Imagine you could register the www.url.anything domain name.
This week the US House Judiciary Subcommittee on Intellectual Property, Competition and Internet held a hearing on the Internet Corporation for Assigned Names and Numbers (ICANN) proposal to launch at least 200 and, potentially, an infinite number of new generic Top Level Domains (gTLDs) (.COM and .NET suffixes are examples of gLTDs).
Setting impressive acronyms aside, what this means is that potential internet url suffixes are about to increase from 21 currently approved gTLDs to a potentially infinite number of truly “generic” Top Level Domains.
Now Congress wants to know how ICANN, the private entity responsible for governing the internet, intends to prevent the inevitable flood of trademark infringement. Business owners, who stand to see their valuable .COM addresses diluted with new .XYZ and other suffixes or, even worse, directly infringing suffixes (think www.google.google) should want some answers too.
Currently, trademark owners have two remedies against users who register confusingly similar domain names which could potentially divert consumers to online “knock-off” websites of major trademarked brands:
1) Sue infringers in Federal Court, per the Anticybersquating Consumer Protection Act, for money and an injunction forcing the infringer to turn over the registered domain to its rightful owners (e.g., America Online, Inc. v. AOL.org); or
2) take the infringers to arbitration via ICANN’s uniform domain-name dispute resolution policy where, after a short and relatively inexpensive process, ICANN’s arbitrators would force the domain name registrar to re-register the domain to the rightful trademark owner.
Even with the less expensive option #2 — relative to the expense of full-fledged federal litigation — business owners must spend a few thousand dollars to prevent internet infringers from free riding on their brands.
Fortunately, under the current gTLD system, there are only one or two popular alternatives to the .COM suffix that business owners need worry about policing because suffixes other than .NET and .ORG do not carry much credibility with the fairly sophisticated internet crowd. ICANN’s proposal to expand the gTLD could change that.
A virtually infinite variation of url suffixes may, and probably will, alter internet culture with regard to suffix legitimacy. Imagine companies starting to use suffixes as well as prefixes to point to their most popular services (e.g., local.google.places or instant.netflix.movies). Such novel customizability could easily end the virtual street cred associated with .COM and .NET suffixes, making it that much easier for infringers to convince unsuspecting consumers that my.facebook.bestfriend points to a legitimate Facebook service rather than some infringing knockoff or, worse, an adware/malware den.
Hoping to allay such fears, ICANN Senior Vice President Kurt Pritz testified that new gTLDs will have significant, robust rights protection mechanisms that do not presently exist in current gTLDs. Specifically, “mark holders will have the opportunity to register their marks in a single repository that will serve all new gTLDs, the Trademark Clearinghouse.”
Under the Clearinghouse plan, new gTLD registries would have to offer a pre-launch period during which registered trademark rights holders will have the opportunity to register their existing names in the new gTLD prior to general registration. Pritz added that “a Trademark Claims service will notify rights holders of domain name registrations that match marks in the Clearinghouse for a period of time at the beginning of general registration.”
While ICANN’s protection mechanisms seem reasonable for wealthy companies (read: Google and Facebook), smaller business would worry about their financial capacity to buy new domain registrations whenever a new, potentially infringing gLTD is offered by the registries.
But Pritz notes that economic studies do not support this fear. According to a study conducted by economists Michael Katz and Gregory Rosston of more than 200 top brands, current brand holders do not register names in all available TLDs, instead choosing to focus their investment on the .COM and .NET suffixes.
In other words, says Pritz, “abusive registrations do not occur at the same rates in newer gTLDs because they do not return value to the abuser.” So business owners need not worry about buying “defensive registrations” in every new gTLDs because abusers are unlikely to register those names anyway.
Unfortunately, ICANN’s diminishing returns theory is based on today’s culture where .COM and .NET suffixes maintain credibility as gTLDs for official existing brands. As discussed above, introduction of a virtually infinite number of new suffixes could very well change that culture, thereby leaving businesses with the same old litigation/arbitration options for protecting their trademarks plus an added bonus of having to police against hundreds if not thousands of brand infringing url variations.
ICANN’s proposals will be ready for final approval on June 20, 2011.
For more articles on internet business and intellectual property law, subscribe to the Handal & Morofsky blog, “Marks & Secrets” at www.handalglobal.com.
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