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Posted: February 10, 2012

Brand protection strategies

Coming internet changes will add layers of complexity

Alex Garcia and Tyler Davis

With the rise of new Internet marketing techniques, protecting your brand online is more important than ever, as consumers are increasingly turning to the Internet to make their purchasing decisions. Business opportunities and brand reputation can therefore be won or lost by quick visits to companies' websites, social media pages or other online outlets.

Given these high stakes, where first impressions mean everything, thoughtful online branding and protection policies are critical to avoid consumer misdirection, confusion, impersonation, scams and other potential pitfalls. Significant changes are also coming to the Internet, which will add additional layers of complexity and more opportunities for deceptive conduct. This article outlines steps your company can take to ensure that it keeps pace with these changes.

The Internet Corporation for Assigned Names and Numbers (ICANN) is the not-for-profit organization charged with enabling and securing the Internet, and it is actively expanding the Internet's horizons. These expansions include changes to the Internet's gTLD structure. gTLD is an acronym for a generic top-level domain, which is the name of the string of characters to the right of the "dot." For example, within the HOLLANDHART.COM domain, the .COM is the gTLD, while HOLLANDHART is called the second-level domain. Well-known gTLDs include .com, .org, and .info, among others. There are also country-code TLDs such as .ru for the Russian Federation and .jp for Japan.

Updating these top-level domains to accommodate for cultural and social preferences has been one of ICANN's top priorities. For example, in response to calls to create a designated area of the Internet for the adult entertainment industry, ICANN recently supervised the launch of a new red-light district, the .XXX domain registry.

Continuing in its expansion of the Internet, in mid-January, ICANN began accepting applications to register a new form of gTLDs, free from the previous constraints of the .com's, .org's, or .info's, and allowing applicants to incorporate almost anything to the right of the "dot."

By way of illustration, suppose that Starbucks submits an application for a new gTLD, incorporating its STARBUCKS® trademark. If successful, Starbucks would own the gTLD .STARBUCKS. However, these new gTLDs are not limited to brands. For example, .NYC, .COLORADO, and .COFFEE, etc. are all up for grabs. Obtaining rights to one of these new gTLDs also ensures that successful applicants will control anything to the left of the "dot" such as COFFEE.starbucks or STARBUCKS.coffee. Successful applicants can also sell domains within these gTLDs, which is certainly how many applicants intend to profit from these new gTLDs. For example, Starbucks could sell the domain COFFEE.starbucks to a third-party.

However, these new gTLDs are expensive and are accompanied by significant compliance requirements. Depending upon an applicant's financial standing, the initial application fee for each of these gTLDs is $185,000. Furthermore, successful applicants must also maintain these gTLDs, which is no small undertaking and involves significant overhead costs, back office resources, and adherence to ICANN's onerous operations restrictions.

If your company is interested in applying for one of these new gTLDs, the deadline to register with ICANN's online filing system is March 29, 2012, while the application deadline is April 12, 2012. Given the substantial investments in both time and resources that are required to apply for and maintain one of these new gTLDs, your company should carefully review the application requirements available on ICANN's web site before beginning this process.

For the vast majority of companies, however, the concern is not necessarily in obtaining a gTLD, but rather, in preventing the inevitable deceptive practices that will accompany these gTLDs. The obvious risks involve trademark misuse within top-level domains (.STARBUCKS) and second-level domains (STARBUCKS.coffee).

To assist brand owners with issues related to top-level domains (.STARBUCKS), on May 1, 2012, ICANN intends to publish all of the applied-for gTLDs. The publication of these gTLD applications will provide the first opportunity to catch a glimpse of these potential gTLDs and will give brand owners the chance to evaluate potential objections to the registrations of any of these proposed gTLDs. Companies can also review and monitor applications for generic terms such as .COFFEE or .COLORADO, which may incorporate companies' particular industries and/or geographic regions.

Unfortunately, however, the greatest risk to brand owners is not necessarily the registration of these gTLDs, but rather, second-level domain registrations such as STARBUCKS.coffee, STARBUCKS.colorado, STARBUCKS.nyc, and so on. Although, there are some tools available to assist brand owners in preventing these registrations.

ICANN has created the Trademark Clearinghouse, a repository for trademark owners to submit their registered trademarks. The registration process for the Trademark Clearinghouse should begin in late 2012. Trademark owners will be required to submit valid trademark registrations - trademark applications will not be sufficient - to participate in the Trademark Clearinghouse.

The Trademark Clearinghouse will not be a "blacklist," preventing the registration of restricted trademarks, but it will offer brand owners a limited number of protections. For example, for 30 days after the launch of each gTLD, participants in the Trademark Clearinghouse will be notified when potential second-level domain applications may infringe upon these registered trademarks.

Additionally, for any deceptive or confusingly similar domain registrations that are not flagged through the Trademark Clearinghouse, ICANN has also created a Uniform Rapid Suspension System, which will provide a relatively quick and inexpensive mechanism for brand owners to object to and disable troubling second-level domain registrations.

Of course, if there are any key brands that are of vital importance, companies should also consider whether it makes sense to register these key brands within any relevant gTLDs. These defensive registrations will remove the need for potential enforcement actions against any deceptive second-level domain registrations.

Companies that are proactive in this process and add the measures above to their online branding and protection strategies will be in a much better position to reduce the potential risks associated with the launch of these new gTLDs.

Alex Garcia counsels clients in trademark portfolio management both domestically and internationally, and he regularly protects clients' trademark rights before the Trademark Trial and Appeal Board and in ICANN Uniform Domain Name Dispute Resolution Policy proceedings. He can be reached at 303-473-2731 or ajagarcia@hollandhart.com.

Tyler Davis’ practice at Holland & Hart focuses on the resolution of disputes and litigation concerning trademark and copyright infringement, trademark dilution, anti-counterfeiting, cybersquatting, false advertising, and unfair competition matters. He can be reached at 303-473-2792 or tjdavis@hollandhart.com.

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