United States: It’s A BRAND New World: Update On ICANN’s Expanded gTLD Program

You have likely heard by now that the Internet is about to get substantially bigger and more complex, with potentially treacherous consequences for brand owners. This past fall, we wrote a  chapter covering this issue in Navigating ICANN's New Rules Regarding Generic Top-Level Domain Names. This update is to let you know what is currently going on with the new gTLD program, and to help you prepare to meet the inevitable challenges that will arise.

It is absolutely crucial that your company have a strategy in place to protect its brands before the upcoming launch, which is expected to commence over the next few months. Reed Smith attorneys have significant experience in this area, and can help you prepare for this momentous change in an already complicated eco-system.

Internet users currently operate in a web environment of 22 generic top-level domains (gTLD), such as, .com, .net, .org, and .jobs. ICANN, the entity established to oversee operation of the Internet, has now created a new gTLD program, which will usher in well over 1,000 new gTLDs, such as .music, .hotel, .book, .buy, and even .sucks. The first group of new gTLDs is set to launch in spring 2013 and the rest will come quickly thereafter, so it is an immediate concern. This launch will likely spawn massive consumer confusion and brand fraud, especially for companies that do not have plans in place to protect themselves.

Reed Smith has been on the front lines of this issue, with attorneys writing client alerts and articles for major publications, giving seminars on this topic, attending meetings with the decision makers at ICANN, serving on committees in an attempt to help formulate protection mechanisms for trademark holders in the new system, and guiding clients through the process, whether they have applied for their own brand-related gTLDs or are just trying to protect their brands and marks.

ICANN's Proposed Trademark Protections

Unfortunately, because the ICANN process is dominated by those who seek to profit from the new gTLD program, very few trademark protections will be available in the new system, and those that will be offered are not likely to be adequate. Nonetheless, it is very important that you know how these protections will operate and that you have a strategy in place regarding how best to use them, even if their benefit is limited.

The three main protections (all of which require payments by the trademark owner) that are currently tied to the launch of the new system are:

  1. The "Trademark Clearinghouse" (TMCH). The Trademark Clearinghouse is a list upon which you can put certain of your trademarks. Those marks will be eligible for a "claims service" whereby, for the first 60 days after a new gTLD is open to the public, a potential registrant who tries to register your exact mark as a domain name will get a warning that it may be in for a fight, and you will get notification if the potential registrant proceeds with the registration, so you can decide whether to take action.
  2. "Sunrise" Registrations. For each new gTLD launch, there will be a 30-day window at the beginning, before it opens to the public, during which you will be able to (pay the registry and) register your exact TMCH-listed trademark in that gTLD as a domain name, before a cybersquatter can get to it.
  3. "Uniform Rapid Suspension" (URS). This is supposed to be a system similar to the current Uniform Domain-Name Dispute-Resolution Policy (UDRP) (but with a stronger burden of proof), whereby trademark owners can quickly and cost effectively "freeze" infringing domain names when there is no genuine contestable issue as to the infringement and abuse that is taking place. However, unlike UDRP proceedings, prevailing in a URS proceeding will not result in the cancellation of the domain name or the transfer of the domain name to the trademark owner. Although this has been in the works for years, ICANN still does not know whether it can actually provide URS at the price points initially anticipated.

In addition, various applicants for gTLDs have individually committed to offer enhanced protections in the event that they are awarded the top level domain(s) for which they have applied. You will need to monitor this process with respect to the gTLDs that are of most interest to your brand(s), so that once gTLDs are awarded, you will be ready to avail yourself of any additional protections offered, over and above the minimum required by ICANN.

Even though the benefits of the expected trademark protections are limited, you need to know how they operate and have a strategy in place to protect your marks before the launch of any new gTLDs, so that you can choose the marks that will go on the TMCH, and have policies in place regarding how you will enforce against infringers. This is especially true since the claims service, offered through the TMCH, expires 60 days after the opening of each gTLD to the public for the registration of second level domain names. Trademark holders can be sure that the opportunities for cybersquatters and typosquatters in this new space will exponentially increase beyond even the alarming amount of abuse that currently exists. Companies need to be focused and vigilant to ensure brand protection.

At Reed Smith, we have been working with clients night and day to help them make it through this process. We have also been at the forefront of the fight to try to convince ICANN that additional protections are needed to guard against consumer fraud and trademark abuse.

Limited Preventative Registration: Public Comment Period

Recently, ICANN asked for public comments on some of these proposed additional Rights Protection Mechanisms, the main one being a "Limited Preventative Registration" (LPR). The LPR creates a framework that provides appropriate safeguards for registrants with a legitimate right or interest in a particular domain name, but also enables trademark owners to prevent registration of their marks as domain names across a portion or all of the new gTLDs, upon payment of a reasonable fee, rather than having to apply and pay for protection separately to a multitude of registries in each gTLD's Sunrise period. You may have engaged in a similar process when .XXX was launched.

Reed Smith has helped clients draft comments illuminating shortcomings in the current Rights Protection Mechanisms, and suggesting possible enhancements such as the LPR. The deadline for the first wave of comments on this and other ideas was January 15, 2013, but there is a second window for reply comments, which is open now and closes February 5, 2013. All comments can be entered and viewed on the Trademark Clearinghouse page on ICANN's website.

Please let us know if we can help make your voice heard or if you would like a detailed explanation of what the various rights-protection proposals entail.

Other Ways in Which Reed Smith Can Help You Navigate This BRAND New World

Reed Smith attorneys are ready to help you navigate this rapidly unfolding expansion of the Internet eco-system in many other ways. If you are an applicant, we can help you best position yourself or your company to be awarded the gTLD(s) for which you have applied, by assisting with any follow-up questions from those who are in the process of evaluating applications, and by working with you to develop strategies to resolve contention sets in ways that best serve your interests. Once you are awarded a gTLD, we can assist you with the registry contract you will need to sign and with registrar and registrant contracts. We can also connect you with vendors for services such as back-office support.

As the new gTLDs start to launch, Reed Smith can help with many other issues, in addition to brand protection strategies. The Federal Trade Commission has made clear, for example, that antitrust, in addition to consumer protection laws, will apply to the operation of new gTLDs. So, if you will be operating an open generic TLD, you could find yourself on the wrong side of competition laws if you run your registry in a manner that disadvantages your competitors. Similarly, if you are not operating a registry, but are being harmed by the way in which a competitor or other registry is operating its gTLD, legal redress might be available. We can help you comply with the law and ensure that your competitors do, too, once ICANN's new program is operational.

There will also be a time not far down the road when the success of the new program will be evaluated and public comment will again be sought. If the benefits of the program are deemed to have exceeded its costs, then there will be a second application round, during which those who stayed on the sidelines during the initial round may opt to participate, and those who did participate initially may choose to expand their collections of new top-level domains. Whether you see the potential to make this expansion work for you or whether you fear the chaos it will bring, Reed Smith can help you plan an appropriate strategy to best find your way in the "brand" new world that is upon us.

 Footnote

1 By way of example, among domain names in many other gTLDs, Reed Smith will have to worry whether someone will take reedsmith.law, reedsmith.lawyer, reedsmith.legal, and even reedsmith.inc.

This article is presented for informational purposes only and is not intended to constitute legal advice.

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