United States: New Top-Level Domain Applications To Be Accepted Next Month

Domain Expansion Program Application Period Opens on January 12, 2012

On December 8, 2011, the U.S. Senate Committee on Commerce, Science, and Transportation held hearings on the Internet Corporation for Assigned Names and Numbers' (ICANN) plans to expand the number of "unrestricted" top-level domains ("TLDs") available on the Internet. TLDs are the last portion of the domain name used in web addresses (e.g., .com, .org, .gov, etc.). Currently, TLDs have been limited to predetermined designations (such as .com, .org, .gov, .net, or .edu), but ICANN's program will allow an indefinite number of new "unrestricted" TLDs to be registered and established beginning January 12, 2012.

ICANN will announce which TLDs were applied for on May 1, 2012. That announcement will also mark the beginning of the objection period, when trademark owners and other interested parties will assert objections based on certain specified grounds (see below). Disputes will be outsourced by ICANN under designated dispute resolution procedures, but lawsuits will be likely as well.

Several Commerce Committee hearing witnesses testified that the new TLD program could create consumer confusion and require businesses to bear unnecessary costs to protect their trademarks. According to these witnesses, companies will not only have to take steps to protect new TLDs that use, or could be confused with, their trademarks (e.g., .Coke), but companies also may feel compelled to make "defensive registrations", i.e. purchase second level domain names in new TLDs issued by ICANN (e.g., Coke.soda), in order to protect the company's intellectual property rights.

Despite protests by a wide array of commercial interests, it appears likely that the TLD program will continue as planned. In particular, neither the attending Senate Committee members nor the U.S. Department of Commerce/NTIA witness indicated that they intended to take any immediate action to impede the program's launch. Therefore, companies should prepare immediately, if they have not done so already, to take steps to protect their interests once the application period opens on January 12, 2012. Defensive measures might include a company applying for new TLD(s) to protect its trademarks or other business interests, and the development of a plan to protect its trademarks and business interests within any newly issued TLDs by registering second level domain names under a new TLD that correspond to their existing trademarks. Alternatively, a company or business may wish to pursue administrative remedies under the ICANN procedures for the new program, such as registering objection(s) to a new TLD on specified grounds.

The TLD Application Process

As discussed in our prior Alert of June 28, 2011, ICANN will accept applications for new TLDs from January 12, 2012 to April 12, 2012.

• Applicants must submit TLD applications along with a substantial $185,000 application fee, which is intended to compensate ICANN for application review and costs of any opposition proceedings, as well as to discourage cybersquatting.
• • The fee is payable in the form of a $5,000 deposit at the time of requesting an application slot, with the balance due with the full application.
• Once ICANN receives an application, ICANN will conduct an initial review.
• • The initial review includes an evaluation of not just the requested TLD for specific types of conflicts, but also the applicant's background including a review of the applicant's finances, any history of cybersquatting, business practices, etc.
• At the end of the application period, ICANN will post the TLD applications for public review.
• • Members of the public will be permitted to object to a proposed TLD on any of four enumerated grounds for formal objections:

• Once an application is approved, the provider must conduct a pre-launch "sunrise period" for its new TLD. This period is intended to allow existing trademark owners first opportunity to register second-level domains under the new TLD which correspond to their trademarks.
• • New TLD operators will be subject both to the traditional uniform dispute resolution policy rulings and a new "uniform rapid suspension" procedure. Under this procedure, a domain name will be suspended if it is found to be confusingly similar to pre-existing trademark or registered in bad faith (e.g., cybersquatting).
• The process for applying for and receiving new TLDs is likely to take at least nine months from the close of the application period, meaning that new TLDs will not become operational until the first quarter of 2013 at the earliest.

Steps for Companies Interested in TLDs & Related Issues

• Companies interested in registering a new TLD should consult their SNR Denton contact person as soon as possible to discuss the necessary qualifications and mechanics for filing. The January 12 deadline is fast approaching, and effective participation in the application process will take planning.
• Companies interested in monitoring the application process to ensure that applied-for TLDs do not infringe on their intellectual property rights, or who wish regular or specific updates on the TLDs for which applicants have applied, should consult their SNR Denton contact to inquire about our TLD monitoring services.
• In the event that a TLD conflict does arise or if you wish to pursue administrative remedies, we can advise and guide you through the dispute process, and ensure that your objection receives the fairest possible hearing.

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.