• ICANN Announces Significant New Domain Name Reservation Procedures
  • June 29, 2011 | Authors: Carol Anne Been; Brian R. McGinley
  • Law Firm: SNR Denton - Chicago Office
  • New "Unrestricted" Top Level Domains

    In a recent significant departure from prior procedures, the Internet Corporation for Assigned Names and Numbers (ICANN) Board of Directors approved a new program on June 20, 2011 allowing applicants to request registration of their own top-level domains (TLDs). Previously TLDs were limited to predetermined designations such as ".com", ".org", ".edu", etc. Now, an indefinite number of character combinations, which may be comprised of characters in a variety of known languages, will be made available for registration as TLDs. Each new TLD would then be available for use with its own set of "second-level" domain addresses. For example, a trade organization may wish to register the TLD ".organizationname" and then offer its constituent members second-level domain addresses such as "constituent1.organizationname" and "constituent2.organizationname."

    Following its approval of the new program, ICANN has instituted a worldwide public relations effort aimed at promoting awareness of the new TLD expansion program which is expected to last approximately six months and lead into the first (and rather expensive) new TLD offerings in January 2012 as discussed below.

    Overview Of "Unrestricted" TLD Application Process

    The TLD program will accept applications during an initial, limited window from January 12, 2012 to April 12, 2012. Applicants may submit TLD applications along with a hefty $185,000 application fee. The fee is designed to compensate ICANN for review and opposition proceeding costs, as well as to deter cybersquatters. Maintaining a new TLD, if approved after an estimated 9 month application process, is expected to cost a registrant approximately $25,000 per year.

    Following application and payment of the application fee, and a determination that an application is "complete," it will undergo an initial evaluation in which ICANN investigates the applicant for, among other things, the applicant’s history, if any, of cybersquatting. ICANN will also determine during the initial evaluation whether the requested TLD conflicts with existing TLDs or other applications.

    Also following ICANN’s determination that an application is "complete," it will post the application for public comments which, if lodged within a limited period of time following posting by ICANN, will be considered by the panel responsible for reviewing the implicated application. Also, formal objections may be filed by parties with standing during the approximately seven month period which follows initial posting of an application for public comment (more specifically, objections must be filed within two weeks following an ICANN panel’s publication of its initial evaluation results).

    One of the four enumerated grounds for formal objection includes objections based on existing legal rights including, for example, registered or unregistered trademark rights. Such objections must be lodged with the existing WIPO dispute resolution authority, which will consider as part of the dispute resolution process whether the applicant’s TLD takes unfair advantage of the distinctive character or the reputation of the objector’s trademark, unjustifiably impairs its distinctive character, or otherwise creates an impermissible likelihood of confusion.

    Any operator or registrant of a new TLD must also implement a pre-launch "sunrise period" for its new TLD. The sunrise period, which must be offered for at least thirty days during the pre-launch phase of a new TLD, is intended to allow existing trademark owners first opportunity to register second-level domains under that TLD which correspond to their trademarks. In addition to being bound by traditional uniform dispute resolution policy rulings, an operator or TLD registrant will be required to honor decisions rendered under a "uniform rapid suspension procedure" with respect to individual second-level domain names registered under its TLD. Under the rapid suspension procedure, a domain name will be suspended if it is found that it is confusingly similar to a pre-existing trademark and that it was registered in bad faith without legitimate interests on the part of its registrant.

    Initial "Unrestricted" TLD Reaction: Impact On Businesses

    This new program not only dramatically expands the universe of potential unique domain names, but opens the door to a wide range of new commercial opportunities for pioneering businesses. As the new ICANN informational video (which can be found at http://www.icann.org/) explains, each new TLD is maintained and exploited by its registrant which may, for example, offer for sale to others (on its own terms) exclusive rights to the various second-level domain names beneath its new TLD thus creating a vibrant new private marketplace within each TLD as well as fertile ground for new brand management strategies.

    In addition to creating a new and potentially advantageous internet framework, however, the new program is seen by many as creating additional policing considerations for trademark owners. For example, a trademark owner may have to decide whether to purchase any additional "defensive addresses" to protect its rights, as well as policing for confusingly similar third party TLDs and TLD applications along with their associated second level domains.

    Additional policing considerations may arise from changes to consumer perceptions of domain names which may result from the new program. Under current domain name dispute resolutions policies, resolution panels generally do not consider TLDs in their analysis of whether a domain name is confusingly similar to a known trademark; e.g., just because ".com" appears at the end of a domain name which incorporates a known brand name does not make that domain name less confusing to an internet user. Under the new system of non-generic TLDs, however, it remains to be seen whether and to what extent a trademark owner may rely on such existing assumptions in domain name disputes.

    Adult-Content Oriented ".xxx" Domains

    Another recent domain name development may, in conjunction with the new TLD expansion program discussed above, give rise to added uncertainty for trademark owners and domain name registrants. In a meeting of the ICANN Board of Directors in March 2011, it approved a long-embattled request for creation of a ".xxx" TLD for use in connection with adult-content (pornography) websites. Supporters say that this new TLD will further encourage segregation of adult-content sites from other, more innocuous, sites and reduce access to them by young persons. The .XXX TLD is currently planned for launch September 7, 2011. In the initial phase, members of the adult-content (pornography) industry may apply for domain names in with the .XXX TLD provided they have a corresponding domain name which was previously registered under an existing TLD (e.g., ".com", ".net", etc.").

    To address concerns from trademark owners that their marks might be misappropriated by others as second-level domain names in association with the ".xxx" TLD, the registrar of the ".xxx" domain names (ICM Registry) implemented an "Intellectual Property Protection" program. The program allows for its own "sunrise period" of 30 days, which will also be part of the initial phase beginning September 7, during which time owners of national trademark registrations may pay a fee (likely of approximately $50-75) to block the domain name(s) which corresponds with its trademark(s) from being registered under the ".xxx" TLD.

    If conflicting filings are made (e.g., on the one hand by a party seeking to reserve a .XXX domain and on the other hand by a party seeking to block), it appears that notice and an opportunity to withdraw the application will be given to the applicant. Applications for "blocking" registrations apparently will only be effective against identical domain names (not alterations or misspellings). Disputes that are not resolved during the sunrise phase may still be addressed under the existing domain name dispute resolution procedures to prevent the registration.

    This particular sunrise period potentially presents a lower cost alternative to standard dispute resolution procedures and to traditional "defensive registrations." It appears to have come about as a result of the uniquely "tarnishing" or morally objectionable nature of the ".xxx" TLD (in comparison with existing TLDs such as ".com" or ".net" which presumably are not associated with potentially objectionable associations).

    Given the origins of the ".xxx" sunrise period, the question arises whether, in light of the recent TLD expansion program instituted by ICANN, similar procedures will be made available by ICANN and/or by individual registrars in connection with other new TLDs considered to be of the "tarnishing" or morally objectionable type and, if so, how relevant authorities will determine which TLDs qualify to be treated under such procedures.