Reserving Names on Sunrise Lists Don’t Game Trademark Claims

The rollout of new top-level domains has repeatedly reshaped the landscape of the domain name industry, creating waves of opportunity for investors, entrepreneurs, and established brands alike. Whenever a new extension launches, whether it is .shop, .bank, .app, or .xyz, there is a rush to secure valuable digital real estate before it is claimed by others. To balance the interests of brand owners and the open market, ICANN and registries have developed structured launch phases, the most prominent being the Sunrise period. This is a window of time before general availability in which trademark holders can register names matching their marks to protect their brands from cybersquatting. Sunrise mechanisms exist to serve a clear policy objective—ensuring that legitimate trademark owners can shield themselves from predatory registration practices. Yet, as with many regulatory frameworks, some registrants have sought to game the system, manipulating Sunrise lists and trademark claims for speculative advantage. This practice may appear clever in the short term, but in reality it creates legal risk, undermines market integrity, and destabilizes the economics of domain launches.

The Sunrise process is built on the Trademark Clearinghouse, or TMCH, a centralized database where brand owners submit evidence of their marks. Once validated, these marks become eligible for priority registration during the Sunrise phase of any new gTLD launch. For a brand like Nike or Microsoft, the purpose is straightforward—they can register nike.shop or microsoft.tech before those names are made available to the public. However, the mechanics of the system also create opportunities for abuse. Some registrants attempt to register trademarks for generic or descriptive words, often in obscure jurisdictions with minimal scrutiny, not because they operate a genuine brand but because they want to secure the corresponding domain in the Sunrise phase. For example, someone might register the word “CloudHost” as a trademark in a small jurisdiction, then use that mark to claim cloudhost.web or cloudhost.online in Sunrise. The motivation is not brand protection but speculation, with the hope of reselling the domain later at a premium.

This practice, often referred to as “trademark gaming” or “Sunrise squatting,” distorts the intended balance of the domain name system. Instead of allowing legitimate trademark holders to protect their marks, it enables opportunists to jump the queue and monopolize valuable terms. Economically, it undermines the pricing model of new gTLDs, because it denies legitimate end-users access to names they might otherwise purchase in general availability. It also creates litigation and arbitration risks, as legitimate companies frequently challenge these registrations under the Uniform Domain-Name Dispute-Resolution Policy or national courts. The costs of defending such names often exceed their speculative value, meaning that the registrants who engage in gaming find themselves mired in disputes rather than profiting from sales.

Trademark offices themselves have grown wary of this behavior. While many jurisdictions allow registration of marks with minimal substantive examination, courts have made clear that registering a trademark without genuine use or intent to use is a form of bad faith. When these registrations are used solely to exploit Sunrise rights, they may be invalidated. In the United States, the Lanham Act requires bona fide use of a mark in commerce, meaning that registering “Shoes” as a trademark solely to capture shoes.shop during Sunrise would not withstand scrutiny. Similar principles apply in the European Union and other major jurisdictions. Thus, registrants who rely on questionable marks to access Sunrise are building their strategy on legal quicksand, and challenges to their marks can quickly unravel their holdings.

The consequences extend beyond individual registrants. Gaming Sunrise lists damages the credibility of the domain industry as a whole. Registries rely on trust in their launch processes to attract brand participation. When Sunrise is perceived as corrupted by opportunistic registrations, brand owners may disengage, reducing the revenue and legitimacy of new gTLDs. This creates a chilling effect where legitimate businesses hesitate to adopt new extensions, fearing they are tainted by predatory practices. The result is lower uptake, reduced aftermarket demand, and weaker long-term valuations across the extension. In economic terms, the actions of a few opportunists externalize costs onto the entire ecosystem, depressing market confidence.

From a compliance perspective, registrars and registries are increasingly vigilant against Sunrise gaming. Some registries have implemented additional safeguards, such as requiring proof of trademark use or verification of business activity before honoring Sunrise claims. Others monitor for patterns of abuse, such as individuals filing dozens of trademarks in obscure jurisdictions just before a new gTLD launch. When abuse is detected, registries may cancel registrations, blacklist accounts, or report matters to ICANN. For registrants, this means that even if a Sunrise registration is initially successful, it can later be revoked, leaving them without the domain and potentially without recourse to recover the fees paid.

Real-world cases illustrate both the temptation and the peril of gaming Sunrise. During the rollout of .xxx, numerous entities attempted to register generic terms through questionable trademark claims, only to find themselves challenged by brand owners and regulators. Similarly, in subsequent new gTLD launches, marks for common words like “Hotel,” “Lawyer,” or “Cloud” were filed in small jurisdictions for the sole purpose of Sunrise claims, sparking disputes and negative press. In each case, the registrants who pursued these tactics faced not only the risk of losing the domains but also the reputational damage of being labeled as bad actors in the industry.

The economics of legitimate Sunrise participation, by contrast, are stable and sustainable. Brand owners who use Sunrise to secure their marks reduce future enforcement costs, avoid disputes, and protect consumer trust. Registries benefit by demonstrating fairness and attracting brand engagement, which strengthens the credibility of their extension. Investors who focus on general availability, premium pricing tiers, or aftermarket acquisitions can build portfolios without entangling themselves in the risks of fraudulent Sunrise claims. The distinction is clear: gaming the system produces short-term arbitrage opportunities at the expense of legal exposure and industry trust, while respecting the rules creates long-term value.

The strict-liability nature of intellectual property law makes gaming Sunrise lists particularly dangerous. Unlike other disputes where intent can be argued, trademark law is often unforgiving when marks are registered or used in bad faith. Even if a registrant insists they believed their trademark was valid, the absence of bona fide use will undermine their case. Courts and UDRP panels have little patience for attempts to weaponize trademarks as speculative tools. In the worst cases, registrants can face damages, injunctions, and findings of reverse domain name hijacking if they try to enforce dubious Sunrise registrations against legitimate businesses. These outcomes carry not just financial costs but reputational consequences that can permanently damage an investor’s standing in the domain industry.

Ultimately, reserving names on Sunrise lists through bogus trademark claims is a self-defeating strategy. It undermines the legitimacy of the Sunrise mechanism, invites costly disputes, and carries the risk of losing both the domains and the money invested in the trademark process itself. More broadly, it destabilizes the economics of the domain industry by discouraging brand engagement and reducing trust in new extensions. For investors and participants who seek to build sustainable businesses in this space, the lesson is clear: don’t game trademark claims. The opportunities in domains are vast for those who operate legitimately, but attempting to manipulate Sunrise lists is not innovation—it is exploitation, and it is a path that ends in forfeiture, liability, and exclusion from the market. The economics of domain investing reward creativity, foresight, and legitimacy, not shortcuts that corrode the foundation of trust on which the industry depends.

The rollout of new top-level domains has repeatedly reshaped the landscape of the domain name industry, creating waves of opportunity for investors, entrepreneurs, and established brands alike. Whenever a new extension launches, whether it is .shop, .bank, .app, or .xyz, there is a rush to secure valuable digital real estate before it is claimed by…