The proposed expansion in generic top level domains by ICANN means that existing trade marks will not be protected against domain name registration by cybersquatters. Katherine Seymour outlines the potential threat to brand owners.
Topic: Domain Names
Who: Internet Corporation for Assigned Names and Numbers ("ICANN")
When: Second quarter of 2009
Law stated as at: ICANN announcement 26 June 2008
ICANN, the body responsible for managing the domain name system, approved proposals on 26 June 2008 to liberalise generic top level domain ("gTLD") name availability. One of ICANN's founding principles is to promote competition in the domain name marketplace.
Applicants will no longer be restricted to the 21 gTLD's currently on offer, incuding .com, .org and .gov as well as country-code top-level domain names ("ccTLDs") such as .uk. Applicants will instead be able to self-select their domain name suffixes to one that is most appropriate to their sector, for example .bank, brand-specific suffixes such as .facebook, and geographical suffixes such as .london.
In 2005, ICANN's Generic Names Supporting Organisation ("GNSO") commenced consultations with a broad range of constituencies with the idea of introducing further gTLDs. .travel and .mobi were introduced in the interim in 2005 and 2006 respectively, and the GNSO presented their recommendations for further gTLDs to ICANN in 2007.
ICANN approved the GNSO proposals in their meeting on 26 June 2008. ICANN plans to start accepting applications in the first round for new gTLDs during the second quarter of 2009.
Implications to brand owners
To establish and operate a gTLD, brand owners would have to pay an application fee of $185,000 per gTLD and submit registrations and use policies. Although trade mark owners would have the ability to create, control and use new gTLDs, there would be huge cost implications for those brand owners who would want to protect a suite of trade marks by registering gTLDs for each to protect against infringement.
The proposals also give rise to the potential for disputes between trade mark owners with identical or very similar brands, for example, where trade marks are registered by different brand owners at different national registries. ICANN proposes that such disputes are resolved by way of auction, as a means being the most economically efficient way of resolving competing claims.
Brand owners will also have to consider whether their domain name portfolio should include branding within non-branded gTLDs such as .bank. Brand owners would have to consider which gTLDs to focus on, and it is thought that this would give rise to disputes as to who is the rightful owner of the non-branded domain name.
Whilst trade mark owners will have a chance to object to an application, trade marks will not be automatically reserved for their benefit. The proposals therefore broaden the scope for cybersquatting, although it is thought that the fee is sufficiently high to deter the average cybersquatter from illegitimately registering a trade mark as a gTLD. However, with such a high cost to register a new gTLD, cybersquatters with deep pockets may cause problems for brand owners who may face even higher costs in defending their IP rights, acquiring and transferring the gTLD.
With implementation of the proposals during 2009, brand owners will have an increased burden to proactively monitor ICANN for new gTLD applications that may infringe existing IP rights. With the potential for an inundation of gTLD disputes on the horizon, brand owners will have to carefully consider, develop and defend their online marketing strategies.