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This past summer the Internet Corporation for Assigned Names and Numbers (“ICANN”) approved the “New gTLD Program,” ending the restrictions on the generic top-level domains (“gTLD”). What is a gTLD? gTLD refers to the most common category of domain names used to navigate the internet (i.e., “.com,” “.net,” or “.org”). Starting on January 12, 2012, ICANN will begin accepting applications for new gTLDs. That means the internet could soon be filled with gTLDs like “.nike,” “.ipad,” or “.sport.” So, what’s the big deal? Some say that this development provides an incredible opportunity for branding a corporation, a city, or any public or private organization who can afford a new gTLD. Instead of having to navigate through McDonald’s website to find potential career options, or looking for a local branch in Anchorage, Alaska, we may soon find websites such as “careers.mcdonalds” and “anchorage.mcdonalds.”
The application fee for ICANN to evaluate your gTLD is $185,000. If your application is approved there is a fixed $25,000 a year fee for your new gTLD. On the other hand, if your application is not approved, the best you can hope for is a partial refund of your application fee. Another exciting aspect of the new gTLD program is that it will provide the opportunity for domains with non-English characters for the first time in the history of the internet. Of course, if you want the rights to the domain “.restaurant” in English, but you also want the rights to the translation in Chinese, Arabic, Japanese, and Hebrew, you will have to pay five evaluation fees and a total of $100,000 a year for maintaining the gTLDs.
ICANN, a non-profit organization, is in a position to make a lot of money. ICANN is not willing to predict exactly how many applications they expect to receive on January 12, but they concede that market speculations have estimated hundreds or thousands of expected applicants. To give you a better idea of the amount of money this program is expected to create, Peter Thrush, former ICANN chairman, helped to put this in context when he said, “The current domain name market is worth about $12 billion. We think it will expand by some $3-4 billion with the new gTLDs.” Not a bad pay-day for a non-profit. ICANN claims that the reason for the fees is to make the system self-funded, but admits it is possible ICANN may “over-collect.”
The announcement of the new gTLD program created a stir among law firms who are looking to advise their corporate clients on how to deal with this new development (if you are interested in some of these firms’ advice, click on any of these firms for a few examples: Kelley Drye, Steptoe & Johnson, Banner & Witcoff). It is clear that the new gTLD program will have trademark implications, but they may be less impactful than most people think. With the way that most consumers interact with the internet these days the only real change may come if Google or Bing decide to create a “.google” or “.bing” domain. Otherwise, consumers will likely not see much change. Brand owners will now have to be even more diligent in protecting their brands. The Anti Cybersquatting Protection Act will still apply to gTLDs (and the $185,000 application fee will likely serve as a deterrent to potential squatters), but this development will definitely lead organizations to increase domain name monitoring and enforcement in order to protect their brands.
Since it is unlikely that organizations will do more than move their websites to another domain name (or perhaps maintain two similar websites, assuming they decide to keep their original “.com”), it will be interesting to see if this new program proves to be an important branding tool, or nothing more than a way for ICANN to make a quick buck.
– Talor Bearman
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