Intellectual Property Advisory - New gTLDs: What You Need To Know

June 3, 2009

The Internet Corporation for Assigned Names & Numbers (“ICANN”) plans to begin accepting applications for new generic Top Level Domains (“gTLDs”) possibly as early as December 2009. The increase in gTLDs may create opportunities for brand owners to increase their marketing and sales activities, but it also may increase the cost of trademark enforcement, especially during the early phases of the application process. With this in mind, this update will (1) provide a summary of the contents of ICANN’s proposal; (2) outline the current progress of the proposal, including upcoming dates for providing feedback and commentary; and (3) suggest meaningful action that brand owners can take to ensure that their interests are represented.

What Is ICANN Proposing?

Currently, there are only 21 gTLDs, such as “.com,” and “.net.” In an effort to expand the current selection of gTLDs, ICANN’s proposal would allow parties to apply for an unlimited number of gTLDs that the parties would control, such as:

Generic words (such as “.shoes,” “.cars,” or “.computers”)
Geographically based words (such as “.boston,” “.virginia,” or “.mexico”)
Brands (such as “.nike,” “.hersheys,” or “.pepsi”)

Some of the most pertinent provisions of ICANN’s proposal are as follows:

Applicants will not be given priority based on the date of their application; rather, ICANN will review applications simultaneously and award the gTLD based on a multitude of factors.
The gTLD application process places the burden on trademark owners to monitor gTLD applications by third parties. Trademark owners will be required to object to any applications that may infringe on the owners’ trademark rights.
ICANN will review disputed gTLDs under a legal analysis similar to that used to determine trademark infringement, but that is geared toward cybersquatters; no mechanism exists to address parties that may both have rights in a mark.
Applicants will have to provide detailed financial and technical information to show that they are capable of operating as a domain name registry.
ICANN will analyze proposed gTLDs for their similarity to existing gTLDs and country code Top Level Domains (“ccTLDs”).
If two applicants apply for the same gTLD, and neither has rights superior to the other, ICANN will award the gTLD to the highest bidder.
The basic application costs $180,000, but can increase depending on the complexity of the applied-for gTLD.

How Far Along Is ICANN’s Proposal?

ICANN released its first version of the Draft Applicant Guidebook (“DAG”), which explains the details of the proposal, on Oct. 24, 2008. ICANN reviewed feedback from the first public comment period and released an updated DAG on Feb. 18, 2009. The second public comment period recently closed, and ICANN plans to release a third DAG by September 2009. ICANN’s stated goal is to begin accepting the first round of gTLD applications by the first quarter of 2010.

What Can/Should I Do About It?

The expansion of available gTLDs will create new business opportunities for brand owners; however, it also will create problems enforcing existing trademarks and may increase the cost of enforcement programs. Brand owners must participate in the rule promulgation process in order to minimize the impact on their ability to protect their brands.

As ICANN has not yet finalized the DAG, there is still an opportunity for you to influence the Guidebook so that it adequately addresses the protection of trademark rights, especially in the areas of dispute resolution and trademark enforcement. Some steps you can take include:

Familiarize yourself with the most recent version of the DAG and the comments submitted (http://www.icann.org/en/topics/new-gtld-program.htm);
Be ready to assist in the preparation of additional comments when the next DAG is released in September 2009. The comments submitted thus far have alerted ICANN to the need to ensure trademark owners can efficiently enforce their marks, but it is important to continue raising this and other issues of interest to trademark owners during the development of the rules that will govern the application process.
Get involved in the Implementation Recommendation Team (IRT). The IRT is a group formed by ICANN’s Intellectual Property Constituency (IPC) that is tasked with developing possible solutions to trademark issues raised in the new gTLD implementation planning. The IRT issued a report on its findings on May 29, 2009 (http://www.icann.org/en/topics/new-gtlds/irt-final-report-trademark-protection-29may09-en.pdf). Brand owners should review and consider publicly commenting on its findings.
If/when ICANN begins accepting applications:
- Consider applying for gTLDs that incorporate your primary brand name. You can take advantage of the business opportunities created by the increase in gTLDs, while simultaneously ensuring that no third parties will be able to register a gTLD.
- Monitor the applications of third parties in order to ensure their trademarks are protected.

For More Information

To learn more about getting involved in the development of policy regarding the new gTLDs, please contact Brian Winterfeldt (202.429.6260 or bwinterfeldt@steptoe.com) or Bryce Coughlin (202.429.1322 or bcoughlin@steptoe.com).