The Internet Corporation for Assigned Names and Numbers (“ICANN”) has proposed a program to introduce new top level domains (“TLDs”), which it states “will bring about the biggest change in the Internet since its inception nearly 40 years ago.” Presently, there are approximately 21 functioning TLDs and 250 country code extensions. In June 2008, the ICANN board approved the selling of new TLDs to compete with <.com>, <.org> and other current TLDs. ICANN’s new plan will allow for extensions of 3 to 63 characters long with support for Chinese, Arabic and other non-English scripts. Although ICANN planned the program roll out for early 2009, it has yet to be launched. Its journey toward implementation has been a bumpy one, largely because of interests who believe the new system will create havoc in cyberspace.
Under the current draft rules, an applicant may apply to register any name or word as a new TLD (i.e., <.books>, <.jewelry>, <.sports>, etc.). Registration is not automatic, however, and the fees and operational requirements are expensive and daunting. The applicant is required to pay a fee to ICANN of $185,000, which is due and payable whether or not the new TLD is registered. In addition, there is an annual registry fee ($75,000 or 5% of transactional revenue, whichever is greater), an extended review fee of $50,000, and a number of other fees and costs.
Trademark holders who own large portfolios of domain names fear that the new program will create a wave of cybersquatting, phishing and malware, and additional drain on their finances. Many companies who have spent years purchasing domain names and building websites around the original list of TLDs are not happy about restarting the process. Indeed, the new TLD program may compel trademark holders to defensively register numerous additional domains (or even numerous TLDs) to protect their marks and prevent potential consumer confusion.
Recently, parties with trademark interests, have also been pushing for substantial changes in trademark protection under the new and perhaps the existing TLD program (<.com>, <.net> and <.org>). One of the most controversial suggestions is a no-cost quick take-down procedure that would substitute for the Uniform Domain Name Resolution Process (UDRP), for allegedly abusive domains. This quick take-down procedure, unlike the UDRP, would occur without notice to the domain name registrant, leaving him/her without a pre-order defense. Whether these remedies will be implemented remains to be seen.
— Deborah Logan, Esq.