Monday, March 11, 2013

Why is ICANN creating new generic top-level domains?

Later this month, the Internet Corporation for Assigned Names and Numbers (ICANN) is beginning a Trademark Clearinghouse to prepare for the implementation of new generic top-level domains (gTLDs) later this year. ICANN is the organization that manages domain names. The Trademark Clearinghouse will allow owners of registered trademarks to purchase the new gTLDs before the general public.

If the mark owners do not purchase the domain name with the new gTLDs and someone else does, the only recourse is to sue under the Anticybersquatting Consumer Protection Act, or to give the domain registrant whatever they want. The Clearinghouse will notify the mark owner if someone else registers a domain with their trademark, but it will not prevent anyone from registering the domain. Paying a domain registrant after they registered a domain would likely cost more than buying the domain in the first place. So, it essentially forces companies with famous and distinctive trademarks to purchase domains they do no want or need, just to prevent cybersquatters.

The new gTLDs do not add anything. Is it easier to visit "" instead of ""? By now, ".com," and ".org" are well-understood. Available domains are not the issue either. If you have a famous mark, for instance Pepsi, you will need to buy domains in all of the new gTLDs when they become available to prevent cybersquatting. Effectively, this does not add any new domains, because Pepsi will ostensibly purchase all of the available gTLDs. It just creates consumer confusion by having a higher number of similar domains when there is not a registered trademark using the domain.

The FTC is concerned about the extra domains too, because it makes it easier to perpetrate fraud. For instance, if Wells Fargo does not pay ICANN for the new gTLDs, then someone else can register domains under Wells Fargo's mark and better deceive consumers with whatever scheme they have hatched.

When there is no plausible non-monetary justification for an action and the actor financially benefits from the action, the reasonable conclusion is that the action is a cash grab. That is the situation with ICANN's implementation of new gTLDs. There are no benefits and the new gTLDs are almost certain to cause problems.

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