Generic Top-Level Domain Expansion Brings New Opportunities – Risks for Business Owners
By Mark E. Stein, Mark Stein Law and
Matthew N. Horowitz, Feldman Gale, P.A.
The introduction of new generic top-level domains (gTLDs) will fundamentally change the Internet name space and the competition between brands for meaningful, appealing Web addresses. Dozens of new gTLDs have already been delegated with potentially hundreds more to come. These can include everything from .bar to .jewelry. While the expansion promises new opportunities to communicate and interact with consumers, it also creates greater risk of fraud, abuse, and potential new legal complications for businesses.
A top-level domain (TLD) name is the suffix that follows the last period in a web address, such as .com, .gov, .edu, and so forth. Several TLDs have specific distinctions, such as those that are attached to a country code (.uk) or industry (.xxx). Generic top-level domains, on the other hand, include unrestricted domain suffixes like .com, .net, org, and .info. Anyone can purchase a lower level domain name and register a website ending with one of these gTLD names, provided the address is available. Websites with suffixes like .biz, .pro, and .xxx are considered generic, but have certain eligibility restrictions, as do sponsored TLD names like .edu, .gov, and .mil, which are assigned solely to designated agencies or organizations.
By the end of 2011, only 22 gTLDs existed.1 In January 2012, however, the Internet Corporation for Assigned Names and Numbers (ICANN) began accepting new gTLD applications – for a price of $185,000 each.2 By the time ICANN stopped accepting submissions in May 2012, despite the steep price, it had received over 1,930 applications.3 Among the applicants are established brands like Google, Amazon, and Microsoft, as well as newcomers and TLD holding companies like Donuts, Inc. On October 23, 2013, ICANN began delegating approved gTLDs on a piecemeal basis, placing them into the Internet’s Root Zone – the database for the Internet.4 Experts predict that as many as 1,400 of these applications could be approved. To date, 430 gTLDs have been delegated, including .zone, .cheap, .marketing, .democrat, .social, .dance, .farm, .glass, .email, and more.5 However, almost 1200 applications remain to be delegated.6
The introduction of new gTLDs presents a number of benefits for gTLD applicants. Applicants for new gTLDs are not merely applying to purchase a domain name, such as in the case of purchasing a lower-level domain name. Rather, applicants are actually applying to create and operate a registry for the new gTLD.7 A registrar is the authoritative, master database of all domain names registered in each TLD.8 A Registry Operator can establish its own business model and policies for its registry – including creating rules and setting registration prices. Not only can this provide an ongoing revenue stream, but Registry Operators can vastly extend the reach of their brand and increase brand awareness.9
The explosion of new gTLDs promises expanded opportunities for business owners, publishers, professionals, and the consuming public as a whole. Additional gTLDs means more meaningful and targeted lower level domains are up for grabs. For example:
- orlando.tickets instead of downtownorlandotickethub.com
- boston.agency instead of premierebostonmarketingevents.net
Moreover, since the Registrar Operator is allowed to set the rules and pricing structure for its gTLD, a diverse set of gTLD rule sets will promote competition and innovation. These changes will impact the landscape of the entire Internet, and the economies and businesses that rely or interact with it. Virtually all companies that utilize the Internet for any kind of contact with clients or potential customers should consider how this will impact new business, brand representation, and consumer relations.
These businesses also need to realize the expansion creates a number of potential legal complications, even for businesses that do not register a web address with one of the new gTLDs. How middle-market and lesser known brands will manage the legal issues in this new name space is among the most pressing challenges the industry faces. Established brands like Apple Inc. or Nike Inc., due to the strength of their brands and the available resources remain in good positions to address potential trademark violations and secure new gTLDs of their own.
