The Internet Corporation for Assigned Names and Numbers (‘ICANN’), the organisation that controls the internet’s naming system, recently released Version 3 of its Draft Applicant Guidebook which is designed to guide potential applicants through the new generic Top Level Domain (‘gTLD’) application process, set to begin in 2010.

Through this process, prospective domain name registry operators who meet certain technical and financial requirements can apply for new gTLDs consisting of virtually any character string. So instead of just ‘.com’ and ‘.net’ etc, the domain name space could be expanded to include ‘.whatever’.

Faced with a barrage of opposition from within the trade mark fraternity (including concerns of increased rights protection costs), ICANN has proposed a number of trade mark protection mechanisms that will operate pre and post delegation of a new gTLD. The following points are of interest to trade mark proprietors:

Firstly, during the first round of applications ICANN will post a list of applications that satisfy an administrative check. It is at this point that applications are opened for formal objections based on four grounds:

1. String Confusion Objection – The gTLD string is confusingly similar to an existing TLD or another applied for gTLD string.
   
2. Legal Rights Objection (‘LRO’) – The gTLD string infringes the objector’s existing legal rights
   
3. Morality and Public Order Objection – The gTLD string is contrary to accepted legal norms of morality and public order
   
4. Community Objection – Opposition from a significant portion of the community to which the gTLD string may be targeted
   

Objections must be filed directly with an ICANN appointed Dispute Resolution Service Provider which in relation to a LRO is, tentatively, the World Intellectual Property Organisation’s (‘WIPO’) Arbitration and Mediation Center. Only a rights holder has standing to file a LRO, and the relevant right may include either a registered or unregistered trade mark.

WIPO, in consultation with ICANN, has developed the policy to be followed in respect of LROs. The panel presiding over the LRO must:

"determine whether the potential use of the applied-for gTLD by the applicant takes unfair advantage of the distinctive character or the reputation of the objector’s registered or unregistered mark, or unjustifiably impairs the distinctive character or the reputation of the objector’s mark, or otherwise creates an impermissible likelihood of confusion between the applied-for gTLD and the objector’s mark."

A host of non-exclusive factors are provided to assist a panel, including whether the applied-for gTLD is identical or similar to the objector’s mark and the intention of the applicant in applying for the new gTLD.

Secondly, the evaluation fee required from all applicants is $185,000 (excluding any dispute resolution or extended evaluation costs) and the annual registry fee is $25,000. This excludes the infrastructure costs involved in setting up a domain name registry, predicted to be in the region of $2 million, as well as legal fees. This is likely to deter all but the most well resourced cybersquatters (those who register familiar marks as domain names in bad faith in order to profit from the sale thereof or the traffic they attract) and ill motivated applicants from applying for a new gTLD.

Thirdly, ICANN may deny an otherwise qualified application if the applicant or any partner, officer, director, or manager, or any person or entity owning fifteen percent or more of the applicant is the subject of a pattern of decisions indicating nefarious domain name practices.

Fourthly, ICANN has formed an Implementation Recommendation Team (‘IRT’) that was tasked exclusively with devising trade mark protection solutions. In its final report the IRT has proposed several rights protection mechanisms that are meant to be ‘a tapestry of globally-effective solutions’:

1. An IP Clearinghouse consisting of a database in which trade mark proprietors can register their rights. This would be used to:


1. validate trade mark rights for use in pre-launch rights protection mechanisms (eg Sunrise schemes giving trade mark holders priority in registering second level domains eg ‘secondlevel.gltd’);


2. establish a Globally Protected Marks List of marks satisfying strict requirements (ie registration in an as yet undetermined number of jurisdictions) with the effect of limiting applications for (a) top-level domains that match or are confusingly similar to trade marks on the list; and (b) second-level domains that match trade marks on the list;


3. administer a Pre-Launch IP Claims Service that will notify new gTLD applicants and trade mark owners that a right exists for the identical term being applied for at the second level; and


4. generate data for the Uniform Rapid Suspension System (‘URS’).


2. URS which will be binding on all new registries pursuant to their contracts with ICANN, and will allow for the low-cost, rapid suspension (not transfer) of domain names that clearly infringe trade mark rights. Importantly, this will not replace ICANN’s Uniform Domain Name Dispute Resolution Policy (‘UDRP’) and proprietors could utilize either or both proceedings.


3. A post-delegation dispute mechanism designed to address systemic abuses by gTLD registry operators who eg intend to profit from infringing registrations.


4. A requirement that all registries are to provide a thick (detailed), centrally managed WHOIS database (a WHOIS database provides public access to information about domain names, including the registrant’s contact informatio).


5. An expansion of the string confusion algorithm to include a consideration of the aural and commercial impression created by the relevant string.
   

It is encouraging to note that ICANN is taking the concerns of trade mark proprietors seriously given that they stand to loose the most from the new regime through increased costs involved in defensive registrations and litigation/dispute resolution fees. However, the implementation date of 2010 may be a little ambitious, given the concerns expressed by the IP community that some of the rights protection proposals are lacking. Below are some of these concerns:

1. Inclusion on the GPML will block the registration of a domain name at the second level that is identical to a Globally Protected Mark (‘GPM’), however, no such protection is offered against second level domain names that are confusingly similar to a GPM, and thus no protection is offered against typosqautting (the practice of mimicking existing domain names by registering another domain that is only slightly different);


2. Regarding the URS, a complainant is only entitled to rely on registered trade mark rights in order to found a complaint. The UDRP on the other hand permits complaints based on unregistered rights. The purpose of this exclusion appears to be the promotion of expeditious proceedings. However, if a complainant wishes to rely on unregistered rights it is only he who would be prejudiced by any resultant delay, and he should be permitted to make such a choice;


3. The suspension of a domain name resulting from a successful complaint under the URS (meaning it cannot be sold, transferred, or assigned, and will no longer point to the registrant’s website) is only effective for the duration of the registrant’s registration. This is problematic for trade mark holders who may have to initiate URS proceedings again and again if that domain name is subsequently registered and used by other registrants in an infringing way. The transfer of the domain should be considered as a possible remedy here.
   

The internet is on the cusp of a momentous change. In my opinion the expansion of the gTLD name space is in keeping with the spirit of progress and innovation that has been the lifeblood of the internet from inception and I firmly believe that if ICANN does not rush the process, the concerns of trade mark proprietors can be adequately addressed. The IRT’s proposals have laid the groundwork, but much refining still needs to be done.