Summary of New Generic Top‐level Domains and Domain Name Enforcement Strategies

The Internet Corporation for Assigned Names and Numbers (“ICANN”) has allowed applications for new generic top‐level domains (“gTLD” or “domains”) which opens up an expansion of new Internet space. Every domain can be viewed as its separate corner of the Internet and identical second‐level domain names can now be registered in each one of these new spaces. Previously, a brand owner needed to primarily be concerned about enforcing its marks in a handful of domains <.com> and <.ca> being the most prevalent in Canada. Additional extensions create increased opportunity for cybersquatting and increase the potential need for enforcement resources. Brand owners should develop a strategy to enforce only those gTLDs that they deem relevant to their brand and industry in keeping with their budget.

ICANN and the New gTLDs

In June 2011, ICANN approved an expansion to the number of existing generic top‐level domains. gTLDs are those domain names that are placed right of the dot such as <.com> and <.net>. Further, gTLDs are contrasted with second‐level domains (“SLDs”) which are the domain names a company would commonly register left of the dot.

The trade‐mark community was advised that the program received 1930 applications. 751 of these applications, which account for 230 domains, involved instances where applied‐for domains have more than one application. These conflicting applications will be moved through a string contention resolution process to determine the successful applicant. Consequently, once the evaluation procedure is completed there will be potential implementation of 1409 new gTLDs.

A broad expansion of gTLDs could alter the dynamics of how the Internet is used and navigated. The new program is particularly interesting to brand owners who seek to efficiently propel their brands into the new space and avoid brand erosion.

A successful application for a new gTLD obliges an organization to act as a registry for that domain name and allows for customization and control over specific Internet space. Using our own law firm as an example, if <.fmc>, was registered as a new gTLD, the firm could use SLDs to uniquely organize its space into practice areas and practicing lawyers, such as <technology.fmc> or <intellectualproperty.fmc>. Customization in this manner can expand the organization’s brand name and facilitate Internet navigation.

Additionally, acting as a registry, the organization has control over SLD registration in the gTLD and could eliminate valid competitors and cybersquatters from this carved‐out space. Restricting counterfeit sites from the gTLD space can therefore act as a mark of authenticity for the brand within the registered domain. If the registry operator puts proper screening mechanisms in place, the new gTLDs can also provide a mark of authenticity for those who do not operate their own TLD.

Issues Arising with the New gTLDs

Once the application evaluation process is completed, the Internet could be potentially carved into more than 1000 new domains, each of which could include registration of identical SLDs. The risk of phishing, cybersquatting, and brand erosion would thereby increase by orders of magnitude. As well, the increased volume of gTLDs correspondingly increases the monitoring, enforcement, and associated costs necessary to preserve one’s brand.

Overall Strategy

The brand owners who have not registered a gTLD are faced with the question of how best to enforce their current trade‐marks against the back‐drop of expanding domain names. Past monitoring and enforcement strategies are no longer as effective due to the sheer increase in the number of new domains and the corresponding cost of enforcing in every single domain. Rather, brand owners would be better served by auditing the list of new gTLDs and developing a strategy to identify which domains are relevant to their own brands and to determine whether it is worthwhile to expend the resources to preserve their own brand in these domains.

Relevant steps when compiling a strategic audit list include: removing gTLDs that are not relevant to your industry and are not being sought after by your competitors; removing those gTLDs where there is no intention to participate in Sunrise preregistration, land rush registration, or enforcement (discussed below); consider adding in gTLDs where your brand may have a grey market issue or counterfeit issue in that space; and most importantly, consideration of budget and resources.

Strategic creation of a list targeting relevant new gTLDs can then be applied to a short‐term strategy exerted in the gTLD application evaluation period, as well as applied to a long term strategy going forward when the new gTLDs are implemented.

Short‐term Strategy‐Application Evaluation Period

The evaluation period, which commenced in June 2012, also includes a Public Comment period and a 7‐month formal Objection Filing Period which allows brand owners to object to applied‐for gTLDs. The deadline to file an objection is January 12, 2013. ICANN has also mandated two further IP rights protection mechanisms, the Trademark Clearinghouse, for facilitation of the Trademark Claims Services, and the Sunrise Service. Brand owners may consider participation in these services as part of their short‐term enforcement strategy.

