Is Your Company Ready for “.Anything”?

The Internet as we know it may soon be changing forever.  From January 12, 2012 to April 12, 2012, the Internet Corporation for Assigned Names and Numbers (ICANN) is expected to accept applications for new generic “top level” domain names (gTLDs), which is the text to the right of the dot, where .com, for example, is now. 

New top-level domains could be a generic term such as .shoe, a geographic term such as .nyc, or a trademark, commonly referred to collectively as “.brand” domains.  Thus, under the new system, companies might be able to own domain names that consist of just their trademarks, without the .com.  In addition, new gTLDs will be available in non-Roman scripts, such as Cyrillic, Chinese, or Arabic.

The cost of such new top level domain names won’t be cheap.  The filing fee alone is $185,000, with no guarantee the name will be awarded.  The operating costs of running the registry for the new top level domain may also be substantial, depending in part on whether the public will be allowed to register “second level” domains (such as nike.shoe) or if the domain name space will be restricted to use by only one company (such as .nike).  Running a registry requires extensive technical capability and the costs of outsourcing this responsibility over the ten year commitment could reach into the millions of dollars.  Thus, a new top level domain is not for everyone. 

Who is ICANN?

ICANN was formed in 1998 in an effort to privatize the management of certain Internet resources and technical functions, shifting responsibility from the United States government.  ICANN operates without direct government control, taking input from numerous “constituencies” including domain name registrars (retail sellers), registries (who maintain and run the computers that manage the addressing of second level domains within the particular top level domain), Internet service providers, commercial and business owners, intellectual property owners, and noncommercial users, as well as governments.

ICANN has already overseen the addition of over a dozen new top-level domains, such as .biz, .info, and .travel.  Most recently, .xxx was finally adopted after years of controversy and objections from the U.S. government and others, and litigation is now pending against ICANN’s approval of this gTLD on antitrust grounds. 

The new gTLD program that ICANN is now embarking on represents a dramatically ambitious expansion of Internet domain name space.  ICANN says that it expects hundreds of applications in the three-month filing window, which opens in January 2012, and it has announced that it intends to introduce up to 1000 new gTLDs per year once the program is fully operational.  For companies that already expend significant resources in developing their online brand strategies and enforcement policies, this quick and vast expansion of the Internet will have a tremendous impact on both their business and customers.

Why Is ICANN Expanding the Domain Name Space?

According to ICANN, expansion of the Internet domain name space will relieve domain name shortage problems, spur innovation, and create economic growth.  Critics charge that ICANN, like the scientists who brought the dinosaurs back to life in Jurassic Park, has been too busy figuring out if it could be done without thinking enough about whether it should be done.  Critics also point to the existing and largely unsuccessful gTLDs like .biz and .info as proof that there is no need for yet more gTLDs.

Organizations like the International Trademark Association have expressed concern for years about the inevitable and real costs to trademark owners in protecting their brands in the vastly expanded cyberspace and the confusion to consumers the rapid expansion will cause.  ICANN has asked these organizations for recommendations on these issues, but it remains to be seen how effective the new trademark and consumer protection measures as adopted by ICANN will be in light of the size and breadth of the proposed expansion of the domain name system.

Should You File for “.Brand”?

The decision to file for a “.brand” top level domain name cannot be taken lightly, considering the high cost and significant responsibilities involved.  Before rushing in to file, companies should consider whether they have the financial resources to operate as a registry for the new gTLD (and the requisite technical capability if they choose not to outsource that function).  Companies should also consider the opportunity costs of filing for a new gTLD.  In other words, what else could that money and effort be devoted to that might be more beneficial to the company?  In addition, if a company loses interest in running the gTLD after a few years, there is the risk that ICANN will “redelegate” the gTLD to another company, reducing the mark owner’s control over its brand. 

Most importantly, companies should consider how they would use a “.brand” domain name differently than their existing domain name.  Most companies that have the financial resources to file for a “.brand” domain probably already have the .com version of their trademark as a domain name.  As Facebook and others have demonstrated, there is a lot that one can do with a .com domain name to give individuals their own space on the Internet.  Is the “totally branded” experience of visiting a “.brand” domain website substantively any different than visiting the brand.com website?

How Can You Protect Your Trademarks?

Even if a company chooses not to file for a “.brand” domain, it must still be concerned about who might file an application for a new gTLD that is confusingly similar to its trademarks, and who might file for a second level domain within one of the potentially hundreds of new gTLDs.  For example, Nike needs to be concerned not only about someone else filing for .nike, but also who might seek to obtain nike.shoes, nike.sports, and nike.store.

The new gTLD program does have some protections for trademark owners both prior to and after launch.  In addition, trademark owners will be able to enter certain marks into a new Trademark Clearinghouse, one of the recommendations supported by the International Trademark Association.  The owner of a mark in the Trademark Clearinghouse that is in current use will be eligible for preferential rights to an identical second level domain during a “sunrise” period required of each new gTLD prior to general availability of domains to the public.  In addition, for the first 60 days after general availability, the owner of a mark in the Trademark Clearinghouse will receive a notice if someone else registers a second level domain that is identical to the mark. 

Finally, a new Uniform Rapid Suspension (URS) system will be implemented for all new gTLDs. Under the URS, trademark owners can suspend a domain for the remainder of the domain name registration period (plus one optional year upon payment of a fee).  Ideally, the process will be quick and relatively cheap.

Conclusion

Trademark owners need to be ready for the almost certain arrival of new gTLDs in 2012 and beyond.  Whether the new gTLD program turns out to unleash mostly tame brontosauruses or out-of-control velociraptors that wreak havoc on the existing domain name system remains to be seen.

The International Trademark Association (INTA) is a not-for-profit membership association dedicated to the support and advancement of trademarks and related intellectual property as elements of fair and effective commerce. It is also a founding member of ICANN’s Intellectual Property Constituency and continues to serve as a leading voice for trademark owners in the ongoing debate over the evolution of cyberspace.

Today, more than 5,900 trademark owners, professionals and academics are members of INTA. Members find value in INTA’s global trademark research, advocacy work, and education and training. Headquartered in New York City, INTA also has offices in Shanghai, Brussels and Washington D.C., and has representatives in Geneva and Mumbai.  INTA can be contacted at +1 212 641 1700 or by email at communications@inta.org