Introduction

In a matter of months, the amount of "Internet real estate"—which has been static for the past several years—will expand dramatically. Companies, organizations, cities and others will be able to apply to ICANN to launch new domain spaces using brand names (for example, .nike), generic terms (such as .shoes) and locations (such as .nyc). Do you want to own some of that territory? If so, there are hurdles and tight timeframes ahead. Do you want to prevent others from owning that new territory? And are you prepared to defend your trademark rights from squatters operating in that new territory? In either case, you should begin preparing now to mount strong defenses.

The expanded namespace will create potential business opportunities but will also introduce new risks and challenges. This client update briefly outlines ICANN's processes and procedures for the launch of new generic top-level domains (gTLDs) and addresses the opportunities and challenges associated with them. In particular, it focuses on helping trademark owners navigate this new Internet landscape by:

  • Outlining the branding and business issues, as well as the legal questions, that you should consider in deciding whether your organization should apply for a new gTLD;
  • Identifying the grounds on which you can oppose such an application and practical tips for preparing to lodge such an opposition; and
  • Listing the numerous rights protection mechanisms that will be available to trademark owners and suggesting ways in which you can prepare to effectively and efficiently employ such tools.

Background, ICANN Processes and Timing

The Internet Domain Name System currently supports 21 gTLDs, such as .com, .net, .org, and .biz, and more than 250 country-code TLDs, such as .us, .uk, and .jp. That will change soon.

After substantial debate spanning many years, including significant input from governments and industry, on June 20, 2011, the board of the Internet Corporation for Assigned Names and Numbers (ICANN) is scheduled to approve a program to launch new gTLDs. Soon thereafter, ICANN will accept applications from organizations interested in managing new namespaces and consider objections from concerned parties. Approximately 12 months later, when the new gTLDs are actually added to the Internet, the available Internet namespace will expand substantially. The process, with its numerous important deadlines, will move quickly.

On April 15, 2011, ICANN released the latest and likely final draft version of the Applicant Guidebook, which provides the processes that ICANN will implement as it considers applications for and objections to proposed gTLDs. A lengthy and detailed document, the Guidebook specifies, among other things, the information and documentation required in an application, the legal and financial commitments required of applicants, and the standards that ICANN will apply to applications and objections during the evaluation periods. The comment period on this version of the Guidebook is open until May 15, 2011.

On May 30, 2011, ICANN is scheduled to release the final version of the Guidebook, on which the ICANN board will vote on June 20. Shortly thereafter ICANN is expected to announce the date on which the period for applying for a proposed gTLD will open and other related dates. Although these dates have not yet been finalized, here is an approximate timeline of the important dates and activities.

Date

Activities

June 21, 2011

Announcement of application period

~ October 2011 - December 2011

Application period: during this 60-day window, ICANN will accept applications for new gTLDs.

~ January - February 2012

Administrative review and publication period: during this two-month period, ICANN will review all timely applications for completeness and, at the end, make public all complete applications.

~ March - July 2012

Initial evaluation period: during this five-month period, ICANN will consider the merits of complete applications. If an application is subject to extended evaluations and/or objections, the evaluation period could extend up to an additional 12 months.

~ July 2012 forward

Delegation period: after an applicant signs a registry agreement with ICANN and passes various technical tests, new gTLDs will be added to the Internet. ICANN currently projects that these activities will take approximately two months.

Apply for a new gTLD

There is already significant interest in launching new gTLDs. Several owners of large brands—including Canon, Hitachi and Deloitte—have announced their intention to apply for new gTLDs, and many other brands have publicly commented about possible gTLD applications. Numerous other organizations are also known to be considering applications for new gTLDs, including those representing the lodging industry (.hotel), e-commerce companies (.shop), the real-estate community (.mls, .home, etc.), various media organizations (.film, .music, etc.) and various geographic locations (.paris, .nyc, etc.).

Should you join this land rush? There are numerous potential business reasons to consider in applying for a new gTLD, including the following:

  • A new gTLD could provide increased visibility for and direct utilization of your brand and/or allow for niche branding opportunities.
  • A new gTLD could reinforce an existing and important brand attribute—e.g., our company is on the cutting edge.
  • A new gTLD could facilitate and integrate connections, communication and collaboration with customers, clients, partners, employees and other stakeholders.
  • A new gTLD could provide a more flexible and scalable platform for the provision of online services.
  • A new gTLD could decrease your third-party dependencies.
  • A new gTLD could offer improved online security, brand protection and risk management capabilities.
  • An application for a new gTLD could hedge against risks, including the risks that (1) another party might demonstrate rights to your preferred new extension; (2) competitors could launch new extensions and get an advantage therefrom; or (3) a new extension could be awarded in this round that materially impacts your likelihood of getting a new gTLD in later rounds.

