On 20 June, the Internet Corporation for Assigned Numbers and Names (ICANN), the organisation that oversees Internet domain names, voted overwhelmingly in favour of one of the biggest changes in the web’s history, allowing a major expansion in the range of web suffixes available for registration.
Under the new naming system, businesses, organisations and governments will not be confined to the existing list of 22 generic Top Level Domains (gTLDs) that include ‘.com’, ‘.net’ and ‘.org’ when they apply to register a domain name. The proposal is that domain names suffixes will now be available in almost any word in any language, that is, nearly any word up to 63 characters in length.
It is thought that the new system will be particularly attractive to companies as it will give them the opportunity to take greater control of their branding. A number of international companies have already expressed their intention to create their own branded web suffixes such as Canon, Deloitte and Hitachi.
The idea behind the change is that organisations around the globe will be able to market their brand, community or cause in new and innovative ways. Rod Beckstorm, president of ICANN, spoke of this latest development in terms of “unleashing the global human imagination” and expressed hope that “this allows the domain name system to better serve all of mankind.”
From a global trade mark perspective, the new gTLDs have the potential to be both a blessing and a curse to companies. New web suffixes will give companies the opportunity to reinforce their brand names in new ways, but at the same time may result in an increase in legal actions required to defend trademarks. ICANN’s latest proposal has not therefore been without opposition, with many large companies expressing concern that they may be forced to spend millions registering their brand names simply to protect their intellectual property.
Applications for the new web suffixes will be accepted from 12 January 2012. Obtaining one of the new web suffixes will not come cheap - a successful application will cost the applicant $185,000 before legal and consultancy fees. In addition, there will be an annual fee of $25,000, a fact which is likely to deter many small and medium size enterprises.
Many companies have expressed reservations that this new system will leave them vulnerable to domain squatting. Domain squatting involves opportunistic applicants buying one of the new suffixes that bears a company’s name and then seeking to resell it to the company for a profit - a major problem in the earlier days of the internet. Another potential problem may arise where more than one company or organisation wishes to register the same suffix, which could potentially be a particular problem for city governments, by way of example, will Dublin, Ohio try to register the ‘.dublin’ suffix before Dublin, Ireland?
ICANN believes it has appropriate procedures in place to mitigate these issues, including maintaining a trade mark clearinghouse to track registered names and establishing a new system to allow rapid takedowns of domains found to be infringing trade marks. ICANN also believes that the significant fees charged for new gTLDs and the difficult application process will deter domain squatting.
It will be interesting to see how the market reacts when the floodgates open in January.