Draft Applicant Guidebook for new gTLDs released

On October 23 2008 the Internet Corporation for Assigned Names and Numbers (ICANN) released the Draft Applicant Guidebook for generic top-level domains (gTLDs). The guidebook will remain open for revision until December 15 2008, while interested parties comment on the proposed application process.

gTLDs would change ICANN’s policies markedly by allowing an organization, institution or geographical location to register not only the domain name, but the TLD as well. Large, well-funded institutions are expected to purchase gTLDs for their brands (eg, ‘.microsoft’), for purely generic purposes (eg, ‘.shopping’) and for geographic areas (‘eg, ‘.Paris’).

Any established corporation, organization or institution in good standing may apply for a new gTLD. Applications will be accepted during a defined period of time, as yet unset. Applications will be subject to an administrative completeness check and an initial evaluation. However, there may be other stages, depending on whether:

an extended evaluation is required;
any objections to the application are filed;
dispute resolution is required; and
there is any confusion or similarity between two applied-for gTLDs.

When the application period opens, all who wish to apply for a new gTLD can register to use the online application system for a $100 fee. The applicant will be required to provide general information about itself and to demonstrate its financial, technical and operational capabilities.

Applications are of two types: open or community-based. An open gTLD “can be used for any purpose consistent with the requirements of the application and evaluation criteria and with the registry agreement”. A community-based gTLD will operate for the benefit of a defined community with a restricted population (eg, Paris). The applicant for a community-based gTLD must:

demonstrate that it has an ongoing relationship with the community;
apply for a string of characters that is strongly and specifically related to the community; and
present an endorsement (in writing) from an established institution representing the community.

During the application period, applicants must pay evaluation fees of $185,000. If the application requires additional scrutiny, the applicant may be charged a number of additional fees, including:

a registry services fee for extended review (probably $50,000);
a dispute resolution filing fee for any formal objections (estimated to range between $1,000 and $5,000);
a dispute resolution adjudication fee (assessed by the appropriate resolution service provider); and
a comparative evaluation fee payable to the provider of comparable evaluations (if similarity is found between two applied-for gTLDs).

This list does not include registry fees payable to ICANN after an application has been successfully evaluated.

The administrative check (the first step of the application evaluation) ensures that:

all questions are answered;
all supporting documents (eg, proof of legal establishment and financial statements) are provided in the proper format; and
all evaluation fees have been received.

Initial evaluation begins after the administrative check and consists of two main elements: a string review and an applicant review. String reviews relate to the applied-for gTLD and address any concerns as to multiple applications for the same or similar gTLDs. Applicant reviews determine whether the applicant has the requisite technical and financial capabilities. The initial evaluation will be conducted by panels of independent evaluators, who may issue a round of questions requesting that the applicant clarify information in the application. ICANN will post initial evaluation reports online.

The objection filing process provides a mechanism for opposing an application. An objection may be filed based on:

legal rights concerns;
string confusion issues;
morality and public order questions; and
community objections.

Objections may be filed anytime before the end of the initial evaluation period. The objection should be filed with the appropriate dispute resolution service provider:

the Arbitration and Mediation Centre of the World Intellectual Property Organization for legal rights objections;
the International Centre for Dispute Resolution for string confusion disputes; and
the International Chamber of Commerce for morality and public order and community disputes.

In order to bring an objection, a party must have standing. In a legal rights dispute, the objector must be a rights holder. In a string confusion dispute, an objector must be an existing TLD operator or gTLD applicant in the current round. In a morality and public order dispute, the standing requirements have not yet been determined. Finally, in a community dispute, the objector must be an established community institution.

If an institution wishes to object to applications containing protected marks, its strongest ground would be the ‘legal rights objection’. In a legal rights objection, the objector must document its existing rights. On consideration of such an objection, the dispute resolution service provider will determine whether the applied-for gTLD:

takes unfair advantage of distinctive characteristics or reputation of the objector’s mark;
unjustifiably impairs the character or reputation of the mark; or
creates a likelihood of confusion between the marks.

A number of factors should be considered, including:

similarity in appearance, sound or meaning;
whether the objector has acquired and uses the rights in the mark in good faith;
recognition of the mark by the relevant public as belonging to the applicant, objector or a third party;
the applicant’s intent, including knowledge and patterns of cybersquatting or confusion;
whether the applicant has used or prepared to use the mark without interfering with the legitimate exercise of the objector’s rights;
whether the applicant has rights in the sign corresponding to the TLD;
whether the applicant has been commonly known by a sign corresponding to the TLD; and
whether there is a likelihood of confusion with the objector’s mark as to the source, sponsorship, affiliation or endorsement of the TLD.

A party may also object to an application on the grounds of ‘string contention’. String contention occurs when more than one qualified applicant applies for the same gTLD or for gTLDs so similar that they pose a probability of confusion to users. In order for a likelihood of confusion to arise, “it must be probable, not merely possible, that confusion will arise in the mind of the average, reasonable internet user”. If a party successfully brings a string contention objection, the only possible outcome is for the applicants to be referred to a contention resolution procedure. However, string contention resolution procedures will not begin until all applications have been evaluated. This means that an applicant has to pay all costs and fees of the application and evaluation process before string contention is even addressed.

A dispute as to an applicant’s chosen string will be resolved based on the following criteria:

the nexus between the proposed string and the community;
how well the applicant is established in the community; and
community endorsement.

To bring a community objection, a party must show:

that it is an established institution;
that it has an ongoing relationship with a defined community that consists of a restricted population;
substantial opposition by the community;
a strong association between the community and the applied-for string; and
a likelihood of detriment to the community if the application is approved.

The ‘moral and public’ objection is nebulously defined at present.

Cost concerns will be a huge obstacle in the application process. The named fees are not exhaustive and are not all set amounts. While this lessens the threat of cybersquatting, it makes the risk of losing a dispute after the entire, costly process of evaluation has taken place almost devastatingly expensive.

James L Bikoff, David Heasley and Linda Riter, Silverberg Goldman & Bikoff, Washington DC

Draft Applicant Guidebook for new gTLDs released

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