Earlier this year, the Internet Corporation for Assigned Names and Numbers (“ICANN”), the organization in charge of managing IP addresses, approved the creation of a new top level domain (“TLD”) for adult-oriented websites, .xxx. The .xxx TLD is a so called “sponsored” TLD, which is being established to represent a specific community -- the online sexuallyoriented adult entertainment industry. The ICM Registry will operate the .xxx TLD.

Trademark Owners Will Have an Opportunity to Block Certain .xxx Domain Names

The ICM Registry recognizes that many trademark owners do not want their marks associated with adult entertainment websites. Accordingly, it announced recently that it will provide a “Sunrise” period, during which owners of trademarks registered with the U.S. Patent and Trademark Office (or the national trademark office of any other country) can submit reservation applications to block others from registering .xxx domain names that are an exact match with their registered trademarks. Blocking applications can be based on registrations for word marks (excluding registrations on the Supplemental Register) or registrations for word + design marks (excluding marks where all the words have been disclaimed).

The Sunrise period will run from September 7, 2011 until October 28, 2011. In order to be eligible to participate in the Sunrise period, the registrations relied on by trademark owners must issue by September 1, 2011.  

Only “Exact Matches” Will Qualify

There will be some latitude in determining whether a .xxx domain constitutes an “exact” match with a registered trademark. For example, if the registered mark includes one or more spaces between words, the spaces may be removed entirely or replaced with hyphens. In addition, if the registered trademark includes a special character (such as -, &, @ § or %), the characters may be: (i) eliminated entirely from the name; (ii) transcribed or (iii) replaced with a hyphen. For example, the owner of the mark “BILL & JANE” may file to block billjane.xxx, billandjane.xxx or bill-jane.xxx. The trademark owner may file separate reservation applications for each variation, but each application will require a separate fee.

Trademark Owners Will Not Actually Register .xxx Domain Names

Trademark owners who file Sunrise applications to block .xxx domain names that match their registered trademarks will not obtain ownership of the domain names. Instead, these domain names are considered “reserved” by the trademark owner and third parties are blocked from registering them. Reserved domain names will resolve to a standard informational page indicating the status of the domain names as reserved. Trademark owners wishing to reserve domain names must pay a non-refundable, one-time fee. The amount of this fee has not yet been set, but will likely be between $200 and $300. The reservations do not expire or need to be renewed, but the ICM Registry will review the reservations from time to time to determine whether the underlying trademark registrations have been cancelled or abandoned. Although the ICM Registry has not said as much, the implication is that a reserved domain name would become available for registration if a corresponding trademark registration is cancelled or abandoned. It is possible that, after the ICM Registry’s ten year contract with ICANN expires, a successor registry will charge additional fees for the blocked domain names.

There Will Also Be a Concurrent “Sunrise” Period for Adult Entertainment TM Owners

Members of the online adult entertainment community who own registered trademarks or have existing registered domain names associated with online adult entertainment may also apply to register .xxx domain names during the Sunrise period that are exact matches with the registered trademark or existing domain name. If, during the Sunrise period, an online adult entertainment applicant requests a .xxx domain name that is also the subject of a reservation application by a non-adult entertainment trademark owner, the online adult entertainment applicant will be given notice of the trademark owner’s reservation application and will have the opportunity to withdraw its application, but otherwise will be given priority.

The ICM Registry will not give priority to competing Sunrise applications based on which one is filed first. Rather, all qualified Sunrise applications will be viewed as having arrived at the same time.

The “Landrush” Period

After the Sunrise period, there will be a “Landrush” period that begins on November 8, 2011. During the Landrush period, all members of the online adult entertainment community can register .xxx domain names that have not already been reserved or registered. A party may file an application for a .xxx domain name during the Landrush period only if it is a member of the online adult entertainment community.

Other Options/Protections for Trademark Owners

Owners of unregistered marks (who cannot apply to block use of their marks during the Sunrise period) and trademark owners who do not file blocking applications during the Sunrise period, will still be afforded some potential protections.

First, these trademark owners can try to submit an application to block the .xxx domain names that consist of their trademarks during the General Availability period (if those domain names have not yet been registered by members of the online adult entertainment community). The General Availability period will begin on December 6, 2011, and all remaining .xxx domain names will be registered on a first come, first served basis (with registration still limited to members of the online adult entertainment industry.) Common law trademark owners outside of the adult entertainment industry can also submit applications to block domain names that correspond to their marks during the General Availability period. Those blocked domain names will not resolve to a website and queries to those domain names will return a response that the domain does not exist. Requests to block domain names by trademark owners during the General Availability period will be considered on a first come, first served basis, so it is important for trademark owners to file requests to block domain names that consist of their unregistered marks as soon as possible during the General Availability period in order to prevent other potential registrants from registering the domain name sooner.

Second, unlike most TLDs, requests to register .xxx domain names must go through an application process administered by the ICM Registry. The application process is designed to try to prevent .xxx domain name owners from engaging in fraud, identity theft, child pornography or the distribution of spyware and malware. As part of the application process, .xxx domain name requests are processed through the ICM Registry’s “Rapid Evaluation Service,” which is designed to identify clear abuse of well-known, distinctive trademarks and personal or professional names of individuals. The fact that the ICM Registry will actively attempt to prevent fraud through the registration application process makes it less likely that potential registrants will be able to register .xxx domain names consisting of famous trademarks. The ICM Registry’s review, however, will likely be of limited assistance for trademarks that are not famous.  

Third, a trademark owner will be able to file a complaint under the Uniform Domain Name Dispute Resolution Policy (which is a domain name arbitration system designed to provide trademark owners with a relatively inexpensive forum to capture infringing domain names that were registered in bad faith) if a .xxx domain name is confusingly similar to the trademark owner’s registered or unregistered trademark. This third option, however, is more expensive and time-consuming than filing a blocking application during the Sunrise or General Availability periods. Therefore, we recommend that owners of registered trademarks pursue filing blocking applications rather than waiting to see if filing a UDRP complaint becomes necessary.

What To Do

Given the potential damage to the goodwill built up in a mark that would result from a mark being associated with a .xxx domain name, we strongly recommend that clients submit blocking applications for .xxx domain names that match all of their registered trademarks (other than marks registered in the United States on the Supplemental Register) during the Sunrise period, which begins on September 7, 2011. We also recommend that clients file applications to block domain names that match their significant unregistered marks as soon as the General Availability period opens on December 6, 2011.