The new .xxx generic top level domain name was approved by the Internet Corporation for Assigned Names and Numbers ("ICANN") earlier this year and is going to be launched on 7 September 2011. Members of the adult entertainment community may be excited to have opportunities to acquire premium domains which they cannot obtain under the existing gTLD extensions and build up their red light district in the internet; whilst brand owners of other businesses who wish to protect their brands from being registered and used as part of the new .xxx domain names can apply to ICM Registry LLC (the "Registry Operator") to block any future bad faith applications upon payment of a one-time service fee.

Launch of .xxx gTLDs

The Registry Operator first proposed the idea of .xxx gTLD to ICANN in 2000. Having lobbied for over a decade, the Registry Operator eventually obtained ICANN's approval of .xxx new gTLD and signed the registry agreement with ICANN in March 2011.

The Registry Operator recently announced their launch plan for .xxx domain names, details of which are as follows:

Sunrise Period from 7 September 2011 to 28 October 2011

During this priority period, the online adult entertainment community and related product or service providers are allowed to apply for registration of .xxx domain names which correspond to their respective registered trademarks (which must be registered prior to 1 September 2011) or existing domain names (which must be registered on or before 1 February 2011).

An opportunity will also be provided for brand owners who are not members of the adult entertainment industry to prevent the others from registering their brands as .xxx domain names in bad faith. Instead of filing a .xxx domain name application for defensive purpose, brand owners can, during this Sunrise Period, apply to reserve the relevant .xxx domain names which correspond to their registered trademarks (which must be registered prior to 1 September 2011). Details are provided underneath the sub-heading "Brand Owners' Opt-Out Mechanism" below.

Landrush Period from 8 November 2011 to 25 November 2011

All online adult entertainment providers and related product or service providers are eligible to apply for registration of any available .xxx domain names, i.e. those names which have not been registered, reserved, allocated or otherwise restricted prior to this period.

General Availability from 6 December 2011 onwards

From 6 December onwards, .xxx domain names will be open to all members of the online adult entertainment community (whether with or without pre-existing trademark or domain name rights) for registration on a first-come first-served basis. Anyone, who is not a member of the online adult entertainment industry, is also eligible to apply for a .xxx domain name corresponding to his personal name, company name and/or product name to which he has a legitimate interest but such .xxx domain name registration will only be a "non-resolving" domain, which is registered only for defensive purpose and cannot be put into use as a conventional web address.

Brand Owners' Opt-Out Mechanism

The introduction of .xxx domain names is controversial and has caused immense concerns to brand owners because cybersquatters of a branded .xxx domain name will more likely result in embarrassment and damage to the image and business reputation of brand owners. To alleviate these concerns, the Registry Operator has made available to brand owners an opt-out mechanism by allowing them to apply to reserve their branded .xxx domain names during the Sunrise Period.

Once a domain name is reserved, it will be permanently set to resolve to a standard webpage indicating the status of the name as reserved and block all future applications of the same branded .xxx domain name. Yet, such reservation is not equivalent to a registration as it does not convey any right to the successful reservation request applicant. The WHOIS search of a reserved .xxx domain name will only show the registrar's information. An applicant for reservation of a .xxx domain name will be charged a one-time fee of around US$300.

It is worth-noting that all applications (whether for registration or reservation) filed within the Sunrise Period will be deemed to arrive at the same time. In case the Registry Operator receives an application for registration and an application for reservation of the same .xxx domain name, priority will be given to the former no matter who files the application first. This means if different parties have conflicting trademark rights, the Registry Operator will still allow registration of the domain name. The parties may attempt to resolve the conflict subsequently by filing an administrative complaint under ICANN's Uniform Domain Name Dispute Resolution Policy or commencing a lawsuit.

Traditionally, brand owners have to incur much costs in filing domain name applications for different variations of their marks for defensive purpose and lodging complaints or lawsuits to recover domain names from cybersquatters. With this opt-out mechanism, it is hoped that brand owners can proactively protect their brands against cybersquatters of .xxx domain names in a more cost-effective manner. Brand owners are reminded to take prompt action during the Sunrise Period (which expires on 28 October 2011) if they desire to protect their trademarks before .xxx domain names go live to the public.