Out-Law Guide 5 min. read
27 Jun 2011, 5:35 pm
The Internet Corporation for Assigned Names and Numbers (ICANN) is the body which oversees the system which identifies websites. ICANN establishes the policies which govern the use of generic top-level domains (gTLDs).
gTLDs are the suffixes which appear at the end of many web addresses. They include familiar suffixes such as '.com', '.org' and '.net'. They do not include country-specific domain suffixes (ccTLDs), which are administered by separate bodies. For example, '.co.uk' is administered by a separate body called Nominet. Globally, nearly three quarters of web addresses are '.com' domains.
Until now, ICANN has only approved 22 general use gTLDs. On 20 June 2011, it announced that it planned to extend the number of gTLDs which can be used to identify websites. In theory, this means that in the long term we could see virtually anything appearing at the end of a domain name in any language.
It is worth understanding the changes as they present opportunities and risks for how you use your internet addresses to reach customers and stakeholders. This guide summarises the key points for businesses to consider when deciding whether to apply for any of the new gTLDs.
ICANN will begin to accept applications for a first batch of new gTLDs from 12 January 2012. This first applications process will run for three months and be limited to 500 applications. It is likely that ICANN will open up subsequent batches of applications towards the middle of 2012.
ICANN has said that it expects between 300 and 1,000 new gTLDs will be created every year under the new system.
The cost to file an application is $185,000, plus further possible fees for evaluation of the application. A decision on a gTLD will take 9-20 months from filing.
The applications process is deliberately difficult. Applicants need to complete an online application and meet very specific criteria, such as proving to ICANN that the applicant has a legitimate claim to run a particular domain.
A $5,000 deposit is due with the application. Once the application paperwork is complete, and in order to trigger a formal evaluation by ICANN, another payment of $180,000 is required. ICANN may charge more fees as the application goes through its process depending on the nature and complexity of the application.
Once an application has been submitted and the $185,000 paid, the application is evaluated by ICANN. ICANN estimates that the evaluation process will take between nine and 20 months for each gTLD. It is therefore unlikely that internet users will see the new domains in action before the start of 2013. The cost of maintaining a registration will be $25,000 per year.
It is up to the applicant to make the case for a new gTLD. ICANN is not releasing a list to choose from. For example, a bank may apply for '.bank' or its own brand '.barclays' or '.lloydstsb'.
There will broadly be two types of applicant who may become new gTLD registrars. These are outlined below.
Brand owners: a brand might apply for and register its own name as a gTLD. For example, a consumer brand such as Nike might apply for and register '.nike'. The result is that Nike will be itself responsible for administering that domain in the same way that a registrar for a '.com' domain does today. Nike could use its gTLD to assign addresses ending '.nike' - including websites and email addresses - to anyone.
A brand owner is likely to use the domain suffix for its own business and possibly for its distributors. It could go wider and offer '.nike' addresses to Nike fans or retailers. Alternatively, Nike could apply for '.nike' with the intention of using it very restrictively. Nike could restrict use of the domain to its own business sectors, for example 'trainers.nike', 'tshirts.nike' or 'golf.nike'.
At its most restrictive, the company could register '.nike' just to stop anyone else registering it and continue to use its own 'nike.com' domain instead.
Existing registrars and entrepreneurs: part of ICANN's motivation is to encourage innovation. It is opening up a new market for existing registrars or entrepreneurs to register any gTLD they want and sell the domains on. For example, possible attractive gTLDs could be '.cookery', '.books', '.running' or '.electricians'.
If these sorts of gTLDs are registered, the applicant will also have to run a complaints procedure and dispute resolution procedure, similar to the ones already run by ICANN and Nominet.
The $185,000 entry cost for applying to register a gTLD means that this generic TLD market will be limited to the big community gTLDs which might come from hobbies or utilities.
One of the reasons that ICANN is charging so much is to put off cybersquatters.
In theory, anyone can apply if they are willing to pay the $185,000. The ICANN evaluation process will include background checks on the applicants and checks on registered trade marks and brands in use generally to try to spot potential conflicts.
Brand owners cannot 'reserve' their own brands. Either a brand owner applies itself or relies on ICANN to take note of its rights through finding out about them through public searches. The brand owner must watch for and object to applications. ICANN will publish lists of applications.
There has been some discussion about whether these new gTLDs could increase the amount of cybersquatting already happening. For example, Canon cameras may register '.canon' as a gTLD. However, if someone else has registered '.cameras' or 'flash' and is offering anyone a domain registration with this gTLD, it is predictable that a third party might try to register 'canon.cameras' or 'canon.flash'. This then becomes another domain name and potential active website which Canon would have to act on using its global trade mark rights. The registrar of '.cameras' or '.flash' would have to operate a dispute resolution process to sort out trade mark conflicts. The company would have to use this process, or the trade mark laws in the relevant jurisdiction, to have the domain name reassigned to it.
Brand owners or other parties will be able to file an objection to a potential registration during the evaluation process.
There is no process to reserve a brand or to have any caution entered against a brand. As things stand, the onus is on the brand owner to watch the ICANN lists for conflicting applications.
There are likely to be lots of disputes. Some of these disputes will be competitions between two brand owners about exclusivity of a brand, for example, between the multiple owners of trade marks for 'Apple', 'Sun', 'PC' and 'Polo'. Where there are two or more legitimate owners of a brand, ICANN attempts to resolve the dispute using a 'points' system. If this fails, then ICANN has the right to sell the gTLD by auction.
There will also be brand owners which have a community of interest because they all serve the same market, for example '.trainers', '.houses' or '.builder'. It may be attractive for them to club together to share the cost of the gTLD and manage the domain jointly. However, this could be seen as anti-competitive depending on what is agreed and how dominant the players are in the market. A parallel can be drawn with luxury and technology brands that operate approved distributor networks. These networks need to be objectively justifiable and open to all who pass the criteria.
There is no single solution for businesses. For some companies this is a lot of money to speculate on the benefit of replacing existing, known and accepted .com and .co.uk domain names. However, the switch could form part of a wider re-brand.
There are two important considerations to bear in mind:
See: Draft ICANN gTLD Applicant Guidebook (352 pages / 4.8MB PDF)
See also: Domain name disputes services