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Opposition window for gTLDs closing in March, TM reservation process gearing up

Two important milestones are on the horizon for the domain name system expansion now underway, with implications for brand owners.

On March 13, the opposition period during which brand owners can object to applications for a new gTLD is closing. (A gTLD is the final element of a web address, such as “.com” or “.org”). Brand owners concerned about potentially conflicting gTLDs should review the list of applications available at http://gtldresult.icann.org/application-result/applicationstatus to assess whether they should commence opposition proceedings.

Regulators are also planning to launch the Trademark Clearinghouse, a central repository designed to help brand owners protect their marks from cyber squatting and other abuses when the new gTLDs come online. Brand owners interested in policing their marks on the new gTLDs should begin preparations for authenticating marks with the Clearinghouse, which is slated to come online on March 26.

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gTLD UPDATE: Questions & Answers

The Internet Corporation for Assigned Names and Numbers (ICANN) has announced that it will begin accepting applications for generic top level domain names (TLDs) on January 12, 2012. The application period is expected to last three (3) months, closing April 12, 2012. The application process ICANN has developed is complex, and will require applicants to take into account a variety of technical, legal, financial and business considerations. To help businesses assess the merits of pursuing their own TLDs, we have prepared the following Q & A covering some of the key points.

My company already has a domain name. How is a TLD different?

Businesses today often register "second level" domain names (e.g., www.our-company.com). Custom "top level" domain names are different. They will take the place of ".com", ".net", and the other TLDs available today. This means that companies will be able to create domain names such as www.catalogue.our-company, and www.locations.our-company.

If my company successfully applies for a TLD, will we be able to sell domain names to the public?

Applicants apply for either an "open" Registry or a "closed" Registry. Open Registry operators will be able to offer domain names to the public for a profit. By contrast, closed Registry operators will be able to create domain names exclusively for their own use. Closed Registries will likely be the better option for most brand owners aiming to bolster their online presence.

What are the benefits of having a brand name TLD?

Creating a custom TLD can offer increased security, an advantage over competitors, as well as a platform for innovation. Specific benefits include:

  • The potential to significantly increase one's online brand profile;
  • The ability to create custom e-mail addresses (e.g., ed.smith@customersupport.our comany);
  • The potential to increase one's standing in search engine results; and
  • The ability to create easily navigable second-level domains (e.g., www.buynow.our company).

What does creating a TLD involve?

Creating a TLD is a significant undertaking. It will essentially involve applying to become the operator of a "Registry" - that is, the database that records all of the domain names registered on a particular TLD. Operating a Registry is both technically and financially demanding, and all prospective Registry operators must submit complex applications for examination by ICANN. Applicants will typically be required to provide projections of the costs, revenues, sources of financing, and sources of risk they anticipate following the creation of their proposed TLDs, as well as detailed technical plans.

What sort of technical capabilities will we need to have in order to run a TLD Registry?

The technical responsibilities of a Registry operator may vary somewhat according the purpose of the proposed Registry, but likely requirements include: (1) backing up Registry data and depositing Registry data in escrow accounts; (2) implementing security measures necessary to prevent tampering with the domain name system; and (3) organizing and managing a trade-mark reservation process to protect third party brand owners (i.e., sunrise periods to exclude trade-marks from being registered as second-level domain names).

How long will our TLD stay in operation? Can we shut it down if it gets expensive?

Successful applicants will have to operate their Registries for a term of at least 10 years, which will be renewable for successive 10 year periods. If a brand owner wanted to shutdown its TLD rather than renew its agreement with ICANN, it is not presently clear whether ICANN would have the authority to transfer the TLD to a third party against the brand owner's wishes. Such a policy would cause hardships for owners of branded closed Registries, and it is hoped that ICANN will provide further clarification in the future.

For what reasons can an application for a TLD be rejected?

There are a number of reasons why ICANN might reject an application for a TLD including: (1) an applicant's failure to establish its financial/technical capacity to operate a Registry; (2) a problem with the applied-for TLD, such as a visual similarity with another TLD likely to cause confusion, or technical issues raised by the applied-for TLD likely to cause instability in the domain name system; and (3) a successful opposition by a third party opposed to the applied-for TLD.

