Prospect of New Top-Level Domains Raises Trademark Infringement Concerns

The testimony of Doug Brent, Chief Operating Officer of the Internet Corporation for Assigned Names and Numbers (ICANN), before a committee of the United States House of Representatives on September 23, 2009, has raised concerns among trademark owners. In his testimony, Mr. Brent alluded to the possibility that a significant number of new generic top-level domains (gTLDs) could be authorized for the Internet domain name system.

ICANN is the organization responsible for the controlling the top-level domains available for Internet users. Among its duties, ICANN authorizes the gTLDs that are so necessary for navigating the World Wide Web. By the late 1980s, the original set of gTLDs was established and in use. These gTLDs included the ubiquitous .com, its widely used brethren .net and .org, as well as .edu, .mil, .gov, and .int. In 2000, ICANN announced the authorization of seven new gTLDs: .aero, .biz, .coop, .info, .museum, .name, and .pro. In 2005, ICANN rolled out more gTLDs: .cat, .jobs, .mobi, .tel, and .travel. ICANN also has authorized numerous country code top-level domain names (ccTLDs), such as .us, uk, and .ca.

Mr. Brent's testimony before Congress included a preview of a significant expansion of the gTLDs that could become available for use in the foreseeable future. Perhaps the most remarkable change to the domain name system would be gTLDs that themselves are trademarks. According to Mr. Brent, a company such as IBM could apply for and receive a gTLD representing the company's brand, e.g., a ".IBM" gTLD. The application fee for such a gTLD is not cheap, so the demand for such company-specific or organization-specific gTLDs may not be that significant. Nevertheless, that ICANN would make such an option available is an interesting development.

While the prospect of trademark-specific gTLDs is noteworthy, a far larger concern to trademark owners would be the introduction of more unrestricted gTLDs. In a typical domain name, such as www.icemiller.com, the ".com" portion is the top-level domain. The "icemiller" portion is the second level domain. Currently, anyone can register any available domain name that has a .com, .net, .org., .info, or .biz extension. A second level domain can be any unique string of alphanumeric characters. This provides individuals and businesses a great deal of flexibility for acquiring second level domains, but also raises issues for trademark and domain name owners.

First, it is not unusual for a domain name owner to register not only the .com version of the domain name, but also the .net, .org., .info, and .biz versions. These defensive registrations cost money, but remove the domain names from the market. The addition of new unrestricted gTLDs likely will require additional expense for defensive domain name registrations.

Second, because domain names are inexpensive and easy to acquire, the business of speculating in domain names continues to be active. I suspect many trademark owners have had the experience of undertaking the process of clearing a new trademark, only to discover that second-level domain for that trademark under the ".com", ".net", and ".biz" top-level domains already are owned by someone else, but not used by that party for any active Web site. Domain names are transferable, but domain name speculators often expect a significant return on their investment before they will transfer a second-level domain name. If the domain name was originally owned by another party before the trademark rights are established, the trademark owner is faced with the choice of paying the price for the domain name, choosing a different trademark, or choosing an alternate second-level domain name that may not correlate so directly with the trademark.

A different problem exists where the second-level domain that was acquired after trademark rights were established. If a second-level domain name is acquired in bad faith, the trademark owner has remedies available under ICAAN's Uniform Domain Name Dispute Resolution Policy (UDRP), and under the United States Anti-Cybersquatting Consumer Protection Act.

Both the UDRP and Anti-Cybersquatting Consumer Protection Act have been around for about a decade. The UDRP is an administrative proceeding that is available in the United States and internationally. The remedy available under the UDRP is a transfer or cancellation of the infringing domain name. The Anti-Cybersquatting Consumer Protection Act provides access to federal courts for resolution of domain name disputes that involve trademarks, and also enables trademark holders to bring lawsuits in rem (against the domain name), instead of against the registrant of the domain name if the registrant cannot be found. In addition to transfer or cancellation of the infringing domain name, a trademark owner that is successful in a suit under the Anti-Cybersquatting Consumer Protection Act also may recover damages and attorneys fees.

While the introduction of new unrestricted gTLDs will provide opportunities for a multitude of new domain names, trademark owners have cause for concern. Over the years, trademark owners have spent significant sums acquiring domain names from domain name speculators, significant sums acquiring second-level domain names for purely defensive purposes, and significant sums pursuing cybersquatters through UDRP and Anti-Cybersquatting Consumer Protection Act actions. The first quarter of 2010 is the date most commonly quoted for the launch of the next wave of gTLDs. Trademark owners would be well-served by monitoring the activities of ICANN between now and then, and developing strategies to deal with new gTLDs as they are released.

Tom Walsh is the chair of Ice Miller's Indianapolis Intellectual Property Group. He assists new companies and established businesses who face intellectual property issues. His experience includes patent prosecution in a variety of technology areas, licensing, intellectual property strategies, technology transactions, trademarks and franchising. Tom can be reached at: thomas.walsh@icemiller.com or 317-236-5946.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice.  The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.