Further, the limited number of existing reputable gTLD registrars and the screening processes that reject attempts by third parties to register domain names that misrepresent a brand make current enforcement efforts easier. With potentially hundreds of new gTLD registrars it is difficult to determine exactly how rigorous the future screening processes will be, but it will certainly be more difficult and expensive for niche brands, small businesses, and middle-market companies to safeguard themselves from potential domain name usurpation.
It is also unclear how current national cybersquatting laws and trademark acts will apply to the new domains. Under current ICANN regulations, when a new domain name is registered, the registrant is required to provide certain business or personal data, known as WHOIS info.10 Since the market will experience additional registrants in a variety of countries, it bears considering whether this expansion will make it easier for serial infringers and counterfeiters, terrorists, hackers, and organized criminals to maintain anonymity on the Web by circumventing looser security protocols or make it easier for individuals or companies seeking to avoid the jurisdiction of certain national court systems.
Since many of these new gTLD registrars will be based in other countries, there could be potential conflict in protecting trademarks abroad, as there may be differences between the different registrars’ national laws. The industry is challenged to find a way to deal with some gTLD registrars being based in countries that may not have the same infrastructure for enforcement, an obstacle that will complicate attempts to rectify trademark and copyright infringements and other potential conflicts.
Fortunately, there are several proactive and crucial steps that companies can immediately take to protect themselves against possible complications that the new gTLDs can present:
- Evaluate the new gTLD options to determine if any are relevant to your industry, and consider registering your brand name using those gTLDs;
- Monitor gTLD registrations of your brand name in other industry domains;
- Register as a trademark any valuable marks your company owns and uses;and
- Consider new avenues of relief set up by ICANN.First, companies should examine the new gTLD names to see if any newly registered suffixes are relevant to your industry. Provided it is not cost prohibitive, it may be prudent to register your brand under each important new gTLD to avoid damage to or dilution of your brands. These new gTLD names are designed to make it easier for web users to categorize their searches, so you might see golf clubs or night clubs using the .club gTLD, but a hospital or gym, on the other hand, would likely use a different gTLD – something like .health. Some businesses may have marks or industry verticals that correspond to several new gTLDs; these brands would be wise to consider registering their names on all relevant gTLDs. For example, a golf club located in Sacramento, Calif., might register under both .club and .golf.
Second, businesses should pay close attention to registrations both within industry-specific gTLDs, and registrations in other gTLDs that use your brand name. For example, if you’re a company like Heineken NV, you should pay attention to not only .beer registrants, but also if anyone registers the name “Heineken” on other gTLDs, like heineken.bar or heineken.pub. These kinds of constructions can be used to intentionally mislead consumers, and can often be easily sniffed out by the occasional Google search.
Third, if you have not done so already, register all of your company’s key brands as trademarks as soon as possible in both the country where your business home office is located and in all other countries in which you conduct significant business. Should any dispute arise, you will have the upper hand. In the overwhelming majority of cases, the courts and administrative bodies favor the company that owns a trademark registration. If a third party, for instance, registers your brand name using a gTLD from unrelated industry, a trademark registration will provide you with a significantly stronger case to have the third party domain name registration cancelled and transferred to you. Additionally, ICANN has established a global repository for trademark data, called the Trademark Clearinghouse (“TMCH”), that provides a number of advantages to trademark holders. For example, trademark holders that have registered their mark with the TMCH can take advantage of Sunrise Periods – special pre-registration periods in which to register domains prior to their offering to the general public.11 All new gTLDs are required to have a Sunrise Period.12 The TMCH also provides a valuable notification service to trademark holders. Any potential registrant seeking to register a domain name that matches a trademark term in TMCH receives a warning notice. If the registrant continues to register the domain name, despite receiving the warning notice, the TMCH notifies the trademark holder so that they may take appropriate action.13 Keep in mind that this service is still building, and that new gTLDs are still being considered and processed. Check to see what gTLDs have been delegated and find out if you qualify for these Sunrise Periods so you can register before the majority of your competition.