My company does not plan on applying for a custom TLD. Why should we still follow the rollout?

First, brand owners will want to monitor the application process to ensure that applied-for TLDs are not confusing with their trade-marks. Second, once a TLD is created, brand owners may want to exclude their trade-marks from use as second level domain names by taking part in the TLD's sunrise period. Finally, brand owners will want to pay particular attention to TLD applications for generic industry terms, such as ".shop" or ".music", since there would be a significant risk of consumer confusion if cybersquatters were to register their marks as second level domain names on such TLDs.

Please contact your Gowlings professional for more information.


.YourBrand? Get ready for custom domain extensions

The Internet Corporation for Assigned Names and Numbers (ICANN) recently voted in favour of accepting applications for new top-level domain (TLD) extensions beginning January 12, 2012.  There are currently 22 generic TLD extensions (including .com, .net, and most recently, .xxx), but ICANN’s announcement means that TLDs may eventually number in the hundreds as cities, corporations, industry groups and others apply for custom extensions, such as .toronto or .tech.

The expected explosion of TLDs will have important implications for brand owners, not only in terms of providing businesses with new opportunities for branding online, but also in terms of providing cyber squatters with new opportunities to commandeer the trademarks of others as domain names.  Here are the basics as currently envisioned by ICANN…

WWW . STORE . BRAND — Your brand on the top level

  1. Choice of TLD:  ICANN’s announcement means that businesses will soon be able to create TLDs incorporating their brand names.  However, the new TLDs will not have to be trademarks.  There will be few limits placed on an organization’s choice of extension, the main exception being that no two TLDs can be so similar that they risk confusion.  If two or more applied-for TLDs are deemed confusing by ICANN, the conflict will be resolved by way of auction if necessary. 
  2. Eligibility:  Corporations and organizations will be able to apply for a new TLD (individual and sole proprietorships will not be eligible).  However, applicants will have to demonstrate the technical and financial capability to operate a TLD.  Applying for a TLD will also be a complex and expensive process, meaning that eligibility will be narrowed in practice.
  3. The Cost:  The initial filing fee for a new TLD will be USD $185,000.  Additional fees will arise over the course of the application process, with the total cost for a new extension potentially reaching USD $500,000 or more by some estimates.
  4. The Timeline:  Applications will be accepted from January 12, 2012 to April 12, 2012.  The new TLDs are not expected to go live, however, until the end of 2012.  In the event that a business misses this initial application period, ICANN hopes to launch a subsequent round of applications by April 2013. 
  5. Preserving Trademark Rights:  Applications for new extensions (as opposed to domain names applications, discussed below) will be opposable on a number of grounds, including that the applied-for TLD infringes on the objector’s registered or unregistered trademark.  Dispute resolution service providers (to be named) will consider several factors in assessing trademark objections, including whether the proposed TLD is likely to create confusion, and whether the applicant was aware of the opponent’s mark.  If a confusingly similar TLD does launch and its operators engage in abusive conduct, brand owners will also be able to file complaints resulting in penalties up to the termination of the TLD.

WWW . BRAND . STORE — Your brand on the second level

  1. Implications for All Brand Owners:  A major implication of ICANN’s decision to allow custom TLDs is that every time a new TLD is created, unscrupulous parties will have another opportunity to register domain names incorporating the trademarks of others (e.g. brand.entertainment; brand.toronto; brand.sport).
  2. Sunrise Periods:  In order to combat infringement, all new TLD operators will be obliged to conduct sunrise periods, giving brand owners an opportunity to register marks as domain names before a given TLD goes live.  Eligible participants will include registered trademark owners providing proof of use.  If a brand owner wishes to exclude its mark from all new TLDs, it will have to participate in each new sunrise period.  
  3. The Trademark Clearinghouse:  To help brand owners participate in multiple sunrise periods, ICANN plans on establishing a trademarks clearinghouse that will authenticate brand owners’ registrations and act as a repository for their proof of use.  TLD operators will be able to refer to this database when conducting their respective sunrise periods.  Brand owners who file claims with the clearinghouse will also receive notice whenever a domain identical to their mark is registered during the launch of a new TLD.
  4. Trademark Rights Post-Launch:  Following the launch of a new TLD, ICANN is planning to implement an expedited complaint procedure to suspend identical or confusingly similar domain names.  The owners of registered trademarks that have filed evidence of use with the trademarks clearinghouse will be among those able to avail themselves of this procedure.  A complaint mechanism will also be available whereby brand owners will be able to report TLD operators that consistently permit third parties to register infringing second-level domain names.

