Out-Law News 3 min. read

ICANN backs custom domains, gives brand-owners nightmares

The managing body for the internet's domain name system will massively increase the 'real estate' of the internet, letting brands and generic words become top-level domains. A legal expert said that the plans will make brand protection a nightmare.

The board of ICANN, the Internet Corporation for Assigned Names and Numbers, backed the move at a meeting in Paris yesterday. Presently, users have a limited range of 21 top-level domains (TLDs) to choose from, like .com, .org, .info.

Dr Paul Twomey, ICANN's president and CEO, said in a statement: "The Board today accepted a recommendation from its global stakeholders that it is possible to implement many new names to the Internet, paving the way for an expansion of domain name choice and opportunity."

"The potential here is huge," he said. "It represents a whole new way for people to express themselves on the Net. It's a massive increase in the 'real estate' of the Internet."

ICANN authorises the launch of every new TLD, though the launch itself is conducted by an ICANN-approved registry and the domain names are sold by registrars. Under the new proposal, applicants for new TLDs can self-select their domain name and operate as a registry. They can either use the names exclusively for their own purposes or open them for sale to third parties through registrars.

In a statement ICANN said: "It is expected that applicants will apply for targeted community strings such as (the existing) .travel for the travel industry and .cat for the Catalan community (as well as generic strings like .brandname or .yournamehere). There are already interested consortiums wanting to establish city-based top level domain, like .nyc (for New York City), .berlin and .paris."

Phil Kingsland, director of marketing and communications at Nominet, the registry for .uk domain names, told OUT-LAW.COM that the move would "present some interesting opportunities" but he stopped short of endorsing it. "We will wait and see how it pans out," said Kingsland, who attended the ICANN meeting in Paris. "We welcome that they've listened to the community and that they've reached a decision," he said.

Under ICANN's plans, a "limited application period" will invite "any established entity from anywhere in the world" to submit an application. That application will go through an evaluation process, which is expected to last nine months. "It is anticipated that there will be additional rounds relatively soon after the close of the first application round," it said in its statement.

Trade marks will not be automatically reserved, though there will be an objection-based mechanism for trade mark owners where their arguments for protection will be considered, ICANN said. Offensive names will also be subject to an objection-based process "based on public morality and order."

Kingsland said that many details of the plan have still to be finalised. The main barrier to entry for would-be registries is likely to be the application fee. There has been speculation that the cost of an application will be $100,000 to $500,000 but when it was put to him, Kingsland doubted that that figure had come from ICANN.

"We don't know for sure what it [the cost] will be, but they've spent $10 million over past three years in building this up and they said they're looking to do it on a cost recovery basis," he said. "Probably the bigger cost will come downstream, when you set up and run a registry. They'll want to make sure you're in it for the long haul."

John Mackenzie, a partner with Pinsent Masons, the law firm behind OUT-LAW.COM, said the move is bad news for brand holders.

"This has the potential for utter chaos," he said. "The attraction for domainers and cybersquatters is not going to be setting up a registry that matches someone else's brand, it will be in the generic TLDs. All of a sudden, every brand will be forced to register their name at .shop, .buy and .london to stop anyone else getting it."

Nominet's Kingsland said brand owners will have a strategy to apply to registrations currently. "Either they defensively register all the names they can or just deal with them after the fact and use the UDRP [dispute resolution process]," he said.

But Mackenzie warned that the scale will make that exercise far more expensive.

"We saw this with the introduction of .eu," said Mackenzie, who advises on brand protection. "Our clients didn't want the .eu domain name but they felt they had no choice. They had to register their brands as .eu names. Before that it was .info and .biz and all the others. Each time a new TLD is introduced, large brands spend a fortune on defensive registrations to avoid the greater expense of recovering the names from cybersquatters further down the line. ICANN has just multiplied those costs. It's a brand owner's nightmare."
Upon approval of the implementation plan, it is planned that applications for new names will be available in the second quarter of 2009.

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