New Domain Name Rules Create Opportunities and Threats for Trademark Owners
During a special meeting in June, the Internet Corporation for Assigned Names and Numbers (ICANN), a non-profit corporation that regulates Internet domain addressing, adopted a new generic Top-Level Domain (gTLD) program. The program will allow the introduction of hundreds of new top-level domains in addition to the 22 existing domains like .com, .net, and .edu with which we are currently familiar. These domains include keyword domains like .shop, .toys, .hotel, and even place domains like .nyc and .msp. The program also allows organizations to introduce brand domains like .twins, .ford and .target.
Many brand owners have publicly announced plans to establish their own brand domain names. Those brand owners can expect to encounter a lengthy process and a rather significant price tag—the new domain names are slated to appear on the web in late 2012 with an application fee of $185,000. The application process is summarized in the ICANN Applicant Guidebook.
A brand domain name offers many strategic opportunities to trademark owners including better control of marketing initiatives and security against third parties seeking to trade off the notoriety of a particular brand. Owners of well-known consumer brands are encouraged to apply for a brand domain name early in the process because early applications increase the chances of a successful acquisition. Additionally, once a new domain is approved, confusingly similar domains will not be allowed.
Trademark owners seeking to defend their existing rights will have several options available. For example, the new program incorporates the traditional Uniform Dispute Resolution Procedure (UDRP) that is currently available against infringing gTLD domain names. It also introduces some additional protections for trademark owners. For example, each new gTLD applicant must use a Sunrise Period to allow trademark owners the ability to apply for their trademarks in the new gTLD. Moreover, a Trademark Clearinghouse will be established in which trademark owners will have the opportunity to record their rights. These brand owners will then be notified if infringing domains are registered in the new gTLDs.
ICANN has also implemented a new type of dispute resolution mechanism, called the Uniform Rapid Suspension (URS) proceeding. A URS proceeding closely resembles the existing UDRP except the URS remedy is limited to the suspension of the domain name for the duration of the registration term, rather than its transfer or cancellation that is currently available under the UDRP.
The new program also introduces a Post-Delegation Dispute Resolution Procedure (PDDRP) whereby brand owners may file formal complaints against a domain name registrar for engaging in multiple instances of bad faith exploitation of domain names that conflict with an owner’s trademark. The PDDRP provides for the suspension of a registrar’s business for such conduct.
Once the new gTLDs are added to the existing 22 top-level domains, there will be a lot more possibilities for trademark misappropriation. Trademark owners seeking to launch their own gTLD by late 2012 should not only start taking steps to ensure early submission of their application, but also begin developing and implementing strategies to protect and defend their trademarks under the expanded system.