ICANN’s New Generic Top Level Domain Name Process Promising, But Not Appropriate for Most Companies

December 3, 2008

By now you are probably aware of the decision of the Internet Corporation for Assigned Names and Numbers (“ICANN”) to develop guidelines and procedures which will permit companies to register new generic Top Level Domains (“gTLDs”) – the three-letter or more designation which follows the “dot” in internet domain names (e.g., .com, .net, .info, etc.). Under this new program, any qualifying party can establish a new gTLD of any string of up to 64 letters, consisting of anything from an abbreviation, to a trademark, to a personal name.

ICANN has published for comment a Draft Applicant Guidebook which can be found at www.icann.org, along with study papers, blogs, and draft application materials. The final Request For Proposal for this program will not be published until early 2009, and applications will not open for at least 45 days thereafter – probably in May or June 2009.

Although intended to provide increased space for new domain names, and promising the possibility of new marketing and naming potential, participation in the new gTLD process is not for everyone. Establishing a new gTLD will be extremely costly and require the ability to provide back end registry and server services.

We agree with other analysts that adopting and overseeing a new gTLD should only be seriously considered by companies whose businesses can be enhanced by, or which offer online services, and which can profit from the sale and use of these gTLDs. Such companies would include operators of existing domain name registries, companies which provide technical services for such registries and servers, and companies whose business consists of buying, selling, and commercializing domain names (which can be expected to establish truly generic domains such as .sports, .realestate, etc.).

New gTLDs might also be appropriate for large global commercial entities (especially those with products focused on or relating to the internet) (e.g., Microsoft, Google, Yahoo, Intel, AT&T, Vodaphone, etc.) or geographic areas (e.g., countries, states, cities, or regions).

Even beyond the necessity of establishing registry and server capabilities, registration of new gTLDs entail very high start up and participation expenses of approximately $500,000 in the first year alone:

  • $185,000 application evaluation fee
  • $ 75,000 ICANN annual fee
  • $ 30-50,000 application costs – including the cost of law firm representation, preparation of business plan, etc.
  • $120,000 annual fees for back-end registry providers (unless provided by the applicant)
  • Fees for consultant to keep registry operator and registry compliant
  • Insurance fees

These costs may decrease with the rollout of the second round of applications, but will remain substantial.

Trademark owners should, however, monitor the process because of the possibility that third parties may seek to register other companies’ trademarks as gTLD domains. ICANN has established a process for objecting to new gTLDs which will be administered by WIPO, and trademark owners should consider using a watch service to receive notice of applications to register their trademarks.

Marshall, Gerstein & Borun can assist in your consideration of registering new gTLDs and second level domain names, and establishing trademark protection programs for the internet and domain name space. Once the new gTLD program becomes operational, we can help monitor new gTLDs to protect against registration of your trademarks. Please contact any of our attorneys if you have questions or want to discuss how to best protect your company’s trademark and other intellectual property rights on the internet and in the registries.

Contact:

Michael R. Graham
Partner
Marshall, Gerstein & Borun LLP
[email protected]
312.474.6616

Gregory J. Chinlund
Special Counsel
Marshall, Gerstein & Borun LLP
[email protected]
312.474.6617

About Marshall, Gerstein & Borun LLP:

The law firm of Marshall, Gerstein & Borun LLP provides intellectual property and litigation representation in worldwide acquisition, protection, defense, enforcement and transfer of patents, trademarks, copyrights and trade secrets. Patent prosecution, litigation and transactional offerings encompass all areas of science and technology.