New gTLD Program Offers Opportunities and Risks

 
 
Posted 2013-04-23
 
 
 
gTLD, generic top-level domain

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.

Examples of Legal Rights objections include: <.pin> (filed by Pinterest against Amazon); and <.song> (filed by DotSong Limited against Amazon). Examples of Community objections include: <.hotel> (filed by Hotel Consumer Protection Coalition against Booking.com B.V.); and <.bank> (filed by International Banking Federation against Dotsecure Inc.). 

All the objections will be adjudicated through a mandatory arbitration procedure that is expected to be completed in a few months. Third parties had until March 13, 2013, to file objections based on a claim of legal rights in the name that forms the extension at issue.

If an application successfully proceeds through the examination process, the applicant will then be required to perform a series of additional steps before the new gTLD can be implemented. These include completing a set of technical tests to demonstrate that the gTLD can be delegated into the Internet Assigned Numbers Authority (IANA) “root zone” database—which represents the delegation details of top-level domains—within the time frame specified in the registry agreement. It is anticipated that the predelegation testing process will take approximately two months to complete.

It appears that the earliest date that a new gTLD may go live is in July 2013.  However, ICANN is proceeding cautiously due to various concerns associated with the release of the new extensions, including concerns about the potential impact on the technical stability of the DNS system.  Therefore, it would not be surprising if the release date is delayed. 

Another issue that is still being finalized relates to trademark owners’ ability to prevent and respond to abusive registrations once the new extensions go live. ICANN has developed a centralized database called the Trademark Clearinghouse, in which trademark owners can deposit their trademark information. That will give them priority in registering domains during “sunrise periods” on the new extensions, and allow them to receive notice if others attempt to register domains consisting of their trademarks. 

The owners of the new extensions will need to ensure that their systems are set up in such a manner that they can comply with their Trademark Clearinghouse obligations.

The new gTLD program has generated significant interest, as demonstrated by the nearly 2,000 applications that were submitted for new gTLD extensions. The strategic and technical considerations that each applicant was required to consider before submitting an application undoubtedly benefited professionals across a range of industries, as well as in the IT, legal and marketing fields.

As the application examination process nears its completion, it is expected that the rollout of the new extensions will result in even more opportunities for professionals in these fields. These will range from setting up IT systems and responding to IT-related issues, to handling trademark disputes, to advising on branding opportunities.

Alexandre Montagu is founding partner at MontaguLaw, P.C., and author of Intellectual Property: Money and Power in a New Era, LegalWorks, 2012.

Tom Walsh, a member of MontaguLaw, P.C., focuses on intellectual property law, particularly in the area of trademarks.