United States: ICANN Implements Plans To Expand Top-Level Domain Name Options

The Internet Corporation for Assigned Names and Numbers (ICANN), the non-profit entity tasked with coordinating the worldwide Internet domain name system, has implemented two plans that will greatly impact the Internet's structure of domain name suffixes known as generic top-level domains (gTLDs).

UNIQUE (OR BRANDED) gTLDs

A gTLD is an Internet extension such as .com, .org, or .net. Under a new ICANN program, in addition to the 22 current gTLDs, new gTLDs may be created that comprise a variety of terms, including brand names, geographic locations and generic names. For example, Davis & Gilbert LLP could apply to register the gTLD ".DGLaw" and thereafter build URLs such as www.trademark.dglaw or www.corporate.dglaw. There are certain restrictions on what will qualify as a new gTLD. New gTLDs may not include country names, two letter combinations, three letter country abbreviations, numbers or politically incorrect words.

Unlike current domain name registrations, the application process for the new gTLDS is anticipated to be comprehensive and costly. ICANN will accept applications between January 12, 2012 and April 12, 2012, with an overall limit of 500 new gTLDs being authorized. An additional application period may be implemented, with industry insiders predicting between 500 and 1,000 additional new gTLDs to be approved.

For each gTLD requested, an applicant must submit an initial application fee of $185,000 along with an annual fee of $25,000. However, given the costs associated with preparing and filing an application, putting in place a process to respond to potential objections and operating the new gTLD, applicants should anticipate an initial cost of at least $400,000 to $500,000 for securing and operating a unique gTLD.

After the close of the initial application window, ICANN will review the applications for administrative completeness and will publish a list of all complete applications, including all non-confidential portions of the application, and the desired new extension. There will then be a 60 day public comment period during which interested third parties may file formal objections to an application with a Dispute Resolution Service Provider. There will also be a "string" contention resolution process to address a situation where two qualified applicants request the same or similar gTLD and cannot reach a resolution.

ICANN will conduct its substantive evaluation of applications between June 2012 and October 2012, which will consist of a review of the proposed gTLD word string and a review of the applicant. The "string" review will consider whether the proposed new gTLD is similar to any existing gTLDs, country code top-level domains, protected geographical designations (e.g., "USA") or reserved names and whether the proposed gTLD is similar to a gTLD being requested by another applicant. The applicant review will consider whether the information provided by each applicant demonstrates sufficient financial, technical and operational capability to operate a new gTLD. The first group of approved new gTLDS is expected to be operational in late 2012 or early 2013.

.XXX gTLDs

ICANN also recently approved the gTLD .XXX. This gTLD was created specifically for the online adult entertainment industry, although it will afford trademark owners that do not operate in the adult entertainment industry an opportunity to defensively secure their marks in the .XXX space. For example, Acme Corporation could apply to register the gTLD "Acme.XXX" to prevent a third party from using the Acme brand name as a .XXX domain for a live website that contains adult content. There is a different procedure and timeline for those in the adult entertainment industry and those who are existing trademark owners outside of the adult entertainment industry.

Applicants within the adult entertainment industry will be eligible to apply for registration during a period known as Sunrise A (September 7, 2011- October 28, 2011). Those in the adult entertainment industry who do not apply for a .XXX domain during Sunrise A can later apply during the Landrush period (November 8, 2011 – November 25, 2011). If more than one party applies for the same .XXX domain name, that domain name will be awarded to the highest bidder in an auction.

Entities that own a registered trademark or service mark of national or international effect issued prior to September 1, 2011 and that operate outside of the adult entertainment industry will be eligible to apply for a .XXX domain name during a period known as Sunrise B, which is the same time frame as Sunrise A. These brand owners can apply to permanently block another party from registering the brand owner's mark as a .XXX domain for a one-time fee of between $200 to $400 and an annual registration fee of approximately $60. Domain names secured through this process will not lead to a live website, but instead will lead to a standard webpage which states that the domain is reserved for use. Accordingly, any live website with a .XXX extension will likely relate to the adult entertainment industry and may contain sexually-oriented content. Effectively, the result of a successful Sunrise B application is that the domain name incorporating the trademark will be unavailable for registration by a third party. Those who are not members of the adult entertainment industry and who do not apply for a .XXX domain name during Sunrise B may apply during the General Availability period (beginning on December 6, 2011) and will be granted a registration on a first-come, first-served basis.

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