Wines & Vines

September 2014 Wine Industry Finance Issue

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58 p r a c t i c a l w i n e r y & v i n e ya r d S e p t e M B e r 2 0 1 4 w i n e m a r k e t i n g T hree entities have each applied to become registry operator for the ".wine" generic top level domain (gTLD) as part of the new gTLD pro- gram, which involves the addition of thou- sands of new top-level strings to the Internet Domain Name System. 1 The .wine applicants foresee this domain string as having significant future breadth of cov- erage for online wine information, services and resources. However, wine industry groups in the United States and Europe see this as extor- tion by the Internet Corp. for Assigned Names and Numbers (ICANN), the orga- nization responsible for administering the Internet domain naming system. Controversy over the new gTLD pro- gram has not been limited to .wine. Con- tentious domains include .art, .eco and geographical domains like .amazon. Competing registry applicants — private commercial interests on one hand, and groups purporting to represent online community interests on the other — lined up to reserve some of this new cyber landscape when the program opened in early 2012. Will the .wine string (and others, like .vin) see the light of day? The latest news reports have anticipated ICANN's reaffir- mation of its March 2014 decision to move ahead with the wine-related domains. European union and industry concerns This is the latest in a long series of negotia- tions involving governments, producers, ICANN and the registry applicants related to wine industry concerns about potential cybersquatting, counterfeiting, consumer fraud and infringement upon the rights of Geographical Indication (GI) interest groups (such as producers of Champagne and Napa Valley wines). The European Federation of Origin Wines (EFOW) has garnered European national support for the concerns regard- ing .wine and .vin, and the European Commission has been actively consulting with ICANN's Governmental Advisory Committee about the situation. In contrast, the United States govern- ment believes existing protections are adequate, and the burden should be on the wine industry to police the new gTLDs. But U.S. wine industry groups and the EFOW contend that the burden is unfair, and the registries should set limits on who can purchase secondary domains. The EFOW is expected to boycott the .wine and .vin gTLDs if approved by ICANN without added protections. An uptick in litigation related to the misap- propriation of GIs in the second-level domains (left of the "dot") is anticipated. Wine trade groups in Europe and the United States have voiced concerns regarding potential counterfeiting and cybersquatting, and have lobbied ICANN to shelve the proposed .wine and .vin gTLDs until ICANN incorporates addi- tional safeguards for geographic and ori- gin names at the second level. Producer groups from eight wine regions in the U.S., including the Napa Valley Vintners, Oregon Winegrowers Association, Willamette Valley Wineries Association, Long Island Wine Council and others — totaling nearly 2,000 winer- ies — have joined forces to protest the expected delegation of the .wine gTLD. Wine industry 'TriPS' out Affected parties have asserted that a sys- tem of safeguards should protect geo- graphical indications (GIs) such as "Napa Valley" and "Champagne" in the same way that protection is afforded to trade- mark owners, as reflected in the 1995 World Trade O rga n i zat ion (W TO) Agreement on Trade Related Aspects of Intellectual Propert y (TRIPS). 2 This includes remedies against passing off 3 and other false or misleading use of GIs. Article 23 of TRIPS specifically requires members to provide remedies against the misuse of GIs for wines and spirits. This TRIPS-based argument for GI pro- tection is similar to arguments raised by the International Olympic Committee and the Red Cross, that due to protection under international treaties, their indicia should be blocked from third-party domain registration under the new gTLD program. Both of those groups ultimately received protections in their respective new gTLDs. To infinity and beyond With the availability of .wine and .vin strings at the top-level, there will be a vir- tually limitless variety of second-level domain names available for purchase. With the Internet essentially going from 22 top-level domains historically to more than 1,000 top-level domains overnight, the number of domain registrations has soared. This expansion compounds a pre- exising enforcement problem for all brand owners, and GI interests in particular. While all brand owners will face this exponential uptick in the volume of potentially infringing domain names on the Internet, most will be able to avail themselves of the Trademark Clearing- house (TMCH), an online database of reg- istered trademarks operated by IBM in association with Deloitte Enterprise Risk Services. The TMCH provides warning notices to applicants seeking to register domains incorporating pre-existing trademarks in the database, and it offers claim notifica- Chris Passarelli, Dickenson Peatman & Fogarty, Napa, Calif. BY 101101001010001011010110110100101000101101011011010010100010110110110100101 101101001010001011010110110100101000101101011011010010100010110110110100101000110101 101101001010001011010110110100101000101101011011010010100010110110110100101000110101 101101001010001011010110110100101000101101011011010010100010110110110100101000110101 101101001010001011010110110100101000101101011011010010100010110110110100101000110101 101101001010001011010110110100101000101101011011010010100010110110110100101000110101 101101001010001011010110110100101000101101011011010010100010110110110100101000110101 101101001010001011010110110100101000101101011011010010100010110110110100101000110101 101101001010001011010110110100101000101101011011010010100010110110110100101000110101 101101001010001011010110110100101000101101011011010010100010110110110100101000110101 101101001010001011010110110100101000101101011011010010100010110110110100101000110101101101001010001011010110110100101000101101011011010010100010110110110100101000110101 101101001010001011010110110100101000101101011011010010100010110110110100101000110101 Meet the new digital frontier: .wine Meet the new digital frontier: .wine 1. Afilias Limited, Donuts Inc. (under the applicant name of its subsidiary, June Station LLC) and Famous Four Media Limited (under the applicant name of dot Wine Limited). Donuts also applied for the gTLD ".vin" (under the applicant name Holly Shadow LLC). 2. Article 22(1) of the World Trade Organization's 1995 Agreement on Trade Related Aspects of Intellectual Property (TRIPS) defines geographical indications as "indications which identify a good as originating in the territory of a Member, or a region or locality in that territory, where a given quality, reputation or other characteristic of the good is essentially attributable to its geographic origin." wto.org/english/docs_e/legal_e/27-trips.pdf (last visit July 26, 2014). 3. Passing off is classic trademark infringement, in which a seller represents his goods or services as being those of another or falsely holds out his goods or services as having some association with another. With the availability of .wine and .vin strings at the top-level, there will be a virtually limitless variety of second-level domain names available for purchase. An uptick in litigation related to the misappropriation of GIs in the second-level domains (left of the "dot") is anticipated.

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