Objections

Over a 7‐month period, objections can be filed under four separate headings:

  1. Legal Rights Objection

This objection is used when a brand owner contends that an applied‐for domain will infringe its existing trade‐mark rights. The objector must include documentation establishing the objector’s right to the trade‐mark and a statement and explanation of the basis for a legal rights objection. Successful objections will compel the objected‐to gTLD application to be withdrawn.

  1. String Objection

This objection is only available to existing TLD holders and new gTLD applicants when it is alleged that an applied‐for domain of a third party is confusingly similar to their domain or appliedfor domain. A successful objection under this heading will shift the confusing applied‐for domains into the string resolution contention process.

  1. Public‐Interest Objection

This objection is directed towards gTLD applications that run contrary to accepted legal norms or morality. This objection heading also allows for a rapid screening process to eliminate frivolous, vexatious, or abusive objections.

  1. Community Objection

This objection is specialized and allows institutions associated with a specific community to object to an applied‐for domain when there is substantial opposition to the gTLD from members of the targeted community.

Trademark Clearinghouse

The Trademark Clearinghouse requires participation by gTLD applicants during the first 60 days of a new gTLD launch. Other brand owners can register their trade‐marks in the Clearinghouse and receive notice of potentially infringing SLDs being registered within the new domain. Note that the Clearinghouse is limited to notification concerning identical trade‐marks only and brand owners may want to consider engaging a separate domain name watch service in order to pick up non‐identical matches.

Sunrise Registration

Sunrise services are accessible for a 30‐day period prior to the launch of a new gTLD to trade‐mark holders who can substantiate use of their marks and seek pre‐registration of SLDs. This service is for brand owners who wish to register their trademarks as domains before registration is available to the general public. Accordingly, Sunrise registration occurs before the initial land rush registration during which time generic domains are registered if they cannot be secured during the Sunrise period.

Long‐term Strategy ‐ New gTLDs Implementation Period

The Trademark Clearinghouse and Sunrise Services are only mandatory for a short period of time surrounding the gTLD launch. Brand owners should consider other ongoing rights protection mechanisms as part of a long‐term strategy for protection. Similar to the overall strategy and short‐term strategy, a cost‐effective enforcement strategy will be limited to those relevant spaces that were determined when auditing the list of new gTLD applications.

Enforcement Measures

URS

The Uniform Rapid Suspension System (“URS”) is a new process that is designed to facilitate rapid suspension of an infringing domain name where infringement is obvious. The process should take less than two months and if successful, result in suspension of the contested domain name but the system does not award the transfer of the contested domain to the mark holder.

UDRP

The Uniform Domain‐Name Dispute Resolution Policy (“UDRP”) is a process outside of ICANN whereby complaints are addressed to certain dispute‐resolution bodies and if a bad faith registration is substantiated, the trade‐mark holder can gain ownership of the infringing domain. Note that the Canadian process for <.ca> domains is still available pursuant to CIRA’s Dispute Resolution Policy (“CDRP”).

PDDRP

A Post Delegation Dispute Resolution Procedure (“PDDRP”) is a mechanism which directs claims at an offending registry operator who has used the TLD or allowed registration of SLDs that infringe upon the rights of the marks holder. PDDRP can result in termination of the registry operator’s agreement with ICANN, as well as suspension of the infringing domain.

Additionally, traditional litigation is an option for brand owners and can lead to the recovery of damages.

Conclusion

The introduction of new gTLDs will expand the Internet space substantially and require brand owners to develop a strategy to enforce their rights. Brand owners should review the list of currently applied‐for gTLDs here. Owners should first determine which of these might be relevant to their industry or confusing with their own trade‐marks and secondly, if concerns arise, educate themselves about the rights protection mechanisms surrounding the launch of the new gTLDs. The costs of policing new Internet space will soon increase for brand owners and it is essential that a cost‐effective strategy be employed.

As a reminder, the deadline to file an objection to the current round of applications for gTLDs is January 12, 2013. It is expected that the first golive dates for successful applicants will occur sometime in Q4 of 2013. It is unknown if or when ICANN will permit another round of applications.

We continue to monitor information releases by ICANN. The cost of a single application for a new gTLD in this round was at least $185,000. Further information and a useful video explaining the pros and cons of seeking a gTLD can be found here. If your organization is interested in filing an objection to an application for a gTLD or would like more information on how to participate in any of the ICANN procedures, please contact us for further information.