EY-Julia Cheng of CyberlawStudio

Julia Cheng founded CyberLaw Studio to fulfill a desire to make quality legal services accessible to entrepreneurs. Here, she shares her insight on the impending explosion of domains and how this may impact treps.

Domain mania may be about to hit

On the Internet today we see just 22 generic top-level domains (gTLDs), such as .com, .net, .org, .biz, etc. Some may find that number overwhelming. Others may have an appetite for more, and their dream may soon come true.

ICANN, the domain name system governing body, is reviewing over 1,900 applications. If approved, these new gTLDs (web suffixes) may be introduced by year-end. Website registry companies like Donuts, a $100m startup, spent $55 million to apply for more than 300 gTLDs. (It costs $185,000 to apply for a new gTLD).

Applications for new gTLDs include: .music, .hotel, .buy, .property and .realestate. The new gTLDs include not only English domain names, but also new gTLDs in Japanese, Arabic and Chinese.

What does this mean for trademark owners?

What trademark owners will likely see is an increased cost and policing effort required to enforce their trademark rights. A trademark registration owner has the right to stop a third party from using exact or similar domain names. But this is only if the third party is offering goods and services that are related to the owner's.

For example, Mr. Smith owns a trademark registration for the mark "Purple Moon" and sells clothing via his website "www.purplemoon.com." He may be able to stop another business from using the domain name "purplemoon.biz." But only if that business sells clothing using the mark, not if that business offers spa services. A strategy would be to purchase as many similar domain names as possible to prevent third parties from purchasing them.

With the increased numbers of generic top-level domains, trademark owners with websites will need to purchase more domain names with new gTLDs. This is to protect themselves from businesses that use similar names but offer different product or service lines.

Going back to our example, if the new gTLDs are introduced, Mr. Smith should:

  1. Purchase similar "purple moon" domain names ending in.com, .biz., .net, etc.
  2. Purchase similar "purple moon" domain names ending in new gTLDs such as .fashion, .shop, .clothing
  3. If Mr. Smith's online shop operates in cities like Tokyo, he needs to purchase Japanese translations of .fashion, .shop and .clothing.

How trademark owners can protect their rights

ICANN has proposed protection mechanisms that are available to trademark owners if they register their marks with the Trademark Clearing House. One of the protection mechanisms is the "claims service."

Once registered, trademark owners are notified when a third party attempts to register a domain name identical to the owner's mark. The Clearinghouse will also notify the third party of potential infringement. Once notified, an owner must decide whether to challenge the domain name through various legal measures, which will incur costs.

Another protection mechanism available is the "sunrise registrations." Sunrise registrations allow owners to register marks in new gTLDs within the 30-day period before the general public can register domain names.

To register with the Clearinghouse, the trademark owner will need a valid trademark registration and provide proof of use.

Registration fees are:

New generic top-level domains are likely to be available to the public starting late summer 2013.

Trademark Clearing House launched its online registration system on March 26th, and ICANN's goal was to set up the sunrise and claims system by end of June, beginning of July.

But entities like Verisign have raised concerns that the delegation of new gTLDs is premature. These entities feel that the delegation can cause risks to the stability and security of the DNS (domain name system). They also feel it may affect the operation of the Internet.

Whether the 1,000 or more new gTLDs will be launched by year end remains to be seen. Treps should consult with IP attorneys now to devise strategies to protect trademarks before the impending explosion of new gTLDs

About Julia Cheng, Esq.

Julia Cheng is the Founding Principal of CyberlawStudio, a legal boutique servicing clients in the areas of business, intellectual property and digital media law. Launched in 2004, CyberlawStudio has been servicing foreign and domestic venture backed startups, investors, seasoned creatives and non-profits based in New York and California. Clients come from industries including software, ecommerce, social media, fashion, entertainment, music, health & fitness, food, and non-profit organizations with business operations in Asia, Europe and Latin America.

Follow Julia @cyberlawstudio.

The views of third parties set out in this publication are not necessarily the views of EY. Moreover, the views should be seen in the context of the time they were expressed.