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Change has come to the world of domain names. The first-come, first-served domain name registration system for the “.com,” “.net” and “.org” top-level domain names suffers from a number of problems, including hoarding and piracy. Two objectionable practices — cybersquatting, the practice of registering domain names that are the same as the trademarks of others for the sole purpose of extorting money from trademark owners, and “warehousing,” the practice of registering a host of generic names for profitable resale — have thwarted attempts to register a domain name that customers would readily associate with a business’ trademark or service mark. Even if a business has not been a victim of cybersquatting or warehousing, it may find that it has no choices for its domain name, since many desirable “.com” addresses are taken. Domain name addresses are unique; once a “.com” address is registered, no one else can register the same domain name during the term of the registration. Companies do not have this problem under trademark law, where an identical name or mark can be registered by different businesses for use with different goods and services. The consequence is that businesses have been forced to acquire domain names at high prices or create new words or arrangements that are unmemorable or unintuitive. In spite of these problems, e-commerce continues to expand and domain name registrations have multiplied. In response to the growing scarcity of names, the Internet Corporation for Assigned Names and Numbers (ICANN) announced on Nov. 17, 2000 the introduction of seven new global top-level domains (“gTLDs”). In May 2001, registrars of the new gTLDs, “.biz” and “.info,” concluded their registry agreements with ICANN. “.biz” began its “IP Claims Service” on May 21. “.info” is expected to commence operations in late June. The remaining new domains likely will be ready by the end of the year. How can a business take advantage of “.biz” and “.info” to position, develop and maintain prominence on the Internet in an era of increased competition and commercial use? This article discusses the roll-out of “.biz” and “.info” domain names. It then proposes a six-step strategy to secure new domain names and to protect a business’ trademarks and other valuable brands on the Internet. HOW THE SYSTEM WORKS A computer or server connected to the Internet is located using a numeric Internet protocol (IP) address, usually represented by four numbers separated by dots. Because names are easier to remember than numbers, the Domain Name System (DNS) was devised to provide a convenient alternative to using numeric IP addresses. The DNS indexes these domain names against their corresponding numeric IP addresses, allowing servers to look up an IP address in the way that people look up a telephone number in the phone book. For example, the domain name www.weil.com contains three labels: “www”, “weil”, and “com”. The top-level domain (TLD) for www.weil.com is “com” (the domain name traditionally used by commercial businesses). At the time this article was written, the domain name www.weil.com corresponded with the IP address of 4.17.177.29. ‘.biz’ The “.biz” gTLD, which will be operated by NeuLevel (http://www.neulevel.com), offers registration of a “.biz” domain name to businesses for “bona fide business or commercial use.” NeuLevel defines this use as: (1) the exchange of goods, services or property of any kind; (2) the ordinary course of trade or business; or (3) the facilitation of either (1) or (2) above. NeuLevel plans a three-phase registration process: First, the start-up phase will allow trademark registration with NeuLevel’s IP Claims Service. The IP Claims Service will notify a registrant when an application for a domain name is identical to the registrant’s trademark. Second, during the “landrush” phase, NeuLevel will process applications, issue domain names and notify applicants of other applications for the same domain name. Third, during the “registry live phase,” NeuLevel will provide open registration on a first-come, first-served basis. The start-up phase operates from May 21 to July 9, 2001. To protect its trademarks a business must submit via e-mail a “Trademark Claim Form” including the character string in which trademark rights are claimed. This registration may be done through NeuLevel or accredited domain name registrars (listed at http://www.icann.org). NeuLevel’s IP Claims Service will compare these strings with new domain name applications and notify registrants of potentially infringing applications. The IP Claims Service will cost ninety dollars per trademark. Submission of a Trademark Claim Form does not confer on the registrant any rights to a domain name. During the start-up phase, NeuLevel will also collect domain name applications, although it will not process those applications until the landrush phase. The landrush phase is scheduled to begin June 25, 2001. NeuLevel will randomize the applications received by each registrar, process the applications and issue domain names. NeuLevel will also compare new domain name application with the database of trademark owners registered with the IP Claims Service. If NeuLevel identifies a possible infringement, NeuLevel will notify the trademark owner and the applicant and put the application on thirty-day hold. During this hold phase, the applicant can elect to cancel or, upon expiration of the thirty-day hold period, go forward with the registration. If the applicant elects to go forward, the trademark owner will be able to seek recourse against the applicant through the NeuLevel’s own Start-up Trademark Opposition Policy (STOP). The domain name will remain on hold until the dispute is resolved. Under