ICANN (the Internet Corporation for Assigned Names and Numbers) is currently developing new policies in relation to the allocation of new top-level domains (TLDs) including generic domains, and country-code domains. These proposed changes have already been severely criticised by bodies such as the BBC, ebay and Microsoft in relation to the impact the policies will have on brand owners, particularly in the current economic climate. This article outlines the changes that ICANN is set to introduce and the problems that brand owners can expect to face as a result of these changes. The article then goes on to provide recommendations as to how brand owners can tackle these problems.
In the past, generic Top Level Domains (gTLDs) were limited to 21 domains including .com, .org and .net. However, ICANN is currently developing a program to expand the number of available gTLDs, whereby applicants will be able to propose and apply for domains that are associated with their particular brand or business sector, for example .superdry or .marksandspencer. The second facet to this is that an entity may purchase a more generic domain such as .store, for which domain names could be bought, such as superdry.store or marksandspencer.store.
Discussions and consultation on the release of new gTLDs began in 2005, and the current target launch date is 31 May 2011. However it was announced on 10 December 2010 that ICANN will be holding an “Intersessional Meeting” with the Government Advisory Committee (“GAC”) in February 2011. This is to address concerns that still remain over the release of these domains. These concerns particularly relate to trade mark protection, the economic impact of the new program and the treatment of geographic domains.
The release of new gTLDs has the potential to create an explosion in the number of gTLDs, and has important implications in terms of brand protection. There is concern amongst brand owners that there is likely to be an associated explosion in domains being registered by counterfeit operators passing themselves off as being associated to the bona fide brand.
This may lead to:
• brands having to buy a gTLD simply to prevent others from doing so, which will be costly (the application fee is estimated to be 185,000 USD, with an annual fee of 25,000 USD for maintenance) and time consuming; and/or
• brands being required to police the launch of each gTLD and the possibility of extensive disputes where unforeseen domains are registered and used by other organisations in competition to their own. For example, Marks & Spencer will have to ensure that, on the launch of .store or .shop a third party does not register marksandspencer.store or marksandspencer.shop.
There are currently around 250 country-code top-level domains (ccTLDs) such as .uk and .fr in addition to the generic TLDs outlined above. In 2007, the Generic Names Supporting Organisation (GNSO) made recommendations to ICANN regarding the need for domain names written in non-ASCII scripts, for example Arabic, Cyrillic or Chinese script. Such domains are known as Internationalised Domain Names (IDN ccTLDs). As a result, ICANN has begun authorising the release of internationalised IDN ccTLDs.
Some IDNs have in fact already been released; for example the .IL Hebrew IDN was released on 26 December 2010 and the Saudi Arabian IDN was released on 5 May 2010. The program for the wider release of these TLDs is in progress and there will be more IDN ccTLDs.
The introduction of such domains could also have implications for brand owners, as not unlike gTLDs, it extends the scope of domains that it will be necessary to police. Furthermore, this policing will be technically difficult to undertake in countries where ASCII scripts are the norm, and thus expensive.
Enforcement of ICANN policies:
Despite its crucial role in the coordination of the internet, ICANN has been keen to emphasise the fact that it is not an enforcement entity, and that it has no technical or legal rights to control website content. In fact, ICANN is a Californian not-for-profit organisation that was originally delegated to perform its current role by the US Department of Commerce. The important issue is that any entity that applies for a gTLD and becomes responsible for each gTLD becomes a registry operator. Any new registry must sign agreements with ICANN to implement certain policies and meet technical requirements. Indeed, the registry agreement that will be entered into by each new gTLD owner has itself been the subject of much debate in the consultation process that has been ongoing since ICANN announced the gTLD expansion. Concern has focussed, to some extent, on ICANN’s inability to enforce its policies via existing registries, which manifests itself in a number of ways:
• there are some registries (particularly within South Korea and India) that do not always adhere to the terms of ICANN policies. Where disputes arise over domain name ownership, these registries can cause severe problems. By way of example, if it is found that a party is infringing a brand owner’s rights by use of a particular domain name, and it is agreed that they will transfer the domain to the brand owner, these registries may fail to transfer the domain name on request, or they may warehouse domain names in order to sell them to brand owners for a higher price;
• there have been circumstances where ICANN does not use the agreements in place with registries to prevent abuses. For example despite the repeated abuses of the American registrar, OnlineNIC, ICANN failed to implement its right under the Registrar Accreditation Agreement to terminate its contract;
• finally, by operating a “first come first served” system ICANN takes no responsibility for the registration of domain names that infringe registered trademarks.
It seems that this practice is likely to remain largely the same following the expansion of gTLDs and the introduction of IDN ccTLDs.
How to tackle the problems:
• Evaluation: Whilst ICANN may not always enforce its policies, parties will have to undergo a lengthy evaluation process, as outlined in the gTLD Applicant Guidebook proposed final version published in November 2010 in order to apply for a gTLD.
• Pre-emptive objections: After extensive consultation, the new gTLD program also includes a mandatory dispute resolution system. This system provides a mechanism for resolving disputes where a party applies for a gTLD and a third party objects to this on the basis that the proposed gTLD would infringe their legal rights in a trade mark or brand. In relation to brand owners, therefore, a party may complain on the grounds that the “string” comprising the gTLD applied for will cause confusion with an existing domain, or that the third party has existing legal rights in the string comprising the gTLD. The brand owner is, however, required to monitor the application process in order to file any objection, unless it has taken advantage of the Clearing House (see 3 below).
• Submission of trade marks to the Trademark Clearing House: As part of the expansion of the gTLDs, ICANN is also establishing a Clearing House in order that information relating to the rights of trademark proprietors can be authenticated, stored, and disseminated. The Clearing House was adopted following recommendations made by the Implementation Recommendation Team during the consultation process and gives trade mark owners notice of any domain applications that are an exact match of their trade mark. The proviso being that a trade mark owner must register its rights under the Clearing House in order to receive such notice.
• Uniform Rapid Suspension system: This is a system proposed to be introduced to allow registries to “lock” offending domain names that are obvious infringements and is designed to be quicker and cheaper than the current UDRP process.
Purchase of new gTLDs:
Whilst it may be an expensive option, brand owners may find themselves forced to buy up crucial new gTLDs in order to protect their brand. The author is aware of a number of major brands that are planning to do this, despite the hefty price tag and the current uncertain economic conditions.
In summary, the changes being made by ICANN over the coming months are far reaching and likely to result in a significant expansion in the number of domain names available for use on the internet. ICANN says that this expansion is crucial to maintain the level of competition within the system, thus providing increased access to members of the public. Brand owners are not so sure, given that it will almost certainly result in the need to purchase, for defensive purposes, more domain names and lead to the requirement for increased vigilance, all of which incurs costs which ultimately may be passed on to the consumer.