United States: Radical Changes To The .com Arena

Introduction

This chapter addresses the new generic top-level domains, or gTLDs. The new gTLDs are considerably different from the dozens of longstanding generic top-level domains—.com, .net, .org—to which Web users have become accustomed. In 2011, the Internet Corporation for Assigned Names and Numbers (ICANN) voted to open up the Internet to allow organizations to choose any top-level domain desired, with certain limitations.

The first round of gTLD applications opened on January 12, 2012 and closed on May 30, 2012. During the first round of applications, ICANN received approximately 1,900 applications. ICANN has already announced that it is committed to a second round in the not-too-distant future after it has processed the first round of applications.

New gTLD Rules and Their Impact on Trademark Owners

The new gTLD program allows each gTLD applicant to become its own registrar. For example, instead of going to a third-party domain registration and hosting service, such as Go Daddy, Network Solutions or 1 & 1, and applying for usebrinks.com, an organization can operate as its own registrar and sell domain space to others, depending on its agreement with ICANN and the use of the domain (e.g., TiffanyShimada.UseBrinks).

While being a domain registrar offers an entity certain advantages, it also entails a significant amount of technical expertise. In fact, ICANN will not grant gTLDs to any entity that does not seem capable of assuming these responsibilities. For that reason, the application process includes 250 questions, covering such topics as technical capability to efficiently and effectively run a new gTLD, financial capability to set up and maintain the new gTLD for at least ten years, and background checks of entity officers. Simply put, a registrant must prove that it is the owner of an established, viable entity, that it is financially sound, and has the technical ability and stability to manage a domain registry.

Protecting Clients from Consumer Confusion or Infringement in the gTLD Realm

For trademark owners, the new gTLD program will greatly affect the way trademarks are used to promote entities on the Web. During the first round of gTLD applications, many entities deliberately applied for a myriad of gTLDs, suggesting that they are hoping to take advertising to a whole new level. For example, Canon applied for .canon, which may allow users to upload pictures to their own .canon domains in the future. L'Oréal may allow its customers to complete personal makeovers at a personalized .loreal domain space. Alternatively, an entity may provide a resource website using a more generic term such as .baby or .love for new parents or for a new dating website. Intellectual property attorneys must be diligent in advising their clients on how best to pursue the new gTLDs and whether to pursue them at all.

The gTLD Comment and Objections Period

Comments

Counsel for entities that wish to comment on any applications for a new gTLD should, as a first step, visit the ICANN website to view applications that were filed in the first round. ICANN provided a public comment period of sixty days, which initially ended on August 13, 2012, during which anyone could post a comment on any application filed to date. The comment period has recently been extended another forty-five days until September 26, 2012. These comments will be taken into consideration by ICANN as it reviews applications during the initial and extended evaluation periods.

Objections

If a company has recently applied for a new gTLD, counsel has likely been consulted to help with the application—or will become involved if a competitor files an objection to the entity's application. Conversely, if a competitor files for a new gTLD that is similar to an entity's trademark or is of interest to the entity as a mark owner, the company may wish to pursue a formal objection.

To keep pace with filing objections, it is important for attorneys to stay abreast of changes with respect to ICANN's gTLD Program available online.¹ In the newest version of the Applicant Guidebook 4, ICANN has established a distinct process for filing objections, which counsel will need to become familiar with before filing an objection to a new gTLD application.² Most notably, the objection-filing period for rights holders is only seven months and began June 13, 2012, after the first round of applications was publicly posted.

Types of Objections to a gTLD

Objections can be based on different grounds: string confusion, legal rights, community objection, and limited public interest. Different dispute resolution service providers are charged with addressing each type of objection.

String confusion pertains to confusion that might occur when two applicants apply for the same or very similar strings, such as the thirteen applicants that applied for the gTLD .app. String confusion objections will be mediated by International Center for Dispute Resolution, which is part of the American Arbitration Association.

A legal rights objection is filed by a rights holder claiming that a particular gTLD infringes on its trademark, whether registered or unregistered. Legal rights objections are to be handled through the World Intellectual Property Organization (WIPO).

A community objection is typically filed by an independent objector as a representative of a community at large. For example, a nonprofit advocacy group might object to an application for the gTLD ".gay" on the premise that the applicant is not an adequate representative of that community, and therefore should not be allowed to operate the new gTLD.

Similarly, the limited public interest objection can be posed by any organization that perceives that a particular gTLD violates public order or is blatantly offensive to the ordinary person, e.g., ".childporn."

Both community and public interest objections will be managed by the International Chamber of Commerce (ICC).

If an opposer is unfamiliar with filing objections with dispute resolution service providers, such as WIPO, it can be a very challenging process in both form and function. For example, some of the requirements for the objectors filing legal rights objections are as follows:*

• Contact dispute resolution service provider (e.g., WIPO)
• File electronically and only in English
• Give statement on standing
• Give arguments for objection
• Give documents to support objection
• Limit arguments to 5,000 words or twenty pages

*Additional requirements are detailed in Module 3.2 in Applicant Guidebook.³

The rights holder who intends to object to a gTLD application would be best served by hiring an experienced trademark practitioner.

The GTLD Objection Process

The biggest challenge in filing a new gTLD objection is understanding the objection process itself. A second challenge is the cost of filing a formal objection. For example, a legal rights objection costs approximately $10,000 in upfront fees to ICANN, and $2,000 of the fee is non-refundable. The fees will be used to fund an expert panel, comprised of three to six panelists that will evaluate the objection.

