Legal

gTLD expansion: what your business needs to know


Business leaders take note: the largest expansion of generic top level domain names (gTLDs) to date is about to hit the Internet.  The Internet Corporation of Assigned Names and Numbers (ICANN) is in the final stages of opening top-level domain name strings to the public. Those who are approved will control the portion of domain names to the right of the dot. Business leaders should read this article to familiarize themselves with the timeline, opportunities, and requirements of the gTLD expansion.

On June 20, the ICANN Board will convene in Singapore to vote on the final version of the gTLD guidebook.  ICANN plans to use a four month period of time to promote the gTLD process.  ICANN will likely begin accepting applications in fall 2011. 

The initial application period will be open for 60 days.  ICANN will confirm the accuracy of the applications and will post non-confidential portions of the gTLD applications for public review in approximately the spring of 2012.  The approval time will depend on the number of applicants, the number of applicants for a particular gTLD, and the number of objections to the gTLDs. 

Companies seeking to obtain and run a new gTLD can select any combination of up to 63 characters.  The gTLD is the suffix of the domain name; the letters to the right of the dot.  For example, common domain names today are brand.com or school.edu.  The new gTLDs are .brand and .school.  Those companies who maintain the new gTLDs can then open the left of the dot for branding purposes or for registration by the public.

The registration of the new domain name string is open to everyone, though ownership of a gTLD has significant barriers of entry.  The first barrier is the $185,000 application fee that is made payable to ICANN.  Based on this fee, applicants will likely consist of large companies who want to use the gTLD system in connection with a brand (e.g. IBM) or well-funded companies who want to capitalize on a generic space like .web or .fun.

ICANN will ultimately choose the gTLDs that will make it on the Internet.  That decision process, however, is designed to be objective.  On May 30, 2011, ICANN published a revised 355-page applicant guidebook [http://icann.org/en/topics/new-gtlds/rfp-clean-30may11-en.pdf] that will be used to assist companies through the application process.  Applicants will be required to submit information regarding their technical plans, financial resources, and business models.

More information regarding the application process can be found at the “New gTLD Program” portion of ICANN’s website [http://www.icann.org/en/topics/new-gtld-program.htm].  ICANN’s latest gTLD news is also posted on the Twitter accounts @ICANN and @NewgTLDsICANN.

Capitalizing opportunity

The gTLD introduction to the public will provide significant opportunities to companies looking to capitalize on an entire web space.  Companies with brands will have the chance to enjoy controlling content running through their top-level domain strings.  Non-brand gTLDs are also expected to be in high demand.  Entities looking to capitalize on generic terms such as .city, .fun, or .sports will have the opportunity to put an application in for those names.

Those companies who desire to apply for a gTLD should take action quickly.  With the application process set for a 60-day period at the end of this year, companies seeking to acquire a gTLD will need to start putting together their plans accordingly. Business leaders who are hesitant to move forward with registration should consider longer term. ICANN has not announced when it will next open its doors for new applications.  If companies are looking for their own gTLD, the time is now. 

The introduction of the gTLDs will also present challenges for companies.  Like previous gTLD introductions, the opening of the new gTLD space to any number of companies will introduce potentially thousands of brand enforcement and dispute issues. 

The U.S. Congress has taken notice of the potential branding and community issues with the proposed gTLDs.  On May 4, the House Judiciary Subcommittee on Intellectual Property, Competition, and the Internet held a hearing on ICANN’s new gTLD program.  Representatives from both major parties, trademark owners, and the domain industry were represented at the hearing. 

Despite the hearing, the gTLD expansion is somewhat outside of Congress’ hands.  The Internet is not confined to a single country and the gTLD process will be open to companies throughout the world.  Any limitations would seemingly be avoided by going to other countries. 

ICANN, formed in 1998 during the Clinton administration, has not sat idly midst the controversy.  ICANN’s 13 years of governance has provided insight on how to better protect brand owners and the community.  ICANN has implemented new strategies and policies to thwart the improper registration and use of domain names.  The ultimate responsibility, however, rests on the brand owner and communities.

Protecting your brand

Brand owners should maintain a careful watch over the application and introduction of the new gTLDs.  The gTLD application process will have procedures for brand owners to file objections to proposed names (those on the right of the dot).  Further, communities, special interest groups, and certain classes of citizens will have the right to object to applications that are morally objectionable. The objection filing period will open after ICANN posts the list of complete applications and will last for approximately seven months.  Objections must be filed with dispute resolution providers, not with ICANN.

Once the gTLD string is accepted, brand owners will have a variety of mechanisms available to them to protect their brands to the left of the dot (e.g. brand.web). Under the Trademark Post-Delegation Dispute Resolution Policy, brand owners will have the right to file a dispute against the registry operation in connection with the top level (to the right of the dot) and second level (to the left of the dot) names.  The complainant must prove by clear and convincing evidence that the registry operator’s conduct takes unfair advantage of the complainant’s mark, impairs the character or reputation of the mark or creates a likelihood of confusion with the complainant’s mark.

Each of the gTLDs will also have a mandatory sunrise program that will allow trademark holders to register their brand prior to general availability.  Brand owners desiring to use the sunrise services should consider trademark registration of their brands as opposed to relying on common law rights.  Certain countries have rapid registration services.  Business leaders should contact their trademark attorneys for more information regarding registration.

Brand owners should also be aware of the trademark claim process that will be employed as part of the new gTLD launch. Brand owners who do not want to register blocking domain names may put a claim in on a particular term.  If someone tries to register that name, the potential registrant will be notified of the trademark claim and the trademark holder’s alleged rights.  The claim, however, does not block the registration.  The potential registrant may proceed with the registration provided it represents it will not infringe on the brand owners rights. The brand holder will then be notified regarding the registration and will be provided the registrant’s contact information. 

Brand owners who do not take part in the sunrise or claims programs may take action after their brand has been registered.  The Uniform Dispute Resolution Policy (UDRP) is an alternative dispute resolution process that already exists with existing domain names transfer or cancel domain names that were improperly registered or maintained.  Additionally, brand owners may use the Uniform Rapid Suspension program (URS) that is planned to handle straight-forward cybersquatting cases.

The introduction of new gTLDs will create opportunities and challenges to leaders of businesses worldwide.  Businesses should begin developing strategies now regarding the new gTLD expansion.

William D. Schultz is an attorney with Merchant & Gould in Minneapolis. Mr. Schultz specializes in online trademark and copyright litigation matters. Using UDRP, federal court litigation, and simple persuasion, he has secured the return of hundreds of domain names to trademark owners. He can be reached via email at wschultz@merchantgould.com.