Thursday, October 31, 2013

Startup Journey--From Starting Out to Exit, in the Co-Founder's Own Words

It has been a while since I blogged, my sincere apologies as it has been a very busy summer and fall at CyberlawStudio. However, recently I came across an article which I would like to share with my readers. For a startup and business lawyer who has read many articles and advised many clients on the topic , I find this article to be one of the most comprehensive article on the subject of startups. The article, "Lanyrd: from idea to exit--the story of our startup,"  was written by Natalie Downe, the co-founder and CPO of, a social conference directory platform which was eventually acquired by Eventbrite. In the article, the author talked about the history of her company, the experience of going through an incubator program, how to pitch to investors (and pick them),  tips on hiring, interactions with the press, and the eventual acquisition. In the event that you work at a startup, or are interested in starting a company, this article will be very helpful. You can read the article by clicking here.

Wednesday, February 13, 2013

ICANN Domain Name Expansion--Trademark Issues for Trademark Owners

Currently, when we log onto the Internet, we are familiar with  generic top-level domains (gTLD) such as .com, .net, .org, .biz, etc.. To be specific, there are currently 22 gTLDs.  Some of us may find that overwhelming. Others may have appetite for more and their dream may come true. ICANN, the governing body of the domain name system, is currently reviewing more than 1900 applications for new gTLDs, which, if approved, may very well likely introduce more than 1000 new gTLDs by the end of 2013. Website registry companies like Donuts, a $100m startup, spent $55 million to apply for more than 300 gTLDs (it costs $185,000 to apply for a new gTLD).  Applications for new gTLDs such as .music, .hotel, .buy, .property, .realestate, etc.. have been filed. What does this mean for trademark owners?  What trademark owners will likely see is an increased cost and policing effort in enforcing their rights.

With the increase in the number of gTLDs, trademark owners with website presences will need to purchase more domain names to protect their rights.  To begin with, owning a trademark registration provides the owner with the right to stop a third party from using exact or similar domain names only if the third party is offering goods and services that are related to the owner's. For example, if Mr. Smith owns a trademark registration for the mark "Purple Moon" and sells cupcakes via his website ","  he may be able to stop another person from registering the name "" if the person is offering to sell desserts using the mark, but not if the person is using the mark to offer spa services.  Therefore, a common pre-emptive strategy would be for Mr. Smith to purchase as many similar domain names as possible to decrease the chances of third parties purchasing those domain names. In this context, in event that the new gTLDs are introduced, not only does Mr. Smith have to purchase similar "purple moon" domain names ending in the .com, .biz., .net, etc.. he will have to look into purchasing similar "purple moon" domain names ending in .cake, .bakery, .desserts, etc...

To address potential infringement issues, ICANN proposed a few protection mechanisms, all of which require payment of fees  by the trademark owner. One of them is inclusion into the Trademark Clearinghouse. By registering its marks with the Clearinghouse, owners will be notified by the Clearinghouse in event a third party attempts to register a name identical to the owner's mark as a domain name. The Clearinghouse will also notify the third party of potential infringement. Once notified, it is up to the owner to decide whether or not to challenge the domain name through various legal measures, all of which will incur costs.  To register with the Clearinghouse, the owner will need a valid trademark registration and show proof of use. Fees for registering is $150 per mark per year, $435 per mark for three years and $725 per mark for five years.  Last but not least, Clearinghouse will notify the owner only if the mark to be registered by the third party is exactly the mark owned by the owner. Going back to the scenario of Mr. Smith's Purple Moon, in event a third party attempts to register "purplemoone" using a new gTLD, Mr. Smith will not receive notification from the Clearinghouse of such attempt.

Another protection mechanism available is the "sunrise registrations," which allows owners to register their marks in the new TLDs within the 30-day period before the general public is allowed to register domain names in the new TLD.  Only marks that are registered with the Trademark Clearinghouse will be eligible for sunrise registrations. Again, this adds additional costs to the trademark owner in its protection efforts.

As of last month, the CEO of ICANN stated how the company is not ready to launch the new gTLDs and if it were up to him, he would delay the release of the new gTLDs by at least a year due to scaling and technology issues. In addition, trade industries such as the Association of National Advertisers, together with leading professional and industry groups representing a wide variety of industry sectors, have strongly urged ICANN to slow down the creation of new gTLDs and proposed a defensive mechanism called the limited preventative registration allowing trademark owners to prevent registration of their exact trademarks across all the registries for a single reasonable fee.  Whether or not if the .cake, .salon, .pizza, .vacation, and all the 1000 or more new gTLDs will indeed be launched by the end of 2013 remains to be seen. In the meantime, it will be wise for trademark owners to consult with their IP attorneys to  start devising a strategy to protect their portfolio of trademarks in light of the impending explosion of new gTLDs.