Rise of the TLDs: an interview with Kurt Pritz

The Internet Corporation for Assigned Names and Numbers (ICANN) is preparing to change the way the average user interacts with the Internet. On June 20, ICANN’s board of directors, convening in Singapore during one the corporation’s annual meetings, approved a plan to increase the number of Internet domain name endings.

There are currently 272 top level domains (TLD), including .com, .org and .net., and country code TLDs such as .co, .uk and .cn When the application process for new TLDs opens in January 2012, ICANN will officially open the Internet’s doors to potentially thousands more.

Almost any word will be eligible for adoption as a TLD under the new programme, meaning that the Internet could be personalised by businesses, brands, governments and individuals alike. The new TLD programme will also see internationalised domain names (IDN)— domain name endings that are made up of non-Latin characters, such as those used in the Arabic or Chinese languages—become widely available.

IDNs are currently available at the second level—they precede the .com or the .net in a web address—and are preliminarily available as country code TLDs. ICANN is offering these to the governments and administrations of countries and territories only, and 27 have so far accepted.

When the application process opens, ICANN will begin accepting applications for generic IDN TLDs, and there will be no restriction on who can apply for those. Kurt Pritz, senior vice president of stakeholder relations at ICANN, says: “TLDs in many languages and scripts will be generally available for the first time as a result of this programme. It is expected that new products and services will also result.”

Pritz’s department manages the relationships with all current TLD registry operators and registrars, and it has played a significant role in the implementation of the new TLD programme that, Pritz says, is the result of bottom-up stakeholder policy recommendations. Internet stakeholders include those with an interest in intellectual property, and many of those stakeholders have been watching ICANN’s work on the new TLD programme very closely.

“Intellectual property representatives have been an important part of the development of this programme since the beginning,” Pritz says. “We expect that they will continue to be involved in the new TLD roll-out specifically and in the ICANN bottom-up process overall.”

A group of IP attorneys comprised the Implementation Recommendation Team, which was formed by ICANN to recommend rights protection mechanisms for the new TLD programme. Team members include Microsoft’s managing attorney Russell Pangborn and Jamil & Jamil’s barrister at law Zahid Jamil.

Pritz points to the presence of many of the team’s recommended mechanisms in the Applicant Guidebook, a guide outlining the procedure that new TLD applicants must follow during the application process and beyond, as proof that the team has fulfilled its role.

IP owners are not the only ones with something at stake here. ICANN’s role in the new TLD programme has been about “balancing competing interests and views that people take very seriously”, Pritz says. “It’s understood that businesses rely on intellectual property investments and built-up value,” he explains.

“Others have interests in, say freedom of expression, or diversity of representation. ICANN is the kind of place where those debates and discussions will take place.”

Top level

Applications for new TLDs will have to adhere to the procedures set out in the Applicant Guidebook before ICANN will sign a formal agreement with the registry operator.

The application process requires TLD applicants to submit detailed applications to ICANN between the planned dates of January 12 and April 12, 2012. Each application is subject to multiple reviews, including a background screening process. Pritz says that objections can also be raised that will delay an application.

“[There could be] concerns expressed by governments, a formal objection to protect trademark interests and multiple qualified applications for the same TLD name.” The World Intellectual Property Organization (WIPO) will act as the dispute resolution body when legal rights objections are submitted prior to ICANN’s acceptance of a new TLD application.

Given WIPO’s experience with the Uniform Dispute Resolution Procedure (UDRP), trademark owners are getting a tried and tested mediator for their TLD disputes. In the event that two applicants apply for the same generic TLD—such as .tree, for example—ICANN would prefer to leave it to the two applicants to find an amicable solution. “Information on the applications received is publicly available,” Pritz says.

“[This is] so that two or more parties [that] have applied for the same TLD can reach an agreement or settlement among themselves.” If a settlement is not forthcoming, ICANN could carry out an addition evaluation, as long as one of the applicants has claimed priority based on its association with a ‘community’.

Community applicants could represent a professional group. A TLD such as .doctor could be secured and then licensed to practising doctors only, creating a secure and exclusive branch of the Internet for those practising medicine.

