There are currently 22 Top Level (after the dot) Domains on the Internet, the most popular being (dot)com. The common practice for trademark owners has been to defensively register their (before the dot) brand names in more than one top level domain, for example, yourbrand.com, yourbrand.net, yourbrand.info, and then direct all traffic to the primary url, usually the (dot)com. Often brand owners have to go after owners of other domain name registrations who are trading on their brand name or passing off counterfeit goods by selling via an unauthorized website. If the unauthorized activity doesn’t stop after the first cease and desist letter, the brand owner can sometimes get relief short of going to court by filing a Uniform Domain Name Dispute Resolution Proceeding (UDRP) to try to get the infringing url transferred back to its rightful owner.

Brand owners need to be aware that the complex world of web domain name registrations is about to get more confusing. On Monday, June 20, the Internet Corporation for Assigned Names and Numbers (“ICANN”) authorized a process for taking applications from qualified registrars for an unlimited number of generic Top Level (after the dot) Domains. The new “gTLDs” are expected to increase competition and foster free speech, but they also present a much more difficult trademark enforcement environment as brand owners struggle to ferret out and shut down unauthorized use of their marks and sales of counterfeit goods and services on the web.

Applications for the new gTLDs will be accepted beginning January 12, 2012 and the first round of applications will close April 12, 2012. Qualified registrars may apply for ANY string of letters after the dot, e.g. (dot)realestate, (dot)casinos, (dot)sports, (dot)toys, (dot)music, or (dot)movies. The final gTLD Applicant Guidebook is over 400 pages long and the application fee alone is estimated at $185,000. Although the new gTLDs are characterized as “generic”, (dot)Brand TLDs are eligible and large brand owners should consider whether they want to own and run their own unique Top Level Domain. For example, Hitachi and Canon have already announced they will be applying for (dot)Hitachi and (dot)Canon respectively.

Possible uses of the (dot)Brand domain include providing second level (before the dot) registrations to suppliers, distributors, and customers. Companies may also be able to provide more secure information at such sites by providing password access to qualified users. However, the brand owner will also have to form an ICANN qualified registrar or employ a third party to run the dot.Brand Top Level Domain and comply with complex ICANN contractual obligations under the applicable Registry Agreement. Operation of a new registry is expected to cost at least $500,000 at start-up and several million dollars over the first few years.

Short of establishing their own (dot)Brand Top Level Domains, brand owners will have to decide how best to enforce their trademarks and the authenticity of the goods and services associated with those marks in the new unlimited gTLD environment. Certain rights protection mechanisms have been negotiated by representatives from ICANN’s Government Advisory Committee (GAC), Business Constiuency (BC), and Intellectual Property Constituency (IPC), which serves in an advisory capacity to the ICANN authority regarding trademark owners’ rights.

The final Applicant Guidebook approved by ICANN on June 20 at its meeting in Singapore contains three primary trademark rights protection mechanisms, namely the Trademark Clearinghouse with a Sunrise period for registration, an Intellectual Property Claims Notification service during the first 60 days of the launch of any new gTLD, and a new Uniform Rapid Suspension dispute resolution procedure which is designed to be cheaper and faster than the existing UDRP proceeding.

Under the new system, brand owners will have the opportunity to pay to enter their trademark records into the new Trademark Clearinghouse, which is expected to be up and running in the fall of 2012. Eligible trademark registrations may come from any country, but must be both applied for prior to the date ICANN publishes the applications for the new gTLDs and registered prior to the date the applicable registry agreement is signed for the new gTLD. If the brand owner desires to purchase a domain name registration in a new gTLD during the Sunrise period, proof of use must be deposited with the Trademark Clearinghouse when the record of the trademark is entered into the system. Common law marks may also be permitted under certain circumstances that are still being defined.

Once a trademark record is accepted into the Trademark Clearinghouse, the owner is eligible to purchase a registration during the Sunrise period for any new gTLD. If the Sunrise registration is not purchased by the brand owner, an Intellectual Property claims notice will issue to the trademark owner based on the Trademark Clearinghouse record if a third party registers the identical trademark before the dot in the new gTLD. However, as presently designed, this IP claims notice process will only be in effect for the first sixty days of the launch of any given new gTLD. After that, it is anticipated that the entity that wins the ICANN contract to run the Trademark Clearinghouse will offer ancillary watch services for a fee to alert a brand owner when domain name registrations are purchased that use the brand owner’s trademark.

Finally, if a new domain name registration proceeds in spite of the brand owner’s record appearing in the Trademark Clearinghouse notice, the brand owner may be able to obtain a quick and cheap suspension of the new registration if bad faith in obtaining the registration can be established and the brand owner can prove use of the mark. This new procedure is called Uniform Rapid Suspension (“URS”).