At its recent Paris meeting, the Internet administration Internet Corporation for Assigned Names and Numbers (ICANN) gave the green light for the introduction of new Top Level Domains (the endings of Internet addresses such as .com, .info or .de). It is intended to implement two new categories of Top Level Domains (TLDs): (1) generic endings shall be up for grabs, for instance .apple or .ebay; (2) non-Latin TLDs using, for instance, Cyrillic letters shall be put in use, but this will not be discussed here. The breaking news on the introduction of the new TLDs caused a great stir that was furthered by speculations about the registration fees. According to the draft Guidebook published by ICANN in October, the proposed application fee for the new TLDs will amount to US$185,000. Additionally, the applicants will be supposed to pay an annual maintenance fee to ICANN amounting to $75,000 or 5 percent of the registry’s transaction revenue. It is clear that small initiatives will not be able to afford the registration. It is clear that ICANN intends to apportion its own current cost of approximately US$13 million already to the new applicants.
An evaluation process will follow the application. ICANN will assess whether the new TLD may cause confusion with other domains and geographic terms, whether the technical requirements are met and financial feasibility is ensured. According to the TLD Terms and Conditions of ICANN, appeals against the decisions made by ICANN in respect of the application are not permissible.
ICANN makes a distinction between “open” and “community-based” applications. An open TLD can be used for any purpose and any entity. A community-based TLD is operated for the benefit of a defined community consisting of a restricted population, e.g., .cat for Catalan language, and regional domains, or for trade organizations.
In theory, the introduction of the new generic TLDs means that every firm or institution with the necessary petty cash can obtain a domain ending for itself. According to the draft Guidebook, however, individuals and sole proprietorships will not be permitted to apply. For companies, the introduction of the new TLDs may be of great importance. Imagine someone wishing to register the TLD .ebay (e.g., as URL www.xyz.ebay); the auction site of the same name must consider whether it will take actions or not.
However, ICANN intends to implement some kind of opposition proceedings that will allow opposition based on existing name rights and trademark rights, as well as on risk of confusion with existing domains. In addition, it is intended to also provide for the possibility of opposition based on moral objections or the ordre public. Further, an opposition from a community to which the domain may be explicitly or implicitly targeted is possible.
While some participants of the meeting voiced their concern over this latter possibility because of the risk that these potential oppositions could be abused by governments, such concerns were contradicted. ICANN intends to have potential opposition proceedings conducted by a professional and internationally accepted organization, using an international arbitration proceeding. At this stage though, it is unclear who will conduct the proceedings and how much the proceedings will cost.
Apart from the formal opposition proceedings involving ICANN, holders of trademarks and name rights can assert their rights in due process of law. Generally speaking, they can access the national courts as well as the arbitration proceedings. Chances of success of such ordinary proceedings depend on whether the claimant can assert a violation of his own rights. This may in particular occur with regard to name rights and trademarks, which can also be asserted in the opposition proceedings.
Trademark rights could potentially be claimed if a third party uses someone else’s trademark or signs as part of a domain without authorization to do so. But this only gives rise to a claim for injunction if the domain is then used for the same branch of trade as the infringed trademark; implies a risk of confusion; or constitutes “Passing Off,” the extent of protection for trademarks does not encompass the use of a domain that is not confusable with the goods or services protected by the trademark of the owner. However, this may give rise to claims based on rights to a name. Trademark rights may be even further curtailed by the introduction of the new TLDs because the new domain endings provide for additional differentiating factors in the URL compared with individual Second Level Domains only; the risk of confusion may thus be substantially minimized.
This is of even greater importance with regard to the protection of name rights pursuant to § 12 German Civil Code (Bürgerliches Gesetzbuch). The use of a name in the sense of § 12 is prohibited if a third person without a right to carry the name uses the same name as the name bearer without authorization, and thereby creates confusion in attribution of this name and the interests of the name bearer which merit protection are infringed. Such infringement may also occur through the unauthorized use of a name in a domain. With regard to the new TLDs, the decisive question is whether a confusion in attribution still occurs. According to current case law, the TLDs available until now such as .info, .com or .de, are not capable of excluding a confusion of attribution in case of a Second Level Domain that uses someone else’s name. However, if entirely new, generic TLDs become available, they may be able to eliminate this confusion. It remains to be seen how the courts will adapt to the new situation. First signs of an increased importance of TLDs can be deducted from the recent “solingen.info” decision by the German Federal Court of Justice (Bundesgerichtshof), which specifically includes TLDs in its reasoning.
The time frame recently announced by ICANN envisions the third quarter of 2009 as the commencement for the application period for the new TLDs. In light of the outstanding regulations, agreements and application documents this seems somewhat ambitious. The technical limits may also pose considerable problems: it is estimated that a few thousand new address zones are feasible. The theoretical option to register a few million place names is technically impossible, at least under the current state of the art.