Many business owners have heard about the two major changes occurring in connection with the launch of .XXX and ".brand" top level domains. These new internet opportunities will allow for businesses to further leverage their brands by utilizing new website domain names. But they will also create headaches for those who will need to police their trademarks in a new larger domain name universe. All brand owners should be aware of the new changes, how the new systems work, and what they potentially mean for their business.
The new changes pertain to top level domains (TLD), which are the letters that typically appear to the right of the dot in a web URL (think ".com" or ".net").
The first new change creates the new TLD ".XXX" for use in connection with the adult entertainment industry. As more fully explained below, trademark owners have tools and strategies at their disposal to avoid being associated with the .XXX domain.
The second new change allows parties to apply to create and run their own generic top level domain (gTLD), like a ".com" or ".info". However, acquiring a gTLD will be neither easy nor cheap. Applicants must complete a comprehensive 200+ page application, and submit a $185,000 application fee. Of course, even if obtaining your own gTLD sounds too pricey or time consuming, brand owners will need to be aware of the tools and mechanisms available to protect their intellectual property once the new gTLD program rolls out.
.XXX and Protecting Your Brand
While the .XXX TLD will be desirable for numerous adult entertainment businesses, other brand owners will wish to avoid it for fear of brand tarnishing. To assist trademark owners, ICM Registries (the party running the .XXX domain registry) has adopted an early sunrise period, during which owners of registered trademarks may elect to "opt out" or block their mark from registration with .XXX. Registered mark owners may sign up during the sunrise period by filling out a brief form with an approved registrar (like Godaddy.com) and paying a nonrefundable fee of $199. Once signed up, and assuming no adult entertainment providers have previously registered your mark, these trademark owners can essentially rest assured that no one will be able to use their mark in connection with a .XXX domain (no website will exist, and web browsers will instead redirect users to an information page about the opt out decision).
NOTE: The sunrise period ends on October 28, 2011.
Parties that have a trademark but do not have a registration may still control the use of the .XXX brand, but will need to do so by defensively registering domains starting on December 6, 2011. Of course, if a party feels that another is infringing its trademark rights (regardless of whether it is a registered mark or not) in connection with a .XXX domain, then the usual recourse of civil litigation and Uniform Domain Name Dispute Resolution Policy proceedings still exist.
Your Own gTLD: Nuts and Bolts
Beginning on January 12, 2012, the Internet Corporation for Assigned Names and Numbers (ICANN) will open the window for public and private organizations to apply to create and manage new gTLDs. With a few exceptions, a party can apply to register any gTLD it wishes. So, McDonalds could apply to register ".mcdonalds" or ".burger" or ".restaurant" as their gTLD. Additionally, ICANN will accept applications for Internationalized Domain Names, which use characters not included in the basic Latin alphabet (i.e., other than A-Z). The application window will remain open for three months, after which ICANN will begin a multilayered review process of both the applying entity and the proposed gTLD.
Obtaining one's own gTLD is a major undertaking, because it means that a party is agreeing to form and operate a new gTLD registry (think VeriSign). As noted above, applicants must complete a comprehensive 200+ page application, providing a defined mission and purpose for the new gTLD, as well as detailed financial information regarding the applying entity and its technical and operational capability to maintain a gTLD registry. On top of all this is the $185,000 "evaluation fee", and, if ultimately accepted, quarterly fees of $6,250 for an initial term of up to ten years. Consider, however that if more than one applicant applies for the same gTLD, only one will be able to emerge with the new domain, and as a last resort ICANN might hold an auction over the rights to the new gTLD.
Once the application period ends on April 12, 2012, the gTLD review process will begin. Applications will go through a rigorous review.
Brand Owners: How to Protect Your Brand
Even if you do not plan on applying to register your own gTLD, if you own a trademark it is critical to consider how you will police your brand in the new domain world. The chances that a cybersquatter would try to reserve your brand as a possible gTLD seems unlikely given the hefty application fee. However, businesses will want to monitor the publication of applied for domains (which will occur soon after the application window closes) to see if any party has tried to register its brand as a domain. Businesses will be able to bring a legal rights objection with ICANN under a newly defined dispute resolution system if an applied-for gTLD allegedly infringes the objector's existing legal rights.
Brand owners should also be particularly wary of possible infringement occurring at the Second Level for new gTLDs. While the existing methods of combatting such cybersquatting remain in place (a proceeding under the Uniform Domain Name Dispute Resolution Policy or a civil action under the Anticybersquatting Consumer Protection Act), ICANN has incorporated additional tools to help brand owners with the new gTLD program. These will include a Trademark Clearinghouse that rights holders can register marks with and other "rights protection mechanisms".
Overall Thoughts on the Brave New Domain World
Brand owners should begin to organize their thoughts on how to approach the new gTLD era:
- Remember the key dates:
- October 28, 2011- .XXX sunrise period ends
- December 6, 2011- .XXX general registration opens
- January 12, 2012- Application window opens for new gTLDs
- April 12, 2012- Application window closes for new gTLDs
- Consider whether applying for a gTLD is in your organization's best interest. Think about how the domain adds value to your company's product or service offerings, and whether the costs are worth the benefits. It is yet to be seen whether new gTLDs will catch on. An example of how a new gTLD could benefit your company is seen with digital camera manufacturer Canon, who has announced that it will likely pursue .canon and provide a personalized webpage to those who buy Canon cameras to allow photo uploading and sharing.
- Contemplate how your company wants to police its marks in connection with the new gTLDs. Consider who will be responsible for monitoring the applications when they are posted for public comment, and how evaluations will be made on whether to file a legal rights objection to a proposed new gTLD.
- Pay attention to further developments with the Trademark Clearinghouse, and strongly consider filing your marks with the same.
- Develop a strategy as to how your company will approach registering domains with new gTLDs, including possible Sunrise period registrations. While some registrations will be more of a defensive measure to prevent a domain from being the target of cybersquatters, the minimal cost of acquiring such domains might be well worth it compared to the costs of prosecuting someone seeking to illegally benefit from your company's good will. If you are considering defensive registrations, you should plan to file to register the domain names immediately at the start date.
Having a comprehensive plan in place as ICANN works to implement the new rules will prevent surprise once new gTLDs are launched. Companies should continue to monitor ICANN for announcements and developments, especially as the January 12, 2012 application opening date approaches.
This article is intended to serve as a summary of the issues outlined herein. While it may include some general guidance, it is not intended as, nor is it a substitute for, legal advice. Your receipt of Good Company or any of its individual articles does not create an attorney-client relationship between you and Sheehan Phinney Bass + Green or the Sheehan Phinney Capitol Group. The opinions expressed in Good Company are those of the authors of the specific articles.
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