Internet naming is going to get a lot more interesting now that generic Top Level Domains (gTLDs – the word to the right of the dot, as in “.com,” “.org,” or “.net”) are expanding from the 22 options currently available to domains ending in brands, products, hobbies, political causes and just about anything else.

Canon Inc., the camera and printer company, already plans to apply for ".canon." And Apple could go after not just ".apple," but also ".ipad" and ".iphone."

Groups have already formed to back ".sport" for sporting sites, and two conservationist groups separately are seeking the right to operate an ".eco" suffix. Trade groups for bankers and financial-services companies are jointly exploring applications for ".bank," ".insure" and ".invest" for their member companies.

The incentives to apply for a gTLD are compelling. Among others:

  • Protecting your brand name from a similar brand owned by a third party (e.g. Avery labels and Avery Outdoors);
  • Concern that competitors in your market may claim the gTLD for themselves (e.g. Plantronics competitor Blue Ant seeks “.headsets” or “.bluetooth”)
  • Channel management by combining a unique top level domain with second level domains (e.g. “personal.citi” and “business.citi”)

Unfortunately, as has been well-documented, see, e.g., WebTM, the barriers to applying may outweigh the benefits:

  • The application is voluminous (250 pages), takes nine months or more and requires expert vendor assistance (e.g. domain registration consultants and specialized counsel) of which there is limited supply;
  • Practically speaking, if you have not yet started to prepare for the first round applications due Jan. 2012, you are too late and will have to wait over a year until the next round;
  • The upfront application costs, all in, exceed $300K and there is a minimum 10 year commitment to operate the new domain adding additional costs exceeding $1M.

Assuming these barriers are too great for most companies, there is nonetheless a near term, low cost strategy that even these companies should consider.

First, the international agency responsible for administering the applications for the new domain names, ICANN, will, after the application period closes in April 2012,  post on its website the names of the gTLDs applied for as well as the identity of the persons behind the applications.  Plan now to monitor the ICANN website for this information.  The monitoring cost is nominal and it will provide a timely opportunity to consider a variety of administrative and legal means available to you to challenge the application, which are summarized, among other places, in ICANN’s FAQs on gTLDs.

Second, the ICANN’s Applicant Guidebook ("Guidebook") creates a Trademark Clearinghouse for protectable trademarks. A trademark owner must apply for and be accepted for inclusion in the clearinghouse. By joining the Clearinghouse, the trademark owner creates a trip wire providing notice if someone is attempting to register their mark as a second level domain (such as “ToyotaPrius”) with a relevant suffix (such as “.eco,” creating “ToyotaPrius.eco.”) Furthermore, there is a “sunrise” registration period where members of the clearinghouse are given the first opportunity to register their mark (“ToyotaPrius”) in any top level domain (“.eco”).  The estimated fees and costs for applying for membership in the Clearinghouse are $5,000 – $20,000, far less than the hundreds of thousands if not millions of dollars required to seek and operate a new suffix domain. Furthermore, this cost-effective administrative remedy may be pursued as a proactive response to the operation in the future of a new suffix domain in a manner that infringes trademark rights or constitutes unfair competition. 

True enough, the Clearinghouse is still in the planning stages and Clearinghouse remedy is limited to protecting against infringement in second level domains – but you’ve got to start somewhere and this is something that you can commit to do now without placing significant resources at risk and with the reasonable expectation of timely identifying potentially harmful cybersquatting on your brand.