As a result of the highly active application period for new generic top-level domains (gTLDs), a thousand or more new domain spaces may be available on the Internet beginning as early as mid-2013. During last month’s Internet Corporation for Assigned Names and Numbers (ICANN) meeting in Toronto, various Internet policy stakeholders, including brand owners, came together to discuss the impact of these changes on the domain name system (DNS). The changing landscape will likely bring long-term domain name enforcement challenges for brand owners. As such, it is important for organizations, even those that did not submit new gTLD applications, to remain apprised of program developments, upcoming deadlines, and potential enforcement options, including development of strategies to detect and deter possible infringement.

The Applicant Pool

Of the 1,930 applications submitted to ICANN, 1,923 remain in process. Applications include generic terms, brand names, internationalized domain names (IDNs) in non-Latin characters, geographic names, and terms representing communities, with a split between open registries (in which the registry operators will sell second-level domain names) and closed registries (which will be used only by their respective registry operators). Multiple applications were submitted for some strings, particularly desirable generic terms.

The public comment period, during which members of the general public could submit comments on specific applications to be forwarded to the application evaluators, ended on September 26, 2012. Thousands of comments were submitted addressing issues such as the rights protection mechanisms detailed in certain applications or the applicants’ business practices and plans; in some cases, comments expressed support for a particular applicant when a string had been the subject of multiple applications. Although the public comment window has closed, brand owners still have opportunities to raise issues regarding applications of concern through advocacy efforts and formal objections, as discussed below.

Impact of Drawing Proposal on Brand Owners

Given its commitment to not add more than 1,000 new TLDs to the root a year, ICANN has been considering potential approaches to the batching of applications for evaluation and the sequencing of delegation. Following the June 2012 cancellation of an unpopular “digital archery” program to sort applications into batches, the program schedule remained in flux for several months. However, before the start of the Toronto ICANN meeting in October, ICANN announced its Prioritization Drawing program as a solution to both evaluation and delegation scheduling issues. The proposal, which calls for each new gTLD applicant to participate in a drawing to be held in early to mid-December 2012, will assign a draw number to each application that will determine priority for the remainder of the application process, including the release of evaluation results, negotiation of the Registry Agreement, and pre-delegation testing. IDN applications would receive priority over Latin character strings under this proposal, in order to satisfy a new gTLD program goal of expanding the global reach and accessibility of the Internet.

ICANN’s Drawing proposal is not yet final, and a public comment period on the proposal is open until November 9, 2012. Brand owners should be aware that, if implemented, this proposal will impact objection filing strategies. Under the proposed schedule, the formal objection filing window would be extended two months, through March 13, 2013. However, as the first evaluation results will not be posted until late March 2013, all objections will have to be filed without the benefit of knowing whether an application has passed Initial Evaluation. As such, if the Drawing proposal is fully implemented in its current form, careful consideration should be given to the targeting of appropriate applications for objections.

Top-Level Protections for Brand Owners

The delegation of potentially 1,000 or more new TLDs, within a relatively short window, ensures that enforcement at the top and second-level domain spaces will demand significant attention from brand owners. ICANN has expressed a commitment to its existing calendar, including the issuance of Governmental Advisory Committee (GAC) Early Warnings on November 20, 2012, close of the formal objection period on March 13, 2013, and issuance of formal GAC Advice in April 2013, following the Beijing ICANN meeting. Thus, brand owners will need to make decisions in the near future regarding how to approach applications of concern.

With GAC Early Warnings due to issue later this month, and with GAC members already beginning to assess priorities regarding formal GAC Advice, organizations should finalize plans as soon as possible regarding outreach to members of the GAC. Such strategies may include forwarding copies of any public comments submitted to ICANN and raising any additional issues of concern with GAC members in key jurisdictions. As the GAC has over 1,900 new gTLD applications to consider, and thousands of public comments to review, targeted advocacy efforts may be necessary to ensure that issues of concern receive appropriate attention from GAC members.

Further, with the close of the formal objection window approaching in March 2013, organizations should begin assessing their ability to voice objections and on what grounds (string confusion, legal rights, limited public interest, and community), as each one has specific substantive and standing requirements. Organizations lacking standing, or that would prefer to pool resources for objections, may wish to consider coordinating objection efforts with industry groups.

