On June 20, 2011, the Internet Corporation for Assigned Names and Numbers (ICANN) formally approved the system to launch new generic top level domains (gTLDs). Any term or letters in any language on the right side of the dot can be registered as gTLD, like .apple, .bank, .ge, .health, .hotel, .ibm, .law, .nike, etc. ICANN has provided a list of reserved names, country codes and other terms that would be prohibited from being delegated, such as "ICANN", "TLD", "WHOIS", "Olympic", "Olympiad", "Red Cross", "Red Crescent", "Red Crystal", etc. including translations of such terms into various languages.
ICANN will begin accepting the first round of applications from January 12, 2012 to April 12, 2012 and will likely hold additional rounds in the future. ICANN anticipates a substantial increase of the existing 22 gTLDs (.com., .edu, .gov, .int, .mil, .net, .org, .arpa, .aero, .biz, .coop, .info, .museum, .name, .pro, .asia, .cat, .jobs, .mobi, .post, .tel and .travel) and the 250 country code top level domains (ccTLDs).
What sets apart this new gTLD system from the earlier gTLDs is that the applicant will now own and manage its own gTLDs. The applicant for the new gTLDs will be a Registry Operator which will create and operate a registry business supporting the Internet's domain name system. Entrepreneurs, businesses, governments, communities, large organizations around the world will be able to apply to operate a gTLD of their own choice based on various themes, such as company names, organizations, trade-marks, entertainment, real estate, music, movies, sports, political causes, etc.
Application Process and Fees
When the first round of applications opens, applications will be filed by logging into TAS and answering 50 questions ranging from the purpose of the application and the desired domain name to details on costs and funding, upload supporting documents and pay the evaluation fee of US$ 185,000 per new gTLD, payable in the form of US$ 5,000 deposit at the time of obtaining a TAS user registration and the remaining US$ 180,000 submitted with the completed application. Each application will have to go through several evaluation stages, namely, Background Check, Administrative Check, Initial Evaluation, Extended Evaluation, String Contention, Dispute Resolution and Pre-delegation, which would likely last from 8 to 18 months.
Once an application is deemed to satisfy all the criteria and passes all evaluation and selection processes, including objection processes and final approval, the applicant is required to sign a ten-year agreement with ICANN and pass the technical pre-delegation tests prior to a final decision is being rendered. In addition to the US$ 185,000 fee and under the agreement, the applicant is required to pay two fees: (a) a fixed fee of US$ 6,250 per calendar quarter or US$ 25,000 per year; and (b) a transaction fee of US$ 0.25 for each domain name per year over 50,000 domain names registered in the gTLD. The fees alone for each new gTLD could be an average annual expenditure of over US$ 200,000, without including the business startup costs and legal fees.
It has been reported that over 150 organizations so far have expressed their interest in applying and launching new gTLDs. Canon and Hitachi are the first two corporations that have publicly stated their intention to apply for new gTLDs that correspond to their brands. Others, such as Pepsi, Ikea, Morgan Stanley and Wells Fargo, have decided against such move.
Trade-mark Owners' Protection
This gTLD expansion is of great concern to trade-mark owners because of the increased risk of infringing their rights. ICANN will address this issue by way of a Trademark Clearinghouse. Under the new system, trade-mark owners will have the opportunity to enter their trade-mark records into the Trademark Clearinghouse to be set up by ICANN in the fall of 2012. The corresponding fees will be determined by the Trademark Clearinghouse Service Provider. The application for the mark in the Trademark Clearinghouse along with proof of use will have to be filed prior to the date ICANN publishes the applications for the new gTLDs and prior to the date the applicable registry agreement is signed by the applicant for the new gTLD. If a new gTLD is identical to a trade-mark deposited at the Trademark Clearinghouse, ICANN will reject the application.
Legal Rights Objection
Trade-mark owners can also file a formal objection to any gTLD that infringes their rights. After the list of all new gTLD applications has been published on ICANN's website, there will be a period of five and a half months from the application date for third parties to file a formal objection based on one of the grounds set up by ICANN, namely, Legal Rights Objection. The Arbitration and Mediation Centre of the World Intellectual Property Office (WIPO) will be serving as the Dispute Resolution Service Provider for Legal Rights Objection.
The panel evaluating such objections will determine if the applied-for gTLD creates a likelihood of confusion and impairs the distinctive character of the objector's mark. If the objector prevails, the gTLD application will be rejected.
When filing an objection, the objector is required to pay a filing fee in the amount to be set up and published by the relevant Dispute Resolution Service Provider. Additional fees for the preparation of an objection should be taken into account.
The full impact of the introduction of new gTLDs is not clear at this point. One thing for sure is that trade-mark owners will need to be proactive and will have to be prepared to protect their rights. As a first step, we recommend that all trade-mark owners register their trade-marks with the Trademark Clearinghouse in 2012 to prevent others from adopting their brands as gTLDs.
Further information about the new gTLD could be found in the Applicant Guidebook located at ICANN's website www.icann.org.