A dramatic shake up of the online world is on the horizon following a recent Internet Corporation for Assigned Names and Numbers (ICANN) decision to allow custom generic Top Level Domains (gTLDs). When applications open in January next year, businesses will be able to apply for gTLDs containing almost any word in any script or language.

With the change, businesses will have the opportunity to establish a broad, uniform and unique internet presence. For businesses with a wide range of products, it will enable a straightforward means of dividing their portfolio of products and services. However, from a brand protection and IP policing perspective, these greater possibilities bring with them greater challenges.

Throughout the long consultation process, stakeholders and businesses expressed concern about the protection of trademarks and other IP Rights under the new regime. Brand owners have voiced concerns that the gTLD expansion could lead to a parallel expansion in trademark infringement and cybersquatting. In that scenario, inexperienced gTLD administrators that may emerge in the market to license the new domains would be taken advantage of by opportunistic offenders. As such, brand owners have expressed a need for infringement-prevention tools that will help the new gTLD owners, if and when they open up their suffixes to partner organisations.

As a result, ICANN has sought to incorporate a raft of protection measures into the process. Although the final form of the measures remains to be seen, the precautions are two-fold: First, there will be extensive scrutiny and stringent requirements imposed on gTLD applicants. Second, tools and procedures will be put in place to support new gTLD owners in preventing and dealing with trademark infringement and cybersquatting.

The mechanisms built into the application process include:

Cost

The application fee alone is US$185,000 (£112,000) and upkeep costs will be substantial. Investment will be required to satisfy ICANN’s stringent technical tests and ICANN will scrutinise an applicant’s financial capability.  This should act as a useful filter, limiting the number of custom gTLDs and restricting responsibility to those with the resources to manage them on a consistent basis.

Rigorous examination

ICANN will subject each application to comprehensive examination. Among the requirements of the 300-plus-page application form, the applicant must demonstrate sophisticated technical standards and processes. As Bruce Tonkin of Melbourne IT told the BBC, ‘You need IT robustness and IP protections … You have to have a 24/7 abuse team. You have to have mechanisms where a trademark holder has first right to get their name.’

Restrictions on applicants

Individuals and sole traders are ineligible to apply and corporate applicants must demonstrate ‘good standing’. Companies and corporations listed on any of the 25 largest exchanges globally will benefit from a presumption of good standing, but others will be subjected to a vetting procedure. It is hoped that companies able to satisfy this requirement will be responsible - and averse to the bad publicity that unchecked trademark infringement within their gTLD would bring.

Publication and objection

Each application received by ICANN will be published on ICANN’s website and subjected to a public comment and formal objection process. This will provide a further layer of scrutiny of each new applicant.

Having overcome the above hurdles and obtained a new gTLD, registrants will not be left to handle infringement and cybersquatting issues alone. Specific measures to assist gTLD owners in dealing with trademark infringement include:

A new trademark clearinghouse

ICANN plan to put in place an international trademark clearinghouse to serve as a database of trademarks registered worldwide. New gTLD holders will have access to the clearinghouse to assist in the regulation of their own sub-domains. Once that facility is established, trademark holders should ensure their trademarks are registered with the clearinghouse, though ICANN has made clear that failure to submit trademarks to the clearinghouse is not to be perceived as a waiver of any rights by the trademark holder.

A streamlined dispute resolution process

ICANN propose to implement a Uniform Rapid Suspension (URS) system operated by third party providers. Rapidity will be a key element of the system. A registrant will have 14 days to respond to a Notice of Complaint from the gTLD owner, in default of which the service provider will carry out an evaluation based on the complainant’s evidence alone. Determination in favour of the complainant will lead to suspension of the domain. Complaint filing fees are expected to be in the order of US$300 (£188), though some ‘loser pays’ mechanism is expected.

It remains to be seen how effective the implementation of the above, and other, protection mechanisms ICANN expects to build into the new gTLD process will be. Given the stringent tests and prohibitive cost, a proliferation of new gTLDs is unlikely, which will likely ease the concerns of trademark holders.

It is hoped that ICANN will ensure that new gTLD owners have the tools and support available to them to effectively police their domains. How that is borne out in reality will depend upon take up when applications open next year and the effectiveness of new gTLD owners in making use of the clearinghouse and URS system. Trademark and brand owners would be wise to remain vigilant and to ensure they take advantage of these mechanisms.


Alex Hall is a solicitor at Mundays Solicitors LLP’s Surrey office

More information about ICANN’s anti-brand abuse mechanisms can be found in its official gTLD Applicant Guidebook, downloadable as a PDF from here