ICANN: Uncertainty to the Right of the Dot

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The announcement by ICANN (Internet Corporation of Assigned Names and Numbers) of the public’s ability to apply for personalized top-level domain names (gTLDs) caused uncertainty for companies in the Internet landscape with regard to trademark protection. The looming unknown might provide the flood of graduating law students a foray into an exciting new world of Intellectual Property issues to the right of the dot. Trevor Schmidt, an associate at Moore & Van Allen PPLC, laid the foundation of Internet domains and hinted at issues that will arise from the roll-out of ICANN’s gTLD application process.[1]

Of particular uncertainty is the protection of trademarks under the new application system for top-level domain names. Parties will be concerned with whether they are able to register their mark in the particular domain and whether they are able to protect their trademark from unauthorized use.[2] The expansion of domains creates a strong potential for fraud.[3] Although ICANN claims to promise an increase in security measures in the new domains, many companies are looking to spend unnecessarily large amounts of money in order to play defense.

One solution wary companies will likely resort to is the registration and purchase of domains regardless of whether the companies intend to use them. For large companies such as Nike, the cost will likely be manageable to purchase a variety of domain names: .nike, .swoosh, .jumpman, etc. For a small company with a very specific trademark, the economic effect of purchasing multiple domains in order to protect the brand must be borne by either the company or the consumer.

Of course, there is growing skepticism over the price of the gTLD applications – a new domain costs $185,000. Compared to the $0.25 charge for .com domain renewals, the additional funds going to ICANN raise suspicions over the incentive for ICANN to implement the system, and raise concerns over the modes of dispute resolution and trademark infringement protections available with the roll-out of the new vanity domains.[4] One of the founders of ICANN, Esther Dyson, posits that the expanse of new domains will ultimately make Google the big moneymaker, as Internet users will resort to search engines because the domain names will become increasingly more difficult to remember.

Opposition is mounting, but the ICANN gTLD application timeline ticks on. With little bargaining power by the United States (PDF), the future of the Internet, and of protecting trademarks on the Internet will be left to the self-regulating, quasi-judicial nonprofit entity of ICANN.

[1] Trevor P. Schmidt, Associate, Moore & Van Allen PLLC, Trademark Issues in Foreign Domains, Presentation at North Carolina Journal of International Law and Commercial Regulation and North Carolina Journal of Law and Technology Symposium (Jan. 27, 2012) (hard copy available with speaker).

[2] Id.

[3] Id.

[4] See Matthew J. Schwartz, ICANN’s Vanity Top-Level Domain Names: Fraud Magnet?, Information Week (Jan. 11, 2012, 12:45 PM), http://www.informationweek.com/applications/icanns-vanity-top-level-domain-names-fraud-magnet/d/d-id/1102206?; Expanding Internet Domains, N.Y. Times (Dec. 25, 2011), http://www.nytimes.com/2011/12/26/opinion/expanding-internet-domains.html?_r=2;Presentation by Trevor P. Schmidt, Trademark Issues in Foreign Domains, supra note 1.

Posted by Elizabeth M. Hodge on Sun. February 26, 2012 12:17 PM
Categories: Cyberlaw, Intellectual property, Trademarks

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