GENERIC TOP-LEVEL DOMAIN NAMES:
Protecting Your Intellectual Property in a New Electronic Era

Written by Katie Lynch - Legal Assistant

As of 12 January 2012, companies and organisations may apply to the Internet Corporation for Assigned Names and Numbers (ICANN) to register a new generic top-level domain name (or gTLD).  While this innovation has the potential to drastically change the way consumers search the internet and could represent a significant marketing opportunity, it also presents a serious challenge to businesses wishing to protect valuable trademarks.

Back to Basics: What is a gTLD?

A domain name is a humanly recognisable term (as opposed to unintelligible code) referring to a defined area of control within the internet, and is typically comprised of several parts, denoting different levels of the domain.  At the top level are the country codes, such as .nz or .au, and the generic top-level domains (gTLDs), such as .com, .edu and .org.  Underneath the first-level domain names exist a myriad of second and third-level domain names which refer specifically to a given website.  When creating a website, businesses will register a domain name at the second or third-level within one of the gTLDs, for example: www.denniskinglaw.com.

The New gTLD Registration Scheme

Under ICANN’s new system, eligible applicants may register a new top-level domain name, and that name could be absolutely anything.  For example, Dennis King Law could register the domain name .DKL or .law, or alternatively, it could wait until the ICANN application round is complete, see if someone else has already registered .law, and then (if possible) register a second-level domain name within the new gTLD.

To be eligible for a new gTLD, the prospective applicant needs to be an established corporation, organisation or institution, and cannot be an individual or sole proprietorship.  The requirements of having a registered gTLD are burdensome.  The new registrant has to have the capacity to operate a registry and if it decides to allow others to use the new gTLD, it has to liaise with ICANN accredited registrars in relation to the application process for second-level domain names.  As a result of these requirements, all applicants will have to supply enough supporting documentation to demonstrate that their operational capacities are up to scratch.

After the application submission round has closed, ICANN will consider whether the proposed gTLD is too similar to an existing gTLD, whether it would adversely affect the stability of the gTLD system, and if the gTLD refers to a geographical location, it will consider whether governmental approval is required.  If two applicants make essentially the same submission, there will be an auction for the proposed gTLD.

The Implications of the New gTLD Naming System

A .brand gTLD has the advantage of being unique to the business that has registered it and could change the way potential users locate it on the internet.  Additionally, gTLDs which are likely to be popular, like .law for example, could be a valuable piece of digital real estate.
However, there are, of course, some disadvantages to the scheme.  Firstly, the cost is likely to be prohibitive to all but the largest businesses.  Applicants pay an initial fee of US$185,000 as well as annual registration fees of US$25,000.

Secondly, cyber-squatting is likely to be exacerbated by this development.  Cyber-squatting is when a person acquires a domain name which is associated with a pre-existing trademark, for the purpose of poaching trade from a legitimate business or selling the name back to that business at a higher price.

ICANN has set up some safeguards to prevent undesirable registration at the top-level.  If a business feels that an applied for gTLD infringes their rights, it can file a formal objection before the application has been approved, or utilise ICANN’s post-delegation dispute resolution procedure after an application has been approved.

At the second-level, registry operators of a new gTLD are required to maintain a trade mark claims service, to determine if anyone applying for a second-level domain name within the new gTLD will be infringing a trade mark.  This is done through a ‘trade marks clearinghouse’, which is a database of trade mark rights.

In Brief: What Does This Mean for Your Business?

If your business is considering a new domain name:

• Decide whether you wish to apply for a gTLD or a second-level domain name within a new gTLD;
• If you wish to apply for a gTLD, follow the application procedure on ICANN’s website and ensure that you have sufficient supporting documentation to demonstrate your capacity to operate a registry, bearing in mind that the closing date for applications is 12 April 2012; and
• If you wish to apply for a second-level domain name, examine the list of applied for gTLDs that ICANN will post after the application period ends.

If your business is concerned about the security of its trade mark:

• Carefully review the list of applied for gTLDs once they are posted to determine whether you should file an objection; and
• Register your trade mark with the trade marks clearinghouse.

Disclaimer:  This article discusses its topic in general terms only and should not be relied upon as legal advice.

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