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Client Alert - The New Generic Top-Level Domain Names (gTLDs) - What Brand Owners Need to Know

06.25.2012

On June 13, 2012, which was officially dubbed "Reveal Day," ICANN (the Internet Corporation for Assigned Names and Numbers) made public the list of applicants for new generic top-level domain names (gTLDs) setting in motion a series of important procedures of which brand owners should be aware.

The Evaluation Period

Due to the volume of applications and number of review panels, gTLD applications will be evaluated in sequential batches; the first batch will contain approximately 500 applications, with subsequent batches of approximately 400.  The batching process will conclude in early July and the initial evaluation of the first batch of applications will begin shortly thereafter.  It is unclear how long this initial review will take, but ICANN estimates that the entire application process (Administrative Check, Initial Evaluation, Extended Evaluation, String Contention, Dispute Resolution and Pre-delegation) will take from nine to twenty months.

“Reveal Day” and the Public Comment Period

“Reveal Day” will be followed by a 60-day public comment period during which ICANN will accept comments with respect to various issues, such as string similarity and financial capability on pending applications, that will be considered by the evaluation panels.  It is unclear at this time, however, what weight these comments will carry with the review panels.

During the public comment period, it will also be possible to submit comments on legal rights objections (claims that the applied-for gTLD string infringes existing legal rights of the objector), string confusion objections (that the applied-for gTLD is confusingly similar to an existing TLD or to another applied-for gTLD string), limited public interest objections (that the applied-for gTLD is contrary to generally accepted legal norms of morality and public order recognized under the principles of international law) and community objections (opposition to the gTLD application from a significant portion of the community to which the gTLD string may be targeted).  However, ICANN has specifically stated that such comments will not be considered as formal objections and will not by themselves block an application from being evaluated.

The Objection Period

In addition to the public comment period, Reveal Day will also kick off a seven-month, formal objection period during which brand owners and others will have the opportunity to file objections to any application on the contested grounds described above (i.e., legal rights, string confusion, limited public interest and community).  ICANN recently appointed the World Intellectual Property Organization (“WIPO”) to be the exclusive provider of dispute resolution services for legal rights objections. 

According to WIPO, in assessing the validity of a trademark owner’s objection based on legal rights objections, the panel will decide whether the applied-for gTLD (i) takes unfair advantage of the unique character or the reputation of the objector’s registered or unregistered trademark,  or (ii) without justification, impairs the distinctive character or the reputation of the objector’s mark, or (iii) creates an impermissible likelihood of confusion between the applied-for gTLD and the objector’s mark.

The announced official fee for filing an objection with WIPO is not insignificant.  A case involving an objection to one application (i.e., for one gTLD) to be decided by one expert will cost $ 10,000 for each party (including a non-refundable $ 2,000 case administration fee), subject to a refund of the expert fee ($ 8,000) to the prevailing party. Different (most likely higher) fee arrangements will apply to three-member panels.

Notably, the remedies available pursuant to an objection filed with WIPO are limited to the success or dismissal of the objection. There will be no monetary damages, but the prevailing party will be entitled to a partial refund of the panel fee as described above.  ICANN has indicated that after the objection filing period closes, objections that have been filed will be evaluated during a dispute resolution process, which is estimated to take about five months.

Additional Protective Measures

Once the gTLDs are approved and operational, additional protective mechanisms will be available to trademark owners, including a Trademark Clearinghouse for use with Sunrise periods and Trademark Claims services.  The Trademark Clearinghouse will be a centralized database of verified data on registered (or court-validated, or "statute/treaty-protected") trademarks. The Clearinghouse is intended to minimize burdens on bona fide trademark owners by allowing them to deposit, for a (yet-to-be-determined) fee, their trademark data with one centralized source, rather than with each new gTLD registry.  New gTLD registries will be able to retrieve such centralized data from the Clearinghouse.

The existing Uniform Domain Name Dispute Resolution Policy (UDRP) will also apply to all new gTLDs.  The UDRP is a dispute resolution mechanism for trademark owners to resolve clear cases of bad-faith, abusive registration and use of domain names out of court. The UDRP is applicable to all domain name registrations in ICANN-approved gTLDs (e.g., .com, .net, .org).

Other post-approval mechanisms that will be available to trademark owners are a Uniform Rapid Suspension System (URS), and a Post Delegation Dispute Resolution Procedure (PDDRP).  The URS is intended to be a quicker alternative to the existing UDRP.  Like the UDRP, it is intended for clear-cut cases of trademark abuse.  The PDDRP is an administrative option for trademark owners to file an objection against a registry whose conduct in its operation or use of its gTLD is alleged to cause or materially contribute to trademark abuse.  The PDDRP is intended to be a higher-level enforcement tool to assist ICANN in its compliance program.

For more information regarding how to deal with the new gTLD program and how the program may affect your brand, please contact Joel Karni Schmidt (jks@cll.com) or William M. Borchard (wmb@cll.com).

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