ICANN is still developing its new TLD policies.  More to come at www.GowlingsOnDomains.com.


New generic Top-Level Domains (gTLDs)
By: Eric Macramalla

On June 26, 2008, the Internet Corporation for Assigned Names and Numbers (ICANN) approved a plan to add more gTLDs. Under the draft rules, applicants may propose almost any name or word as a new gTLD.

Currently, 21 gTLDs exist. These include popular top level domains such as .com, .net, and .org, as well as industry-specific ones such as .mobi and .travel.

ICANN is expecting over 500 applications for new gTLDs. The applications could come from various types of applicants:

  • Brand owners could apply for their trademarks, such as .nike or .mtv
  • Individuals could apply for their names, such as .gates or .trump
  • Communities/industries could create suffixes such as .doctors or .paris

ICANN plans to start the first application round in December 2009, although it may be postponed until the first quarter of 2010.

Key Moments in the the Application Process
(as based on ICANN's Draft Applicant Guidebook, Version 2, February 18, 2009 - public comment closed April 13, 2009)

(a) Application Submission: An applicant's business plan and technical capacity will be evaluated. Applicants must demonstrate the technical, financial and operational ability to administer the new gTLD.

The application fee is expected to be approximately US$185,000.00, with a yearly service fee of $25,000.00 or 25 cents per domain name registration. Additional infrastructure costs could run half a million dollars.

(b) Filing Objection: Third parties may object to a proposed gTLD on any of the following 4 grounds:

  • String Confusion Objection - The applied-for gTLD is confusingly similar with an existing TLD or with another applied-for gTLD in the same round of applications.
  • Legal Rights Objection - The applied-for gTLD infringes the existing legal rights of the objector.
  • Morality and Public Order Objection - The applied-for gTLD is contrary to generally accepted legal norms of morality and public order that are recognized under international principles of law.
  • Community Objection - There is substantial opposition to the gTLD application from a significant portion of the community to which the gTLD may be explicitly or implicitly targeted.

Dispute filing fees may be between $1,000.00 and $5,000.00. ICANN estimates adjudication fees for a proceeding could range from "$2,000.00 to $8,000.00 (or more) per proceeding. ICANN further estimates that an hourly rate based proceeding with a one-member panel could range from USD 32,000 to USD 56,000 (or more) and with a three-member panel it could range from USD 70,000 to USD 122,000 (or more). These estimates may be lower if the panel does not call for written submissions beyond the objection and response, and does not allow a hearing."

As directed by ICANN's board, on March 26, 2009 the Implementation Recommendation Team (IRT) was formed. The IRT has been formed to provide possible solutions to trademark issues.

Some Issues for Brand Owners:

  • Businesses will need to think about protecting their brands (defensive registrations) within any of the potential new gTLDs, primarily at the second level - although this may be relevant at the top level. Seemingly endless headaches for brand owners.
  • Do brand owners expand portfolios or abandon existing domain name portfolios in favour of new gTLDs? There is the possibility that a new gTLD may not function everywhere on the Internet or in certain parts of the world. Some ISPs may not properly provide for new gTLDs to be resolved. For example, .info had problems when it was launched due to ISPs in certain countries not enabling TLDs that contained more than three characters such as .com. In some cases, software modifications may also be required, and this may not occur until there is a strong business case for doing so.

The content provided on this site is general information only. It is not intended as nor should it be regarded or relied upon as legal advice or opinion. We would be pleased to provide you with more information or specific advice of matters of interest to you at your request. You should not rely on, take any action or take or fail to take any action based solely upon information appearing in this publication.

Please note as well that the presentation of information on this site or your use or reliance upon such information does not establish a lawyer-client relationship between you and Gowlings or between you and any Gowlings professional.

 

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