ICANN UNDER FIRE ON EVE OF NEW GTLD RELEASE

The Internet Corporation for Assigned Names and Numbers (ICANN) plans to accept new applications from January 12, 2012 to April 12, 2012 for hundreds of new generic top-level domains (gTLDs, e.g., .com, .net, .org), unless the Department of Commerce convinces ICANN to delay the rollout or limit the number of applications that it will approve.  When the application period opens Jan. 12, entities that meet ICANN’s background and technical operations requirements (along with the $185,000 evaluation fee) may apply to run their own registry.  For example, applicants may apply for new top-level domains containing a brand name or a generic term.

Brand owners and nonprofit organizations have opposed the program, complaining that it could exponentially increase their burdens associated with challenging cybersquatting and trademark infringement.  Persuaded by recent discussions in Congress, the National Telecommunications and Information Administration (NTIA) urged ICANN to reevaluate its plan, stating in a Jan. 3, 2012 letter:  “I urge you to consider implementing measures: (i) to minimize the perceived need for defensive registrations; (ii) to implement promptly ICANN’s existing commitments for law enforcement and consumer protection; and (iii) to ensure better education of stakeholders.” 

Throughout the new gTLD approval process, NTIA has stood behind ICANN’s multi-stakeholder approach to policymaking, which encourages broad collaboration and creative problem solving, in contrast to other countries’ heavy-handed Internet regulation.  Nevertheless, NTIA recognized through discussions with stakeholders that many trademark owners believe they need to file defensive applications at the top-level even though they may have no interest in operating a registry.  NTIA suggests that ICANN take measures to alleviate this possibility and immediately educate stakeholders on the purpose and scope of the program.  

Also, NTIA noted deficiencies and inaccuracies in the WHOIS policies, including the need to authenticate WHOIS entries, and it expects ICANN to address these issues in its June 2012 board meeting.  NTIA further suggested that ICANN take steps to centralize and automate the complaint process so that it would be more transparent by the third quarter 2012.

If the new gTLDs proceed as planned, trademark owners should be aware of some new protection mechanisms established by ICANN, in addition to the traditional remedies under the Uniform Domain Name Resolution Policy (UDRP) and other trademark laws, including the following:

1. Trademark Clearinghouse.  ICANN intends to contract with a neutral third party to establish a Trademark Clearinghouse for registered marks and other marks protected by court order or statute.  New gTLD registry operators (“Operators”) will be required to provide trademark claims services and sunrise services to owners of marks in the clearinghouse.   To review final guidelines, as of September, 2011, for the Trademark Clearinghouse, click here.
2. Sunrise Services.  Operators of generic industry extensions, such as .hotel, must offer sunrise services to owners of marks in the clearinghouse.  This differs from previous sunrise registration periods, where registry operators have been required to offer sunrise periods to registered trademark owners.  Operators will not be required to offer a domain name under a new gTLD unless the trademark owner: (a) applies for entry in the Trademark Clearinghouse prior to publication of the new gTLD; and (b) registers the subject marks prior to execution of the registry agreement between ICANN and the Operator. 
3. Trademark Claims Services.  Within 60 days of the launch of a new gTLD, Operators must provide prospective domain name registrants under the new gTLD with notice of marks in the Trademark Clearinghouse.  Operators must require the prospective registrant to confirm that he/she has read and understood the notice and that the prospective domain name does not infringe on any rights in the notice.  Operators must also notify owners of the marks in the Trademark Clearinghouse if a domain name containing an identical mark ultimately registers under the new gTLD.  Notifications will not include misspellings or variations of the mark as registered with the clearinghouse. 
4.  Uniform Rapid Suspension (URS).   ICANN will offer URS as a cheaper and faster dispute resolution remedy for domain name registrations under the new gTLDs.  URS complaints are only recommended for clear-cut cases of trademark abuse, and will be limited to 500 words with a proposed $300 filing fee.  Trademark owners must support complaints with both proof of use of the mark and an allegation of bad faith supported by reasonable evidence.  If a trademark owner is successful under URS, Operators must freeze the domain name, but they will not be required to transfer the domain name to the trademark owner.

The new gTLDs could dramatically change the scope of the Internet in the very near future.  Although, the expansion may become irrelevant due to search-based web navigation, trademark owners should be wary of some potential short term implications and take steps to protect against cybersquatting and trademark abuse.