At a special meeting in Singapore in June, the Board of ICANN* approved a plan to increase the number of Internet domain name endings – called generic top-level domains (gTLDs) – from the current 22, which includes domain suffixes as .com, .org and .net.#

From 12 January 2012 - 12 April 2012, people will be able to apply to ICANN to register new gTLDs. The list of potential generic top level domains is unlimited, and includes domains in non-Latin scripts such as Arabic and Chinese.

The significance of new generic domain names

According to the ICANN News Alert on 22 June:

"New gTLDs will change the way people find information on the Internet and how businesses plan and structure their online presence. Internet address names will be able to end with almost any word in any language, offering organizations around the world the opportunity to market their brand, products, community or cause in new and innovative ways.

"Today's decision will usher in a new Internet age," said Peter Dengate Thrush, Chairman of ICANN's Board of Directors. "We have provided a platform for the next generation of creativity and inspiration.""

Sounds exciting, doesn't it? But before we all rush off and think of what domain name we want to apply for, you might want to consider the opportunity cost and benefit first.

New gTLD costs

The new gTLDS will not come cheap. The evaluation fee per domain name will be US$185,000. ICANN states this fee is set to recover costs associated with the new gTLD programme. If successful, each new owner will have to pay a 'registry-level', or registration maintenance, fee of US$6,250 per quarter (US$25,000 per annum) plus a 'registry-level' transaction fee (to be determined on a case by case basis).**

Nice, if your business can afford it...but how many New Zealand businesses have those kinds of dollars to invest in a domain name? Given the often cited statistic that the majority of businesses in New Zealand are small-medium size enterprises, the answer is most likely not many - perhaps only the Fonterra's and Fletcher's of this country.

New gTLD benefits

As apparent in the ICANN statement above, supporters of the new gTLDs argue that for brand owners, especially multinational corporations and organisations, there are potential significant marketing benefits in having your own gTLD.

Really? Surely the strength of a brand name, and consequently a domain name, does not rise and fall by a domain name suffix - .com, .net etc. The strength of a brand name and domain name derives from the name itself. Coca-Cola, Nike, BMW are all examples of this. Consumers looking for these brand owners' websites will find them online whether they have a current or new gTLD - but finding these names under a current gTLD will be significantly cheaper for the brand owners.

A missed opportunity

One of the most significant problems with the current gTLD (and country level domain name) system is its failure to accommodate brand owners who have the same or very similar name, but which operate in different markets, who want to register the same .com or .net or domain name. This of course is possible under the classification system used in the registration of trade marks which distinguishes between different classes of goods and services.

In effect, the current gTLD system enables the first to register a particular .com domain name, for example, to secure a monopoly in that domain name across all goods and services and in all industries.

The new gTLD system does nothing to address this issue. In embarking on what appears to be purely a money-making venture, ICANN has missed a significant opportunity to align the gTLD and country level domain name systems with the international trade mark registration system.

This writer believes ICANN should put its implementation of the new gTLD system on hold and engage in a strategic rethink along the following lines:

ICANN could identify a list of new gTLDs, segmented at least by industry or business type if not by classes of goods and services. This system could be called iTLDs - industry top level domain names. For example, .sports might be an appropriate gTLD for sportswear and sports equipment brands while .post might be an appropriate gTLD for postal and courier services. ICANN could offer existing gTLD domain name holders the opportunity to secure their own iTLD. So Nike the sportswear company could register Nike.sports, while Nike the courier company (if one exists) could register, rather than losing out on the .com as it would do under the current system.

On the whole the iTLD's would more closely reflect the rights brand owners enjoy under the trade mark registration system, accepting that there may be some brand names which may be so unique and well known - like Coca Cola - for which registration may have to be restricted. The current gTLDs could then be phased out.

Closing comment

If you are interested in applying to register a new gTLD, please contact either your trade mark attorney or Ben Cain in our Litigation team.

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.

James and Wells is the 2010 New Zealand Law Awards winner of the Intellectual Property Law Award for excellence in client service.