Following a consultation period,1 the Internet Corporation for Assigned Names and Numbers ("ICANN")2 has confirmed that it intends to introduce new generic top-level domains ("gTLDs") in 2010. Although 21 gTLDs3 are currently available (the most common being .com, .net, .org), ICANN believes that expansion is necessary to the continued success of the Internet; the desire to increase diversity, choice and competition are all cited as factors driving the decision.

On October 24, 2008 ICANN released a draft gTLD Applicant Guidebook4 for public comment and review, setting out the information for those who are considering applying for a new gTLD. The public consultation period concerning this document will close December 8, 2008. It is expected that the finalized Applicant Guidebook will be released in early 2009, followed within four months by the formal commencement of a limited application period. After the application evaluation process is completed, the first new gTLDs are expected to be approved and ready for use in the first half of 2010. It is presently intended that additional application rounds will take place after the conclusion of the initial application period.

Two types of gTLD applications will be permitted: (1) those seeking to establish a gTLD endorsed by a particular restricted community (i.e. a particular industry (e.g. .flowers), or a particular geographic region (e.g. .toronto)); and (2) those wanting to establish a gTLD that can be used for any purpose consistent with the requirements of the evaluation criteria and registry agreement. This second type of gTLD may or may not have exclusive registrants or users and may or may not employ eligibility or use restrictions. It is anticipated that the latter group will include a large number of applicants wishing to secure gTLDs that match the name of the applicant or its trade-marks (e.g. .yourpersonalname, .yourcompanyname or .yourtrademark). In addition to roman characters, applicants will be able to apply for gTLDs in languages that use other character sets, thus truly internationalizing the domain system.

Applicants must be an established corporation, organization or institution; individuals and sole proprietorships may not apply. All applicants must demonstrate that they have the organizational, technical and financial capabilities of operating a gTLD. The cost of an application has been set at US$185,000, although applicants may be required to pay additional fees in certain cases. It is intended that the fees will be used to recover all of the costs associated with running the application process.

Naturally, the gTLD expansion process is of great interest to trade-mark owners who are concerned that other entities may apply for gTLDs that are identical or confusingly similar to the brand owner's trade-marks. Given the global nature of the Internet and the more restricted national scope of protection afforded by trade-mark registrations, such concern is well founded. For example, if Company A owns trade-mark X in Canada, and Company B owns the same trade-mark X in Australia, should either company be entitled over the other to secure .X as a new gTLD? Even in a single country, there may be two or more companies that can legitimately claim trade-mark rights in the same mark if no confusion would be likely to arise. Company C may have rights in Canada to trade-mark Z for use with beer and Company D may contemporaneously have rights in Canada to trade-mark Z for use with airline services, and both companies may wish to have the .Z gTLD. Accordingly, the new gTLD evaluation process will contain a mechanism by which trade-mark owners will have an opportunity to object to applications for gTLDs on the basis of existing legal rights.

ICANN intends to post all applications for new gTLDs, and all brand owners – whether they are applying to secure a gTLD or not – should plan to monitor the applications filed by others to determine if they wish to file an objection prior to the posted deadline date. Not only should brand owners be concerned about preventing their trade-marks from ending up in use as someone else's gTLD, but they need to be aware that this is one party they don't want to be late for; once a TLD is allocated during the first application round, no confusingly similar TLDs will be permitted in later application rounds. This is expected to result in thousands of applications and objections alike being filed in the first round.

An application may also be denied on the basis that the proposed gTLD is offensive5 or is comprised of a character string that is confusing with one of the existing TLDs, or is objected to by a significant portion of the community to which the gTLD may be explicitly or implicitly targeted.

If there are multiple competing applications for the same gTLD (or for different gTLDs which contain very similar strings, e.g. .sport vs. .sports) which otherwise clear any objections raised and are not resolved by other means, it is anticipated that the gTLD will be auctioned to the highest bidder.

Trade-mark owners should also note that it is expected that all new gTLDs will be subject to ICANN's existing Uniform Dispute Resolution Policy ("UDRP") for domain names or a modification thereof. Accordingly, if the successful applicant of a new gTLD permits second level domains to be registered within that TLD which are confusingly similar to a brand owner's trade-mark (e.g. <yourtrademark.newgtld>), it is expected that, at the option of a complaining trade-mark owner, the domain registrant will be required to participate in a mandatory arbitration proceeding, with the remedy for a successful complaint being the transfer or cancellation of the domain name.

In deciding whether to apply for a new gTLD that corresponds to its name or trade-marks, brand owners should consult with each of the areas of the company that will have a stake in the project and consider what it is that they hope to accomplish. Will securing a corporate gTLD lead to increased visibility as a global brand? Will it allow a better connection with customers? Will it provide a unifying platform through which disparate corporate segments can be effectively merged? Will it enhance the company's brand protection and security/risk management strategies? Can goodwill be increased by allocating domain names to customers or affiliates? Will becoming a gTLD registry operator permit the company to eventually reduce dependency on third party service providers? Where should the registry be located and how will it be structured? Who will maintain the registry? These are only some of the points that need to be considered.

Given the high cost, as well as the operational and technical requirements associated with securing a gTLD, it will certainly not be every company that will seek to file an application. However, the new gTLD allocation process will provide a unique opportunity for many trade-mark owners, and will require an increased level of vigilance for all trade-mark owners, both during and after the application period.