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The Divine Right of Names:
New TLDs Prep for Start-up

by Ellen Rony
Will the highways of the Internet become more few?
--George W. Bush, Concord N.H. (January 29, 2000)

The pressure for expanding the Internet name space is palpable. At the current rate of growth, .COM domain names should top 20 million by the time ICANN meets in Marina del Rey to discuss the introduction of new top level domains (TLDs).

Market theory suggests that with more TLDs, registrants will have greater opportunity to acquire the names they want. As the supply of TLDs increases, the resale prices for desirable names will collapse, removing the profit incentive that drives domain speculation.

Trademark owners have not embraced this solution. They fear that the introduction of new TLDs will increase opportunities for infringement, cybersquatting and freebooting to such an extent that it will be impossible for them to effectively police the Internet for such violations. Nonetheless, bottleneck basics have exposed the obvious: surging demand for acceptable names, diminishing supply, robust speculation and a zero sum game. Now, for the first time since the domain name system was established in 1984, new TLDs--other than country codes (ccTLDs)--will be added to the legacy root.

Proof of Concept

On August 3, 2000, ICANN issued a formal call for proposals by those seeking to sponsor or operate one or more of the new TLDs, which will be introduced in a "measured and responsible manner". Applicants must include a non-refundable $50,000 fee, technical, financial, and business capabilities; registry details; data privacy and escrow policies; acquisition plans; capital requirements and fitness disclosures. ICANN has also been attentive to the friction over rights to domain names, and trademark interests will play a key role here. Although specific trademark policy has not been imposed upon the new TLDs, an applicant seeking to win board approval must describe measures for protecting intellectual property and other rights, along with policies that discourage abusive domain name registration practices.

ICANN's TLD process overview identifies four general types of TLD: sponsored or unsponsored; restricted or not. In a sponsored TLD, the sponsoring organization selects the registry operator. A sponsoring organization will have authority to make decisions regarding policies applicable to the TLD, provided they are within the scope of the TLD's charter and comport with broader requirements concerning interoperability, availability of registration data, etc. to serve the interests of the Internet community.

For unsponsored TLDs, ICANN will formulate the policies, which initially will be those currently applied to .COM, .NET and .ORG. Restricted TLDs have limitations regarding who may apply for registration and/or what uses may be made of those domain names. An unrestricted TLD is open to all, regardless of residency or intended use.

ICANN's formal TLD application process concluded on October 2, 2000. Among the 44 proposals currently under review (47 were submitted, but three were incomplete or withdrawn) 15 are for unsponsored/unrestricted TLDs, 8 are unsponsored/restricted, and the remaining 21 are sponsored/restricted proposals.

Sunrise Controversy

A key concern for ICANN is the gold rush mentality that will greet the launch of the new TLDs. An initial explosion in registrations poses concerns about bottlenecks, preferential treatment of applications, and cybersquatting. The Council of Registrars (CORE), notes in its TLD application for .NOM, "The initial rush effect is proportional to the overall speculative interest aroused by the TLD."

ICANN requires applicants to address how registrations will be handled at start-up. The application asks:

E15. Will you offer any "sunrise period" in which certain potential registrants are offered the opportunity to register before registration is open to the general public? If so, to whom will this opportunity be offered (those with famous marks, registered trademarks, second-level domains in other TLDs, pre-registrations of some sort, etc.)? How will you implement this?

The concept of a sunrise period ripened after a World Intellectual Property Organization (WIPO) study on the management of Internet names and addresses. In its Final Report, WIPO recommended that a mechanism be established for granting exclusions to famous and well-known marks. True consensus on the appropriate mechanism, however, has not been achieved within the Internet community.

ICANN's Domain Name Support Organization (DNSO) created Working Group B in July 1999 to address the implementation of protection for famous and well known marks in the domain name system, as recommended in the WIPO Report. The group discussed a proposal for creating a list of famous trademarks to be used to protect the registration of the marks as domain names. During a proposed "sunrise" period, famous trademark owners would be able to register their marks as domain names without competition from the general public.

This hotly-debated proposal was rejected by a number of Working Group B members. Among the objections, they noted that the creation of a list of famous marks would expand the existing rights of famous trademark holders; eliminate individuals, non-commercial groups and small businesses to register domain names for non-commercial uses; and require an exhaustive list of criteria to define.

In light of the difficulty and controversy surrounding the creation of a famous marks list, the Intellectual Property Constituency (IPC) submitted--on deadline--a proposal for how all trademarks and could be protected when new TLDs are introduced. Dubbed Sunrise+20, the proposal provided that any owner of a valid national trademark or service mark registration would be eligible to register as domain names that mark plus up to twenty variations before the TLD opens to the general public. Registrations by trademark owners would be handled during a 30-day sunrise period on a first come, first-served basis.

Sunrise+20 drew vocal opposition from those who asserted that an exclusion for all trademarks exceeds both the scope of the working group and ICANN's charter as the technical coordinator of Internet administration. The IPC published a revision several months later, christened the Daybreak Proposal. The "daybreak period" would be available only to owners of trademarks and service marks to pre-register those marks as domain names.  Thus, during "daybreak", a trademark owner would be confined to a single registration corresponding to the exact mark. Notwithstanding the IPC's concession to a more limited approach, neither Daybreak nor Sunrise +20 are grounded in U.S. or international law.

