Canada: New Generic Top Level Domains: Opportunities And Risks For Trade-Mark Owners

On June 20, 2011 the board of the Internet Corporation for Assigned Names and Numbers (ICANN) approved a plan to increase the number of generic top-level domains (gTLD) from the current 22 (which includes .com, .net and .org) to possibly hundreds.

The changes to the naming system, which is the culmination of six years of planning, discussions and public consultation, will mean that companies, organizations and individuals will be able to apply for a gTLD of their own design which may be an existing trade-mark, such as .microsoft, or a generic term such as .hockey. Parties obtaining such gTLDs will be required to operate a registry system and will be able to offer second level domains to others, like existing registrars do now, or maintain the gTLD for their own use. For example, a brand owner such as Kodak may register .kodak and make use of second level domains such as cameras.kodak, or lenses.kodak.

APPLICATION PROCESS

The application process to obtain a new gTLD will be rigorous and expensive with a fee of $185,000, not to mention the costs of preparing the application and meeting the technical requirements. These costs will discourage casual "cyber squatters" however that does not mean there will not be disputes arising from the new system. Part of the application process for the gTLDs will be an objection procedure. Grounds for objection include: String Confusion Objections, which will arise when more than one party is applying for a gTLD that is the same or confusing to that of another; Legal Rights Objections by owners of registered or unregistered trade-marks; Community Objections; and Limited Public Interest Objections.

OPPORTUNITIES FOR TRADE-MARK OWNERS

If you are a trade-mark owner you may wish to consider making an application for a gTLD containing your company's brand(s) or perhaps a generic word that relates to your company's industry. As a trade-mark owner if you choose not to apply for a gTLD there is still an opportunity to obtain registrations for second level domains for your company brand in conjunction with the new gTLDs.

RISKS AND RISK MITIGATION FOR TRADE-MARK OWNERS

Along with the opportunities that the new gTLD process brings also come risks to trade-mark owners. The most significant risk is that another party registers one of your company's trade-marks, or one that is confusingly similar, as a gTLD. Whether you choose to pursue a gTLD or are concerned that another party locks up one of your company's trade-marks, your company should be prepared to object to the applications of others. A list of gTLDs being applied for will be publicly available; once the list is publicised a short period of time will open for objections to be filed.

As a trade-mark owner you should be aware of these deadlines and be prepared to take swift action. Another risk is that a third party will register one of your company's trade-marks as a second level domain. For this reason your company should have a strategy for protecting its marks from registration as a second level domain once the new gTLDs are in place. New gTLD registrars will be required to have dispute mechanisms in place and means for the notification of trade-mark owners. These mechanisms must include sunrise periods for registrations and the use of a trade-mark clearing house to be operated by an independent party chosen by ICANN.

The trade-mark clearing house will be a central repository for information to be authenticated, stored, and disseminated, pertaining to the rights of trade-mark holders. The clearinghouse will have two primary functions: (i) authentication and validation of the trade-marks in the clearinghouse; and (ii) serving as a database to provide information to the new gTLD registries to support pre-launch sunrise or trade-mark claims services.

Rights holders will be able to submit information on their registered trade-marks for inclusion in the clearing house and will be notified if a party attempts to register a second level domain that is identical to one of their marks.

Use of the clearing house is a proactive step your company can take to protect its trade-marks.

SUMMARY

ICANN is expected to begin a rigorous public information and education campaign leading up to the first application process which is set to begin January 12, 2012. More specific information will continue to be issued on the objection and dispute resolution processes and as a trade-mark owner your company may want to begin considering whether to register its brand as a top level domain or what steps will be taken to object to applications of others for similar or identical gTLDs, or the registration of second level domains that may infringe existing rights.

The new gTLD is here to stay and whether you choose to participate in the process and use it to your company's advantage or employ a defensive strategy, both require awareness and a proactive approach. At Borden Ladner Gervais LLP, we have professionals in each of our offices across Canada who have been following the ICANN proposals and are experienced in brand protection and Internet issues. Whatever approach your company decides to take we can help your company make an application for a new gTLD or build your company's defensive strategy.

About BLG

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.

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