2012 heralds a new era for the internet

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Shortly after the first new .xxx domains have been introduced, the Internet Corporation for Assigned Names and Numbers (ICANN) is starting another revolution by completely opening the catalogue of generic top-level domains (TLD) in January 2012. From this date any conceivable combination of letters after the dot can serve as a TLD, such as references to business sectors (.sport) or products (.beer), places (.zurich), imaginary domains (.doremi), or even brands (.nike, .migros). This really introduces a paradigm change, as TLDs were restricted to the relatively small number of 22 to date and new TLDs were very difficult to obtain (as evidenced by the recent introduction of the .xxx domains).

For these new TLDs the important thing is not to obtain an own name, but rather a whole register of names. For example, a manufacturer of sports equipment could register the TLD .board and then operate a number of different websites under this TLD, such as snow.board, skate.board and wake.board. At the same time it can sell websites with this TLD to third parties, so that the stationery manufacturer can reserve memory.board, the producer of ironing boards can reserve ironing.board, and the travel agent can reserve go-on.board with the owner of the TLD .board.
This opening of the catalogue also eliminates the obligation to use the Latin alphabet and in future domains with names in the Cyrillic, Chinese or Arabic alphabets can also be registered, making it possible to better account for special cultural, linguistic and ethnic interests.

Applications for new TLDs must be filed with ICANN before 12 April 2012 (the application phase will start on 12 January 2012). The conditions that must be met by these applications are set out in the almost 400-page gTLD Applicant Guidebook of ICANN. The application questionnaire consists of more than 100 pages and various financial documents must be provided in addition to a host of technical information. The application formalities are so complex that applicants are advised not to try to do the application themselves, but rather to obtain professional advice. If an application meets the formal requirements and the application fee of USD 185,000 has been paid, an evaluation phase lasting approximately 12 months will start. Operational new domains can therefore be expected from mid-2013 at the earliest.

Although it is the intention to accept additional applications at a later stage, it is not yet clear when this additional application period will start. As a large number of applications are already expected for this first application period, it is unlikely that there will be a second application period in the near future. Anybody who wishes to register a TLD should therefore try to do so during this first phase. Early registrations or reservations are not possible, even though many providers have suggested that this might be the case and numerous groups and companies are already working on applications for new domains.

What will be interesting during the application process is the possibility of objections by third parties as well as the problem of different applications for the same domain. During the evaluation phase, third parties (regardless of whether they are government or non-government organisations, natural persons or legal entities) can submit their objections against domain names and lodge formal appeals. If an appeal is lodged, a dispute resolution procedure will take place, and if two or more qualified applicants apply for the same TLD, there will be a conciliation procedure. If no settlement can be reached, the TLD will be auctioned. Such conflicts are quite conceivable for domains such as .cola or .zurich.

As far as the opening of the TLD catalogue is concerned, trademark owners must decide whether they wish to have their trademark(s) registered as a TLD, and they should also think about how to defend their trademarks against new TLDs that infringe upon their trademark(s).

Whether a trademark owner should register its trademark as TLD depends on a number of arguments. Firstly, the costs of approx. CHF 2 million that should be budgeted for the first two years (taking account of the possibility of appeals by third parties, dispute resolution procedures and auctions as well as the comprehensive evaluation procedure) are quite substantial. As there is also an obligation to use the new TLDs, it does not make sense to simply register a TLD in defence or just in case, even if the budget should be available. The requirements that must be met by the technical infrastructure are also high. Taken together, this means that only large companies can really afford to register their own trademarks as TLD. The TLDs should primarily be of interest to companies whose products are often copied, as this would make it easier to see if a distributor is really part of the official sales network or not. This also holds true for companies that have a very large number of contractual distributors (e.g. .canon). The registration of generic terms will also be of interest to company associations or organisations (e.g. .law for law associations) as this TLD can then be used to allocate second-level domains (e.g. for the TLD .basel, the second-level domains could be art.basel, uni.basel, airport.basel, etc.). In any case, institutions and cities are expected to submit many applications.

Trademark owners who decide against the registration of their trademark as TLD cannot then simply forget about the issue, but need to develop a strategy for in case a third party uses their trademark or makes life difficult for them by registering terms that are often used in its business sector. Although ICANN has introduced the possibility of an appeal during the evaluation procedure as a defensive measure, a trademark owner would have to know about the existence of a TLD application before it can lodge an appeal. We therefore advise trademark owners to regularly visit the ICANN website during the application phase so that they can appeal against any applications to register their trademark as TLD in good time. Trademark owners can also register their trademarks in what is known as the trademark clearinghouse, in which case they will be informed of an application for a TLD that is the same as their registered trademark within 60 days and can then take the steps that are needed. Cases of unmistakable trademark infringement can be countered with the fast and at USD 300 quite inexpensive Uniform Rapid Suspension (URS) procedure. This is similar to the Alternative Dispute Resolution (ARS) procedure used to settle normal domain name disputes, but is much faster and cheaper. However, a successful URS procedure simply means that the TLD will be blocked, not that it will be transferred to the owner of the trademark.

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