Protect Your Brand From Cybersquatting

Right now, we are witnessing what an executive at the Internet Corporation for Assigned Names and Numbers (ICANN) called “the biggest change to the Internet since its inception.” As ICANN begins launching new generic top-level domain (TLD) extensions, we’ll no longer be limited to addresses ending with .com, .net, and other already familiar TLDs. We’ll see .clothing, .food, .sport, and many, many more. Some people are hailing the new launches as a huge win for consumers, while others decry the oncoming juggernaut as a significant threat to the rights of brand owners. The scope of this TLD launch, its reception by the internet community, and, ultimately, its success or failure all remain to be seen. What is certain is that businesses, brand owners, and other stakeholders need to be informed of these changes and take steps to prepare themselves.

It might surprise you to hear that, even prior to this current expansion, there were 21 generic TLD extensions in place. The domain space was expanded by ICANN in the mid-2000s to include various extensions that turned out not to be very popular, such as .jobs and .mobi. But now, ICANN is working in partnership with various stakeholders to allow for the creation and delegation of what many say will be hundreds of new TLDs. Over the next few years, we can expect TLDs to incorporate generic terms like .book, .clothing, and .diamonds.

Allowing these new TLDs will give many companies and individuals better options for registering their marks, names, and other designators as second-level domain names (to the left of the dot). For example, imagine that Bob owns a business in Boston called Vintage Clothing.  In setting up its original website, he was disappointed to find that vintageclothing.com was unavailable and even bobsvintageclothing.com was taken, so he settled for bobsvintageofboston.com. Now, he has the chance to register bobsvintage.clothing or even vintage.clothing.

The problem, of course, with more naming options is more opportunity for cybersquatting. Thus there is tension between the benefits of more domain extensions and the threats to trademark owners’ ability to protect their marks from infringement. Here’s what you should know about how ICANN hopes to prevent and fight cybersquatting and infringement, through the establishment of two rights-protection mechanisms:

The first is a system that enables trademark owners to pre-register domain names under each new TLD that correspond to their registered trademarks. The mark owner must first submit proof of its rights to an entity ICANN created, the Trademark Clearinghouse (TMCH). Once those rights have been verified by the TMCH, the mark owner will be eligible to register domain names that are an identical match to its registered mark during “sunrise” periods — periods of at least 30 days before registration for a given TLD is opened to the general public. This process is designed to give brand owners a key advantage over potential cybersquatters trying to register infringing domains.

Sending proof of rights to the TMCH provides an additional benefit to brand owners. If someone attempts to register a domain name during the general registration period under any new TLD, the mark owner will receive notification of the attempt, and the registrant will be shown a cautionary notice that their registration may violate the brand owner’s trademark rights. The domain registrant can still proceed with registering the domain, as there is no automatic blocking. However, they will have been put on notice, which could help the brand owner’s case in a later challenge to that domain registration.

Brand owners should be aware that there is an annual fee to use the TMCH, and they will also be charged a fee set by the registrar to register any domain names during the TLD sunrise periods.

A second rights-protection mechanism implemented by ICANN is the Uniform Rapid Suspension (URS) system, a mechanism through which brand owners can contest the registration and use of a domain name that is identical or confusingly similar to its trademark.

The URS is designed to be a speedy and cost-effective proceeding, with a shorter duration and significantly lower filing fees than current domain dispute remedies such as the Uniform Domain-Name Dispute-Resolution Policy (UDRP). Although not appropriate for all disputes, the URS can offer brand owners some significant advantages when used as part of an overall brand-protection strategy.

As with the current UDRP, adjudication of a URS dispute is handled by an authorized dispute resolution provider. Unlike the UDRP, however, a successful URS complaint will result only in the challenged domain name’s suspension, termination of the registrant’s control over the domain, and the disabling of any website or other services or content associated with the domain name. The URS will not provide for transfer of the disputed domain name to the trademark owner, and the brand owner will not be permitted to use the domain name while it remains in suspension during the duration of its registration term. If the brand owner wants to take ownership of and use the disputed domain, it should instead pursue a UDRP proceeding or other legal action. The essence of the URS, which is designed for clear-cut cases of cybersquatting where there is no genuine dispute over the facts, is in its speed and simplicity.

In addition to the URS, trademark owners can also utilize the currently available UDRP and litigation in federal court under the Anti-Cybersquatting Consumer Protection Act to resolve domain disputes. Each of these available options provides for somewhat different relief, and the choice of which to select will depend on a variety of factors. Brand owners should consult with counsel to discuss which may be the best option for the particular situation.

The expansion of the domain name space will create new challenges, but it also presents positive opportunities for businesses and individuals to stake new ground online. Provided that you, as a brand owner, are aware of your options, you should be able to navigate the expansion to your advantage.

Harvard Business Review