The Internet is changing in ways that companies need to closely monitor. As of the end of last September, there were more than 160 million domain names in existence. Beginning at the end of 2009, however, the Internet’s domain name system, overseen by the Internet Corporation for Assigned Names and Numbers, will begin expanding dramatically, creating both opportunities and additional costs for brand owners.
Domain names that incorporate brand names or other trademarks may be valuable to businesses by allowing existing customers to easily locate them online. Conversely, generic domain names that identify a category or type of good or service may be valuable for launching a new business. In all cases, domain names may be used to attract new customers — and may be used by competitors and cybersquatters to divert traffic to other locations.
ICANN has introduced new generic top-level domains (gTLDs) before. For example, the original list of gTLDs, which included .com, .org and .net were supplemented by a host of others, including .aero, .biz, .coop, .info, .museum, .name, and .pro following an announcement by ICANN in 2000. In 2005, ICANN subsequently approved a new list of gTLDs — .cat, .jobs, .mobi, .post, .tel and .travel — not all of which are yet live. By contrast, ICANN in 2007 rejected a proposal for the .xxx top-level domain.
The new expansion — which is set to begin in December — will not add specific gTLDs selected by ICANN. Rather, the system is being opened up so that any person, government or entity potentially could acquire its own top-level domain. Instead of using, say, Apple.com for the computer company’s domain, the domain could simply become .apple. ICANN also will begin introducing internationalized domain names in 14 initial languages in 2009 and 2010, which are domain names represented by local language characters, including letters or characters from non-ASCII scripts (such as Arabic and Chinese).
A draft RFP for new gTLDs (also known as the “applicant guidebook”) was released on Feb. 18 and was schedule to remain open for public comments through April 13, after which a revised guidebook will be issued. Applications for new gTLDs will be subject to a review process to prevent approval of new domain names that are confusingly similar to existing gTLDs (such as .kom, .comm or .bizz) or that offend morality or public order. Although the exact rules for disqualifying gTLDs on the basis of morality and public order are being worked out, what ICANN has in mind are domain names that might incite violent, lawless action or that promote discrimination based on race, gender, ethnicity, religion or national origin or child pornography or the abuse of children.
ICANN will also implement an objection-based process to allow trademark owners to assert that proposed gTLDs would infringe their legal rights. The process presumably will include something akin to the sunrise objection periods implemented in 2001, 2005 and 2006 when the .info, .biz, .asia, .aero and .mobi gTLDs were introduced. In addition, applicants will be required to describe in their applications a proposed “rights protection mechanism” while ensuring that, at a minimum, all second-level registrations (such as coca.cola) would be subject to ICANN’s Uniform Domain-Name Dispute Resolution Policy, known as UDRP.
Beyond legal objections, “community” objections may be raised to particular new gTLDs. For example, if a proposed gTLD, while not a trademark, constitutes the name of a Buddhist ritual or a community organization, interested parties will be able to object that the applicant does not fairly represent the interested community. ICANN will also screen applications for country and territory names to ensure that any new gTLDs are not deemed objectionable by relevant government or public authorities. The cost per application has not been finally determined, but current estimates are that it will be approximately $185,000 per domain name. Applicants will not only need to make a significant investment but will also need to be prepared to actually run their own top-level domain.
ICANN’s proposed expansion has been criticized by the U.S. Commerce Department and by the International Trademark Association. While the expansion of gTLDs undoubtedly will lead to more disputes for brand owners (and more legal expenses, as brand owners or their counsel will be required to monitor potential applications), the new expansion also provides unique opportunities. Some brand owners undoubtedly would benefit by having their own trademark as a top-level domain. Others with new business ideas likewise could benefit by obtaining a generic term or category as a top-level domain.
Although ICANN recently delayed the launch of the new system from September to December 2009, the lead time for preparing an application (including setting up the mechanism to actually operate a TLD) is not insignificant. Given the time line envisioned by ICANN, companies seeking their own gTLDs (based on either brand names or generic categories) must act quickly if they hope to present a successful application to ICANN.
Ian C. Ballon is a shareholder in the Intellectual Property Litigation and Media and Entertainment practice groups of Greenberg Traurig, where he divides his time between the firm’s Santa Monica and Silicon Valley offices. He is the author of the four-volume “E-Commerce & Internet Law: Legal Treatise with Forms, 2d Edition” (West Publishing, 2009), from which the material used in this article was taken. He can be reached at [email protected].
