Following the schedule announced at its last meeting in San Francisco in March, on April 15, 2011 the Internet Corporation for Assigned Names and Numbers (ICANN) released a new draft of the Applicant Guidebook (DAG) for its upcoming new generic top-level domain (gTLD) program.
After a number of delays, this program, which will allow organizations to control their own customized Internet top-level domains and become Internet registry operators, is now progressing steadily on schedule. For more background about the program, see our previous alerts here and here. The revised DAG contains a number of updates that will be of interest to potential new gTLD applicants and brand owners who are concerned about protecting their trademarks. Brand owners will note that some of the concerns identified in our last alert have been addressed and rights protections have been improved.
This alert covers significant (although not unexpected) changes to the DAG, which fall into three general areas: modifications to the gTLD application and review process, modifications to address rights-owner issues, and modifications to address post-delegation issues. In addition to the revised DAG, ICANN issued six explanatory memoranda, outlining the rationale behind several ICANN Board decisions relating to the gTLD program. These memoranda discuss issues such as trademark protections, the role of ICANN's Government Advisory Committee (GAC) in identifying problematic strings, exemptions to objection fees for governments, root zone scaling, market and economic impacts of the new gTLD program, and registry-registrar separation. Potential gTLD applicants and brand owners concerned about protecting their trademarks should review the new version of the DAG and the associated memoranda carefully.
According to the ICANN timeline, the public comment period on the new version of the DAG will be open until May 15, 2011. After this round of public comment, ICANN will prepare a final version of the Applicant Guidebook, which will be released on May 30, 2011. This public comment period is the final opportunity to express concerns about any provisions of the DAG or provide input to the ICANN Board's policy decisions. Anyone who remains concerned about any aspect of the gTLD program should consider preparing and submitting comments before the May 15 deadline.
Modifications to the gTLD Application and Review Process
- As far as the application is concerned, ICANN has provided additional detail regarding the requirements for satisfactorily answering a number of the application questions, explaining the elements of a complete answer, offering a suggested length for each response, and outlining the components required for a score of 1 versus 2. For additional information about these changes, see this article from Alexa Raad, CEO of Architelos.
- ICANN has narrowed the application window to 60 days. Assuming ICANN starts the four-month communications period on June 21, and the application period opens at the end of October, the application window will close around the end of the year. A shorter application window than previously anticipated makes advance planning for the program and any potential applications ever more important.
- After applications are posted to the ICANN website for review, there will be a 60-day window for public comment, which has been extended from 45 days in the previous draft. During that 60-day window, the Governmental Advisory Committee (GAC) may also issue Early Warning notices concerning applications. While these notices are not formal objections, they may later be subject to "GAC Advice." "GAC Advice" will represent a consensus position by the GAC that an application should not proceed. There is a strong presumption that the ICANN Board will not approve an application for which "GAC Advice" has been provided. Applications that receive an Early Warning from the GAC will receive an 80% refund of their $185,000 application fee if they are withdrawn within 21 days of notice, but ICANN is encouraging potential applicants to work directly with relevant parties (including governments) to mitigate concerns. Comments received after the 60-day comment period has closed will be stored by ICANN and available during later proceedings (e.g. the dispute resolution process).
- The DAG now includes a slightly expanded timeline for application review (a total of seven months), allowing ICANN additional time to complete its Administrative Completeness Checks for submitted applications. This extension is not likely to significantly delay the first new gTLDs from being rolled out starting in the second half of 2012, although TLDs that are subject to objections, extended review or contention may take significantly longer.
Based on these revisions, the timeline now looks something like this:*
*Specific dates for the periods after the June 21 announcement have not been finalized.
Modifications to Address Rights-Owner Issues
- Previously, the process for the Trademark Clearinghouse favored registered or adjudicated marks, while many U.S. companies and individuals have traditionally relied on unregistered common-law marks in domain name disputes. In the new version of the DAG, the Trademark Clearinghouse will no longer rely on substantive review as a means for inclusion, but will instead require proof of use. This addresses some of the concerns of U.S.-based rights owners and decreases the need for rights owners to spend significant time, money and energy registering marks.
- The Uniform Rapid Suspension (URS) process, through which trademark owners may file complaints to disable infringing second-level domain names, has been streamlined for greater timeliness and efficiency and has been changed to a limited loser pays model. Under the revised model, complaints that specify more than 25 domains will be subject to a Response Fee that will be refunded to the prevailing party.
- To meet ICANN's minimum requirements for Rights Protection Mechanisms, all new gTLD Registries will be required to support both a Trademark Claims service AND a Sunrise process. Previously, only one or the other was going to be required.
Modifications to Address Post-Delegation Issues
- If a Registry Agreement is terminated and all sub-domains are used exclusively by the Registry Operator, then ICANN may not transition operation of the TLD to a successor without the consent of the Registry Operator. Among other things, this means that an organization (probably a company) that acquires a gTLD for its own use and does not open registration up to third parties will be able to terminate its use of the TLD and shut down all of the secondary domains without the TLD being transferred to a third party – potentially a competitor. ]ICANN has committed to reviewing the effects of new generic Top-Level Domains (gTLDs) on the root after the first application round. Only after it has been determined that the security and stability of the root have not been jeopardized, will a second round be allowed to proceed. As many commentators have noted, no one is certain when the next round will be, and many suspect it will be at least four to five years away.
As we've noted before, the countdown to the approval of the gTLD program has already begun, and the time to make the decision to apply, defend or do nothing is now. ICANN's apparent determination to avoid any further delays and honor the current timeline for launch in 2011 emphasizes the importance of beginning to plan as soon as possible. Despite the modification of the process to address some of the concerns of rights owners, rights owners will need to be prepared for numerous "sunrise" procedures and potential disputes as between 200 and 500 new TLDs are approved and come online in 2012. Brand owners need to review trademark portfolios and their existing Internet and domain name enforcement programs to address the new domain spaces.