New gTLDs: Shaking up the Internet

June 17, 2010

In June 2008, ICANN, the body responsible for governing domain name extensions worldwide, passed a proposal that set the scene for the introduction of Internationalised Domain Names (IDNs) and new generic Top Level Domains (gTLDs). These changes had different objectives but one common goal of creating a more diverse, accessible and open Internet landscape.

IDNs have been widely supported since inception as it was clear they had the potential to change Internet communication across Asia, the Middle East, Eastern Europe and Russia, and open up the Web to some 4.5 billion people that are not yet online.

Before IDNs were introduced, the Internet had to be navigated in Latin script, yet there are thousands of different languages using many alphabets to conduct day-to-day communication. The country code top level domain, for China, for example, is .cn but the introduction of IDNs means that, in the future, there could be a domain for China expressed in Chinese characters.

This acceptance for IDNs from the Internet community, and ICANN’s commitment and ability to ‘fast track’ the IDN process, has allowed IDNs to become a reality in several countries including the United Arab Emirates, Saudi Arabia, the Russian Federation, and Egypt.[1] As of May 2010, local businesses and consumers in these countries have been able to get online and use the Internet exclusively using their native alphabet. Before they would have needed a ‘foreign’ Roman keyboard that would allow them to type the characters needed for the domain name.

Pick and mix of domains

New gTLDs have not been met by everyone with the same acclaim as IDNs. The decision to introduce new generic domains has split the Internet community, with one camp believing gTLDs will spawn innovation and choice, and the other stating it will cause further complications with increased opportunities for phishing, fraud and online trademark infringement.

Supporters of gTLDs are excited by the prospect of potentially hundreds of new Top Level Domains (TLDs), which they believe will provide opportunities for businesses and more choice for consumers. These domains are likely to fall under three main headings:

·         domains for specific sectors of business, like the existing .travel and .aero

·         community domains, such as the .cat domain, which already exists for the Catalan speaking communities

·         brand specific domains registered by large corporations to ring fence their online identity with their own .brand domain.  

Community domains such as .cat and future city domains such as .london or .berlin have been hailed as potentially useful expansions of the domain name system, bringing together people and information that share the same interest and goals and making it easier for consumers to navigate the Web and locate information quickly.

New business opportunities are also a possibility with sector specific gTLDs. Currently identical trademarks can be used in different fields of use, and companies operating in different countries can have identical or similar names in ignorance of each other. However, there are limitations to this as there are a relatively small number of gTLDs at present and registrations are dominated by .com and .net (together accounting for 85% of current gTLD registrations[2]). New gTLDs could benefit companies that were unlucky enough not to get their desired domain name in the first place or which have been started more recently.

The domain space that companies have been most vocal about is the brand specific domains; Canon for example, announced in March that it will bid for .canon as soon as possible stating that it will ‘globally integrate open communication policies that are intuitive and easier to remember compared with existing domain names such as’. Canon believes the new domains will help to ‘increase the convenience and effectiveness of its online communications’.[3]

Brand owners who are considering following in the footsteps of Canon need to  consider whether the potential benefits of having their own .brand outweigh the financial and operational investment required. Whilst many corporations would like to completely align their Web site address with the community they are targeting by owning their own gTLD, there are several expenditures to consider when applying to run one.

To illustrate, the administration fee for ICANN for a ten-year contract is set at $185,000. There will also be ongoing operational overheads including the running of the gTLD and a potential corporate re-branding exercise. In addition, the company will have to make sure it is able to run the registry to ICANN’s technical and operational standards.

Downfall of new gTLDs

However, not all companies are viewing gTLDs as a ‘not-to-be-missed’ opportunity. Certain multi-national brands are concerned that the changes to the domain name space will increase the costs and time required to monitor their brand and reputation online. They argue that these costs are already out of control and that a tightening of the rules and more effective controls should be applied to the existing systems for Web addresses before any expansion can be seriously considered.

In fact, some comments on the recent draft Applicant Handbook[4] from ICANN suggest that neither the monetary, administrative and legal burdens brand owners will incur nor the fraud and abuse in the system as it currently exists, which will be amplified by the rapid addition of new gTLDs, were reflected by the handbook. This ICANN handbook is still under review and not yet finalised.

With brand infringement amongst existing gTLDs, companies have the option of using dispute resolution services such as the Uniform Domain Name Dispute Resolution Policy (UDRP) to resolve any trademark issues. However, the required format of dispute services for new potential gTLDs is yet to be finalised. The latest Draft Applicant Handbook from ICANN proposes to act to ensure trademark protection measures are strong by outlining details of the following:

·            Trademark Holder Clearinghouse: a universal database for trademark holders that would be used by all registries during the trademark sunrise period. This would not be a reserved list, but a simplified process for validating trademark holders when a new TLD is launched.

·            Uniform Resolution Suspension (URS) Process: a cheaper and faster process for trademark holders similar to a UDRP, however URS would be done completely online and could be submitted in bulk. Another key difference to a UDRP is that domains would only suspend in a URS and not be turned over to the trademark holder. 

·            Post Delegation Dispute Mechanism: a formal process to handle systemic abuse by a registry. This would address the issue of a registry facilitating trademark violations or not taking the appropriate steps to address trademark issues after a TLD has delegated.

Preparation, preparation, preparation

Even though there are parts of the new gTLD process that are yet to be finalised, there is now sufficient information available for companies to prepare for launch of these pending domains.

Firstly, companies should familiarise themselves with ICANN’s process and consider participation in the development of policies that will directly impact them. If they wish to apply for their own .brand domain there will be a huge amount of investment, both in terms of budget and technical preparation.

Companies should monitor news about when the proposed new gTLDs process is launched, and should ensure that they become aware of applications for a new gTLD. This will allow a brand to participate in the objections-based process, which allows organisations to present how a proposed gTLD infringes on their rights ahead of its approval.

The next stage is for an organisation to consider whether they are interested in registering their company’s trademarks across all the different new gTLDs as a preventative measure or whether they would rather wait to see whether their trademark is infringed before taking protective steps. If there are several hundred new gTLDs, this could be a significant decision.

If the chosen route is to register the brand defensively, it is vital to be aware of the launch dates for the relevant new gTLDs to ensure that a desired domain is not registered by someone else first.  

It is equally important to be aware of the renewal dates of all domain names registered to prevent them expiring and falling into the hands of a third party. 

As long as organisations monitor the ICANN application process stringently, the opportunity for encroachment on trademarks at the gTLD stage will be reduced and their brands will be better protected. 

Future landscape of the domain name industry

The application to run new gTLDs has not yet opened, so it is very difficult to predict how many applications there will be given the costs and technical hurdles. What is clear is that the new domains could have a major impact on the domain industry and, by implication, online brand protection. 

How companies respond to the proliferation of new gTLDs will depend on their strategy for managing domains, and this will definitely need to be revised in preparation for the launch. Cost may be an important factor – applying for your own .brand gTLD could be a one-off marketing opportunity and a major investment. Defensively registering in every suffix through a series of new sunrises will also take significant time, money and planning. In the current economic environment, many organisations may take a more pragmatic view and register only the most relevant domain names in order to save costs. Either way, it would be foolish to completely ignore this major new development in Web addressing.

Now is the time to start planning for this potential proliferation of names and ensure that organisations are as prepared as they can be for a new domain landscape.


Nick Wenban-Smith is senior legal counsel at Nominet.


[2] Source: Verisign Domain Industry Brief June 2010