Second Level Protections for Brand Owners

The Toronto ICANN meeting generated a great deal of discussion about the Trademark Clearinghouse (TMCH), a repository for information on trademark rights, to which eligible rightsholders will be able to submit their marks prior to the launch of any new gTLDs. The data submitted to the TMCH will support two key processes in connection with the new gTLD program, the sunrise service and the Trademark Claims service. New gTLD operators will be required to offer a sunrise period of at least 30 days, during which eligible owners of marks in the TMCH will be able to register domain names matching their marks. The Trademark Claims service will be required for a minimum of 60 days upon launch of each new gTLD registry, and will: (a) provide notification to a potential registrant when a domain name registration matches a mark in the TMCH; and (b) if the registration is completed, despite this notice, provide notification of the registration to the owner of the mark.

Both brand owners and contracted parties (registries and registrars) expressed concerns before and during the Toronto meeting regarding ICANN’s plans to implement the TMCH, and have been working with ICANN leadership to suggest alternatives and enhancements. Particular issues being discussed include whether the Trademark Claims service should be extended or operate indefinitely, rather than for only 60 days following launch of a registry; whether the utility of the TMCH should extend beyond exact matches of a submitted mark; and whether the TMCH should serve as a centralized or decentralized repository.

While such issues are being discussed, ICANN is continuing to work with its vendors to implement the TMCH in a timely manner. During the Toronto meeting, ICANN announced that the TMCH would be open for mark submissions for a 90-day window before launch of the first new gTLDs. As the submission period would begin within a few months under the current timeline, trademark owners should review their portfolios to determine priorities for clearinghouse submission, noting that the cost of each submission is expected to be approximately $150.

Given the size of the applicant pool, brand owners should also start identifying new gTLDs in which they may want to register their brands. Having a game plan in place long before the sunrise process starts is important, especially as there will be potentially hundreds of new gTLDs to choose from that are operating as open registries. In selecting target TLDs for sunrise registration, brand owners should consider factors such as whether the TLD relates to their business/industry, consumer interest in the TLD, costs of purely defensive registrations, and the likelihood of consumer confusion or dilution of mark if not registered in a given TLD. Once these target registries are identified, it will be important to track the status of those applications to ensure that the sunrise window is not missed.

UDRP and URS

Although the sunrise and Trademark Claims services will likely be useful in securing defensive registrations and deterring some infringers, given the scope of the new gTLD space, there is a strong potential for an overall increase in infringement activity. The Uniform Domain Name Dispute Resolution Policy (UDRP) will remain available as an efficient means to cancel or transfer second-level domains that are abusively registered in new gTLDs. No changes to the UDRP procedure are anticipated in the near future, although ICANN intends to undertake a comprehensive review of all rights protection mechanisms in the coming years once the new gTLD program is well underway.

In the alternative, brand owners may use the new Uniform Rapid Suspension System (URS), which is to provide rapid relief to trademark holders for the most clear-cut cases of infringement at a low cost of approximately $500 per proceeding. Brand owners may find the URS option appealing if suspension of the domain name for the remainder of the registration period (rather than recovery of the domain name) is a satisfactory result and if cost and time efficiencies are desired. ICANN has, however, admitted that difficulties with implementing the URS persist and so it remains unclear how the objectives of the URS can be met, although ICANN has committed to resolving the issues prior to delegation of the first new gTLDs. Presentations by dispute resolution providers during the Toronto meeting largely focused on the problematic aspects of the current URS model, rather than on solutions. ICANN is still trying to identify potential URS providers that are willing to administer the URS process as proposed and within the target cost range, and is currently conducting a Request for Information (RFI) with responses due November 20, 2012. In addition, various ICANN stakeholder groups, particularly within the brand owner community, are continuing to work on developing suggestions for improving the URS.

Conclusion and Next Steps

A number of new gTLD program details will likely be finalized in the coming weeks, including specifications for the Trademark Clearinghouse, the Drawing proposal and the new gTLD timeline. In addition, with the issuance of GAC Early Warnings, brand owners may gain insight into which applications may ultimately face significant obstacles to delegation and where additional advocacy efforts are needed.