23 Jun 2011

yeswe.cann - ICANN opens the domain name floodgates

by Jim FitzSimons, Mary Still

The Internet Corporation for Assigned Names and Numbers (ICANN), the entity responsible for the management of top-level domains, has approved a groundbreaking plan to dramatically increase the number of domain name suffixes that are available. This will enable big companies (and those with enough money) to replace ".com" with their own brand, for example ".apple" or ".coke".

From 22 to .unlimited

After years of debate, ICANN voted overwhelmingly in favour of one of the biggest changes in the web's history on 20 June, allowing a drastic expansion in the range of web suffixes available, despite fears that the shift would cause some confusion and favour large companies.

Under the new naming system, businesses will not be restricted to the list of 22 generic top level domains (gTLDs) that include ".com", ".net" and ".org" when they apply to register a domain name. Domain names will be able to end with almost any word in any language, including non-Roman scripts.

ICANN contends that the system will offer organisations around the world the opportunity to market their brand, products, community or cause in new and innovative ways. Companies in particular will have the opportunity to take greater control of their branding and develop it in their own fashion.

Canon and Deloitte are among companies that have expressed interest in creating their own, customised domain names, such as ".canon", while generic names, such as ".cars" and ".hotels", will be auctioned to the highest bidders. Other names, such as ".eco" and ".school", and place names, such as ".paris", are also likely to command strong interest from organisations and governments.

Not.cheap

The new domain names will not come cheaply or easily. It will cost US$185,000 plus the applicant's legal and consultancy fees just to apply, and a number of criteria must be met before ICANN will allow a firm to own the gTLD of its choice. ICANN will also charge an annual fee of US$25,000.

According to ICANN guidelines, only "established corporations, organisations, or institutions in good standing" may apply for a new gTLD, and applications from individuals or sole proprietorships will not be considered. Applications for new gTLDs will be accepted from 12 January 2012 to 12 April 2012, and the first possible time at which some of the applications could be approved would be late in 2012.

New domain names, old trademark problems?

From a trademark perspective, the new gTLDs have the potential to offer a blessing and produce a curse to companies. New gTLDs will provide companies with access to new opportunities to reinforce their brand names, but at the same time may expose them to expensive new challenges in defending their trademarks. The new system has not been without its opponents, with many large companies expressing concern that they may be forced to spend millions registering their brand names simply to protect their intellectual property.

Presumably London England will outmuscle London Ontario one way or another for .london, but all of the places in the US named "Springfield" (apparently the most common place name there) will conceivably be competing with each other and the producer of "The Simpsons" for that name. Will St Petersburg Russia give the Anglicised name to the city in Florida?

ICANN has worked to mitigate these issues, including maintaining a trademark clearinghouse to track registered names and establishing a new system to allow rapid takedowns of domains found to be infringing trademarks. It is hoped that the significant fees charged by ICANN for new gTLDs and the difficult application process will deter domain squattin", where opportunistic applicants seek to resell domain names for a profit after buying them cheaply, a problem in the earlier days of the internet.

Thanks to Cameron McCoy for his help in writing this article.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.