Protecting Your Trademark During the Unlimited gTLD Process

If you own a trademark, start preparing for ICANN’s near-unlimited gTLD application process, which begins January 12, 2012. While not all trademark owners will be applying for one of the newly available, near-unlimited general top-level domains, if you own a trademark and market your product or service on the internet, this post will provide some insight into steps you may take to protect your trademark and brand.

First, let me address the aspects of the application process that are important for businesses who are looking to protect their trademarks and brands from potential infringement. After years of debate, the Internet Corporation for the Assignment of Names and Numbers (“ICANN”) will begin accepting applications for the creation of domains beyond the traditional “.com”, “.edu” and “.asia”. brand owners will be allowed to register their own brand name. For example, “.honda” or “.pepsi”.

Not all brand-owners will be able to obtain their .brand. For example, if your brand is only two letters, such as HP, you will not be able to register your trademark. New applications under the gTLD scheme must be at least three characters, in order to distinguish the new gTLDS from geographic TLDs such as .us and the ever popular, .tv.

Second, in an attempt to discriminate against potential cyber-squatting, applicants must face an onerous and expensive application process; management of the applicant are subject to a background check and individuals and sole proprietors are prohibited from applying.

Additional hurdles are in place where multiple parties lay claim to the same .brand. For example, consider the various products offered under differing “delta” trademarks. An airline, a faucet-maker, and a dental services company, among many others, may have a viable claim to the .delta top-level domain. Also, your .brand application may be rejected or face objection if it is generic or identifies a geographic location – even if translated into a different language. This is particularly challenging to software and internet companies.

So, brand-owners have two options. First, they may take a a purely defensive stance during this first round of applications. Under this strategy, brand owners would wait until April 27th, when ICANN will release the applied-for gTLDS and the identity of the applicants. At that point, trademark owners can examine the list of applications and identify whether any application(s) potentially infringe or are likely cause consumer confusion with the rights holder’s mark(s). The trademark owner may invoke the objection process under one or more of four enumerated grounds. As of this date, it is unclear how much it will cost for a party to object to an application, however it is safe to assume that costs, including attorneys’ fees should reach well into five figures.

Monitoring under the gTLD process is much easier than a traditional trademark monitoring regime. During this first round of gTLD applications, if the number of applications exceeds 500 ICANN will process the applications in 500 batches with a cap of 1,000 applications per year. So, unlike a traditional trademark monitoring program, where applications are constantly flowing into each country’s respective trademark office, there is a finite number of applications that will be accepted and processed in a given calendar year.

A second option, and much more risky, is to adopt a more active defensive position to the .brand application process. Under an active-defensive strategy, the brand owner would apply for its brand and possibly some additional variations on their brand. This strategy requires that the brand owner have the financial and technical capacity to manage one or multiple domains, and be able to master the application process. This may involve outsourcing the technical aspects of domain registry to a capable third-party, and hiring a consulting firm to advise on completing the application. This strategy might be used by a trademark owner with sufficient financial resources to tie up a minimum of $185,000 in application fees for nine months or longer and who might not actually want to manage the domain, so much as control it, or who has some idea about what they would do with the domain registry, but is not entirely clear. This strategy is clearly risky, and an applicant adopting it risks losing all or part of their application fees if their application is rejected. This strategy is also inapposite to the intentions of ICANN, but could buy a brand-owner sometime in the event there are a flood of applications.

At the end of the day,companies may struggle to develop a business case for applying for their .brand. While some companies, such as Pepsi, have stated that they do not intend to apply for .pepsi, others like Honda and Hitachi have announced that they will file applications. However, despite announcing an intention to apply for their .brands, brand-owners have not revealed their intentions for their respective .brands.