Fourth, trademark mark owners should be aware of and investigate potential new avenues of trademark enforcement and protection. The period to object to a new gTLD prior to its delegation has closed.14 However, ICANN has set up Post-Delegation Dispute Resolution Procedures (“PDDRP”) to provide avenues for those harmed by a new gTLD Registry Operator’s conduct to seek relief.15 For example, the Trademark PDDRP allows a trademark holder to file a complaint against the Registry Operator if the gTLD name is either confusingly similar to, dilutes, or tarnishes the complainant’s mark. Additionally, in certain circumstances, a trademark holder can also seek relief against the Registry Operator for any infringing lower-level domains in its registry.16 ICANN has appointed the Asian Domain Name Dispute Resolution Centre, the National Arbitration Forum, and the World Intellectual Property Organization to handle these disputes.17 These avenues may be beneficial to a trademark holder suffering harm from a confusingly similar gTLD string as Courts in the United States have previously found that gTLDs typically do not perform a source identifying function.18
The above four precautionary measures vary in time and expense, but could mean the difference between coasting through this new name space expansion or becoming embroiled in tough, uncharted legal waters. Prior to adopting any strategy, it would be wise to consult an attorney with proven and dedicated experience navigating the cyber law, Internet and gTLD namespace. The above recommendations provide a general framework that each business will need to modify and adopt based upon the business’ specific needs and the new realities created by the enormous influx of new gTLDs.
–By Mark E. Stein, Mark Stein Law and Matthew N. Horowitz, Feldman Gale, P.A.
Mark E. Stein is a partner at Mark Stein Law.
Matthew N. Horowitz is an associate at Feldman Gale’s Miami office.
1 NEW GTLD FAST FACTS, ICANN, http://newgtlds.icann.org/en/about/program.
2 ICANN, GTLD APPLICANT GUIDEBOOK, 1-42 (June 4, 2012).
3 NEW GTLD FAST FACTS, supra note 1.
4 Press Release, ICANN, Internet Domain Name Expansion Now Underway (Oct. 23, 2013), available at https://www.icann.org/news/announcement-3-2013-10-23-en.
5 Program Statistics, ICANN, http://newgtlds.icann.org/en/program-status/statistics (last visited November 6, 2014); Delegated Strings, ICANN, http://newgtlds.icann.org/en/program- status/delegated-strings (last visited November 6, 2014).
6 Program Statistics, supra note 7.
7 Benefits and Risks of Operating a New gTLD, ICANN, http://newgtlds.icann.org/en/about/benefits-risks (last visited November 6, 2014).
8 Glossary, ICANN, http://archive.icann.org/en/topics/new-gtlds/glossary-26aug11-en.pdf (last visited November 6, 2014).
9 Benefits and Risks of Operating a New gTLD, supra note 9.
10 ICANN, WHOIS PRIMER (2013).
11 Sunrise Services, THE TRADEMARK CLEARINGHOUSE, http://www.trademark-clearinghouse.com/content/sunrise-services (last visited November 6, 2014).
13 Ongoing Notifications, THE TRADEMARK CLEARINGHOUSE, http://www.trademark- clearinghouse.com/content/ongoing-notifications (last visited November 6, 2014).
14 Objection and Dispute Resolution, ICANN, http://newgtlds.icann.org/en/program-status/odr.
15 Post-Delegation Dispute Resolution Procedures (PDDRP), ICANN, http://newgtlds.icann.org/en/program-status/pddrp (last visited November 6, 2014).
16 ICANN, TRADEMARK POST-DELEGATION DISPUTE RESOLUTION PROCEDURE (TRADEMARK PDDRP) (June 4, 2012), available at http://newgtlds.icann.org/en/program-status/pddrp (last visited November 6, 2014).
17 Post-Delegation Dispute Resolution Procedures, supra note 17.
18 In re Oppedahl & Larson LLP, 373 F.3d 1171, 1177 (Fed. Cir. 2004).