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Some FAQ’s on the new gTLDs (generic top-level domains).

4 January, 2012

 

Legal News & Analysis – Asia Pacific – Hong Kong – Intellectual Property – TMT

 

 

What is a gTLD?
 
A "generic top level domain" or "gTLD" refers to the suffix at the end of an internet address, for example, the .com, .net, .org or .edu strings that most people are familiar with. Currently there are 22 gTLDs but ICANN (Internet Corporation for Assigned Names and Numbers) has now approved a new gTLD programme that could result in hundreds of new gTLDs.
 
Can you give me some examples of new gTLDs?
 
A new gTLD can be any string of three or more letters or, in scripts that do not use the Latin alphabet (such as Chinese, Arabic or other scripts), two or more characters. Numbers and punctuation are not permitted.
 
Possible categories of new gTLDs could include:
 
  • Generic such as .legal, .fashion, .chocolates or .bank

 

  • Brands such as .gucci, .rolex or .apple

 

  • Associations or communities such as .christian
 
Why introduce a new gTLD program?
 
The program was developed to increase competition and choice into the internet addressing system. Under the new program, internet address names will be able to end in almost any word, in any language. In theory, this will offer organisations around the world the opportunity to market their brand, products, community, or cause in new and innovative ways.
 
Is applying for a new gTLD the same as buying a normal domain name?
 
No. Applying for a new gTLD is much more complex. An entity applying for a new gTLD is essentially applying to become a domain name registry operator. This involves a number of significant responsibilities as the applicant will, in fact, be creating and operating a registry business. An applicant will be assessed on its financial, technical and operational capability to maintain a gTLD.
 
A successful applicant will become an internet registry under a 10 year renewable contract. A gTLD operator will control the gTLD, including determining which second-level domain names (names to the left of the dot) are registered and by whom.
 
Will it be expensive?
 
Yes. The initial evaluation fee is estimated at US$185,000. Applicants will be required to pay a US$5,000 deposit fee per requested application slot. It is estimated that the initial cost of establishing a new gTLD could be as much as US$300,000, plus ongoing annual operating costs (including ICANN fees) of US$125,000 or more. Additional fees for application evaluation and objections may apply.
 
A gTLD applicant must submit a letter of credit, or make a deposit into a cash escrow account, in an amount equal to the estimated costs for operating the gTLD registry for three years.
 
So what businesses would benefit from a gTLD strategy?
 
The following are likely to benefit the most:
 
  • large multinationals;

 

  • companies with large numbers of sub-brands or continually evolving new products which would normally entail new domain names (such as a movie studios or record companies);

 

  • organisations that are interested in owning and controlling whole categories;

 

  • existing registries; or

 

  • entities that are already leasing internet "real estate" (such as eBay).
 
Who might not benefit?
 
 
Companies with an established and recognized .com brand may not feel the need for a branded gTLD as there may be no benefit in terms of market positioning or branding.
 
Brands with a moderate internet presence may not need a unique domain and it would not be worth incurring the significant cost of establishing and maintaining a gTLD.
 
On the other hand, some established businesses with many products and a large and diversified portfolios of brands which are the primary source of identification for the public, may find it difficult (and expensive) to purchase the gTLD for all its products or brands. In some cases, the master brand may not have broad consumer recognition.
 
So why apply for a gTLD?
 
Enhancing brand value
Owning a gTLD can be prestigious and could raise awareness and facilitate promotion of a specific brand. The new gTLDs will give organisations more control over their corporate image on the internet. As well as enhancing brand equity by having product names and/or sub-brands associated with the master brand, businesses may be able to rationalise their online presence, by using their chosen gTLD domain name.
 
Enhanced security and control and extending brand trust
As the gTLD operator, a company would be able to set the requirements for second-level domain name registrants. A .brand gTLD may be able to control counterfeiting by helping to assure internet users that they are dealing with a legitimate company and an authentic web site. Also, by only issuing second-level domain names to valued partners and resellers, companies may be able to extend the prestige associated with their brands and strengthen the trust between their partners and consumers. This may also help to create new marketing opportunities.
 
Making money
If implemented successfully, a new gTLD may also be able to generate significant revenues for organisations through managing the registration and renewal of domain names.
 
What protection will there be for trade mark owners?
 
In addition to the existing Uniform Dispute Resolution Procedure (UDRP), ICANN will be introducing a number of further mechanisms for the protection of trade mark owners.
 
"Sunrise period"
All new gTLD registry operators will be required to offer a pre-launch sunrise period of at least 30 days before the registry opens for registration to the public, to allow trade mark owners to apply for their trade marks as a second level domain name registration.
 
Trademark clearinghouse
A Trademark Clearinghouse will be established where trade mark owners can record their rights. The Trademark Clearinghouse will be a centralised database containing a list of word marks registered in different countries with authenticated documents evidencing an owner's trade mark rights. New gTLD registry operators will liaise with the Clearinghouse to obtain the required trade mark information for the Sunrise and Trade Mark Claims Service.
 
The Trade Mark Claims Service will operate to notify a trade mark owner if a trade mark in the Clearinghouse is registered as a domain name. It is understood that a notice will only be triggered where the registration is an "identical match" so that not all registrations containing a particular mark will result in a notice to the trade mark owner. Therefore, the Trademark Clearinghouse will not be a substitute for an independent watching service. In any case, a service provider for the Trademark Clearinghouse has not yet been selected and it is unclear when it will be operational.
 
Uniform Rapid Suspension 
A new type of proceeding, the Uniform Rapid Suspension proceeding (URS), will operate in tandem with and, as an alternative to, the UDRP. However, the remedy will be the suspension of the domain name for the duration of its registration period, rather than its transfer or cancellation, as under the UDRP. The procedure is similar to the UDRP but is intended to be much faster. However, the URS requires "clear and convincing evidence" so the burden of proof is higher than that required under the UDRP.
 
Filing a URS complaint may be appropriate where infringement is clear and the trade mark owner wants an expedited suspension of the domain name.
 
Post-Delegation Dispute Resolution Procedure 
There will also be a Post-Delegation Dispute Resolution Procedure (PDDRP) to provide a remedy for trade mark owners against registry operators who engage in a pattern of bad faith exploitation of domain names. Convincing evidence of activities that take unfair advantage of the distinctive character or reputation of the owner's trade mark could result in suspension of a registrar's business or even termination of the registry agreement. However, it will be necessary to show affirmative conduct and bad faith on the part of registry operator.
 
When does the application process for the new gTLDs start?
 
The program will be launched on 12 January 2012 and the application window will close on 12 April 2012. The date for the second round of applications has not yet been announced.
 
 
For further information, please contact:
 

 

 

 

 

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