NEW TOP-LEVEL DOMAINS: What Brand Owners Need to Know

On June 20, 2011, the Internet Corporation for Assigned Names and Numbers (ICANN) approved a plan to permit new generic top-level domains (gTLDs), thereby increasing the number of gTLDs from the current 22 (.com, .net., .biz, etc.) to a potentially unlimited number. ICANN began accepting the first round of applications for new gTLDs on January 12, 2012, with the window to file new applications open through April, 12, 2012. An applicant guidebook, which outlines certain details of the program, can be found at http://newgtlds.icann.org/en/applicants/agb. Among other things, the guidebook outlines the procedures for evaluating new gTLDs for approval, the dispute resolution procedure for handling objections to new gTLDs, and “string contention” procedures (which are triggered when two parties apply for identical or similar gTLDs).

A Steep Price for Applicants

Applicants must meet criteria outlined in the guidelines, including payment of a $185,000 evaluation fee for processing each gTLD application (although a limited number of applicants who

demonstrate financial need, provide a public interest benefit, and possess the necessary management and financial capabilities will be eligible for financial aid that reduces the fee to $47,000). Applicants are subject to background screening (to assess general business diligence, criminal history, and history of cybersquatting) and will be evaluated on whether they have “the requisite technical, operational, and financial capability to operate a registry” and whether the putative registry services “might adversely affect DNS [domain name server] security or stability.” The gTLD string will be evaluated for probability of confusion with other gTLD strings; whether it might adversely affect DNS security or stability; and, for gTLDs based on geographical names, whether the applicant has the requisite government approval, if necessary. Thus, the high price of entry and strict criteria against which applicants will be evaluated mean that few brand owners are likely to consider implementing a dot-[brandname] gTLD.

Objection Procedures for New gTLDs

Objections to new gTLDs may cite any of 4 bases: “string confusion”— the proposed gTLD is confusingly similar to an existing top-level domain or another string applied for in the same round of applications; existing legal rights—the proposed gTLD infringes legal (i.e. trademark or trade name) rights of others; “public interest”—the proposed gTLD is “contrary to generally accepted legal norms relating to morality and public order”; or “community objections”—substantial opposition to the application has been voiced by a significant portion of the “community” associated with the string. The gTLD guidebook defines a “community-based gTLD” as a gTLD “operated for the benefit of a clearly delineated community,” such as, for example, .realtor for real estate agents.

Rights for Trademark Owners

Trademark owners will have the first opportunity to object to a new gTLD during the application stage, using the World Intellectual Property Organization (WIPO) as an arbitrator. The cost of filing such an objection is currently forecast to be on the order of $2000 for a single panel arbitrator or $3000 for a 3-panel arbitration board.

After a new gTLD has been approved and put in service, trademark owners will then be able to use a new Uniform Rapid Suspension (URS) system to file complaints against individual domain name registrations having the new gTLD. Like a UDRP proceeding, a URS complaint will require the mark owner to allege rights in the mark, no legitimate interest in such rights by an applicant, and bad faith by the applicant. Unlike an UDRP proceeding, a URS proceeding will be much less expensive—about $300 per domain name. Also unlike a UDPR proceeding, a successful complainant in the URS system can only secure suspension of the domain name and redirection to an informational web page provided by the URS Provider, not a transfer to the complainant. The complainant can still pursue a UDRP proceeding if seeking a transfer.

Trademark owners will also be able to initiate a Post Delegation Dispute Resolution Proceeding (PDDRP) against a gTLD operator whose affirmative conduct in operation or use of a gTLD identical or confusingly similar to the complainant’s mark takes unfair advantage of the distinctive character or reputation of the complainant’s mark, impairs the distinctive character or reputation of the complainant’s mark, or creates a likelihood of confusion with the complainant’s mark. A similar proceeding can also be filed against a registry operator whose affirmative conduct shows “a substantial pattern or practice of specific bad faith intent” to profit from the sale of trademark-infringing domain names, generally, and who has registered domain names within the gTLD that are identical or confusingly similar to the complainant’s mark, taking unfair advantage of the mark’s distinctive character or the reputation; impairing its distinctive character or reputation; or creating a likelihood of confusion. Established institutions associated with defined communities who allege that a community-based gTLD registry operator is not complying with the registration restrictions set out in the Registry Agreement can utilize a Registry Restrictions Dispute Resolution Procedure (RRDRP).

The guidebook also provides for a “Trademark Clearinghouse,” intended to operate as “a central repository for information to be authenticated, stored, and disseminated, pertaining to the rights of trademark holders.” The Clearinghouse will authenticate and validate trademarks and then serve as a database to provide information to new gTLD registries to support pre-launch Sunrise periods (an early registration period during which only proven mark owners can register domain names) and “Trademark Claims Services.” Trademark Claims Services will include (a) notifying prospective domain name registrants of marks in the Clearinghouse, along with a requirement for registrants to acknowledge such notice, and (b) reporting to the registry each attempted registration of a domain name that is an identical match to a mark in the registry. Eligibility standards for inclusion in the Clearinghouse include: nationally or regionally registered word marks from all jurisdictions, any word mark that has been validated through a court of law or other judicial proceeding, any word mark protected by a statute or treaty in effect at the time the mark is submitted to the Clearinghouse, and other marks that constitute intellectual property. Mere applications for registrations, marks within an opposition period, or registered marks that were the subject of successful invalidation, cancellation or rectification proceedings are not slated to be eligible for inclusion in the Clearinghouse. 

Thus, despite opposition by many brand owners to the gTLD process and valiant last-ditch efforts by some advocacy groups to stop it from commencing at all, the gTLD era has begun, and brand owners will now have to protect their interests using the processes defined by ICANN. How much the average brand owner will incur in additional policing costs due to gTLDs remains to be seen.

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