The changes – which have been approved by Internet Corporation for Assigned Names and Numbers (ICANN), the international body that monitors and approves TLDs (ICANN) – will open up limitless possibilities in domain name options.
Rather than being restricted to the current small clutch of generic TLDs – such as .com, .net and .org – and the country specific TLDs (such as .co.uk, .fr, .jp), companies or organisations can use their brand names (such as .orange or .simplywrite), or create generic names (such as .content or .telephones).
I asked Victoria Bell, an associate at law firm Baker & McKenzie in Sidney, Australia to share how she believes the changes will affect businesses and brands.
The advantages of the new TLDs to business
Bell believes that the new TLDs will help brand building, by opening up a world of possibility for companies, ‘for example a confectionery company could register the TLD .confectionery rather than relying on a generic one such as .com.’
Bell adds that the new TLDs will allow brand building by giving business owners the opportunity to use their chosen domain as a dedicated space where their customers can go to find all their products and services.
It is also a powerful way, she adds, to tell customers that a particular TLD is where they should ‘go to for the legitimate brand’.
Companies will no longer have to practice ‘defensive registration’ – by registering multiple domains under the existing batch of TLDs, because they will have the opportunity to register their own brands as a TLD or use a TLD that clearly highlights their area of activity.
Bell points out that over time, there will also be price benefits for companies or organisations that register secondary domains under their TLDs, because as more domain name registration companies enter the market or offer the new TLDs, they will drive down the cost of registering such domains.
Drawbacks of the new top-level domains
Bell says that at the moment, cost is a major drawback to the new system. Filing an application to register a new TLD with ICANN will cost US$185,000, which could make it less attractive to small or medium-sized companies.
There is also a further US$75,000 to pay per year for maintaining the registration.
Bell also highlights that brand owners should brace themselves for further costs ‘to protect and defend their brand’ – through the legal system.
But the hefty price tag isn’t the only drawback; Bell points out that individuals are not allowed to register for a TLD.
In addition, companies without the necessary expertise or technical know-how would be less likely to be able to successfully maintain their TLD. Bell explains ‘companies have to provide a minimum set of technical requirements, which can be technically demanding.
New TLDs and branding disputes
The new TLDs could lead to brand-related disputes, and Bell believes that there will be an increase in the number of branding disputes for three reasons:
- The new TLDs will not be geographic, unlike trademarks which limit goods and services to a specific geographic area
- Due to the lack of geographic distinction, the new TLDs will not allow for brands to co-exist in the same way that they do offline
- Two or more companies may want the same or similar domains but under TLD registration rules, this will not be possible
As with many new legal developments, the full impact of the changes will become more obvious over time, once case law has been established.
Bell adds that a ‘similarity test’ will be applied to new TLD applications and cases will be assessed by dispute resolution panels on the basis of this test. There will, she adds be some ‘interesting test cases and the line that will be taken will depend on whether the dispute resolution panels are multi-jurisdictional – and whether global rules are applied.’
More about gTLDs and the application process.
Post written by DEBBIE LEGALL on 2 July 2011.