New gTLD Program Offers Opportunities and Risks

Posted 2013-04-23 Email Print this article Print
 
 
 
 
 
 
 
gTLD, generic top-level domain

The new gTLD program provides an overdue expansion of the domain name system, but it raises concerns about cyber-squatting and trademark and brand abuses.

By Alexandre Montagu and Tom Walsh

The Internet Corporation for Assigned Names and Numbers (ICANN) recently approved a plan to expand the number of generic top-level domain extensions. The current system permits registration of gTLD domain names in one of 22 available gTLD extensions (for example, NFL.com or NFL.net), but does not allow registration of standalone extensions (such as .NFL).

The new system does allow registration of standalone extensions such as .NFL, thereby vastly expanding the options for specific domains: Patriots.NFL, Patriots.Football, etc. Although the new program provides a long-overdue expansion of the domain name system, it does raise concerns, especially in relation to cyber-squatting and other trademark- and brand-related abuses.

This article explains the new gTLD program, including the application process and issues of concern to brand owners.

Types of Extensions

The gTLD extensions available for registration under the new program were grouped into two categories: community-based and standard/open. Community-based extensions operate for the benefit of a defined community that consists of a restricted population, and there must be a clear link between the domain extension and the community. An applicant for a community-based extension must demonstrate that it is endorsed by an established institution representing the community.

A standard/open extension, on the other hand, can consist of virtually anything (other than a community-based phrase), if the applicant can demonstrate that it meets the application criteria, including those pertaining to its technical, operational and financial capabilities. Examples of community-based extensions include .Music, .CPA, and .Catholic. Examples of standard extensions include .Google, .Money and .Food.

Filing and Maintenance Requirements

The filing and maintenance requirements associated with registering and operating a new gTLD extension are significant. Applications for new gTLD extensions were submitted between January and May 2012 (when the application period closed), and the initial evaluation fee for each application was estimated to be $185,000. The applications are now going through a multistage evaluation process that is expected to be completed soon for the earliest round of applications.

If a company is granted a registration after the extensive application process, it will be required to assume all the responsibilities associated with operating a domain registry, including the necessary technical and administrative tasks. It is estimated that it will cost at least $100,000 per year to maintain and perform the technical operations associated with operating a registry.

Initial Observations on Filed Applications

Here are a few observations about the gTLD applications filed with ICANN:

·  A total of 1,930 applications were filed.

·  Multiple applications were filed for more than 200 gTLD extensions (for example, app, art, book, beauty, cloud, cpa, docs, love, money and tech).

·  Applications for brand names included Apple, BMW, Dell, Delta, Ford, Google, IBM, Microsoft, Oracle, Olympus, Pfizer, Polo, Sony and Yahoo.

·  Applications for generic terms included finance, makeup, book, music, education, courses, food, pizza, beer, flowers and lawyer.

·  Companies that applied for multiple gTLDs included Amazon, Microsoft, Google, L’Oreal and a company named Donuts, Inc., which applied for more than 300 gTLDs.

What’s next?

The filed applications are currently being examined by ICANN. As part of the examination process, applicants may encounter issues, including facing questions about whether they have the requisite technical, operational and financial capabilities to operate a registry, and fielding objections based on other applications for the same or similar gTLD extension.

In addition, applications may encounter objections by third parties based on grounds such as a claim of legal rights in the name that forms the extension at issue, or that there is substantial opposition to the gTLD from a significant portion of the community to which the gTLD may be targeted.  ICANN recently announced that 71 Legal Rights objections were filed, and 113 Community objections were filed.



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