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The Internet’s Holy Trinity of generic top-level domains — .com, .org and .net — is finally getting some company. The first of seven new extensions are in the process of being introduced: .biz, which is limited to commercial Web sites, and .info, whose use is unrestricted. Later this year and early next year, five more extensions, .aero, .pro, .name, .museum and .coop, will be added. The companies operating .biz and .info are proclaiming the rollout to be a success, describing demand as “overwhelming” and “phenomenal.” Both NeuLevel, which is managing .biz, and Afilias, which is handling .info, estimate that applications for new domain names are already in the millions. Intellectual property lawyers, however, are saying that the long-awaited expansion took just a little too long. They describe their clients’ response as tepid, and criticize the application processes as expensive and uncertain. The aim of the new top-level domains, or TLDs, is to relieve Internet traffic on the overburdened .com, .org and .net domains, which currently host more than 30 million names. The new TLDs have been a long time in coming: ICANN, the Internet Corporation for Assigned Names and Numbers, which oversees the domain name system, fretted for over two years whether to add new domains. As it is turning out, ICANN had good reason to be anxious. The rollout is proving to be ICANN’s biggest undertaking to date, enormously complex from both a technological and political perspective. It has already resulted in a number of lawsuits, including a class action filed in Los Angeles Superior Court late last month claiming that the .biz selection process is an illegal lottery. PROTECTING TRADEMARKS One of ICANN’s major challenges has been in devising registration processes for the new extensions that enhance the ability of trademark owners to protect their marks. The intent is to discourage a problem that has plagued existing domains: cybersquatting, where speculators have bought domain names identical or similar to trademarks with the hope of selling them to the trademarks’ owners. With that in mind, ICANN required each of the registries selected to administer the new TLDs to develop a plan for protecting trademarks. ICANN intends to monitor the various plans to see which formulations work and which do not. ICANN’s justification is that this is the first time new domains have been introduced since the advent of the Internet, and the organization is in a learning mode. However, this eclectic approach is making things quite complicated for intellectual property owners and lawyers. As J. Scott Evans, who chairs the International Trademark Association’s Domain Name System Governing subcommittee, also pointed out, “it’s going to cost people a fortune.” NeuLevel and Afilias have in fact taken very different approaches in protecting the interests of trademark owners. NeuLevel, which is managing .biz, is offering an IP claim service to anyone who owns or has applied for a trademark. For a two and a half month period, from May 21 through Aug. 6, trademark owners could submit IP claims for a fee of $90. But the claims do not grant the right to a .biz name. Rather, owners still have to apply for the actual domain name through one of the registrars listed on NeuLevel’s Web site. PROCESSING APPLICATIONS During the next stage, the “landrush” phase from June 27 through Sept. 17, NeuLevel will process applications for .biz names. If an application is subject to an IP claim, NeuLevel will notify the applicant and the trademark owner, and put the application on a 30-day hold. If the applicant decides to go through with the registration, the trademark holder will be given the chance to challenge it through a streamlined dispute resolution process NeuLevel has devised called STOP. For multiple applications for the same name where no IP claim has been made, a “winner” will be randomly selected. Then, on Oct.1, .biz will enter into the last stage, known as “real-time,” during which new domain name registrations will be issued on a “first-come, first-served” basis. As complicated as the .biz registration process may seem, those interested in a .info name will have an entirely separate set of procedures to negotiate. Afilias is choosing to protect trademarks with a “sunrise period,” from July 25 through Aug. 27. During that time, any registered trademark owner will be able to register .info addresses for those names with the registrars listed on Afilias’ Web site before the general public may do so. Afilias then will take batches of applications from registrars, randomize them and consider one application per name per registrar in a round-robin process. This method will discourage the lottery-type phenomenon of multiple submissions, according to Michael Palage, who developed the sunrise process while at ICANN and is advising Afilias on it. Then, starting Sept. 12, Afilias will move to the start-up period, processing domain name requests from the general public, again in a round-robin style. A week later, on Sept. 19, Afilias will go on to the final real-time phase, processing applications as they come in and putting .info domain names on-line. For about four months after the close of the sunrise period, trademark owners may pay $295 to challenge a .info assignment through a streamlined dispute resolution process, Palage explained, with the prevailing party partially refunded any fees it puts up. Trademark lawyers seem marginally to prefer Afilias’ sunrise period — which will also be used with the .pro and .name domains — over NeuLevel’s IP claim service. Peter J. Toren, a partner at Sidley Austin Brown & Wood in New York, said that his clients have shown little inclination to use the IP claim service because “it doesn’t give you any rights in the domain name.” But Jeffrey Neuman, NeuLevel’s director of policy and IP, defended NeuLevel’s system, stating that it was the only one that takes into account the interests of those who do not have a registered trademark, but have a legitimate interest in a domain name. Registering a trademark, as required by the sunrise plan, Neuman said, “is an expensive process.” He said that “we’ve had tremendous interest in the IP claim process,” although he was not able to provide specific numbers. In general, however, trademark lawyers are not all that focused on the nuances of the trademark protections being offered; rather, they view any expansion, no matter how carefully planned out, as potentially problematic. “Most trademark holders are not pleased because it just presents more opportunities for people to try to extort money and more situations for customer confusion,” said Jeffrey Neuburger, head of the e-commerce group at Brown Raysman Millstein Felder & Steiner in New York. “It’s just going to end up costing [my clients] more money.” Christopher K. Aidun, a partner in the New York office of Weil Gotshal & Manges, agreed, saying that clients were applying for .biz or .info names “as a defensive move, rather than as a marketing opportunity.” Lawyers also said that, overall, the interest in a .biz or .info name has been lukewarm. “We certainly have not had a rush of people applying,” Aidun said. Evans, who practices with Adams, Schwartz & Evans in Charlotte, N.C., said interest seemed to correlate to the size of the client. “My larger clients are applying,” he said, “but as far as my smaller clients go, I don’t even think they are aware of it, nor do they care.” E-COMMERCE DOWNTURN Trademark lawyers blamed the underwhelming reaction to the .biz and .info rollout on several factors, including the e-commerce downturn and a more Internet-savvy business community. “Clients want to put their time, energy and money in other directions right now,” said Brown & Wood’s Toren. He said that things might change if e-commerce began to turn around. Jeffrey Osterman, a senior associate at Weil Gotshal agreed: “Right now there aren’t a bunch of people who want to put up retail sites. No one is going to make a big investment on the Internet until they figure out what business model works.” He suggested that a shift in attitude toward on-line marketing may also account for the lack of interest in .biz and .info. “There’s been a sea change in branding strategy,” he said. Companies lost a fortune acquiring and building generic .com names, such as wine.com, garden.com and pets.com, Osterman said. Now, the movement is toward arbitrary and capricious marks, such as Kodak or Xerox. Since domain names using such “fanciful” marks are less likely to be snapped up, companies are not as anxious to apply, he explained. For existing trademark owners, most have managed to get control of the corresponding .com domain name, Osterman said, either through bartering or legal proceedings. And as Weil Gotshal’s Aidun pointed out, most people who are satisfied with their .com names consider a .biz or .info name to be “surplusage.” Whether interest in .biz, .info and the other new domains will pick up down the road remains to be seen, but those involved in the expansion are optimistic. “A lot of companies look at [the addition of new domain names] and think ‘what a pain,’” said Afilias’ Palage. “But when they start thinking about what they can use it for, they’ll see its potential.”

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