As the IPKat has reported, the new generic Top Level Domains (TLD; the part in a domain name after the last dot) which allow private entities to administrate TLDs of their choosing (subject to rules and regulations) are almost certain to come. And it's not like they have been approaching in stealth mode, either, because the Internet Corporation of Assigned Names and Numbers (ICANN) has been soliciting opinions on the proposal for years.
- Misappropriation of Intellectual Property – The experts cite a key concern of misappropriation of intellectual property rights, including the “costs of domain watching, defensive registrations, litigation or other measures to end misappropriation, and costs due to misappropriation that is not blocked (e.g., lost profits due to sales of counterfeit goods or brand dilution).”
- Defensive Registrations – As noted, brand owners may be compelled to file defensive registrations, i.e., “registrations undertaken to protect legitimate trademark or intellectual property rights from misuse, not registrations undertaken as the ‘defense’ of one’s business against increased competition on the merits.” This cost alone could be in the hundreds of thousands of dollars per brand name, creating a multi-million dollar liability for major corporations and a multi-billion dollar cost to the industry.
- Domain Navigation Dilution because Consumers have More Places to Look – The experts note that the “introduction of additional gTLDs may increase the costs of Internet navigation by increasing the number of potential domains over which a user may search. To the extent that such effects arise, they can dilute the value of existing domain names as navigation devices. The costs associated with such dilution include the costs of defensive registrations . . . and the costs due to dilution that cannot be mitigated.”
- Harm to Internet Users from Increased Cybersquatting – One of the most incipient and costly challenges to the adoption of any new TLD is the prospect of cybersquatting and the substantial costs associated with preventing and policing it, which are already well into the billions. With respect to cybersquatting, the experts note, “In addition to harm in the form of increased search costs consumers may suffer more direct harm from increased cybersquatting. This direct harm may result from malware, phishing, and the unknowing purchase of counterfeit goods.” While the experts opine that such a result “may” occur, history proves that cybersquatting will occur just as it has with every TLD that has ever been administered by ICANN.
Establishment of a Trademark Clearinghouse as an information repository performing specific information collection and data validation services. A model for such a clearinghouse, as well as a mandatory Sunrise period and mandatory Trademark Claims service, have all been incorporated into the program. The Sunrise period means that rightsholders will have the first opportunity to secure domain names as desired. The Trademark Claims service provides notice to rightsholders where matching names are registered during the initial launch period. The Trademark Clearinghouse is designed to create efficiencies for trademark holders, so that rights information need only be submitted and validated once, and for other parties in the registration process, by creating a centralized source of information.
Implementation of a Uniform Rapid Suspension (URS) system as a cost-effective and timely mechanism for brand owners to protect their trademarks and to promote consumer protection on the Internet. The URS is a complement to the existing Uniform Domain Name Dispute Resolution Policy (UDRP), and will allow for rapid suspension of a registered name in clear-cut cases of infringement. Intellectual property stakeholders, governments, and representatives from multiple other stakeholder groups, spent significant time refining the details of this proposal so that it would be an efficient, low-cost, and meaningful tool for rightsholders.Establishment of post-delegation dispute mechanisms to attach liability to (i) Registry Operators that operate a TLD in a manner that is inconsistent with the representations and warranties contained within its Registry Agreement, or (ii) Registry Operators that have a bad faith intent to profit from the systemic registration of infringing domain names (or systemic cybersquatting) in the Registry Operator’s TLD. For example, a Trademark Post-Delegation Dispute Resolution Procedure (PDDRP) has been incorporated into the Registry Agreement, and provides another tool for rightsholders.
Requirement for maintenance of a “thick” (more detailed) Whois database in all new gTLD registries, and a requirement that this information is readily available to those who qualify through a centralized source, making it easier to locate wrongdoers than in the current environment. These requirements have been incorporated into the Registry Agreement.