the STOP, an arbitrator is appointed to adjudicate the dispute. NeuLevel will register the disputed domain name on behalf of the prevailing party ten days after the arbitrator’s decision. In the event there are multiple challengers to a domain name, NeuLevel will randomly select the challenge priority and after the arbitrator’s first decision, the arbitrator will consider successive challenges. The STOP has no procedure to resolve disputes involving two or more owners of the same mark (which may cover different goods or services or different geographic areas). An arbitrator’s decision is subject to challenge in a court having jurisdiction. On Oct. 1, 2001, “.biz” will enter the registry live phase. All domain names granted during the landrush phase that are not placed on “hold” will be activated in the DNS. Once in the registry live phase, new registrations of domain names will be issued on a first-come, first-served basis. Initial registration fees and renewal fees will be between $4.75 to $5.30 per year for each domain name. Applicants may select NeuLevel’s enhanced registration service through ICANN-accredited registrars. The service will provide additional security measures against modifications to domain name information and/or transfers of a domain name at a cost of five hundred dollars per domain name. “.info” The gTLD “.info,” to be operated by Afilias L.L.C. (Afilias) (http://www.afilias.com), is a top-level domain for posting information about companies and individuals, and their products and services. “.info” gTLD has a three-phase registration process: a sunrise phase; a landrush phase; and a real-time phase. Afilias expects to roll-out “.info” beginning late June. The sunrise phase is reserved for trademark holders and lasts for at least thirty days. During the sunrise phase, an owner of a trademark registration issued prior to Oct. 2, 2000 by the United States Patent and Trademark Office or an equivalent in a foreign country will be able to register a domain name identical to its mark. Registrations are for a term of five years or longer. A round robin system will be used to process applications from all the accredited registrars, taking one registration from each registrar in turn and, after the first rotation, on a random basis during four more rotations. Qualification for registration of a domain name will be based on the trademark information submitted by the applicant. Unlike domain name application disputes in the “.biz” gTLD, if a “.info” registration is made by more than one trademark owner based on the same trademark, the party whose request is first processed will be granted the domain name. Domain names issued in the sunrise phase will become active seven days after the beginning of the landrush phase. During the landrush phase, there will be no restrictions on parties who may register domain names. The landrush phase also will have five rotations of a round robin system to process queued applications. At the end of the round robin, Afilias will transition to the real-time phase during which the “.info” gTLD will be in full operation and provide registration twenty-four hours a day, seven days a week. Initial registration fees and renewal fees will be a maximum of $5.75 per year. Other services available from Afilias will include monitoring changes to domain data and potentially infringing new domain name registrations. Under Afilias’ Sunrise challenge process, trademark owners have the right to challenge a registration of an infringing “.info” domain for 120 days following the sunrise phase. Unlike NeuLevel’s Claims Service, no pre-registration is required by a trademark owner, but trademark owners must monitor “.info” registrations to identify infringements. After the Sunrise challenge period, challenges must be brought under the ICANN’s Uniform Dispute Resolution Process (UDRP) or in court. The fee for a Sunrise challenge is two hundred ninety-five dollars. Sunrise challenges may be based on any of four grounds: (1) the registrant did not own a valid and enforceable trademark registration; (2) the trademark registration was not of national effect; (3) the second level domain name is not identical to the trademark registration; or (4) the trademark registration was not issued prior to Oct. 2, 2000. Upon notification of the dispute, the applicant may elect to withdraw its application. The domain name applicant must pay two hundred ninety-five dollars to oppose the Sunrise challenge; failure to do so will result in forfeiture of its application. If the applicant provides a certified copy of its trademark registration that meets the criteria for sunrise registration, then the applicant will be granted the domain name and refunded the challenge fee. If not, the domain name application is put on a ten-day hold and the Sunrise challenger may register the domain name. If the Sunrise challenger does not register the domain name, then another challenger claiming trademark rights, if any exists, will have the opportunity to register the domain name. Afilias recently announces that Sunrise challenges will be administered by the World Intellectual Property Organization. An advantage of the new “.biz” and “.info” gTLDs is that businesses can create new branded spaces on the Internet, especially where multiple, legitimate trademarks connected with particular domain names has precluded some trademark owners from a “.com” domain name based on their trademarks. A disadvantage is that “chasing” cyberpirates through the UDRP dispute resolution system or litigation will increase domain name management costs for businesses. Christopher K. Aidun is a partner and Faith F. Wu is an associate with Weil, Gotshal & Manges in New York.

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