Last June the Internet Corporation for Assigned Names and Numbers (ICANN) announced that it would be changing its rules on generic top level domains (gTLDs) with effect from 2012 in order to allow any organisation (public or private) to apply to establish a gTLD registry for almost any word, with up to 1,000 new registrations per annum. Its announced rationale for so doing was “to increase competition and choice”.
The application period (for the first round of applications) opened on 12 January 2012, and will last for three months. Each applicant will be required to pay (amongst other costs) an evaluation fee of $185,000 and (if successful) annual administration fees of at least $25,000.
It is important to understand that this represents not simply a “new set of domain names”, but a (potentially very large) number of free-standing domain registry businesses that are linked into and support the Domain Name System. Furthermore, it constitutes on any view a very major potential change, in that the current number of gTLDs (22) could multiply to a thousand within the next 12-18 months.
Further information on the procedural rules may be found via http://newgtlds.icann.org.
Which words can be applied for?
ICANN’s rules contain relatively few restrictions on the types of words that can be the subject of applications for new gTLDs. They could thus extend not only to ordinary words in the vocabulary, but also to (amongst others) place names, personal names, derogatory words (with some exceptions) and brand names.
If the same word is the subject of two or more simultaneous applications by different parties, then, the decision on the successful candidate will be dictated (failing an agreement between the applicants, and in the absence of a sufficient ‘community interest’) by an auction process.
What are the implications for trade marks?
The long-term implications for trade marks could be major indeed. In contrast to trade mark registrations (which can currently co-exist in separate registry classes, and in separate national registries), a word that becomes the subject of a successful new gTLD application will effectively enjoy global exclusivity, in that no other person will be able to operate an identically-named gTLD registry, and could thus (if the progress of the internet proceeds at its current rate) become something akin to a virtual exclusive world-wide brand.
In the meantime, major organisations representing brands and their owners (including the Association of National Advertisers and the Interactive Advertising Bureau) have strongly criticised the new regime as threatening incalculable financial damage to brand owners.
What should brand owners do?
It is clearly important that brand owners consider adopting a strategy for dealing with the opportunities and risks that the new gTLD regime poses. Strategies could include one or more of the following (amongst others):
– Apply for a new gTLD for one’s brand? Various brand owners (including Canon, Deloittes, Hitachi and IBM) have already been reported as intending to apply for their respective brands to be the subject of a new gTLD registry. The reinforcement to a brand by virtue of it being the subject of one of the new gTLDs could be massive; however, applicants need to bear in mind that the minimum start-up costs in years 1 and 2 are estimated to be up to $1 million per gTLD.
– Apply for a second-level domain within a new gTLD registry? For example, if .toys were to be successfully applied for as a new gTLD registry, a manufacturer of toys under the brand WHIZZO might wish to consider applying for the second-level domain www.whizzo.toys.
– Monitor published gTLD applications, and be prepared to object to those that conflict with one’s IPRs? The use of automated or semi-automated watching services could be very useful for alerting brand owners to published gTLD applications that conflict with their brands. One of the four grounds for lodging objections to a published gTLD application under ICANN’s rules is the ‘Legal Rights Objection’, where an application for a new gTLD constitutes the taking of unfair advantage of a brand, or the unjustifiable impairment of its distinctive character or reputation, or the creation of an impermissible likelihood of confusion with it.
– Register brands with the ‘Trademark Clearinghouse’? The Trademark Clearinghouse is described by ICANN’s rules as a central repository for information to be authenticated, stored and disseminated appertaining to the rights of trade mark holders, and will be independently operated by an ICANN contractor. It appears that registration of a brand with it will or may have a deterrent effect on those who apply for an identical word to be the subject of a new gTLD, and that it will trigger automatic notification of potentially-infringing second-level domain name applications to registrants.