With respect to the objection process, an objector must have standing to file an objection against an application for a new gTLD. Legal rights objections may be filed at any time through January 2013. An objector must also understand the procedures under the dispute resolution service provider hearing the objection. Both applicants and objectors must be ready to move quickly because a decision is likely to be handed down within thirty to forty-five days after the objection is filed.

With respect to any type of objection, the procedures are set by the various dispute resolution service providers. Objection procedures are provided on ICANN's website and may be summarized as follows:⁴

Strategies to Navigate the Radical Changes on the Internet

gTLDs

Entities wanting to take advantage of the new gTLDs may take a few different paths with respect to the new gTLD registration process. First, they may take a "wait and see" approach—in other words, sit back and see what happens to other entities in the first round. Doing so may mean that competitors are taking advantage of new gTLDs and the future marketing opportunities associated with them. However, not doing so could save a substantial amount of money and time. In waiting, the entity could actively research the newly applied-for gTLDs and file a formal objection if its trademark rights are threatened by a new gTLD.

If an entity missed out on the initial application period for the new gTLDs, there will be additional rounds in the near future. Provided there are no significant delays in future rounds for new applications, it is predicted that there will be another application round in 2013 or 2014.

The current round of applicants will benefit from being first to market, although they have invested a significant amount of money into the process. Some entities, such as Google, have taken advantage of many different new gTLDs in addition to their brands. Just as the first entities to the .com space were seen as innovators in their respective fields, many believe that the entities taking advantage of the new gTLDs will be innovators in the next phase of Internet marketing. Just as the .com era, which was once foreign to most, became a part of daily life, the new gTLDs could become the next "big thing" for doing business on the Internet.

Of course, the new gTLD concept could fail, but that is the chance that these entities have taken. After all, if the new gTLDs do not catch on, the .com space continues to be an option for entities that wish to have web presence. What the new gTLDs could potentially add is additional credibility for entities that want to be in control of their own domain space and social media activities. Essentially, if an entity has a ".company" or ".brand" then that entity must be behind it; and the potential for a cybersquatter to run in the same domain space is greatly diminished. All too often, customers may go to a website and doubt whether a particular entity is affiliated with it. If that entity is running its own new gTLD, however, it should provide its customers with a feeling of additional security and privacy.

On the other hand, an advantage to those entities that have not participated in the first round of new gTLD applications is that there have been some quirks and delays in the system, which may be settled in future rounds of new gTLD applications. Also, with respect to cost, ICANN charged a minimum of $185,000 for each new gTLD application during this first round. This cost could potentially diminish over time in future application rounds. Further, the fees to maintain a new gTLD over the required contractual ten-year period with ICANN is estimated to be in the millions. This cost could also diminish over time, as the new gTLD space could respond to increased supply and decreased demand over time.

In conclusion, the domain name application process has changed quite a bit in the last year; and more changes will come. ICANN is currently processing all of the 1,900 applications for new gTLDs. By early to mid-2013, the new gTLDs will make their debut to the world. Attorneys and their clients that are involved in domain space should continually check ICANN's website and news reports with respect to new developments in relation to gTLD filings. They should also start acting now to work with experienced trademark practitioners to object to any new gTLDs that may interfere with their rights as trademark owners. Lastly, entities should also consider whether they would be applicants in the second round if they were not applicants in the first rounds. Stay tuned, as there is much more to come.

Lastly, some entities may be interested in applying for second-level domains, where available. For example, franchisees of a current gTLD applicant may be offered the opportunity to purchase domain space from the applicant and operate under a secure umbrella of corporate-wide new gTLDs, like ChicagoBears.NFL or ChicagoBulls.NBA.

Conclusion

With the introduction of the new gTLDs, we have entered a new era in how Web domain names and websites will be managed and used—and how the largest organizations will seek to protect and market their brands online. Companies that sat out this first round of gTLD applications will undoubtedly benefit from improvements to the process in the second round, whenever that may occur. Most importantly, the arrival of gTLDs signifies that online trademark protection is a serious issue that ICANN is addressing through structural measures for those willing to pay the price of protection.

Footnotes

1. NEW, GENERIC TOP-LEVEL DOMAINS, http://newgtlds.icann.org/en.

2 gTLD APPLICANT GUIDEBOOK, ICANN NEW GENERIC TOP-LEVEL DOMAINS (June 4, 2012) available at http://newgtlds.icann.org/en/applicants/agb.

3 gTLD APPLICANT GUIDEBOOK – MODULE 3.2, ICANN NEW GENERIC TOP-LEVEL DOMAINS (June 4, 2012) available at http://newgtlds.icann.org/en/applicants/agb/objection-procedures-04jun12-en.pdf.

4 Objection and Dispute Resolution, ICANN, http://newgtlds.icann.org/en/program-status/objection-dispute-resolution.

Originally published in Aspatore Special Report

This article is intended to provide information of general interest to the public and is not intended to offer legal advice about specific situations or problems. Brinks Hofer Gilson & Lione does not intend to create an attorney-client relationship by offering this information and review of the information shall not be deemed to create such a relationship. You should consult a lawyer if you have a legal matter requiring attention. For further information, please contact a Brinks Hofer Gilson & Lione lawyer.