The Internet’s address system is about to undergo its largest expansion since it was first created in the 1980s—a change that will force companies to do more work and spend more money to protect their brands, lawyers say.
Many brand owners and organizations have already taken steps needed to protect themselves before the March 13 deadline to file objections to any of the almost 2,000 new applied-for top-level domains (TLDs) that are under review by the Internet Corporation for Assigned Names and Numbers (ICANN), the nonprofit organization that coordinates domain names and is overseeing the expansion. TLDs are the string of characters to the right of the “dot,” such as .com and .net; there are currently only 22 such domains.
The expansion allows companies and organizations to create their own TLDs. Some of the applied-for strings are brand-based domains, such as “.americanexpress,” “.nikon,” and “.chrysler.” Others are concept- and industry-themed domains, such as “.insurance,” “.health,” and “.wine”; or city and community domains, such as “.nyc” and “.paris.” Regardless of the type, companies may look at some of these new domains and see trouble.
“Given the large number of applications, it is reasonable to assume there will be a fair number of objections,” said Peter Brody, a partner who specializes in intellectual property at Ropes & Gray.
Under the rules established by ICANN, objections can be filed for several different reasons. One concerns “string confusion”—i.e. if two or more entities apply for the same domain string. There are quite a few of these: For example, 13 separate applications have been filed for “.app,” eleven have been filed for “.home,” and “.law” has six separate applications on file.
A so-called “community of interest” could also object to a proposed domain on the grounds that the applicant doesn’t adequately represent the interest of that community. And a non-applicant can object to a proposed domain string on the grounds that it infringes the non-applicant’s trademark or legal rights.
It’s especially important for trademark owners and other intellectual property rights holders to participate in ICANN’s objection process, according to IP attorneys. “If they haven’t already, they should look at the list and determine whether any of the applied-for domains are confusingly similar or harmful to their existing brands,” Brody said. “If they are, they should file a legal rights objection right away.”
While the TLD application process is open to anyone, it isn’t surprising that most of the applicants are corporations, major Internet stakeholders, or web speculators. There is a hefty price tag (nearly $200,000) for each TLD application, plus annual maintenance fees for those that succeed in obtaining a domain. The dispute resolution process entails additional fees.
That process is also complex. ICANN has said that conflicts arising from community based applications, for example, will be resolved through a scoring system that will be used to determine which is the more worthy party. For situations where a non-applicant objects to an applicant’s domain string on the basis that it is identical or confusingly similar to the non-applicant’s trademark, ICANN will use a different dispute resolution process. And for standard applications where two or more applicants are seeking the same domain, the domain owner will be determined by an auction.
“The highest bidder wins,” Brody said. “The domain system is set up in such a way that gives the advantage to those with resources, and there’s no question that in the domain space, money talks.”
Once the March 13 deadline has passed, companies will have to remain vigilant about protecting their marks in Internet domains. Later this month—on March 26—ICAAN will launch what it calls the Trademark Clearinghouse, a registry for second-level domains (SLDs) designed to help companies and individuals protect their rights as the new top-level domains roll out. SLDs are those characters to the left of the “dot” in a web address.
The Trademark Clearinghouse is intended to serve as a central repository for trademark data. Companies can register their marks with the Clearinghouse for an annual fee of up to $150 per name they want protected, and receive notice when someone else has registered for an SLD name that is identical to that mark.
If a company also wants to have the opportunity to register its mark as an SLD whenever a new TLD is launched, it can opt in to take advantage of a “sunrise period” that will give it notice 30 days in advance of the standard notification period.
“It’s a brand owner’s nightmare,” said Joanne Ludovici, head of the global trademark prosecution practice at McDermott Will & Emery. “About 1,400 new [TLDs] will be released, and companies have to look out for all of them.”
ICANN has said it will introduce about 20 new domains per week over the next two years, beginning in April. Suffixes in non-Latin languages, such as Chinese and Arabic, will roll out first, but new, uncontested English-language domains may begin rolling out in April or May.
Brand owners with many different marks will have to be especially vigilant about monitoring. They should know the trademarks they want protected, look at the TLDs being released, and decide where they might want to apply for SLDs associated with the marks. And even companies that don’t think they want or need their brands associated with a new domain should pay attention, Ludovici said. “They may have to act defensively against cybersquatters,” she said.
Many companies have yet to figure out what trademarks they want to register and which TLDs and SLDs will be relevant so they can more easily monitor for infringement and enforce their rights if necessary, said Lena Carlsson, vice president of domain strategy at Melbourne IT Digital Brand Services, a domain name management and consulting company. “They are still only vaguely aware of the impact this is going to have,” she said. “But it’s the biggest expansion of the online name space we’ve ever seen and it opens up a lot of new challenges.”
Lawyers say the new system means all brand owners, including those with only one or two trademarks, will have to spend more money and time monitoring domains—even in TLDs that have nothing to do with a trademark holder’s industry. “Everyone is looking at an added layer of cost and complexity moving forward,” Ludovici said. “It’s an added expense and burden, and we don’t know if the benefits will outweigh the costs.”
Companies don’t have to run to register as soon as the Clearinghouse opens on March 26, lawyers say. But they should start looking at their IP portfolios if they haven’t already. And they should note that the new system won’t protect against lawsuits down the road. While new domain owners are required to notify entities with a mark registered in the Clearinghouse of applications for an SLD that conflict with that mark, they are not obligated to deny the applications. And they are only required to provide brand owners with notice for limited times.
“Litigation is likely to follow—just like it did with the dot-coms,” Ludovici said, noting that this time it will be on a far larger scale because of the big increase in the total number of domains.
