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The Internet Corporation for Assigned Names and Numbers (ICANN) recently voted to expand the list of top-level domain (TLD) names to include almost any word in any language. Currently, TLDs are limited to individual countries (.au or .uk) and the 22 generic TLDs (.com or .net). Under the new plan, however, gTLDs can be any combination of letters in any script. While the expansion was aimed at addressing the looming problems that have plagued the current system for the past few years, it also presents significant new challenges.

Why the change?

The Internet has grown at an astounding rate with 50,000 new domains coming online every day! Internet commerce is expected to hit $1.4 trillion by 2015. It has become increasingly difficult in recent years for entrepreneurs to find adequate domain names at reasonable prices. ICANN is hoping that opening up the list of possible gTLDs will increase the number of options for users and help curb the prices for expensive domains. This expansion is expected to introduce various types of new TLDs, such as keyword domains (e.g., .food, .shop, .hotel), place domains (e.g., .nyc, .indy) and brand domains (e.g., .gm, .microsoft, .apple, .facebook). These new domains offer many opportunities to owners, such as tighter control on security and marketing, that were previously unavailable.

Aside from the limitations on domain names, there are 1.5 billion people online and 4.5 billion people for whom the Roman script means nothing. Allowing the creation of gTLDs that use different scripts will remove one of the blocks that currently prevents those people from getting online. Rod Beckstrom, ICANN CEO, describes the new program as an opening of “the Internet’s naming system to unleash the global human imagination…[w]e hope this allows the domain name system to better serve all of mankind.”

Trademark problems and ICANN solutions

One of the main issues with any new system is the potential for people to infringe on established trademarks. ICANN is attempting to assure trademark holders that the evaluation process will take into account any existing trademarks from all over the world when evaluating a prospective gTLD. To accomplish this, ICANN has set up an Intellectual Property Sunrise Period that will allow trademark owners to apply for their trademarks in the new gTLD program. Additionally, ICANN has established the Trademark Clearinghouse to allow trademark owners to record their trademark rights so that ICANN can alert those owners when an application for an infringing domain has been submitted. This does not mean, however, that trademark holders possess an automatic right to the gTLD of the trademark name. Trademark holders will have to go through the entire evaluation process if they wish to register the new gTLD. This is intended to give ICANN the opportunity to find other trademark holders with similar names to work out any infringement issues before an entirely new gTLD is granted.

In addition, ICANN has put in place three other rights-protection mechanisms under this new program. The first is an updated Uniform Dispute Resolution Procedure (URDP), which addresses objections made by an individual or entity against the applicant for a new gTLD. Second is the Uniform Rapid Suspension (URS) that will be similar to the URDP except that the URS remedy will be the suspension of the domain name for the duration of its registration period, rather than its transfer or cancellation. Finally, the new program establishes the Post-Delegation Dispute Resolution Procedure (PDDRP), which allows a trademark owner to file a complaint against a domain name registrar for engaging in a pattern of bad-faith exploitation of domain names that conflict with the owner’s trademark(s).

This brings up the second big question that the new system presents: what if two individuals or businesses want the same gTLD? If one entity has already completed the application process before the other starts, then the gTLD will be issued on a first-come, first-serve basis. If the two entities are applying at the same time, then ICANN will award the gTLD according to a point system. ICANN will also notify applicants who are part of a contention set so that the applicants may work together to find a solution.

How to apply

The application process for this new gTLD program is not only complicated, but also quite costly. To start the evaluation process, applicants will have to shell out $185,000. After the initial fee, additional costs may be assessed throughout the application review process. An annual fee of $25,000 is also required. Obviously, this new program is not intended for the average Joe or small business. The high application costs are used to deter private individuals from “squatting” on valuable gTLDs, which was a major problem for domain names during the early years of the Internet. Large companies, however, should have no problem coming up with the funds to create their own gTLD or gTLDs.

ICANN has limited the application process timeline by setting out certain time periods when applications will be accepted. The first “batch” of applications for new gTLDs will begin on Jan. 12, 2012, and last through April 12, 2012. Once the application process has begun, it could take nine to 20 months for the new gTLD to pass the evaluation. End users can expect to see the first new gTLDs hit the Internet in 2013.

Once these new gTLD owners pass the evaluation process, they basically become the registrar for that gTLD. The owner can then, if they choose, allow anyone willing to pay a registration fee to apply for a domain name under that owner’s TLD. The owner may also restrict or limit a person’s or entity’s ability to access the TLD to enhance security measures.

While the new system presents problems, they are not unlike those problems that arose when the Internet, as we currently know it, was first forming. At this point, owning one of these new gTLDs is only feasible for corporations, government agencies or wealthy individuals as the application process is long, complicated and expensive. It is important to remember, however, that the current structure of the TLD system took years to become cheap and practical and, given enough time, this new system may well live up to the hype. Nonetheless, it will behoove any trademark owner to take advantage of the IP Sunrise Period and other rights-protection mechanisms to make sure its trademarks do not become the gTLDs of another party.

  • Daniel L. Boots

    Dan is a senior partner of the Intellectual Property and Technology (IP&T) group (former chair 1997-2009), concentrating his practice on counseling emerging and established businesses in all areas of intellectual property and ...



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