.[YOUR NAME HERE]: New Domain Name Roll-Outs Underway

 The launch of .XXX and other generic top level domains (gTLDs) will complicate the domain name strategies of retailers and other brand owners. Domain name registration services, such as GoDaddy.com, have been advertising the new .XXX domain to everyone, including those not affiliated with the adult entertainment industry. Second level domains (SLDs) on .XXX are now generally available and almost 200,000 have already been registered. Meanwhile, the Internet Corporation for Assigned Names and Numbers (ICANN) has begun a roll-out of potentially hundreds of new generic top level domains (gTLDs) in four categories: .brand, .generic, .geographic, and .community. The application period for these new gTLDs is open until April 12, 2012, and the first gTLDs are scheduled to go live in early 2013.

Most retailers will not have the resources or business needs to register and administer gTLDs themselves. As the domain name landscape changes, however, retailers should consider taking the opportunity to grab SLDs under .XXX and other gTLDs. Below are some important considerations in weighing the costs and benefits of registering new domains for one’s own use or to prevent use by others:

  • The going rate for .XXX domain names is approximately $100 per name per year, which is nearly ten times the typical price of a .com address. Nonetheless, retailers with potentially valuable .XXX names may want to consider proactive registration in order to avoid more expensive trademark enforcement costs in the future. Domain names registered by retailers outside of the adult entertainment industry will not resolve to a website but will be off limits to others who might use the names for unsavory purposes that could tarnish the retailer’s brand.
  • New gTLDs have an initial application fee of $185,000 and are estimated to cost the successful registrant $500,000 - $1,000,000 in further application and registry maintenance fees and administration expenses during the first two years. While this price tag is beyond the reach of most retailers, if another entity acquires a related .community gTLD such as .retail or .store, it may be worth registering an SLD in that community. This would be especially important if search engine algorithms, adapting to the changing gTLD landscape, rank relevant gTLD names higher than other sites.
  • Buyers of new gTLDs and buyers of SLDs under .XXX or another gTLD must agree to submit to arbitration to resolve any disputes arising from their registration and/or use of the domain. For .XXX domains, the costs and forums for such arbitration proceedings depend on when the domain was registered and how clear the infringement is. For more information on arbitration options, see the National Arbitration Forum website and the Uniform Domain Name Dispute Resolution Policy (UDRP). UDRP arbitrations can easily cost several thousand dollars or more.
  • For gTLDs, arbitration will be available after the application period closes. ICANN will publish a list of proposed gTLDs around May 1, 2012, and there will be a seven-month comment and opposition period during which objections can be filed on the basis of string confusion, legal rights, limited public interest, and community objections. These disputes will then proceed to arbitration.
  • ICANN’s Trademark Clearinghouse, where trademark rights holders can pay to register their names, is expected to start operations by October 2012. The Clearinghouse will alert domain name applicants when they attempt to register a domain name that matches a trademark registered in the Clearinghouse and will alert registered trademark rights holders if the domain name applicant decides to continue with the domain registration. Trademark rights holders will be able to use the Uniform Rapid Suspension System (URS), an expedited dispute resolution system that will function alongside the UDRP as a faster and less expensive route for cases of clear infringement. However, the Clearinghouse will not alert rights holders if the proposed registration is not identical to the trademark. Thus, a retailer’s need for independent trademark monitoring services may be even greater than before. Importantly, retailers should keep in mind that they may need to enforce their trademark rights not only against new gTLDs, but also against subsequently registered SLDs. For more information on gTLDs, including the application process, fees, and the Trademark Clearinghouse, see the New gTLD Applicant Guidebook.

Whether or not they are actively registering new domains, retailers should closely monitor the roll-out of new gTLDs so that they do not miss a cost-effective opportunity to enforce their trademark rights.

Related topics: Intellectual Property, Technology