ICANN requires a community applicant to demonstrate that it has an ongoing relationship with a clearly delineated community, so an applicant (in this example) would have to prove that it has links to doctors in its application. Proof includes a written endorsement from one or more institutions representing the community that the applicant has named.

A community applicant must also apply for a TLD that is strongly and specifically related to the community named in the application. A community applicant that represents doctors may have little luck securing a TLD if it applies for .beach.

Pritz concludes: “If none of the applications meet the standard to be awarded priority based on a community association, the applicants will be encouraged to negotiate a settlement.Absent a settlement, an auction is the contention resolution mechanism of last resort. It is expected that most contending applicants will settle, as it is a more economical alternative as compared to an auction.”

The cost of becoming a TLD registry is significant. A $185,000 evaluation fee is required to apply.

"Absent a settlement, an auction is the contention of last resort. It is expected that most contending applicants will settle, as it is a more economical alternative."

Further costs to the applicant will be incurred if the application is disputed and further evaluation is required. When these costs are combined with the annual operational costs required to maintain a TLD—some commentators have predicted that these costs will be between $50,000 and $2 million per year depending on how the registrar implements the TLD—some trademark owners may be reluctant to take on such a financial burden.

“I believe [trademark owners] are carefully working to understand the process and the trademark protections that are available,” Pritz says. “Trademark holders...are, will be or should be determining in their own cases how best to take advantage of opportunities offered by new TLDs and how to address potential risks.”

As a not-for-profit organisation, ICANN will use fees to cover its costs. “Evaluation fees are calculated to be revenue neutral”, says Pritz. “If revenues exceed expenses, future application fees will be dropped, and in the opposite case, future fees will be increased.”

Pritz says that any revenue gained from TLD auctions will be “earmarked until the uses of funds are determined”.

Second level

The rights protection mechanisms outlined in the Applicant Guidebook will come into effect when the ICANN-approved registries launch their new TLDs. On top of the Implementation Recommendation Team’s recommendations, trademark owners have commented on the rights protection mechanisms, at ICANN’s request, during consultations on drafts of the guidebook.

“First off, a sunrise period is required,” Pritz says. “This is so that rights holders would have the first opportunity to secure domain names as desired. Additionally, the initial launch period includes a notice to be provided to rights holders where a prospective registrant tries to register a name conflicting with certain trademarks.”

A centralised trademark clearinghouse will support both of these services. Trademark owners will have to submit information to the clearinghouse, which is responsible for authenticating and validating trademarks based on the information that it receives. The clearinghouse will then serve as a database to all new TLD registries and support sunrise and notice services.

“[It] is expected to create efficiencies for trademark holders, so that rights information need only be submitted and validated once,” Pritz says. New TLD registries will have to implement UDRP decisions as the procedure will “continue to be available as a means to address cybersquatting complaints”.

Pritz adds: “Overall, [the UDRP] has been a highly regarded ICANN development in providing an efficient, low-cost, alternative to court proceedings for addressing complaints about cybersquatting.” The UDRP will be supplemented by the Uniform Rapid Suspension (URS) system. This will allow the “rapid suspension of a name in clear-cut cases of abuse."

Trademark owners with online presences have used the UDRP to win back infringing domain names from cybersquatters, often with a lot of success. But as the new TLD programme approaches, ICANN is discussing whether or not to reform the UDRP. The Generic Names Supporting Organization, an ICANN policymaking body, is considering when and under what terms the UDRP review should take place.

Pritz says: “With the upcoming introduction of the URS [Uniform Rapid Suspension], I personally believe we should undertake data collection of the UDRP and URS for a period of time, while they run in parallel, and then undertake an analysis of the two existing policies.”

Trademark owners will have to wait and see how the new TLD programme will work in practice. It is unclear how many new TLD applications ICANN will receive during the first round of applications, and it is equally unclear how many of those applications will be approved. The registries themselves will then have to implement ICANN’s trademark protection mechanisms.

ICANN will have to monitor, review and amend the process in parallel as the corporation takes the Internet and all its stakeholders into uncharted territory.