Over the last several years, ICANN¹ which has been working on a process by which the domain name space can be expanded. Currently, ICANN has approximately 20 generic top-level domain names (or gTLDs, as they are called) under its umbrella. The most well known gTLD is the <.com>. Other current gTLDs include <.net>, <.org>, <.info> and <.biz>. ICANN now intends to expand the domain name space by allowing new gTLDs. New gTLDs can be for generic terms, for example, <.copier>; branded terms, for example, <.canon>; ² geographical indicators, for example, <.nyc>; and community terms, for example <.floridians>.

Within the last month, ICANN has taken two significant steps towards launching the first public gTLD application round. On May 30, 2011, ICANN published the final version of the gTLD Applicant Guidebook, which provides significant information about the application process. And on June 20, 2011, the ICANN Board adopted that version of the Guidebook and announced that it will accept new gTLD applications during the window of January 11, 2012 through April 11, 2012.³

Over the next several months, ICANN will be educating the general public about the availability of gTLDs through a mass-marketing campaign (dubbed the ICANN Global Communication Campaign). As a result, attorneys of all kinds, including transactional, intellectual property, and in-house attorneys, will inevitably be asked the question: “Does our company need a gTLD?”

The new gTLD process will allow interested applicants to apply to become the registry for the new top-level domain name of their choice, subject to trademark protections and competing applications for the same top-level domain names. The costs associated with applying to be the registry for a top-level domain name are significant, including a $185,000 application fee, which ICANN will collect for each application.

Owning a gTLD will not be like owning a domain name; gTLD owners are required by ICANN to play a very active role in managing the use of terms on the left side of their gTLDs. Additionally, not only will the proposed gTLD be evaluated (similar to a trademark application), so will the applicant itself, as gTLD ownership is seen by ICANN as a significant role in the Internet community.

While the costs are high, if a brand owner does not apply in the first round of new gTLD applications and another party obtains a gTLD which is confusingly similar to that brand owner’s mark, there is a very good chance that the brand owner will be permanently precluded from expressing its brand as a top level domain name. This is especially true if the brand name is shared by different companies in different industries (for example, DELTA airlines and DELTA faucets). As a result, any decision not to pursue a new gTLD for a brand should be made at the highest level, since the decision could prove permanent.

The announcement of the application window for new gTLDs is significant because it allows brand owners to establish an internal timeline for making the very important gTLD decision. Important pre-application activities include:

1. discussing the benefits, risks, and potential costs of action and inaction with marketing, legal, eCommerce, and C-level management;
2. identifying a suitable backend registry provider;
3. negotiating a backend services agreement; and
4. if applicable, filing an intent-to-use (ITU) application for backend registry services.

In other words, brand owners should not wait until January 2012 to begin the gTLD evaluation process. Even if brand owners decide not to pursue gTLDs, they will need to monitor third-party gTLD applications for potential conflicts.

¹ICANN is the Internet Corporation for Assigned Names and Numbers. ICANN is responsible for the Internet’s domain name system. For a further discussion of ICANN and its role, see McGrady on Domain Names, §1.14 available on http://www.Lexis.com.
²Canon has announced that it intends to acquire registry rights for the .canon top level domain name. See http://www.canon.com/news/2010/mar16e.html.
³ICANN will not give any priority preference to applications filed earlier in the application period.