Domain Names Grow Complex and Pricier on the Information Superhighway

As we reported last in previous issues of Legal Bytes, the Internet Corporation for Assigned Names and Numbers (ICANN) is preparing to open up the generic top level domain space to virtually any string of letters. The 21 existing generic top level domains (gTLD) include .com, .net, .org, .edu, .info and 16 others.

What Does This Means To Your Domains?   Under the proposal, brand owners will be able to apply for gTLDs corresponding to their brands, and entities representing communities, or wishing to organize a community or common interest channel, will be able to apply for names representing those various interests (e.g., .bank, .medicine, .law, .baseball, etc.).

Why Should I Care? These new domains might be used in many ways, but be prepared for steep costs. If someone wants to buy a new top level domain (and, in effect, act as the registry for the purchase or distribution of second level domains), it can be very expensive – $185,000 plus $25,000 per year, plus other fees and costs associated with the processing of the application. . .   and the IP stakes involved in this proposal are high. The comments submitted to ICANN on its First Draft Proposal from about 300 corporations, associations, governmental agencies and individuals worldwide, were largely negative and reflected serious concerns about trademark rights, increased cybersquatting, monitoring costs, defensive registrations and the like. Many complained of the steep toll these costs already take over the 21 existing domains and painted a gloomy choice under the new proposal: increase expenditures on trademark defense over potentially hundreds of new domain channels, or refuse to make the expenditure and potentially jeopardize the strength of a brand.

What You Can Do? Applications will likely not be accepted until, at the earliest, December or the first quarter of 2010, so this is your opportunity to make your concerns known. In the meantime, ICANN submitted its Second Draft Guidebook that purports to address some of the concerns raised by the comments and at least pays lip service to giving further consideration to the trademark questions. Comments on the Second Draft Guidebook are due April 13. ICANN is also soliciting comments on recent related studies and is preparing to issue a report addressing trademark considerations later in April. We know the issues involved and are familiar with this process. We represented the Association of National Advertisers (ANA), the advertising industry’s largest trade association, in connection with its submission to ICANN regarding the First Draft Guidebook, and we are working with the ANA on formulating its position on the second draft. You can click on the highlighted links to read the ANA’s submission to ICANN on the First Draft Guidebook, and an updated Client Alert on this topic. If you are interested in submitting your comments and would like us to assist you, I strongly encourage you to contact John Hines.