But applying for a new gTLD involves a significant and sustained organizational commitment. In addition to the financial outlay (the evaluation fee alone is $185,000; other costs could be substantial also), the application process is a major undertaking that will take many months or several years to complete and involves uncertain outcomes. In all events, whether to apply for a new gTLD is an important business decision with long-term business implications.

Practical Suggestions

  • Convene a meeting of high-level organizational brand managers to consider interest in applying for a new gTLD—either custom (.yourbrand) or community (.yourindustry; e.g., .pharmacy).
  • Consider collaborating on a community gTLD with other organizations in your industry.
  • Discuss marketing, regulatory and legal issues with your professional advisors.
  • Collaborate with registries and registrars, considering particularly their experience in managing TLDs, the standard and customized services they offer, and how those services line up with your goals for a new gTLD.

Opposing a new gTLD

Even if your organization is not interested in pursuing its own gTLD, you should still follow and engage in ICANN's application and objection process because, among other reasons (see below), you may have an interest in objecting to another party's application. There are four grounds on which you might be able to lodge an objection to a new gTLD application.

  1. String confusion. Existing TLD operators or proposed gTLD applicants have standing to object to a proposed gTLD on the ground that it so nearly resembles another existing or proposed TLD that it is likely to deceive or cause confusion.
  2. Legal rights. Rights holders, including owners of registered or unregistered trademarks, have standing to object to a proposed gTLD on the grounds that it infringes their existing legal rights by taking unfair advantage of or unjustifiably impairing the distinctive character or reputation of the mark or "otherwise creates an impermissible likelihood of confusion."
  3. Limited public interest. Subject to a "quick look" review to eliminate frivolous objections, any party can object to a proposed gTLD on the ground that it is "contrary to general principles of international law for morality and public order."
  4. Community. An established institution that is associated with a clearly delineated community has standing to object to a proposed gTLD on the grounds that there is substantial community opposition to the application or that the application "creates a likelihood of material detriment to the rights . . . of a significant portion of the community."

Practical Suggestions:

  • Gather intelligence on likely gTLD applications that might impact your business by networking in your industry and community groups and tracking public announcements by gTLD applicants.
  • Closely monitor the gTLD application review process—especially in early 2012—for ICANN's public announcement of gTLD applications that have cleared administrative completeness review.
  • If you are aware of applications to which you plan to object, start preparing your objection early, including consulting with professionals, gathering evidence and soliciting the support of similarly situated parties.

Preparing to protect your trademarks

Of course, many businesses will have no interest either in applying for a gTLD or in objecting to applications filed by other parties. Most businesses, however, will want to vigorously protect their rights, and particularly their trademark rights, in the expanded namespace. The most recent version of the Guidebook includes improvements in that regard. Trademark owners will have several rights protection mechanisms (RPMs) at their disposal with respect to every new gTLD.

  1. ICANN will launch a trademark clearinghouse, which will be a "central repository for information to be authenticated, stored and disseminated pertaining to the rights of trademark holders." The data maintained in the clearinghouse will support and facilitate other RPMs.
  2. All operators of new gTLDs must offer sunrise registration service for at least 30 days during the pre-launch phase and must notify owners of clearinghouse-registered marks of any sunrise registrations. In short, eligible trademark owners will have an early opportunity to register second-level domains in new gTLDs.
  3. All operators of new gTLDs must provide trademark claims service for at least the first 60 days that second-level registrations are open. The service "is intended to provide clear notice" to a potential registrant of the rights of a trademark owner whose trademark is registered in the clearinghouse.
  4. All operators of new gTLDs must offer the Uniform Rapid Suspension System (URS), essentially a faster and more economical version of the Uniform Domain Name Dispute Resolution Policy (UDRP).
  5. Lastly, the time-tested UDRP will apply to all second-level registrations in the expanded namespace.

Practical Suggestions

  • Audit your trademark portfolio. Because the enhanced RPMs favor registered and court-adjudicated trademarks, consider applying for additional trademark registrations now.
  • Track the implementation of the trademark clearinghouse so that you timely provide the necessary documentation to authenticate your rights.
  • Calendar the important sunrise dates, likely in mid-2012.
  • Budget and plan for the potential for increased policing and enforcement activities after the launch of new gTLDs.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.