Let the good times roll

Anthony Beltran of 101domain, Inc. examines the progress made in rolling out domain names endings, and what to expect in the future

It seems like a lot longer than a year ago that the Internet Corporation for Assigned Names and Numbers, known better as ICANN, finally kicked off the new gTLD programme. It was only February 2014 when we saw the launch of the first new gTLD name—a full string internationalised domain name (using non-Latin characters) meaning ‘web’ in Arabic.

Hopes were high and the fanfare was great. New domain name endings were finally a reality, offering choices upon choices for consumers, and even included different languages. Moving along through the rest of 2014, the industry successfully launched more than 330 new TLD extensions that were available for purchase by the general public.

Looking back through the new gTLD programme’s journey through ICANN’s bottom-up consensus policy-making process, we know that the intellectual property community fought very hard for numerous protections and mechanisms to protect their interests on the internet. The reason was simple. From a brand owner’s perspective, having to contend with the 21 legacy gTLD names (.com, .net, .org, .biz, etc), as well as country-code TLDs in more than 250 countries and jurisdictions, was already a daunting task.

Just like the global trademark system, the global domain naming system was not created equal in all jurisdictions. Protecting your turf online as a brand in the existing system was already very costly and arduous. Brands felt like they were essentially being held hostage and forced to secure and maintain a large portfolio of entirely new domain name extensions, with little to no requirements or regulations in who could purchase and potentially abuse these names.

As a result of their efforts, the IP community won a number of protections through ICANN, designed to deter would-be infringers and abusers of the new gTLDs. The results were new mechanisms and processes that every ICANN-accredited domain registry and domain registrar had to adhere to when selling these domain names. These rules apply to every new TLD name made available for public purchase and consumption.
To recap, here’s a brief description of the major public-facing protections and mechanisms that apply to the new gTLD programme:

Uniform Domain Name Dispute Resolution Policy (UDRP): this was launched in December 1999 to address abusive domain name registrations as they related to trademark rights. The UDRP applies to all gTLDs and a small number of country-code TLDs. The proceedings bring in either one or three panellists to decide each case. If the complainant prevails, the domain name may be transferred to its ownership. UDRP is binding to both parties and has been extended to all new gTLDs, and can cost upwards of multiple thousands of dollars.

Uniform Rapid Suspension (URS): this was created as a protection mechanism exclusively for the new gTLD programme. The URS is essentially a fast-track and streamlined version of the UDRP designed for blatant cases of trademark infringement. The process is cheaper, at $300 to $500 per case versus the thousands of dollars for a UDRP, and faster. The process is limited to a single panellist. The big limitation, and major flaw, of the URS is that when a complainant wins its case, the underlying domain name is placed on hold and left to expire rather than being transferred to the complainant, giving other potential abusers the ability to then register the name at a later point and begin the cycle of infringement anew, while also preventing the winning party from enjoying legal use of the domain name.

Trademark Clearinghouse (TMCH): a centralised validation system run by Deloitte, whereby a trademark owner can submit a trademark to be validated and later used to register domain names matching the mark in the first phase of a new gTLD launch. This first phase in every new gTLD launch is called the sunrise phase and is open only to these validated trademark holders. This mechanism essentially allows a trademark owner to register its names in each gTLD before the general public to ensure their attainability.

Trademark claims notices: this is a unique feature and requirement exclusive to new gTLD registries and registrars that are accredited to sell new gTLDs. Trademark claims notices are designed to alert and put potential registrants of domain names ‘on notice’ that the domain registration they are contemplating, potentially infringes a trademark owner’s rights as validated by the TMCH. When a customer visits a registrar’s website, searches for a name, and starts the checkout process, a notice is displayed to the customer with this information.

Registries and registrars are required to display these notices for all validated trademark terms that are active with the TMCH for 90 days after a new gTLD is made available for purchase by the general public.

What do the stats say?

With these hard-earned mechanisms in place for the duration of the new gTLD programme, and most likely in future rounds as well, how well are they working?

Let’s consider the numbers so far, half way through the programme. At the time of writing, there are just over 4.7 million domain names active and registered in the new gTLD programme after just one year, with about half of the 600+ new gTLDs launched. By comparison, when domain names were first created back in 1985, it took nearly 15 years, until early 1999, to reach 4.7 million names, according to Netcraft.

Though the numbers are underwhelming by comparison to lofty industry projections, the programme is off to a respectable start considering new gTLDs have not gone mainstream, yet. A large number of brand owners and domain investors have been very active in registering many names and continue to do so as awareness increases. We’ve seen a good uptick in new websites being launched using many of these new gTLDs over recent months and gaining traction as each month goes by.

Also at the time of writing, the TMCH has validated 35,131 marks from 104 countries worldwide. This is less than one percent of new gTLDs registered, if you compare volumes.

From these 35,131 validated trademarks, 139,341 trademark claims notices have been generated and given to potential non-trademark holding registrants, which works out at about four notices on average per mark, according to the TMCH.

This means that one trademark claims notice has been shown for every 134 domain names registered to-date.

One drawback and major criticism of the TMCH by some is that the rules, as they were written for this programme, have been exploited to allow persons to validate trademarks for common dictionary terms that were recently registered as trademarks in certain countries.

These validated trademarks may skew the analysis of trademark claims notices above as these terms tend to be premium name terms searched by many, resulting in large amounts of claims notices being generated.

Looking at enforcement statistics, UDRP and URS filings, we find that the number of proceedings through UDRP and URS are less than 100 as they related to new gTLDs. Almost all of them have been ruled in favor of the complainant in each case.

We can draw two very different conclusions in reviewing this information. On one hand, you may say that trademark claims notices have been successful due to the number of claims notices being sent to potential registrants versus the low number of enforcement cases brought through the UDRP and URS.

The low number of enforcement cases may lead you to conclude that there is not much infringement going on and that protection mechanisms as a whole are working well.

On the other hand, you may draw a conclusion that there are a relatively low number of brands actively participating in the new gTLD programme that are diligently enforcing their trademark rights at this point in time. This is evidenced by the relatively low number of TMCH validations versus the number of claims notices generated.

The new gTLD programme is in its infancy and awareness has a long way to go in reaching brand owners and the masses. As awareness grows and the general public takes hold of this movement in domain naming, we will certainly see more infringement issues. The question is: will they be on a similar or greater scale than we’ve seen in the past with .com, for example?

What remains to be seen is how well these various regulations and protection mechanisms stand up to increased end-user and public awareness. New gTLDs have not yet gone mainstream and as we continue to work our way through the second half of new gTLD launches, we will most certainly see greatly increased registration volume from a variety of registrants worldwide.
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