The Internet Corporation for Assigned Names and Numbers ("ICANN") continues to steamroll forward on two important issues during and after its 40^th meeting in San Francisco on March 13-18, 2011.The meeting's two key events resulted from pressure from the Government Advisory Council ("GAC"), which represents more than one hundred national governments and supranational organizations.  First, ICANN decided to continue the headlong push to launch a program that will dramatically expand the number of generic top-level domains ("TLDs") by June 30, 2011. It addressed a small number of the GAC's many objections and agreed to work to further address the rest on an accelerated timeline.Second, ICANN approved .xxx as a new industry-specific TLD over the GAC's objections. The .xxx application is a controversial leftover from a test run of sponsored TLD applications that started in 2000.

New Generic TLD Program

There are twenty active TLDs (not including the forthcoming .xxx, described below), from popular unrestricted extensions like .com and .net to less commonly used domains like .mobi, for providers and consumers of mobile products and services, and .cat, reserved for Catalan language and culture sites. ICANN intends to launch a program that will allow parties interested in serving as registries to apply for new generic TLDs.The most current Draft Application Guidebook for the TLD expansion program was issued in November 2010.Implementation has been delayed because of the ongoing concerns of the GAC and other constituencies.  For more information regarding some of the issues raised by brand owners throughout this process, please see one of our previous client alerts and our article titled Land Rush in Cyberspace: ICANN's Proposed Game-Changer and Its Impact on Trademark Rights. There are numerous outstanding issues on which the GAC and ICANN remain divided, even after the recent consultation sessions in San Francisco. Key issues include:

• Application details;
   
• GAC wants to require applicants to justify the benefit of the proposed new TLD; and
• ICANN thinks it is "too speculative" to be useful.
   
• Cross ownership of registries and registrars ("vertical integration");
   
• Defining "community-based" applicants;
   
• Law enforcement concerns;
   
• Mechanisms for government objections to new TLDs;
   
• Technical and financial support for disadvantaged applicants; and
   
• Trademark and geographic name protection mechanisms;
   
• Conflicts between trademarks and geographic names;
   
• Dispute arbitration mechanics and standards;
   
• Registries' obligations to provide sunrise and claims notification services;Whether registrars will bear any of the IP protection costs, or just registries and IP rights holders; and
   
• Whether trademark "use" will need to be demonstrated in order to pre-register domain names containing trademarks in new TLDs, and/or for trademark-based objections against new TLDs or against domain names in those new TLDs.

ICANN expects the GAC to provide additional comments and suggestions by March 25, 2011, which it will incorporate into a final "scorecard" and into a second proposed Final Application Guidebook by April 15, 2011. After a thirty day comment period ending May 15, 2011, GAC and the ICANN Board are scheduled to have a final telephonic conference, and ICANN would then release a Final Application Guidebook by May 30, 2011.The Board would then vote, and presumably approve the new TLD program and the Final Application Guidebook on June 20, 2011 at its 41^st meeting in Singapore.This timeline remains very ambitious.Bracewell will keep you advised as the new generic TLD program moves forward.

Concerns for Brand Owners

Brand owners may be interested in doing one or more of the following: 

• Operating as a registry for a new TLD;
   
• Asserting trademark rights against new TLD applications filed by others;
   
• Owning domain names in new TLDs; and
   
• Asserting rights against domain names registered by others in a new TLD.

To have the best chance of accomplishing these goals, brand owners should start ensuring that they own up-to-date, enforceable registrations for all of their important marks.Owning registrations is important because current proposals limit recognition of common-law marks to marks validated in a court of law – a requirement that many owners of common-law marks will not be able to satisfy. In addition, because there is some doubt as to whether proof of ongoing use will be required to assert trademark rights, brand owners should consult with trademark counsel to develop an appropriate strategy. 

.xxx TLD

Notably, this is the first time ICANN has approved a new top-level domain over the objections of the GAC.ICANN insists that the applicant for the new .xxx TLD meets the "sponsorship" criteria set forth in the initial call for sponsored TLD applications in 2000, and glosses over the fact that the GAC still does not agree that the application "meets the sponsorship criteria" and does not actively support introducing the .xxx TLD. New domain names in .xxx can be registered and used only by those in the adult industry, and many will likely display adult content. If an .xxx domain name contains a brand name that is not usually used in connection with adult content, this could negatively affect the brand, especially if consumers believe the brand owner operates or is affiliated with that .xxx domain name.Trademark owners in non-adult lines of businesses cannot register domains defensively, like they can in unrestricted top-level domains. Instead, the registry will allow trademark owners to "block" .xxx domain names during the registry's sixty day tiered sunrise program, likely to launch in June 2011, and pre-declare their intent to block domains until March 31, 2011.Trademark owners outside of the adult industry will not own registration rights in the blocked name and will not be able to use it in the future. Companies in the adult industry can register domain names containing their brands (or domain names that match their domain names in other TLDs) through the registry's tiered sunrise program. Companies in the adult industry can submit pre-registration requests for .xxx domain names until March 31, 2011. 

Conclusion

The new generic TLD program may end up being the defining event of 2011 for major brand owners, and the .xxx domain name will present further enforcement challenges for brand owners.