Friday, July 22, 2011

Will New Top-Level Domains Provide Opportunity, Heartache, or a Big Nothing?

Once again, ICANN (Internet Corporation for Assigned Names and Numbers), the nonprofit organization responsible for, among other things, maintaining registries of Internet protocol identifiers and management of top-level domain names, or TLDs (e.g., .com, .org., .gov.), has authorized the expansion of TLDs. Apparently, it has decided that the currently available 22 generic TLDs approved for general use, plus a bunch of country code TLDs, are not enough, or maybe it has determined that there is simply no reason to limit the number of TLDs.

In its most recent action, the ICANN Board of Directors voted to open all the gates to allow registration of virtually anything as a TLD. The expectation is that companies will apply to register their company names or major brands, while others will apply to register generic names, such as .law, .hospital, or .park, with the intent to charge others to use such TLDs. The one-time fee for the application is $185,000 ($5,000 payable at the time the application is requested and the balance upon submission of the application), plus an annual fee of $25,000. Initial applications will be accepted from January 12, 2012 through April 12, 2012, with subsequent application periods to be announced.

For a good beach or cabin read, check out the new gTLD Applicant Guidebook. No need to hurry. It’s still a draft and, I believe, under revision for the fourth or fifth time. The current version is 352 pages. I’ve only skimmed the document (guess I haven’t had enough down time at the cabin lately), but noticed that the estimated evaluation period for the first batch of applications is somewhere between nine and twenty- two months! Also, additional fees and costs might be required during the course of the evaluation.

As with domain name registrations, the gTLDs will be granted on a first-come, first-served basis, but only if the first in line has completed the application process before a subsequent application is filed. Where there are two or more pending applications for the same gTLD, the subject applications will be assigned points in various categories and the one with the most points will win. If there is a tie, the gTLD will be granted to the highest bidder. The owner of a company name or brand represented by the gTLD is not guaranteed to win, but will be entitled to some preferential treatment.

Any interested party can file an objection to any application during the evaluation process for an as-yet unknown fee.

I’m surprised at the number of people who think there will be a rush to register these new gTLDS. Does McDonalds really need a personal TLD to identify its official site or prevent confusion with others? Who even searches using TLDs? Is this a golden opportunity for budding entrepreneurs to become registrars for .health, .law, or .doctors? Before jumping on this, consider how often you see the use of some of the lesser known TLDS that are currently available: .aero, .pro., .name. Will we lose competitive ground if we don’t register in addition to Is this just another opportunity for the scam artists to inundate me with warnings about others trying to register my name or brand as a TLD?

And while percolating on the now unlimited options one has for TLDs, remember that .xxx will now be available for individual monopolization as ICANN recently approved this suffix as a TLD .xxx for use by providers of adult content sites. Policies have not yet been finalized for implementing this new TLD, but it appears certain that trademark owners outside the adult entertainment industry will be given an initial opportunity to file a blocking application to prevent others from registering their name or brand with the .xxx TLD during a “sunrise” period. This period is currently scheduled to begin in September. While the fee for filing a blocking application is expected to be less than $1,000, costs could mount up if a company has several brands, or tries to cover all variations of a company name or brand.

Before you panic about the protection of your name or mark, think about a third party’s use of the .xxx TLD. Will a client or prospective client really not know if we are or Will I accidentally end up at when looking for that cute Baby Gap® outfit? Will I believe that Pillsbury has finally gotten the Pillsbury Doughboy® to pose nude at*

Once again, there is likely to be much ado about nothing, but that’s not to say that both established businesses and budding entrepreneurs should not be thinking about these things and whether or not there is a real concern to be addressed or opportunity to pursue.

*Before you get too excited, a fully-clothed Doughboy® only wears a scarf and a chef’s hat.

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