Part 1: gTLDs, ICANN, and Donuts, What Does It All Mean?

The internet has changed our lives in a number of ways. And in order to keep up with the demands of today’s technologically savvy society, it must continue to grow and change as well. In recent months, the internet universe has been expanding from the .COM and .ORG universe to a number of new domains that were not previously available.

Antonelli Law is providing a series of three posts to explain the development and release of the new generic Top Level Domains. Part I is an introduction to ICANN and domain names.  Part II will further discuss the release of new gTLDs. Part III will provide information on how trademark owners will be affected and how disputes will be resolved.

The first release of new generic top level domains occurred in October 2013 and there are no signs of slowing down. This effort is ostensibly aimed at making things easier for consumers and poses new considerations for companies and trademark owners interested in further developing and protecting their brand.

Whether the release of new gTLDs will in fact achieve these stated aims remains unclear. Remember the .XXX domain released in 2012, where legitimate companies were urged to purchase their identities in the .XXX domain to avoid market confusion? In our opinion, there is no public clamor for these new gTLDS and appears to be just another shot at pumping an internet commerce bubble. Perhaps soon, the market will tell.

Part I: Introduction to ICANN and Domain Names

It is an undisputed fact that the internet has greatly altered the way that companies do business. All aspects of a company’s online presence are closely related to marketing, consumer exposure and trademark rights. But our .COM world is changing to one which is expected to be even more tailored toward the consumer experience.

With these changes, comes a new list of acronyms and buzz words.

• DNS: Domain Name System
• ICANN: Internet Corporation for Assigned Names and Numbers
• TMCH: Trademark Clearinghouse
• gTLD: Generic Top Level Domain
• ccTLD: Country Code Top Level Domain
• Sunrise Period: exclusive trademark holder registration period
• UDRP: Uniform Domain Name Dispute Resolution Policy
• ACPA: Anti Cybersquatting Consumer Protection Act
• Donuts: company that filed the largest number of gTLD applications

While companies were previously in a position to ignore them, they are quickly becoming part of the vernacular. But what do they all mean and how do they work together?

ICANN is an organization that was created in 1998 to handle all of the background operations that enable the internet to function. Participants in the organization come from all over the world and offer input on how the internet should be run.

Computers operate by each having unique identifiers (commonly known as the IP address) so that they can properly communicate with each other. ICANN compiles databases of these identifiers, typically unreadable series of numbers, and implements systems which make the Internet usable. Instead of typing in a series of numbers to reach a specific website, consumers use the name that has been associated with those numbers.

This organization initially focused on handling cybersquatting complaints. Cybersquatting occurs when a party acts in bad faith by occupying a domain name that it feels will be desirable to another party. In many instances, cybersquatters acquired a number of domain names in order to solicit money from parties that had trademark rights in the name and would likely want to use it for their business. The Anti Cybersquatting Consumer Protection Act was put in place to prohibit registration of domain names that contain the marks of others. Today, cybersquatting is almost completely nonexistent.

ICANN controls all of these web addresses and makes available to users wishing to start websites. It creates domains, called registries, and then gives them to a registrar. The registrar has the ability to assign each domain to a specific purchaser. ICANN oversees the many registrars and makes sure that the domains are not duplicated. The US is home to the largest number of registrars, but the can also be found in 60 other countries throughout the world.

ICANN also created a system of ccTLDs (country code top level domains). While it is something that we are relatively unaware of in the US, the rest of the world relies heavily upon these domains. Each country can be assigned its own TLD and it then controls the distribution of sites within that domain. Examples: .CO for Colombia, .DE for Germany, .JP for Japan. There are currently 250 active ccTLDs. Countries are allowed to put their own regulations in place for handling these domains.

The remainder of the internet was originally occupied by a small number of gTLDs, including .COM, .NET and .ORG. ICANN is in the process of greatly expanding the number of gTLDs with the first new ones hitting the market in late 2013. New gTLDs were made available and a number of registrants filed applications in order to obtain them for sale. ICANN claims that “establish[ing] market competition for generic domain name (gTLD) registrations [will] result in a lowering of domain name costs by 80% and saving consumers and businesses over $1 billion annually in domain registration fees.” (http://archive.icann.org/tr/english.html)

For more information:

• http://www.icann.org/en/about/welcome
• http://www.icann.org/en/about/learning/faqs
• http://archive.icann.org/tr/english.html
• http://www.icann.org/en/about/learning/factsheets