10 May 2016Trademarks

Clear trends: what we have learned from the Trademark Clearinghouse

In the three years since it launched, the Trademark Clearinghouse (TMCH) has received more than 40,300 submissions from brand owners.

That’s around 13,400 per year, 1,120 a month and 37 every day on average. Of those trademarks, which cover 121 jurisdictions, nearly 45% have been submitted for multiple years. The submissions themselves total nearly 110,000 trademark years and around 4,600 have expired.

In addition the TMCH, an important tool for protecting trademark rights under the new generic top-level domain (gTLD) programme, has sent nearly 217,000 notifications to rights owners about potential cybersquatting. On top of those, around 265,000 ongoing notifications have been issued.

Analysing the statistics, Jan Corstens, worldwide project partner of the TMCH (Deloitte, which is validating trademarks), says they show that new submissions into the TMCH grow organically and are linked to the number of sunrise periods being launched.

“With over 150 TLDs still to launch (many of them the ‘blockbuster’ TLDs), we’re still expecting some volume to come in,” he adds.

His colleague Peter Van De Wielle, marketing manager of the TMCH (CHIP, which is issuing invoices), explains that these “blockbuster” gTLDs are mainly those that have fetched very high sums at auction, such as .shop, .app and .web. “Trademark owners are holding out for registration in those,” he explains.

Assessing whether the number of trademarks matches up with the TMCH’s expectations at this stage, Corstens says he hoped the total would be bigger, “but if you look at the number of registrations [nearly 16 million domains registered under 939 TLDs], we’re doing okay. Overall, the gTLD programme has been smaller than expected. Success is difficult to measure in numbers”.

Van De Wielle adds: “The uptake needs more time than expected. Brands need time to design and implement their strategy.”

The TMCH may be only three years old, but the concept for it stretches back much further. After the Internet Corporation for Assigned Names and Numbers, the body responsible for the domain name system, decided to drastically expand the number of gTLDs, a group of specialists proposed several tools for protecting trademarks in 2009. One of the mechanisms suggested by the group, called the implementation recommendation team, was an ‘IP clearing house’. Other suggestions including a ‘globally protected marks list’ never came to fruition, but the TMCH did.

How it works

The process is simple. First, trademark owners submit their registered marks into the TMCH, which then verifies their legitimacy. It costs $150 per mark, but there are discounts available for bulk registration. Once the mark is approved, the trademark owner receives a unique authentication key that allows it to participate in any gTLD sunrise period of its choosing.

In order to use a sunrise period, rights owners must have first registered their marks in the TMCH, ie, it is a minimum requirement for accessing the vital sunrise period—which is open before internet users (and therefore potentially cybersquatters) can register domain names.

The main benefit of this first prong is that rights owners can use a centralised database at the start of their attempts to protect their brands. Before the TMCH existed, brand owners would have to have their marks authorised by each individual registry that launched. This was seen as too unfair, time-consuming and costly under the expanded new gTLD programme, under which nearly 2,000 applications were made.

"the main challenge the validation teams face is the fact that the reported information does not always match the trademark record on file and they have to circle back to the trademark holders."

Second, when someone wishes to register a domain name that matches a trademark recorded in the TMCH, the clearinghouse alerts that person about the trademark rights. He or she must acknowledge those rights before completing the registration. If that registration is then made, the TMCH also notifies the relevant rights owner that the domain has been registered.

While the registration containing the trademark may not necessarily be an infringement, the notification to the rights owner allows it to track and take any necessary action to protect its mark. The TMCH now allows rights owners to receive ‘ongoing’ notifications beyond the minimum 90-day period, adding another weapon to brand owners’ armour.

Challenges faced

On the validation side, Corstens explains that there have been several challenges so far for the teams responsible for verifying trademarks.

“The TMCH validation teams have in the first instance the obligation to check that the provided information matches the information that is provided on the trademark certificate and that the trademark is in actual use. This is due to the fact that all the provided information is included in the signed mark data file (the key) that confirms for the registrars/registries that the trademark is verified by the clearinghouse and that the trademark holder has a prior right to register the corresponding domain name.

“Consequently, the main challenge the validation teams face is the fact that the reported information does not always match the trademark record on file and they have to circle back to the trademark holders. In addition, per the TMCH guidelines, all records are re-verified on a yearly basis to check whether these trademarks are still registered,” he says.

“Often the renewal is not shown on the certificate in the online database or the required renewal evidence is missing/not uploaded 
by the client, which complicates the process.”

Finally, he says, “not all jurisdictions have online trademark databases and those that do exist are sometimes not operational or do not reflect the most recent ownership or renewal information. In this respect it is challenging for the TMCH validation teams to verify the information provided in the TMCH record”.

Common errors

Unsurprisingly, trademark owners have been making mistakes when using the TMCH, and Corstens recalls that when it opened, there were errors at all levels. Although the error rate has reduced over time as trademark owners have understood the process, he says, some noticeable mistakes are still being made.

“For example, the name of the holder or the address does not match. This is due to the fact that companies change names or address, but do not update their trademark certificate with the national trademark office. Or they do not provide us with enough evidence about the fact that they are a licensee/assignee,” he explains.

Another error is that the sample of proof of trademark use or declaration of proof of use is missing, meaning the validation teams have to go back to the client and request the missing document.

In addition, the sample of proof of use can be insufficient. “There are requirements that the sample proof of use must meet. In the event that the sample of use is insufficient, trademark holders are requested to provide another sample of use,” Corstens notes.

Last, he explains that the signed declaration of use is sometimes not signed by the effective owner of the trademark. “The validation teams then have to go back to the client and request a new declaration in the name of the trademark holder as per the certificate.”

New features

On the trademark claims side, Corstens says that because “we are always looking at creating more value for trademark holders, taking into account the market we participate in”, the TMCH has launched tools such as the ongoing notifications service.

“In January 2016, we upgraded the ongoing notifications so trademark owners can submit variations of their mark in order to receive a notification when a domain name is activated that is similar to the trademark in the clearinghouse.

“This could be a common typo, a variation of the mark, a partial word, or a suffix. For instance, the trademark ‘Trademark Clearinghouse’ would receive an alert when the domains names ‘clearinghouse’ or ‘trademarkclearinghousedb” were activated,” he adds.

The TMCH now also provides a service called Brandpulse, which provides a brand monitoring report on the domain activity of any exact or similar matches of a mark, not only in new gTLDs but also legacy TLDs (eg, .com) and country-code TLDs.

“It is complementary to the notification service. Where the notifications have an instant character, the report will have a greater view on activity beyond the new gTLD programme and in addition works retroactively,” Corstens explains.

Asked whether the TMCH has been effective so far, Corstens points out that its main benefit for brands is that they avoiding going through individual registries to validate their marks.

“Now it has to happen only once. There is added value for the system as a whole now; it’s a unified, consistent system.”

Van De Wielle adds that it has been effective as a “universal solution across the board: one submission of any jurisdiction or script across a myriad of gTLDs”.

Others seem to agree. In article for our sister website Trademarks & Brands Online in September 2015, Joel Vertes of law firm Olswang said that the TMCH is “fastidious” when verifying marks. He added that while it is no panacea to cybersquatting, “so far the TMCH seems to be a good start given the size of the brand protection task at hand”.

In the next part of this “In the Spotlight” series, we will discuss issues such as cybersquatting, the review of the TMCH, and education about the gTLD programme.

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