ICANN, the Internet Corporation for Assigned Names & Numbers responsible for coordinating the Internet’s addressing system, is orchestrating a dramatic expansion of the existing domain name system which will open the door to countless new generic Top Level Domains (gTLDs). According to ICANN, “one of its foundational principles has been to promote competition in the domain name marketplace while ensuring Internet security and stability. The expansion of the generic top-level domains (gTLDs) will allow for more innovation, choice and change to the Internet’s addressing system, now represented by [existing] gTLDs”.
To date, there are 21 existing gTLDs (including .com, .net, .info, .biz, etc.). Brand owners and others who have previously been limited to registering brands as second level domain names (eg: BRAND.com) will now have the option to apply for top level domains reflecting their brands (eg: XYZ.BRAND), as well as to register their brands at the second level of new general gTLDs registered by others (eg: BRAND.industry, BRAND.city).
While anyone can apply for a gTLD (ie: individuals, brand owners, organizations, industry associations), the process will be complicated and costly. Current estimates project at least US$185,000 to apply for evaluation of a new gTLD and at least US$25,000 for annual registry fees. In addition, an applicant will need to demonstrate that it is financially and technically capable of operating a stable and secure gTLD registry business. Despite these strict criteria, there is likely to be widespread interest from brand owners, community groups and others, who see value in a dedicated registry. ICANN is expecting an initial wave of 300-500 applications when it launches the gTLD expansion.
Potential advantages of new gTLDs:
- increased opportunities to control and exploit key brands
- greater security and public confidence within certain gTLDs
- greater choice, flexibility and competition for domain extensions
- community benefits of group membership
Once applications for new gTLDs have been received and vetted by ICANN, such applications will be subject to a public objection process with four possible grounds of objection: (1) string confusion, (2) protection of existing legal rights (such as trade-mark rights), (3) morality and public order, and (4) community objections. Of greatest interest to brand owners will be the possibility of objection based on protection of existing legal rights, such as trade-mark ownership. The cost of participating in the objection process may be prohibitive, particularly for small businesses. Objectors and applicants will be required to pay fees to resolve any objection and such fees are estimated to be in the range of US$122,000, with no upper limit set.
While ICANN’s plan to implement a new gTLD system has been years in the making, its efforts have been curtailed by considerable negative feedback from industry, governments and other stakeholders, some of whom question whether such expansion is necessary or even wise.
Potential disadvantages of new gTLDs:
- uncertainty regarding consumer demand (is there a real consumer need for additional gTLDs or is this simply a lucrative new revenue source for ICANN?)
- high cost and intensive use of resources to manage a gTLD
- increased cost to trade-mark owners for protection/defensive registrations/objections
- increased fraud, cybersquatting and consumer confusion (security issues)
Several of these disadvantages will affect all trade-mark owners, regardless of whether or not they choose to apply for a new gTLD. For example, trade-mark owners may be faced with the additional cost of defensive registrations at the second level in multiple new gTLDs (to ward off cybersquatters), or the high cost of objecting to applications which may infringe their trade-marks.
In response to such vociferous criticism (including hundreds of comments on the first two versions of the Draft Applicant Guidebook), ICANN has acknowledged that the concerns of trade-mark owners must be addressed before the new gTLD application process is launched. As a result, ICANN established the Implementation Recommendation Team (“IRT”) to develop solutions for the potential risks to trade-mark holders posed by the new gTLD process. The IRT Final Draft Report (submitted to ICANN on May 29) contains several recommendations for dealing with the rights of trade-mark owners.
IRT recommendations include:
- IP Clearinghouse, Globally Protected Marks List and associated Rights Protection Mechanisms (“RPMs”), and standardized pre-launch rights protection mechanisms
- Uniform Rapid Suspension System (“URS”)
- Post-delegation dispute resolution mechanisms
- Whois requirements for new TLDs
- Use of algorithm in string confusion review during initial evaluation
The IRT’s report has been posted on the ICANN website and is open for public comment until June 29, 2009. ICANN will be holding public discussions (focussing on trade-mark protection and the potential for abusive conduct) throughout the summer, and public comments on the amended sections of the Second Applicant Guidebook will be accepted until July 20, 2009. Currently, ICANN plans to release the final Applicant Guidebook later this year and open the application process for new gTLDs in early 2010. Further changes to timelines may come out of the ICANN meeting in Sydney on June 21, 2009.
If you have any questions about the benefits or drawbacks to your organization regarding the impending launch of new gTLDs (whether or not you plan to apply), please contact a member of our Technology & Intellectual Property Group and we will be happy to provide you with further information.
