Last year ICANN embarked on a major initiative to authorize potentially hundreds of new generic top-level domains (gTLDs) starting in 2010. In addition to the 21 current gTLDs (which include the ubiquitous .com, .net and .org), you could soon see domain names ending in .paris, .food, .google and other terms. ICANN believes that gTLD expansion will add choice and flexibility to the Internet address system; however, wary trademark owners, especially financial institutions and financial services associations (including Bank of America Corp. and the American Bankers Association), have objected to its plans, anticipating an explosion in cybersquatting, typosquatting and phishing incidents and a spike in trademark abuse prevention and defensive domain name registration costs (millions of new domain names mean millions more that could end up in the hands of baddies).

In response to these objections, ICANN convened the Implementation Recommendation Team (IRT), a group of intellectual property experts, in March 2009 to examine the problem. On May 29, 2009 the IRT published its Final Report on Trademark Protection in new gTLDs for public comment. If you enjoy the sensation of being repeatedly slammed in the head with a large brick, I invite you to read the report. If you enjoy the sensation of being slammed in the head once or twice with a brick of more middling size, you can check out an article I wrote www.revenews.com summarizing the high points (such as they are) of the Final Report.

A couple of key issues bear mentioning here. First, the report calls for the creation of both (1) an IP Clearinghouse to serve as a repository of data about asserted trademark rights (both registered and unregistered trademarks) throughout the world and a validator of these rights where trademark claims impact domain name registrations, and (2) a Globally Protected Marks List (GPML) of select trademarks which have a large number of registrations in numerous countries and, accordingly, are targeted for the highest levels of abuse. Third-party applications for top-level domains that match or are confusingly similar to trademarks in the GPML (such as, hypothetically speaking, .apple) would initially be blocked, as would third-party applications for second-level domains that are identical to marks on the list (apple.computer, again hypothetically speaking).

Applicants to be domain name registry operators for the new gTLDs would also be encouraged to offer a Pre-Launch IP Claims Service, whereby, if a third party attempts to register a second-level domain that matches a trademark contained and validated in the IP Clearinghouse (and that is not a Globally Protected Mark subject to blocking), the registry would notify both the trademark owner and the registrant. The registrant receiving the notice would not be blocked from registering the domain name, provided that it makes certain contractual representations and warranties – i.e., it has a right or legitimate interest in the domain name, will not use it in bad faith and (under penalty of cancellation of the domain name) has provided accurate contact information.

Finally, the IRT report also recommends that all gTLD registries be required to participate in a new Uniform Rapid Suspension System (URS), sort of a cheaper, fast-track, limited-purpose version of ICANN’s Uniform Domain Name Dispute Resolution Policy (UDRP) for super-bad cybersquatters. In clear-cut cases where there is no “genuine contestable issue” about the registrant’s bad-faith registration and use of an abusive domain name, the trademark owner could have the registration frozen for its natural life, and Internet users attempting to access that domain name would see a specific error webpage. Complaints would be submitted (by e-mail, if the complainant chooses) to a third party selected by ICANN, which would retain a qualified legal expert to render a decision. Fees would be assessed by the third party on a cost-recovery basis. All in all, the process would be more streamlined and less formal than under the UDRP.

All of these trademark rights protection mechanisms will provide a much needed supplement to the wheezing and expensive UDRP (mandatory arbitration that costs thousands of dollars in legal and filing fees per squatter). Nevertheless, with a huge increase in the number of potentially problematic domain names, brand protection and trademark abuse prevention will remain an administratively complex and costly process.

One idea I had is that trademark owners could effectively deputize their online marketing affiliates by license agreement to snap up domain names on their behalf and point these URLs to approved ad copy. Affiliates could be paid a premium commission for clicks or transactions resulting from Internet traffic visiting the new domain names, to compensate the affiliate for both its initiative in opening up new real estate and the mitigation of trademark risk to the merchant from having the domain name in “friendly” hands. The affiliate contract/license agreement could even contain a buyout clause giving the trademark owner the option to purchase the domain name registration from the affiliate at a designated price (the affiliate’s out-of-pocket costs plus some kind of premium). For the trademark owner, in addition to increased Internet traffic, this arrangement would mean lowering its trademark abuse and brand protection costs – fewer domain name registrations to acquire and maintain, fewer disputes to pursue under either the URS or UDRP.

Well, that’s enough for one afternoon (blogging, not work). At the risk of sounding like a philistine, for today’s happy hour recommendation, try the roof of TGI Friday’s on the Ben Franklin Parkway between 17th and 18th Streets. It’s certainly no gastropub, just fun in the sun. (In these hazy, languid days of August, I’m very low-maintenance!)