall continue to closely monitor the process even as we participate in it.
8. Any proposed alteration of the URS premised on cost considerations must await actual market testing of the implementation costs of the present model – doing otherwise would put the cart before the horse. The suspect and possibly self-serving declarations of existing UDRP providers cannot be relied upon as an accurate URS implementation cost indicator. It is therefore incumbent upon ICANN to aggressively promote and seeks responses on a global basis to its recently issued URS implementation Request for Information (RFI) from qualified arbitration service providers beyond the ranks of existing UDRP providers.
9. Cost considerations cannot justify a degradation of registrant rights in URS proceedings below acceptable levels, and any cost-premised alteration must actually have the potential to reduce costs both in the URS and in totality. In this regard, the proposal to eliminate all substantive review and have automatic default judgments when a registrant fails to respond by the specified deadline is unacceptable as such a procedure would neither consider whether the complainant possesses its claimed trademark rights nor whether the domain constitutes a clear cut and incontrovertible instance of infringement; it would also not inquire into whether there was actual use of the domain, without which the critical element of bad faith use cannot exist. Therefore, a default judgment process would constitute an unacceptable degradation of registrant rights. And the proposal to reduce the burden of proof to the same as that of the UDRP would actually increase costs, as it would convert the URS from a procedure targeting clear black-and-white infringement cases to ones that are multiple shades of grey and require protracted and more costly deliberation. Likewise, the proposal to allow complainants to acquire domains via URS filings, like burden of proof reduction, would convert the URS from a narrow supplement to the UDRP into a full substitute, an unacceptable “bait-and-switch” result; and would further increase total costs by placing the burden of long-term defensive registrations on complainants when other means could readily prevent the re-registration of incontrovertibly infringing domains and eliminate such defensive registration costs.
10. URS providers must be placed under a binding standard contract.     Requiring such contracts was a central recommendation of the Special Trademark Issues – Recommendation Team that hammered out the final RPM details included in the AG. In a year in which the broad Internet community rose up against proposed SOPA legislation that would have suspended domains absent adequate due process for registrants, it is unacceptable for ICANN to accredit and empower entities to censor domains via rapid suspension absent binding agreements that set clear limits on their powers and provide ICANN with flexible and measured enforcement tools. As a non-profit private sector entity, ICANN’s only real powers are based in its contract enforcement authority and they must be exercised to ensure a properly balanced URS process. Issues to be addressed in the contract should include assuring that potential panelists are truly unbiased and are fairly and broadly selected for cases. While we see merit in the Business Constituency’s proposal that URS arbitration be awarded to a single vendor – as that would help ensure more uniform URS application while foreclosing forum shopping – the potential selection of multiple vendors gives greater urgency to the development of a binding standard contract. We are dismayed that ICANN has indicated that it is on a path to rejecting this crucially important STI-RT recommendation and to emulating the deeply flawed contactless model of the UDRP.
11. RPM implementation must not further delay the introduction of new gTLDs. The potential new price competition, business model innovation, and other attendant benefits of new gTLDs should be realized as soon as possible. This consideration reinforces our stance against substantial revisions that could prove controversial and divisive and incite protracted debate and accompanying delay.
12. New gTLDs should be laboratories for change, including RPM approaches. While we are skeptical of substantial revisions in the ‘one-size-fits-all’ RPMs contained in the AG, we believe it is appropriate for applicants and applicant groups to experiment with gTLD-specific RPMs and registrant qualification requirements that go beyond the baseline protections contained in the AG. Analysis of the real world results of these varied approaches, including their acceptability to registrants, can inform any future discussion of RPM policy changes after several years of utilization at the new gTLDs launched in the first round.

This article by Philip Corwin from the Internet Commerce Association was sourced from:
internetcommerce.org/Domain_Rights_Dozen