The Non-commercial Constituency of the DNSO and the United States Small Business Administration lodged complaints, among them that the Daybreak provision will not be effective in curbing trademark violations since only the exact corresponding domain name can registered preferentially; trademark interests are already adequately protected by the Uniform Dispute Resolution Policy and the Trademark Cyberpiracy Prevention Act and the proposal would deny the public-at-large an opportunity to register domain names on a first-come first-served basis.

Intellectual Property Provisions

Fast forward to November 2000. A quick review of the TLD applications argues that the process is a win for proponents of preferential registration for trademark owners.

ICANN requires every TLD applicant to propose a "well-thought-out plan for allocation of names during the start-up phase of the TLD in a way that protects the legitimate interests of significant stakeholders, including existing domain-name holders, businesses with legally protected names, and others with which conflict is likely. " And the applicants have complied.

Forty-five percent of the TLD proposals include specific sunrise provisions that allow owners of trademarks or famous marks to acquire their respective marks as domain names in advance of the general public.

The Sunrise period varies from 15 days (.Abacus America, BIZ, .COOL, .FAM, INC, .XXX) to six months (Internet Events International, Inc., .EVENT). Several TLD applicants designate this time solely for owners of famous marks, globally recognized marks (DotKids, Inc.) or "major marks "(Affinity Internet, Inc.). One proposal (Commercial Connect, Llc for .MALL, .SHOP or .SVC) includes copyright holders along with trademark owners in its 90-day sunrise provision.

The various TLD applications detail other mechanisms to protect intellectual property rights and discourage the registration of domain names in bad faith. For example, both NeuStar, Inc. (.DOT, .INFO, .SITE, .SPOT, .SURF, or. WEB) and the International Air Transport Association (.TRAVEL) describe an intellectual property notification service.

The IP notification offers no guarantee that the name will be reserved for or allocated to the trademark owner as there may be additional parties claiming intellectual property rights to the same domain name.

Additionally, the International Air Transport Association plans to publish all new applications for domain names on the Internet for a period of ten days so that parties with rights in any of the names can file litigation before the registration being granted, before any use of the domain name occurs.  

Eastern Communications Company (.FIRM, .GAME, .INC, .INFO, .LTD, .NEWS, .SHOP, .STORE, .or TOUR) has no sunrise policy but will prescreen registrations for famous and well-known marks.

Sarnoff, et, al. ( .I ) proposes both a Daybreak pre-emption for trademark owners and a "takedown" provision to discourage a bad faith registrant from subsequently registering minor variations of the same domain name. Subsequent similar domain name registrations to that party will be deleted or transferred upon notice of such prior decision by the complaining party in the prior dispute.

Image Online Design (.WEB) plans to establish a "blackout" period for registrants in its unrestricted TLD. The application specifically rejects the sunrise concept but offers a 14-day phase-in period during which trademark holders can place existing .WEB registrations (i.e., those that have been pre-registered) on hold pending the resolution of a dispute under either the UDRP or a court of competent jurisdiction.

The Cooperative League of the USA, sponsoring a proposal for the restricted TLD .COOP or CO-OP, offers sunrise only for members of the National Cooperative Business Association and the International Co-operative Alliance during a six-month start-up phase.

SRI International, sponsor of .GEO, an infrastructure for registering geospacial references, offers no sunrise period but will conduct a trademark-type search prior to accreditation (registration), followed by a sixty-day period for public comment.

The Museum Domain Management Association (.MUS, .MUSE, .MUSEA, .MUSEUM, MUSEUMS) also has no sunrise for its restricted TLD proposal but introduces a "cooling off" period of five days post-registration to minimize the workload on registrars caused by registrants who their minds.

Sidelines Until Sunset

Where does that leave the rest of us? Those who have common law marks, non-commercial uses for the same words, new entrepreneurial plans tied to commonplace words, surnames that are identical to trademarks, or other legitimate uses for the same words must remain on the sidelines until after trademark owners scoop up their premium choices.

Plans that do not circumvent a first-come, first-served policy and lack preferential treatment for one class of Internet users, would be a fairer approach. Trademark owners already have legal tools--the TCPA and the UDRP--as deterrents to bad faith registrations. Several private companies currently offer monitoring services, which track domain name registrations and notify parties when a specified character string is registered. Between the ACPA, UDRP and these monitoring services, trademark holders have effective mechanisms to prevent cybersquatting and enforce their trademark rights. Logistical or technical solutions can be developed to handle the onslaught of initial registrations.

The Office of Advocacy of the Small Business Administration noted last April that the sunrise approach "creates a presumption that commercial use is the superior use of the Internet." While commercial use of the Internet is valuable to the economy, it does not justify giving that class of users superior rights to individuals and non-commercial interests.

This clash over rights to names may reflect a maturing global technology. But I remain wistful for a simpler time on the Internet, only a few years ago, when the common concern was how long it was taking to replace those ubiquitous "under construction" signs.  

In my humble opinion.

Copyright © 2000 Ellen Rony. All rights reserved. 


Other articles, editorials and domain-related comments by this author:

At Large Membership: ICANN's Ultimate Tarbaby

The ICANN-VeriSign Agreement: A Sweetheart Deal

The Envelope, Please: New Top Level Domains on the Horizon

Procter & Gamble Bids Adieu to SINUS, THIRST and FLU

Words First!

Sunrise+20: The Numbers Tell the Story

Famous Marks

Clicks or Mortar: Are Domain Names Property?

Res Ipsa Loquitur

RDND: Reverse Domain Name Denigration

IIR: Internet Impact Report

The Devil is in the Details

An Alternative to ICANN?

Comments on the WIPO Interim Report RFC-3
















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