Trademarking .generics - the .bank fiasco!

New generic Top-Level Domain Names (gTLDs) are all about innovation, entrepreneurship and creativity; they are about identifying new entrants, opening up competition and providing the domain name market with the opportunity to explore new means of interaction on the Internet. Equally, new gTLDs are a great opportunity for existing businesses and brands to reconsider their business practices and models and to adapt to new commercial realities and ideals. In both cases, however, it is important that some basic rules and principles are maintained so that terms are not abused, terms are assigned to their rightful owners and, where there are no rightful owners, a robust and fair process is in place to ensure that the assignment of words is done in a manner that does not endanger the Internet, does not confuse consumers or does not obstruct current societal structures.

I, for one, have been a proponent of new gTLDs from the early days of their policy development process within ICANN. I always believed that the existing gTLDs – and mainly the .com space – have created artificial scarcity, which is primarily responsible for much of the cybersquatting and the abuse trademarks experience. I do not share the same fears as those who argue that new gTLDs will create intolerable levels of cybersquatting or will necessitate defensive registrations from brand and trademark owners alike. As for the policy itself, I do not believe it is perfect and I feel that, for certain issues, ICANN could have taken a different direction, but, ultimately I recognize and respect ICANN’S multistakeholder governance structure and the decisions that have come out of it.

Lately, however, something has caught my attention, which can potentially create problems. Almost the same day ICANN opened up its application process, a tiny start-up was granted by the United States Patent and Trademark Office (USPTO) a trademark for .bank (registration number 4085335). What is the problem with this? The problem is twofold: first of all, there is a general principle within traditional trademark law, which instructs that generic terms cannot be trademarked if they are to reflect what the term means. In this context, a company would not be able to register the word coffee and sell coffee. This would provide an unfair competitive advantage to any company and would, most likely, excommunicate all other similar companies selling coffee. Secondly, by granting this application, the USPTO is essentially leaving ICANN and its Governmental Advisory Committee (GAC) with a big problem. Part of the whole exercise regarding the role of the GAC within the new gTLD process related to the GAC’s role; this issue was resolved with the agreement that the GAC would be in the position to provide early advice to any new gTLD application, effectively giving the GAC the right to torpedo and determine the success of an application, which the GAC believes it raises issues of cultural significance or is contrary to national laws. To this end, it is exactly names like .bank that the GAC had in mind when they were pushing ICANN to insert this provision within the Applicant Guidebook: “[The GAC may advise] ICANN that there are concerns about a particular application ‘dot-example’. The ICANN Board is expected to enter into dialogue with the GAC to understand the scope of concerns. The ICANN Board is also expected to provide a rationale for its decision”.

Now, with the USPTO granting trademark rights for .bank, this early warning mechanism becomes superfluous, and multiple rights are created for .bank. On the one side, there are the rights of the trademark owner; on the other, there is the GAC which believes that the term .bank is sensitive enough to interfere and whoever applies needs to go through a scrutiny process; and, finally, there is also the rumoured applicant of .bank – a joint effort made by the American Bankers Association (ABA) and BITS, part of Financial Services Roundtable. So, in practical terms, what the USPTO has essentially done is to provide the opportunity to an independent entity to object the application of .bank by asserting valid trademark rights.

So, this is a mess and a mess that will only get worse unless trademark offices around the world stop granting trademark registrations to .generics. The way things are right now, the GAC may sign off the .bank gTLD to ABA and BITS, but the owner of .bank will have valid claims to stop this application process or at least demand some sort of financial compensation for giving up the name to someone else. And, if he is really pissed off or he wants to retain .bank for his own personal use, he can then sue for trademark infringement. In any case, the trademark owner is the only winner here and both the GAC and the American Bankers should feel very pissed off with the USPTO. At this stage, the only solution is for the USPTO to accept that they screwed up and recall this trademark.