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