Despite flaws cited by brand owners and government representatives, the Internet Corporation for Assigned Names and Numbers (ICANN) recently approved sweeping changes to the Internet’s top-level domain structure that will allow for registration of a virtually unlimited number of generic top-level domains (gTLDs). Some companies, such as Canon and Hitachi, are already planning their dot.brand, while others are taking a more cautious “wait and see” approach. Whatever your organization’s inclination now is the time to consider the opportunities, costs and risks associated with owning a piece of the Internet.

The new and controversial structure will allow strings from 3 to 63 characters to be registered as gTLDs thereby adding to the 22 existing top-level domains (i.e., .com, .edu, .org, .net). In addition, non-Latin characters in languages such as Chinese, Arabic and Japanese may also be registered. From .sports to .market to .yourbrand, the potential for new gTLDs is endless.

The barriers to entry for obtaining a new gTLD are considerably high. The initial application fee is $185,000 and yearly renewal fees are $25,000. In addition, applicants must meet stringent technical and financial requirements in order to secure a new gTLD. Given that application for a new gTLD equates to operating a domain registry system, the actual costs associated with owning .yourbrand are estimated to far exceed the application fees. Competition for industry terms like .pharma or .cars may cause certain desirable generic names to go to an auction process.

Considering most Internet users are accustomed to using search engines to reach a desired web site, some take the position that the utility and demand for an open gTLD system remains to be seen. Others view this long-awaited expansion as a chance for significant innovation in a move away from the crowded .com space. No matter the perspective, a new digital age is here, and it warrants serious consideration and preparation by nearly every brand owner. Without question, there are concerns about protecting valuable intellectual property rights against cybersquatters and infringers. Although still subject to revisions, brand owners must familiarize themselves with the Rights Protection Mechanisms described in the gTLD Applicant Guidebook, such as the Trademark Clearinghouse and String Contention Procedure.

ICANN is commencing a six-month public relations campaign and will begin accepting new gTLD applications on January 12, 2012, with the first application period continuing for three months. Successive application periods will also be available, though they may not occur for at least another year or two. All brand owners are strongly encouraged to develop a plan to navigate the new and complex gTLD procedures in order to ensure maximum protection of trademarks and other intellectual property rights. We can assist you in auditing your trademark portfolio and discuss plans to monitor third-party gTLD applications. Please contact us to learn more about these major new developments.