Brand promotion and protection on the Internet recently became more complicated when the Internet Corporation for Assigned Names and Numbers (ICANN) released its long-awaited list of proposed new generic Top-Level Domain Names (gTLDs). This unprecedented increase in the number of available Internet domain names offers businesses the opportunity to expand their brand presence, but also presents an increased risk of brand abuse by competitors and cybersquatters. Brand owners who act early to develop an informed gTLD strategy that takes into account risk, opportunity, and cost will be best positioned to expand and protect their brands in the new gTLD universe.
A gTLD is the portion of a web site URL “to the right of the period,” such as .com, .org, and .edu. As ICANN announced on June 13, 2012 (also known as “Reveal Day”), businesses, governments, and other parties have proposed more than 1,900 new gTLDs, including .baby, .home, .hotel, .inc, .online, .restaurant, .shop, and .store, as well as company-specific gTLDs such as .apple, .ferrari, and .merck. Brand owners should immediately review the list both to take advantage of the now-open periods for public comments and objections and to prepare themselves to file new domain name registrations and utilize various rights protection mechanisms that ICANN will deploy in the coming months.
Public Comment Period and Objection Period
Reveal Day opened up a sixty-day public comment period in which the general public can comment on the pending gTLD applications. Comments must be submitted in the New gTLD Application Comments Forum1 by August 12, 2012. Comments will be considered as part of the application file, but unlike formal objections (see below), comments in and of themselves are not sufficient to block a pending gTLD application.
In contrast, the objection process allows brand owners to formally assert legal and other grounds to prevent approval of a gTLD. These grounds are summarized on the Objection and Dispute Resolution Section2 of ICANN’s web site, and include the legal rights objection, the string confusion objection (the gTLD is confusingly similar to another top-level domain), the limited public interest objection (based on affronts to generally accepted principles of morality and public order), and objections from a particular community to which the gTLD relates. Objections must be filed by January 13, 2013 and will undergo a formal arbitration process by one of four different arbitration bodies.
Of primary relevance to most brand owners will be the prior legal rights objection, which asserts that a proposed gTLD would infringe the objector’s existing rights, such as a registered or unregistered trademark. The World Intellectual Property Organization3 (WIPO) will adjudicate prior legal rights disputes. Fees4 will be at least $10,000 for each of the complainant and defendant, though the prevailing party will be entitled to a refund of most of those fees. More information can be found at WIPO’s Legal Rights Objection web site5. If a brand owner believes that a proposed gTLD would infringe its existing rights (or that it has other grounds for an objection), it should consult with legal counsel.
Preparing for Registration, Monitoring, and Enforcement
When reviewing the application list for objections, brand owners should also identify new gTLDs that they see as relevant to their business, in which they may eventually want to register their brands or challenge registrations by competitors or cybersquatters. Although it will be many months before brand owners can register domain names under the new gTLDs and before ICANN rolls out its additional rights protection mechanisms, planning now will facilitate quick and efficient action at the appropriate time. More on these processes follows.
Sunrise and Post-Launch Registrations
Prior to the public launch of a new gTLD, the gTLD registry must provide a thirty day Sunrise Period in which the owner of a trademark can register the mark as a second level domain (SLD) under the new gTLD. (The SLD is the middle part of the domain name, such as “lowes” in www.lowes.com.) Only exact matches of registered or otherwise validated trademarks will be eligible for Sunrise registration. Once the Sunrise Period ends, the new gTLD will be available to the public for registration, and brand owners should quickly register any additional domain names that they were not able to register during the Sunrise Period. Although both the Sunrise Period and post-launch period will not begin until 2013 at the earliest, brand owners should compile a list of relevant gTLDs now so that they are prepared to file Sunrise and post-launch registrations when the time comes.
Trademark Clearinghouse and Claims Service
One of the rights protection mechanisms currently under development is the Trademark Claims Service, which will be facilitated by the Trademark Clearinghouse. Owners of registered trademarks will be eligible to record their marks in the Clearinghouse. Those who do will be notified, pursuant to the Claims Service, of potentially infringing SLD applications filed under the new gTLDs by third parties. However, the benefits of the Claims Service will only be offered for a limited time period, and will only catch exact matches for marks recorded in the Clearinghouse. Thus, the Claims Service will not eliminate the need for independent monitoring and enforcement in the new gTLD landscape. Brand owners can monitor the development of the Clearinghouse on ICANN’s Trademark Clearinghouse web site6.
Existing domain dispute resolution mechanisms will be supplemented by a new, lower-cost Uniform Rapid Suspension (URS) system (draft program summary available here7), which will be available in clear cases of trademark abuse, as well as a Post Delegation Dispute Resolution Procedure (PDDRP) in which an action may be brought against infringing domain registries for SLDs and gTLDs under their control (draft program summary available here8). All of these mechanisms are in development, and ICANN will release more details in the coming months.
A Note About Cost
Many brand owners will be tempted to file “defensive” SLD registrations under multiple gTLDs with no intent to use them. With hundreds of new gTLDs on the horizon, defensive SLD registrations (at an annual cost of $50 - $500 per domain) in a large number of the new top-level domains will be prohibitively expensive for most brand owners. Likewise, pursuing enforcement action against infringing registrations in several hundred top-level domains may not be feasible. Businesses should therefore prioritize registering and protecting names that have significant business value or present a serious risk of customer confusion or brand tarnishment. For example, a home improvement business such as Lowe’s might wish to register “lowes” as an SLD in new gTLDs such as .home and .store (i.e., www.lowes.home and www.lowes.store), but probably does not need to consider www.lowes.baby, and may not be concerned even if a cybersquatter registers www.lowes.adult.
Reveal Day was a significant milestone in the roll-out of the new gTLDs. For most brand owners, now is when the hard work of reviewing, registering, monitoring, and enforcement begins. Those who act quickly to assert their rights and pay close attention as details unfold in the coming months will be best positioned to both capitalize on brand-strengthening opportunities and guard against the increased risks inherent in the expanded domain name universe.
Andrew Ferren is a member of the Goulston & Storrs Intellectual Property Group.
For questions regarding the information contained in the advisory, please contact:
Andrew J. Ferren
This advisory should not be construed as legal advice or legal opinion on any specific facts or circumstances. The contents are intended for general informational purposes only, and you are urged to consult your own lawyer concerning your situation and any specific legal questions you may have.
Pursuant to IRS Circular 230, please be advised that, this communication is not intended to be, was not written to be and cannot be used by any taxpayer for the purpose of (i) avoiding penalties under U.S. federal tax law or (ii) promoting, marketing or recommending to another taxpayer any transaction or matter addressed herein.
© 2012 Goulston & Storrs – A Professional Corporation All Rights Reserved