In a move that will allow brand owners a greater degree of innovation and choice, the Internet Corporation for Assigned Names and Numbers (ICANN) recently announced it is broadly expanding the number of generic top-level domains (gTLDs), the identification labels, such as .com and .org, that end every website address.
These labels are part of the structure of the Internet’s global addressing system, or domain-name system (DNS), used to route traffic through the Internet. Creating new domains is expected to be a significant commercial boon. For example, if an individual registers the gTLD “.lawfirm,” it can then set up and sell domain names using that extension, such as “www.dlapiper.lawfirm.”
The entities ultimately responsible for operating a new gTLD will be called registries. To obtain a new gTLD, applicants must submit to a complex application process, sign agreements with ICANN to meet technical requirements and comply with applicable policies.
The application for a new gTLD is a complex process because an applicant is, in fact, applying to create and operate a registry business and enters into a contract with ICANN. Applicants are required to provide information on the legal establishment of the applying entity and to identify its directors, officers, partners and major shareholders. Background screening, features of the gTLD Registry Agreement, data and financial escrow mechanisms are all intended to provide registrant and user protections. Applicants will be expected to submit proof of legal establishment and financial statements.
Immediately following the close of the application submission period, ICANN will ensure that all applications are complete. This process is expected to take several weeks.
There will be an initial evaluation by ICANN having two main elements: string reviews (a determination that the applied-for gTLD is not likely to cause security or stability problems) and applicant reviews (including background screenings on the applying entities and the individuals named in the application). This part of the process is expected to take approximately five months.
Once the list of completed applications has been posted, formal objections to applications may be filed. These objections must cite specific grounds. This process will be open for nearly six months and will run in parallel with initial evaluations.
When a formal objection is lodged against an application, the parties will enter into a dispute resolution service to adjudicate the issue. This could take as long as five additional months. Entities that apply for the same string are encouraged to resolve the issue themselves, but will be placed into a string contention resolution stage. This stage could take between two to six months.
Also running in parallel with the initial evaluation and the objection period is a public comment mechanism, which will remain open for 45 calendar days. This period allows time for the community to review and submit comments on posted application materials.
Those entities that do not pass the initial evaluation can request an extended evaluation for such concerns as questionable technical issues. This extended evaluation could take up to five more months.
Finally, after successfully completing all stages, applicants will then be required to carry out a series of concluding steps, including executing a registry agreement with ICANN and completing a pre-delegation technical test to validate information provided in the application. Only after all these steps are complete will the applied-for gTLD be delegated into the root zone. This last part of the process is expected to take approximately two months.
The ICANN application fee is estimated at US$185,000. There is also a US$100 user registration fee to access the applicant system. Because an application might follow different paths in the application process, such as going through an objection or auction process, additional fees may apply. Once an application successfully passes all evaluation steps, the applicant must sign a Registry Agreement with ICANN. Under the agreement, there are two fees: a fixed fee of US$6,250 per calendar quarter and a transaction fee of US$0.20 on future domain registrations and renewals. These are only the base fees due to ICANN and do not account for possible additional costs, such as dispute resolution issues or technology development requirements.
Among these possible extras is a Registry Services Review Fee for additional costs incurred in referring an application to the Registry Services Technical Evaluation Panel for an extended review. Not all applicants will be required to participate in this step, but should it be required, it could cost at least US$50,000. There are also Dispute Resolution Filing Fees (ranging from US$1,000 to US$5,000), which trigger a Dispute Resolution Adjudication Fee, ranging from US$2,000 to US$8,000.
The process may be complicated, but it has been designed to be fair to participants while protecting consumers. For certain clients, this gTLD rollout will provide significant opportunity. For others, it could significantly affect how they do business and enforce their trademark rights on the Internet.