A milestone has been reached in the Internet Corporation for Assigned Names and Numbers’ controversial and ambitious generic top-level domain program.
On February 6, the Internet Corporation for Assigned Names and Numbers (ICANN) announced that more than 500 new generic top-level domain (gTLD) registries are now operational and offering domain name registrations. This marked a significant milestone in ICANN’s controversial and ambitious new gTLD program, which ICANN has described as the “Internet’s largest expansion ever” and has seen the number of available gTLD domain name extensions skyrocket from 22 to more than 530 since October 2013. This milestone provides us with an opportunity to take stock of ICANN’s program and to consider where it is, where it is going, and the practical steps that trademark owners can take to build and protect their brands in this new online landscape.
Current Status of the New gTLD Program
Since October 23, 2013, when the first new gTLD registry commenced operations, an additional 508 new gTLD extensions have been introduced to the Internet. These new gTLD domain extensions correspond with generic terms that identify a variety of products, services, content, and Web users (e.g., .business, .dating, .email, .exchange, .fashion, .finance, .fund, .gripe, .healthcare, .investments, .lgbt, .money, .pharmacy, .support, .tax, .vacations, and .ventures), geographic indicators from around the world (e.g., .nyc, .london, .moscow, .paris, .quebec, .sydney, and .tokyo), well-known brands (e.g., .barclays, .bmw, .google, .hermes, .ibm, .marriot, .samsung), and in certain cases, are written in foreign scripts (e.g., .公司 for “business organization” in Chinese, .موقع for “site” in Arabic, .онлайн for “online” in Cyrillic). Some new gTLD extensions are designed for mass appeal and are generally available on a first-come, first-served basis (e.g., .guru). Other extensions are directed at discrete communities or highly regulated industries and may be registered by parties that meet specified registration requirements only (e.g., .organic). Meanwhile, certain extensions are designed for the sole use of the new gTLD registry itself (e.g., a .brand extension).
It remains to be seen whether these new gTLD extensions will revolutionize how we communicate and interact online. In fact, it remains an open question whether many of these new gTLD registries will be commercially successful. As of this writing, there are approximately 4.3 million domain names registered in new gTLD extensions, which means that, on average, each of these new gTLD domain registries have issued only about 8,450 domain names. By way of comparison, there are more than 116 million domain names registered in the ubiquitous .com gTLD extension alone.
Nevertheless, certain new gTLD extensions appear to have obtained some market traction. For example, there are approximately 780,000 domain names registered in the .xyz new gTLD extension and about 350,000 domain names registered in the .网址 (i.e., “Web address” in Chinese), which is targeted to Chinese-speaking Web users. In addition, the .club, .berlin, and .wang (i.e., “net” in Pinyin) new gTLD registries each boast more than 100,000 domain name registrations.
Moreover, as evidenced by the amount that certain parties are paying to obtain control of contested new gTLD extensions (i.e., extensions that were sought by more than one party), it appears that many in the Internet community continue to be excited by the commercial opportunities that ICANN’s new gTLD program presents. For example, one entity paid $6.76 million for the right to own and operate the new .tech gTLD registry, and the final cost for the new .realty and .salon gTLD registries were each in excess of $5.1 million. In addition, industry giants are deeply invested and engaged in ICANN’s program, and portfolio companies, such as Afilias, Demand Media, Donuts, Famous Four Media, Top Level Domain Holdings, and Uniregistry, have collectively spent hundreds of millions of dollars to secure handfuls of new gTLD registries.
The New gTLD Program Moving Forward
It is important to note that ICANN’s new gTLD program has only partially completed its initial phase. By the middle of 2017, ICANN expects to have introduced another 800 new gTLD extensions to the Internet. This number includes contested extensions, such as .app, .blog, .charity, .coupon, .data, .inc, .hotel, .insurance, .llc, .mobile, .music, .phone, .search and .store. It also includes extensions that have been allocated by ICANN but have not yet completed ICANN’s testing and delegation process, such as .bank, .buy, .broker, .cars, .contact, .dealer, .like, .love, .news, .online, .safety, .style, .sucks, .tickets, and .vip, as well as versions of .com in Chinese, Cyrillic, Hebrew, Korean, and Japanese.
In addition, ICANN is committed to opening a second application window for new gTLDs as quickly as possible. With this in mind, ICANN is undertaking a comprehensive review of the new gTLD program to determine whether it has met its intended objectives, including enhancing competition, consumer choice, and consumer trust, and what changes it should make before the proposed second phase of the new gTLD program commences. ICANN’s review will likely not be completed until 2018. Accordingly, it appears that a second application window for new gTLDs may open shortly after the last of the new gTLD extensions secured during the initial phase of the program reach the Internet in 2017.
<strong">Next Steps for Trademark Owners</strong">
ICANN’s new gTLD program has created new channels that trademark owners may exploit to reach their customers and target audiences. It has also provided new opportunities for cyber squatters, infringers, counterfeiters, and other bad actors to confuse and defraud consumers. Accordingly, trademark owners need to take proactive steps to enhance brand protections and protect their rights online. This will involve considering a trademark owner’s existing trademark registration and domain name portfolio, its current and expected business goals, and the costs associated with registering domain names in the new gTLD extensions (which may be significantly more expensive then registering a .com domain). Trademark owners should also incorporate the various tools available to them to protect their rights online.
Morgan Lewis can help trademark owners develop and implement a cost-effective and comprehensive strategy to protect their brands across jurisdictions as the Internet continues to expand. Our lawyers have been following ICANN's new gTLD program closely and have helped clients in various industries prepare for and flourish in this new space, both offensively and defensively. Moreover, we have experience with the tools available to protect trademarks online, including ICANN’s Trademark Clearinghouse, the Domains Protected Marks List blocking systems that have been implemented by several domain registry operators, the myriad domain name watch and Internet monitoring services available to trademark owners, and ICANN’s Uniform Domain-Name Dispute-Resolution Policy. If you have any questions or would like more information on the issues discussed in this LawFlash, please contact any of the following Morgan Lewis lawyers:
. New gTLD registration statistics are fluid. The registration statistics referenced above were obtained on February 12, 2015 from the websiteshttps://ntldstats.com/ and http://namestat.org/, which collect data for a variety of publicly available sources, including ICANN’s Centralized Zone Data Service, registrars, and registries.