gTLDs and .XXX TLDs: Be on the Winning Team!
Kelley Drye Client Advisory
Make Sure Your Company Knows the Rules by Which to Play
Here are some quick excerpts from the playbook relating to important dates for the introduction of new gTLDs and .XXX TLDs.
gTLDs
A generic top-level domain name (gTLD) may be just a four-letter acronym to some, but to brand owners gTLD means planning, budgeting, and bracing for the unknown. The Internet Corporation for Assigned Names and Numbers (ICANN) recently announced that on January 12, 2012, it will begin accepting applications for new gTLDs. The universe of available gTLDs will expand beyond the standard “.com” and “.net” to include industry gTLDS such as “.golf” and “.fashion” and brand names such as “.kelleydrye” or “.yourbrand”..XXX TLDs
If it was not enough to wildly expand the universe of gTLDs currently in existence, ICANN signed an agreement with ICM Registry LLC (ICM) to introduce .XXX as a new TLD. Why? ICM states that the .XXX TLD will create a clearly identified place on the Internet where adult entertainment can be accessed and provide industry professionals with a new home for their online content. For mark owners not involved in the adult entertainment industry and who do not want to expose their brands to possible registration as a .XXX domain name, there is a defensive reservation request procedure, “Sunrise B”, that will open in September. A detailed summary of ICM’s launch plan and policies is available here.Be aware of these important dates. While we are in the 4th quarter of the game in some respects, there is no need to fumble. Here is a quick overview of dates you should know:
- Now - Check with key players within your organization (management, marketing, legal, information technology and others) regarding whether they are interested in applying to register for a gTLD.
- September 7 - October 28, 2011 - Sunrise B opens, and ICM will begin accepting .XXX reservation requests for 52 days. An applicant must seek to reserve a domain name in the .XXX gTLD space that corresponds to a mark it registered prior to September 1, e.g., “yourbrand.xxx”. Once approved, the .XXX domain will resolve to a standard information page that indicates that it is not available for registration within the .XXX registry. Some registries are pre-registering now.
- October 23 - October 28, 2011 - ICANN will hold its 42nd international meeting in Dakar, Senegal, where several important announcements are expected to be made regarding the final details of the gTLD Applicant Guidebook and rights protection mechanisms (RPMs) that will be available to intellectual property owners whose rights are infringed by gTLDs.
- January 12 - April 12, 2012 - ICANN will begin accepting new gTLD applications through its online TLD Application System (TAS). It is estimated that the application process will take at least 9 months and probably much longer.
- April 26, 2012 - ICANN approximates that, within two weeks of the close of the TAS application submission period, gTLD applications considered complete and ready for Extended Evaluation will be posted for public review and comment. While public comments will not be considered as formal objections, this will be the first date where brand owners may review a complete list of gTLD applications in order to file objections with dispute resolution service providers.
Develop a game plan
The first critical decision is whether your organization will apply for a gTLD, and if so, how it will use the gTLD. A cross-sectional team of key employees from various departments, including marketing, finance, legal, and information technology, should take part in the process. Since your organization may not have extensive experience operating a registry, strongly consider hiring a knowledgeable, outside consultant.Three Uses of a gTLD
A successful gTLD applicant, who demonstrates throughout the application process that it can operate its gTLD in a stable and secure manner and comply with the rules, will be approved to become a Registry Operator like GoDaddy.com, Inc. and eNom Inc. As part of your discussions, consider three scenarios regarding how organizations may use the gTLDs. Under the first scenario, organizations might register a gTLD to use it as a placeholder while they wait to see how this new area of cyberspace develops or to block others from registering the same name. Otherwise, they could be barred from registering their key brand as a gTLD in future application rounds because the same or similar gTLD string registered to someone else. For instance, only one “.apple” may be registered - a gTLD in which Apple Inc. and Apple Corps Ltd. (aka Apple Records) both might have an interest. If your organization has a name or brand that is identical to one used by others, it may wish to register a gTLD and develop the basic infrastructure required by ICANN to run it so your organization is not blocked from utilizing this marketing opportunity in the future. To reiterate, a gTLD string that is not identical, but is found to be confusingly similar to another’s gTLD string, will likely result in dispute resolution proceedings or an auction where only one gTLD string will prevail. Could this happen to your organization’s key brand? A second scenario envisions a closed registry, where only the company or its selected affiliates would own domain name registrations within the gTLD. For example, Stellar Co., a hypothetical car company, could organize its business by departments (“sales.stellar”, “humanresources.stellar”, etc.) or sell second-level registrations to its dealers (“jamesbrowndealership.stellar”) making both part of the new Stellar on-line community. In a real world example of the third scenario, an open registry, Canon Inc. was one of the first companies to announce that it plans to apply for “.canon”. While it did not declare its specific plans, it might operate as an open registry. If so, Canon could offer to sell second-level registrations to its customers so they could store and share their Canon photos at their very own photo gallery (“janedoesphotos.canon”).The Application Process
It is a very complex process to apply for, create, and operate a registry; it is estimated that the application process alone will take over 9 months. An overview of the gTLD application procedure is available here. The application fee is $185,000, with a minimum annual fee due to ICANN of at least $25,000 for 10 years, which does not take into account the costs associated with building and running the registry.Delay
Another factor in deciding whether to get into the game is that ICANN will process the applications in batches during the Initial Evaluation and limit the first batch to 500 applications. Subsequently, they will review batches of 400. ICANN estimates that it will not complete the first review until at least November 2012, and the new extensions will likely go live in 2013. They have not announced when the next window will open for the submission of applications. If a brand owner does not file an application when the first window opens, it could spend many months on the sideline ruminating over a missed opportunity.Punt, pass or kick - Or block?
More domain names mean more enforcement issues, which affect brand owners in several ways, two of which are discussed here. First, weigh the registration costs against the costs of enforcement actions. With regard to .XXX TLDs, brand owners need to consider whether to file to block any of their marks from being registered as a .XXX domain name by someone in the adult entertainment industry. The theory is that it may be cheaper and more time efficient to pay the estimated one-time reservation fee of around $200 - $400 per mark to preclude others from registering it rather than having to utilize post launch RPMs including actions under the Uniform Domain Name Dispute Resolution Policy (UDRP). While some may consider defensive registration of gTLD names because of concerns that there are legitimate organizations with the interests in the same or similar names or marks, there should be no reason to register a gTLD out of fear that a cybersquatter would register your organization’s key brand as a gTLD. The process is too complex and expensive for a typical cybersquatter to file for such names.Second, more domain names and enforcement issues mean you should develop a strategy and a budget for monitoring and objecting to the gTLDs and .XXX TLDs and have an understanding of the RPMs available to prevent or recover infringing domain names, infringing content, and misuse of your organization’s valuable marks.