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.