By Richard Watts, PARTNER and Raphael Winick, SENIOR ASSOCIATE
1,930 proposals for new top-level domains (TLDs) were announced on 13 June by the governing body for Internet domain names, the Internet Corporation for Assigned Names and Numbers (ICANN). Our earlier article of 16 April 2012 summarises the new TLD program. Now that the proposed domains have been revealed, trade mark owners and website operators should consider how the new TLDs may affect their businesses, and be aware of some steps they can take over the next several months to protect their rights.
Reviewing the New TLDs
As a first step, brand owners should review the proposed new TLDs, available here. The new domains fall into four categories:
- Brands (.nike, .google, .sky, .toyota, .anz)
- Geographic (.sydney, .london, .paris, .nyc)
- Generic (.shop, .blog, .ltd, .web, .music, .beer, .hotel)
- Community (.gay, .eco, .green, .rugby, .irish).
For the first time, TLDs include non-Latin characters. Chinese, Arabic, Japanese and other characters are well-represented, including applications for the translation of .com in at least nine different languages.
Reviewing the list provides a glimpse into the pandora's box about to be opened. The vast number and variety of new top-level domains may substantially change how users identify, evaluate and search for information on the Internet. For example, a food and beverage retailer trading in New Zealand, Australia, Japan and the UK will need to consider whether to register domain names across .food, .beer, .store, .shop, .sydney, .melbourne, .london, .tokyo and many others. On the other hand, the new top-level domains may become unused digital curiosities, as has happened to some existing top-level domains such as .info and .biz.
.kiwi and .kiwi.nz
The new applications include .kiwi, submitted by a company owned by New Zealand and Canadian investors. Further complicating matters, InternetNZ, who administers the .nz top-level domain, has proposed creating a new second-level domain, .kiwi.nz. InternetNZ's plans to introduce .kiwi.nz will proceed on a separate (and potentially much quicker) timetable than ICANN's process for introducing new TLDs such as .kiwi.
Who Goes First?
The first new domains will not become operational until the beginning of 2013 at the earliest. Each application is subject to an ICANN approval process, including possible objections from third parties. Because ICANN cannot process all 1,930 applications at once, it will process the new TLDs in batches of 500. The first group of 500 will be announced on 11 July 2012. Brand owners should review the ICANN website again after 11 July to determine whether the TLDs of most interest are part of the first batch.
ICANN will prioritise TLDs that have received more than one application, such as .store, .bank and .cloud. ICANN has not estimated when it will be able to process the next batch of 500, but it is likely to be several years before ICANN formally reviews all of the proposed new domains. TLDs will be launched on a rolling basis as they emerge from the approval process.
Comment and Objection Periods
Brand owners, government bodies and others will have two windows to raise concerns about particular applications. During a two-month window that ends on 12 August 2012, ICANN will accept comments about any proposed new domain, which ICANN will consider during the initial review process.
During a separate seven-month window that ends on 13 January 2013, parties can submit formal objections to independent bodies appointed to resolve disputes about the new TLDs. The World Intellectual Property Organisation will resolve intellectual property disputes. The International Chamber of Commerce will resolve what ICANN considers to be "public interest" and "community" objections.
We anticipate that most objections will be submitted by large multinational corporations, government agencies, and NGOs. Smaller companies and other entities can also participate, although the US$10,000 filing fee will deter many potential objectors.
ICANN will resolve disputes between different applicants who have applied for the same domain, such as .app (13 applications) and .blog (9 applications). In some cases, ICANN will resolve competing applications by auctioning the domain to the highest bidder. In other cases, ICANN will consider which applicant will serve as the best custodian for "community" domains.
Sometime in 2013, after applications in the initial batch of 500 have been approved and objections are resolved, the first new TLDs will become operational. When this happens, the real work will begin for brand owners and website operators.
Most companies can sit on the sidelines during the objection process, and allow other parties to fight over the new top-level domains. However, when the new TLDs begin registering "second-level" domains (the part of the domain name to the left of the dot) sometime in 2013, brand owners and online businesses will need to become more actively engaged.
Previously, many companies could limit their domain name strategy to a simple one-time decision about what .com to register, and perhaps whether to also consider a .net, .co.nz, .co.uk or other domain. Going forward, domain name management will require ongoing attention, as hundreds of new top-level domains are introduced on a rolling basis over several years. Websites and brands will need to consider relevancy, geography, language, expansion plans and other factors to determine whether it is worth registering their brands under .shop, .music, .ltd or .??.
