Fear and the Introduction of New TLDs

I was intrigued by the title of this article, "How can you protect your brand online if new domains are created?" from SC Magazine when it came across my twitter feed from minds + machine's New TLD News. Unfortunately, without even dealing with the inaccuracies and/or misuse of legal terms in the piece, the tone of doom and gloom for trademark owners compelled a response. The truth is that trademark owners should not fear the introduction of new top-level domains, as such an introduction is inevitable and trademark owners prepared for the process will be better positioned to control the costs associated with new TLDs.

The truth is that the implementation of new top-level domains in some undetermined form now appears inevitable. New TLDs concern trademark owners for primarily two reasons: 1) the potential misappropriation of a trademark by a third party as either a new TLD (i.e. to the right of the final dot) or as a domain name registered in connection with a new TLD (i.e. immediately to the left of the final dot) and 2) the costs associated with either the registration and use of a new TLD that incorporates the trademark owner's mark or the defensive registration of domain names incorporating the mark in multiple new TLDs.

With regard to misappropriation, the article quotes Charlie Abrahams, vice president and general manager EMEA at MarkMonitor: "Somebody else would get .barclays and sell it back to Barclays in the future, that is less of a concern as the costs can be high and it needs to be running for more than ten years, so that could be more than $1 million, and for a criminal this is a higher level of entry.” This is not a legitimate concern and Mr. Abrahams certainly qualifies this statement, but there are legitimate concerns for trademark owners, such as trademark owners that hold trademarks for terms identical or similar to trademarks held in connection with differing goods or services, i.e. the APPLE marks held, respectively, by Apple Computers and Apple Corps.

Another concern with regard potentially to misappropriation for trademark owners in this area is trademark terms that may be considered generic or descriptive terms in other contexts. To continue the above example further, a fruit-growing organization could potentially also apply for the .apple top-level domain.

Each trademark owner must be thinking about these issues now to determine best practices in connection with the implementation of new top-level domains. Nobody can credibly predict whether new TLDs will gain significant market share, as .com is still king. Nevertheless, nobody can similarly predict when ICANN will offer another opportunity to apply for new TLDs. The choice not to apply for a new TLD or to allow a third party to apply for the TLD associated with the trademark holder's mark could represent a missed opportunity for branding, marketing and advertising purposes that will not return for some time.

With regard to the costs attributable to trademark owners in connection with the implementation of new top-level domains, the article asserts, "there are instances where people get a desirable domain by paying for it and this has led to instances of people buying sites for high amounts of money." If the "people buying sites for high amounts of money" refers to trademark owners, then I think it is important to remember that we will not be returning to the ransoms paid by trademark owners for domain names associated with those marks prior to the implementation of the UDRP. The real concern for trademark holders is that the UDRP process is, itself, relatively expensive and the multiplication of multiple UDRP claims across various new TLDs could prove exorbitant.

First, it is not even clear at this point that the UDRP will be the most efficient procedure for contesting the registration and/or use of domains names registered to third parties that incorporate marks held by trademark owners. Second and most importantly, it is certainly not clear that many of the implemented new top-level domains will succeed to the degree that sufficient Internet traffic will be generated to justify the expense associated with a UDRP claim.

The fact is that new top-level domains are inevitable and the introduction of new TLDs poses particular concerns for trademark owners, both potential misappropriation and costs. Trademark owners that begin preparing for this implementation now, in partnership with counsel familiar with the myriad issues associated with this process, will be better positioned to deal with the concerns of misappropriation and costs. And those who prepare now will find that there really is nothing to fear in the introduction of new TLDs.

ICANN's IDN ccTLD Fast Track Process Updates

In relation to the discussion of IDNs below, ICANN is posting updates with regard to the IDN ccTLD Fast Track process here. So far 10 requests for IDNs have been submitted in five languages. Check back often to stay apprised of any information related to the introduction of new TLDs.

Suggestions for Protocols

In the previous post, the suggestion was made that trademark owners should treat the introduction of IDNs as a test run for the implementation of new gTLDs, which resulted in a couple of e-mails seeking suggestions as to what such protocols might entail.

New gTLDs are somewhat more complicated, but IDNs are similar to ccTLDs with regard to factors to consider in registration.

Do you have a trademark registration in the relevant country?
Do you conduct significant business in that country?
Is the country a likely prospect for expansion?
What would be your likely response if your trademark was registered as a domain name by a third party?

These are some of the questions trademark owners need to be considering as the introduction of IDNs comes closer to reality. The implementation of new gTLDs may be delayed, but new gTLDs are inevitable. The sooner trademark owners begin asking the above-referenced questions, the less painful the ultimate roll out will be.

Trial Run for Trademark Owners

Last week, the most-recent ICANN meeting concluded in Seoul, South Korea with a meeting of the ICANN Board, in which the Board approved the introduction of non-Latin character domains ("internationalized domain names" or "IDNs"). New IDNs could result in new country-code top-level domains ("ccTLDs") in scripts such as Arabic, Chinese, Cyrillic, Hindi, Japanese and/or Korean as early as mid-2010.

Moreover, during the Seoul meetings, ICANN made clear that the introduction of new generic top-level domains would be delayed beyond the first quarter of 2010, as delineated in ICANN's initial ambitious time line.

Many trademark owners were legitimately concerned with the possibility of ICANN introducing en masse up to 500 new top-level domains concurrently. While the implementation of new top-level domains now appears inevitable, the introduction of IDNs offers trademark owners a unique test case for the development and implementation of processes by which the trademark owner can determine whether to register domain names in new top-level domains.

In anticipation of the introduction of IDNs, trademark owners should now be developing such processes to treat the initial implementation as a trial run for the introduction of new generic top-level domains.

Period of Adjustment

This blog is intended to serve trademark owners in connection with the pending introduction of new top-level domains (TLDs). As you may be aware, the Internet Corporation of Assigned Names and Numbers (ICANN) is planning to permit the registration of, potentially, 300 new TLDs, beginning in 2010. A TLD in a domain name consists of the letters to the left of the last dot in a domain name, such as .com, .net and .gov. ICANN's introduction of a host of new TLDs could possibly include generic terms (.food, .sport), trademark terms (.deloitte) or geographic terms (.nyc, .berlin).

Trademark owners are likely already well aware of the challenges related to the easy registration of domain names that may include terms identical or confusingly similar to their mark. These challenges are only going to increase, but that should not mean trademark owners feel overwhelmed. Trademark owners will, however, need timely and accurate information related to the process, as well as the aftermath.

There is no shortage of content on the Internet related to the introduction of new TLDs, but the information dedicated specifically to the unique challenges of trademark owners is less robust. Hopefully, this blog will serve to keep trademark owners abreast during this period of adjustment.