Topic: Domain names
Who: The Internet Corporation for Assigned Names and Numbers (ICANN)
When: new generic Top Level Domains expected to go live in 2013
Where: Worldwide
Law stated as at: January 2013
What happened:
One of the biggest internet developments of 2012 (and arguably of the last decade) was the launch by ICANN of a new regime for applying for new generic top level domains (“gTLDs“).
At present there are only 22 gTLDs (such as .com, .net, .org) in addition to a handful of country code top level domains (such as .co.uk, .de, .fr). The new regime, which will see a massive proliferation of gTLDs in 2013 and beyond, has allowed any private or public organisation which meets certain criteria to apply for a new gTLD which can comprise any combination of characters. These may be general terms such as .car or .shopping but can be brand-specific such as .audi or .asda.
More than 1,900 applications for new gTLDs were accepted by ICANN and successful applicants will become domain registry operators for an initial ten year period under registry agreements with ICANN. Some successful applicants will operate open registries and allow other parties to register second-level domains under them (for a fee), while some will maintain closed systems for use only by themselves or other businesses working in partnership with them.
The first application round closed in April 2012, and the first new gTLDs are expected to go live at some point in 2013. The full list of applications is available via ICANN’s website. There are likely to be further application rounds for new gTLDs in the future, although no announcement on further rounds is likely until this initial application round has been dealt with in full.
Opportunities for brand owners
So what does this mean for brand owners? Well, the big opportunity was to apply for a gTLD that corresponded to a brand identity. The idea presumably being to create a unique space online that says “this brand is so important, we have our own space on the internet”.
Whether or not the new .brand domains will live up to the hype (and be worth the application fee of USD$185,000) remains to be seen. There are however still opportunities for brand owners who either missed the application round, or are happy to stand on the sidelines as far as gTLDS are concerned to see how this all plays out.
While most .brand gTLDs are likely to be operated as “closed” domains to be used only by the brand owners (and conceivably their affiliates, licensees or selected distributers or retailers) the myriad of new truly generic gTLDs are likely to operate as “open” domains under which any business can apply for a second level domain in the usual way. Many of the generic terms applied for as gTLDs correspond to consumer products and services, so there may be opportunities for brand owners to apply for domain names that incorporate their brand identity in the second level in the normal way, but end with a specific product or service in the top level (for example: osborneclarke.law, bbc.news or yourcompany’sname.marketing).
In addition some gTLDs will present brand owners with an opportunity to present a particular message to the public simply by registering a second level domain under the name. Registering and using a second level domain under gTLDs which correspond to words to which consumers respond favourably may be worth considering as part of an overall brand strategy, such as brandname.health, brandname.home, or brandname.luxury.
Risks for brand owners (and what they can do to minimise them)
In general, applying for second level domains under new gTLDs in this way poses little or no additional risk to brand owners as far as trade mark law is concerned over and above the current regime. The only major caveat being that if the combination of a brand identity or other words in the second level with another word or words in the top level somehow constitutes a sign identical or similar to a third party’s trade mark (in a way that the second level word alone does not) then disputes may arise. Such circumstances are however likely to be extremely rare.
The main challenge that brand owners face as a result of the new gTLD regime will be policing the multiplicity of new gTLDs that will emerge to ensure that third parties are not abusively registering second level domains using words identical or similar to brand terms. Brand owners are faced with the prospect of policing more than 1,000 gTLDs, up from the 22 current gTLDs and handful of country code TLDs. In the absence of a mechanism for preventing the sale of domains which correspond to brand owners’ trade mark rights, no second-level domain registration system is going to be free of the problem of cybersquatting. Given this massive proliferation of gTLDs brand owners will have to be more vigilant than ever in preventing third parties from registering and using second-level domains that infringe their trade mark rights under the new gTLDs.
In particular, most brand owners will be keen to prevent third parties registering and making use of websites at addresses such as www.brandname.porn, www.brandname.sex, www.brandname.sucks or www.brandname.wtf (all of these gTLDs have been applied for).
Trademark Clearinghouse
ICANN has however sought to put some mechanisms in place to assist brand owners. Before applications for second level domains under new gTLDs are permitted, brand owners will be able to list their registered trade marks in a Trademark Clearinghouse, at an estimated cost of around $150 per mark.
The model for this, as set out in the ICANN handbook, is that trade mark owners who list their marks in the Clearinghouse will be afforded the opportunity to purchase second-level domains corresponding to those trade marks under any new gTLDs before those gTLDs are opened to the public for second-level domain registration (i.e. during a so-called “Sunrise Period”).
Additionally, once the gTLD is open to the public, any applicant for a second-level domain which exactly matches a trade mark in the Clearinghouse will be notified of the brand owner’s trade mark rights. These notices will only be given if the application is made within the first 90 days of operation of the new gTLD. Additionally, there is no mechanism for brand owners to prevent registration of second level domains which correspond to their trade marks and they would only be notified once a second-level domain corresponding exactly to one of their listed trade marks has been registered.
Many brand owners feel that these mechanisms are insufficient and ICANN is still in the process of consulting with stakeholders on the details of the Trademark Clearinghouse as at the date of publication of this article. That consultation period is due to close on 15 January 2013.
In addition to the Trademark Clearinghouse and the normal domain name dispute resolution procedures, a Uniform Rapid Suspension procedure will be put in place with the intention of providing an efficient and inexpensive mechanism for dealing with obvious instances of cybersquatting.
Why this matters:
This development continues to present real challenges to brand owners, as well as opportunities. Below is a list of five things that businesses should do in relation to the new gTLD applications.
1. Review the published list of applications
Consider whether there are any gTLDs under which you might like to apply for a second level domain either because they correspond to a relevant product, service or marketing message. Similarly, identify any gTLDs that you want to keep a close eye on to ensure that third parties are not abusively registering your brand name(s) as a second level.
2. Consider using the Trademark Clearinghouse
The proposed Clearinghouse is not without its flaws, but it may be worth lodging at least a small portfolio of registered trade marks in the Clearinghouse (whenever the details are finalised and the system goes live), both as a deterrent to would-be cybersquatters and to afford you the right of first refusal on any second-level domains under the new system.
3. Ensure your own trade mark portfolio is in good shape
Make sure that any trade marks which you may wish to record in the Trademark Clearinghouse are validly registered.
4. Monitor the roll-out and use of the new gTLDs
There may be lessons to be learned from how this first batch of gTLD applicants fare throughout the application process and in their use of new gTLDs which are granted. The next round of applications may not come for a while, but be prepared to apply if you think your business can benefit from owning a gTLD. Similarly, lessons will likely be learned from how brand owners respond to the opportunities to apply for and use second level domains under the new gTLDs.