The sheer number of applications and applicants is daunting at first. However, brand owners will need to consider far fewer than 1,930 top-level domains. Many separate applications cover the same domain. Some applications are for "closed" TLDs, which will not be open to the public. Other applications will be abandoned during the approval process. ICANN may also reject some proposed TLDs. For example, trade mark owners have indicated they are likely to object to the proposed .sucks domain (which apparently had enough appeal to attract 3 competing applications).
The Trade Mark Clearinghouse
ICANN has established a trade mark Clearinghouse and a mandatory "Sunrise" period to protect established brands and websites. These procedures are highly imperfect and have been widely criticised, but brand owners should consider taking advantage of the limited protection they provide.
The Clearinghouse will act as a central registry to inform trade mark owners if other parties apply to register identical trade marks during the initial launch of a new TLD. Trade mark owners are responsible for submitting each of their marks to the Clearinghouse. IBM and Deloitte, who will operate the Clearinghouse, estimate that they will begin accepting submissions sometime in October, and that each submission will cost approximately US$150.
The Clearinghouse is intended primarily for brands already protected as registered word marks in a national trade mark office such as IPONZ. ICANN's guidelines indicate that some unregistered marks may also qualify for inclusion in the Clearinghouse, but provide few specifics.
Once added to the Clearinghouse database, a trade mark owner will be notified if another party applies to register their mark as a second-level domain during the Sunrise period (such as simpsongrierson.law). However, the Clearinghouse will only advise trade mark owners of identical matches. Trade mark owners will have to rely on other sources to detect applications to register plurals, misspellings or other variations (such as simpsongreirson.law or simpsongriersonnz.law).
The Clearinghouse itself will not block registration of any domain names. It will serve strictly to notify trade mark owners and domain name applicants that a potential dispute exists. Trade mark owners must then take affirmative action in order to prevent registration of a domain name. Finally, domain name registries are not obligated to use the Clearinghouse after the initial Sunrise period.
All TLDs must comply with ICANN's existing Uniform Domain Name Resolution Policy, which establishes administrative panels to resolve disputes about potentially infringing second-level domains. ICANN also intends to establish a new Uniform Rapid Suspension process to expedite cases of obvious trade mark infringement and cybersquatting.
Inclusion in the Clearinghouse will also enable brand owners to take advantage of a "Sunrise" period to register domains before the general public. Each TLD must offer trade mark owners the first opportunity to obtain second-level domain names using their brands. This Sunrise period will last for a minimum of 30 days.
Start and end dates for the Sunrise periods will vary for each TLD, depending on when each TLD emerges from the ICANN approval and objection process. Brand owners must monitor notices from the Clearinghouse, and from the TLDs of particular interest, to ensure that the relevant 30-day windows are not missed.
Sunrise periods have been used for previous TLDs, such as .xxx, .eu, .info and .biz, with mixed results. Most brands have used the early-registration process for purely defensive purposes, incurring the expense of registering domains, with no desire or intention to ever use them. Given the large number of new TLDs, brand owners may become more selective about which domains to register during the Sunrise periods. For companies with a portfolio of multiple brands, costs can add up quickly. If domain name registrations average $300 each, a portfolio of 10 domain names across 20 top-level domains will cost $60,000 for initial registration, as well as smaller ongoing fees for renewals and administration.
The new TLDs will make domain name management a more complicated process, requiring ongoing attention and resources from brands and online businesses. In the short term, brand owners should review the list of proposed new domains, and begin to think about their long-term domain name strategy. Specifically, companies should consider which of their brands and websites merit registration across multiple top-level domains, and which top-level domains are the most relevant to their business.
Companies with significant concerns about particular TLDs can submit formal comments to ICANN by 12 August 2012, and objections by 13 January 2013. When the Clearinghouse becomes operational in October of this year, trade mark owners should register marks that qualify for inclusion in the Clearinghouse database. As new TLDs start to become operational in 2013, the landscape will become even more complicated. Brand owners and websites will need to be alert to Sunrise periods and other deadlines for each new TLD, and monitor applications to register potentially infringing second-level domain names. And most importantly, companies will need to keep a close eye on the marketplace to see how Internet users react to the new TLDs.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.