New Web Domains Complicate Trademark Enforcement
The internet just got a lot more complicated. The body that oversees the management of "top-level domain" addresses for the web, like .com and .org, agreed to allow for an almost infinite array of new domain endings, such as .phone, .coke., .advertising, .facebook, or just about anything, presenting a new challenge for brands on the web.
The Internet Corp. for Assigned Names and Numbers (ICANN), the governing body that manages web domains, said it made the decision in an effort to further open up digital distribution and enable new businesses built on new top-level domains.
"Today's decision will usher in a new internet age," ICANN Chairman Peter Dengate Thrush said in a statement. "We have provided a platform for the next generation of creativity and inspiration."
But critics see two main initial beneficiaries: ICANN itself, which will collect huge fees for anyone applying to own a new top-level domain, as well as those disputing them, and trademark attorneys, which will be kept on alert as new domains open up thousands of new potentially-infringing registrations.
"The cost is huge and the potential distractions are large," said John Hines, a partner at law firm Reed Smith. "The problem is they are out there available for the purchase. It is expensive but it is expected that entities will take advantage of the offering."
The cost to set up a new top-level domain is $185,000 with a $25,000 annual maintenance fee -- steep prices that are designed to dissuade cyber squatters who dominated domain names when the commercial internet took off a few decades ago. There will be a "sunrise" period for companies that own established trademarks where the approval process will be more efficient.
ICANN also subjects new applicants to an exhaustive process, including a comment period for anyone disputing the registration to object. ICANN will subject all applicants to a screening for criminal history or past "cybersquatting" behavior.
ICANN won't be taking applications till Jan. 12 of next year, which presumably gives companies enough time to examine the feasibility of registering new domains, but that may still prove difficult.
Yet the new domains are the most significant shift to the architecture of web addresses in more than a decade and will require a re-think of some entrenched strategies for dealing with trademarks on the web. Currently, ICANN recognizes 22 top-level domains like .com, .biz, .info and .edu, and 240 country- or territory-specific domains like .ly and .uk. ICANN is also adding the .xxx domain for adult sites, which includes its own process for trademark-owners to block the registration of certain domains.
"A limitless number of top-level domains means you are going to have to make a different kind of decision on where you are spending your money on enforcement," said Steve Abreu, trademark attorney with Sunstein Kann Murphy & Timbers. "The consumers are going to have to get smarter -- they are going to know that cocacola.soda might not be the official site. It is going to be interesting to see if brands are going to want to have their domain names in the top level that are related to their industry. Is Motorola going to care about Motorola.phone?"
Disputes around domain names has been big business for members of ICANN, and this latest move by the group could spark more business for the quasi-governmental body. According to the new guidelines, "adjudication fees for a proceeding involving a fixed amount could range from USD 2,000 to USD 8,000 (or more) per proceeding."
But costs around dispute resolution appear to have no limit. In the case where ICANN would require a three-member panel to adjudicate disputes, the group estimates costs could range from $70,000 to $120,000 "(or more)."
Based on these fees, critics claim this latest move is way to simply increase revenues at ICANN. "ICANN is going to make a lot of money," Mr. Abreu said.
Potential complications from this new world of web addresses could include instances where a company name may be broken up into a series of domains, such as face.book or newyork.times, exponentially increasing the number of defensive addresses companies typically register to maintain ownership of their brands.
The new URLs might look impressive, but they won't have any advantage in search results, according to Danny Sullivan, editor of Search Engine Land. "Search engines like Google and Bing give no particular credit or boost to generic top level domain names in general," he wrote. "They don't say, 'Hmm, .com — that 's more important than .net, give it a boost.' They don't say 'Hmm, .travel, boost any site with that over other travel sites.'"
New top-level domains will begin populating in late 2012.