The window for applying for generic top-level domains (gTLDs) is fast approaching. Applications can be made from 12 January to 12 April 2012. Businesses should act now to develop a strategy to maximise this opportunity and protect their brand.
This update provides general information on gTLDs and how this opportunity could be important to your business and your brand.
What are gTLDs?
gTLDs are new top level domain names. Previously, entities could register second level domain names under existing top level domains, such as "dot-com" or "dot-net." From 12 January to 12 April 2012, entities can apply to create and manage gTLD registries.
There are two types of gTLDs:
- Brand-based gTLDs
- Generic gTLDs, ie "dlapiper.com" could become ".dlapiper" or ".law".
This is the first stage of a long-term plan to expand the gTLD system. In the future, it is likely that brand-based (eg dot-dlapiper) or generic (eg dot-law) top-level domain names will become more intuitive. Early adopters could have a lead of between three and five years on their competitors because any second round of applications cannot begin until all first round applications are processed and opened.
How do you apply for a gTLD?
Applying for gTLDs is a complex process. Applications are made online to the Internet Corporation for Assigned Names and Numbers (ICANN) and take between nine and 20 months to process. Applicants must pay an initial US$185,000 fee. Businesses applying for a gTLD are essentially applying to set up and operate a registry. This involves additional costs, which could exceed US$500,000 over five years.
What are the trade mark risks for businesses that do not take up the opportunity?
Applications for gTLDs are open to the public and entities do not require a trade mark to apply for a particular gTLD, be they brand-based (eg dot-dlapiper) or generic (eg dot-law).
In the case of brand based gTLDs, there is a risk that other entities could acquire a gTLD that incorporates elements of your trade mark if you do not act promptly. The US$185,000 application fee will most likely deter cyber squatters. However, businesses could lose control of their brand and product marketing if another entity registers elements of their trade mark. Businesses could also be prevented from registering second-level domain names by the gTLD owner.
There is high likelihood that multiple entities will apply for same or similar gTLDs and conflicts regarding ownership will be resolved by auction. Access to second-level domains will also be restricted. This could have serious implications if you compete with a third party with a legitimate right to a key mark or term because you cannot buy a registry from a successful applicant and the second round of applications may be five years away.
How do you maximise opportunities?
Brand-based gTLDs (eg dot-dlapiper) offer the ability to create a unified online brand presence under one umbrella. It also demonstrates a first-mover advantage in the market place. Furthermore, it could potentially reduce the impact of third-party cyber-squatting activity if consumers are aware that all official content is located under the brand-based gTLD.
Generic gTLDs (eg dot-law) demonstrate serious market power in given industries as the gTLD most relevant to that industry is under your control. This could also create a "halo" effect with consumers that raises the profile of your brand's other offerings in other product categories. It could potentially create a new revenue stream if public registration of second-level domains is allowed. Conversely, it could also allow exclusion of competitors from second-level domains under desirable gTLDs if access to second-level domains is restricted.
Is a gTLD suitable for your business?
By applying for a gTLD you are also applying to create and manage a domain name registry. This requires significant financial investment and close co-operation between the legal, marketing and IT departments of your business, at a minimum. Applicants should expect ongoing fees and capital expense costs. However, gTLDs offer unparalleled opportunities to protect, promote and grow your brand.
Taking action
The internet is essential to 21st century business. The internet is changing to satisfy 21st century business demands. Businesses must act early, be that by applying for a gTLD or by developing trade mark and brand protection strategies if they do not.
We strongly recommend that you consult qualified professionals to assist you with this process. Of course, we welcome the opportunity to discuss the issues associated with the process in more detail at your convenience.
© DLA Piper
This publication is intended as a general overview and discussion of the subjects dealt with. It is not intended to be, and should not used as, a substitute for taking legal advice in any specific situation. DLA Piper Australia will accept no responsibility for any actions taken or not taken on the basis of this publication.
DLA Piper Australia is part of DLA Piper, a global law firm, operating through various separate and distinct legal entities. For further information, please refer to www.dlapiper.com
