ICANN Domain Name Policy Concerns

 

As an attorney representing businesses with a robust online presence, I have seen both the good and the bad from ICANN. In case you are unfamiliar with ICANN, it is the non-profit organization that governs domain names and the Internet. I generally think the organization does a great job and we clearly need some regulatory oversight in place to protect brand owners and ensure a fluid and free Internet. However, there are some ICANN domain name policies that negatively affect the business community and brand owners in particular. I have kept track of my own thoughts based on past experiences filing Uniform Domain Name Dispute Resolution Policy (UDRP) complaints and dealing with other domain related issues.

The following is a summary of 2 important domain name issues that brand owners should be informed about.

 

1. The threshold to demonstrate UDRP ‘Bad Faith Registration’

The current UDRP fast track process, which is a crucial domain recovery tool, gives brand owners no recourse much of the time. The argument for allowing trademark or service mark owners the unfettered right to the corresponding domain or confusingly similar domain are pretty clear cut. However, in order for a trademark or service mark holder to recover a domain name via a UDRP action, it must show both bad faith registration and use of the domain. This hasn’t always been easy to do.

The domain would not likely have value but for the efforts of the holder of the underlying mark. Brand owners are essentially being punished for not being first in time to secure the corresponding domain name when they have been the only ones to develop the brand in commerce. If a brand owner can demonstrate legitimate and continuous use of the corresponding mark in commerce qualifying for brand protection under existing U.S. law, the brand owner should be presumed to have an exclusive interest in and to the identical or a confusingly similar domain. The evidentiary burden could then should shift to the respondent to demonstrate legitimate use made in good faith. In other words, it would help brand owners if UDRP rules eliminated showing bad faith registration entirely.

Recently, arbitration panels have begun to be persuaded by “retroactive bad faith registration” arguments. This has certainly helped more brand owners recover their domains. But, this has not been consistent. What happens to the businesses that have carefully cultivated their brand in commerce, yet cannot recover the corresponding domain name from a host provider due to the inability to demonstrate bad faith registration? The domain in this case is registered and never used in any capacity by the registrant prior to the establishment of the brand in commerce. The brand owner may be forced to file a federal lawsuit under the Anticybersquatting Act, which also requires a showing of bad faith. 

What about when an a disgruntled employee or ex-spouse or girlfriend registered your small business’s domain and listed herself or himself as the registrant? The domain may not have been registered in bad faith at the time or used in bad faith now other than a refusal to cede control, and proving this could be difficult. Of course, even a UDRP suit filed by a qualified attorney will cost on average $2500-$5000. Resorting to filing a federal lawsuit to recover the domain would likely be far more expensive.

Search engine ramifications along with general branding dilution are big concerns to all businesses. The UDRP policy, while an excellent solution, is not without some flaws and understanding the issues that surround domain name branding can prevent a ton of future problems.

The lesson to brand owners is pretty simple: secure your domain as early as possible and maintain control as the registrant at all times.

 

2. The creation of so many new gTLDs

I wrote about this in an earlier post. ICANN has sanctioned many new generic top-level domain names (gTLDs) that have had the cumulative effect of diluting a given brand. Brand owners who have spent capital and cultivated the brand face a dilution of their brand online. The brand can now have numerous top level endings, such as yourbrand.guru, yourbrand.sucks, yourbrand.attorney, etc. The list is expansive and there is seemingly no end in sight.

There are sunrise registration periods for registered trademark owners to reserve and secure a new top-level domain before they are released. The “Sunrise Period” is the time during which a trademark owner who has registered their mark(s) in ICANN’s Trademark Clearinghouse can register a corresponding gTLD first. After the Sunrise Period closes, registrations will be on a first-come/first-served basis. This means that trademark registration will not prevent some third party to register it before the brand owner has the opportunity to do so. But, it may be too late for many unregistered mark holder to register in time and take advantage of any sunrise periods.

The resources and energy spent policing the Internet and determining how to prevent or address dilution and infringement will certainly not be cost-effective for many small to medium sized businesses. The market has already dictated that .com has been the gold standard in gTLDs and while there is certainly room for other gTLDs, releasing a new gTLD seemingly every week is a bit much.

The bigger problem lies with the availability of gTLDs such as the .sucks and .porn top-level domain names. The implications of allowing yourbrand.sucks to be registered by a third-party are obvious.  Using the domain in a legitimate, non-commercial manner would likely be considered to be free speech, not infringement of a brand owner’s mark. Under the current UDRP process, an offending domain does not necessarily have to be used in commerce to demonstrate bad faith on the part of the registrant. However, the element of bad faith must still be shown and using the domain as a critical forum won’t rise to that level. Such use diminishes the underlying brand. It was extremely expensive to reserve a . sucks domain during the sunrise period ($2499 for the standard option). Not to mention that the underlying mark must also be a registered trademark or service mark. This certainly places small to medium sized companies at a disadvantage. (This is why I actually recommend not purchasing yourbrand.sucks for most clients and focus that money and energy on building a great brand instead. Spending less money on some other much cheaper top level variations depends. It may make sense for the recording studio to secure its company name with a top level domain such as .music or a law firm to secure .attorney, for example. )

On the other hand, some of my clients view the onslaught of so many new gTLDs as marketing opportunities. Specific niche top level domains such as .music or .attorney to provide unique advertising and branding opportunities. But, the onslaught of so many top level domains cannot be considered to have an overall net positive effect on established brand owners.

 

Transition of U.S. oversight of ICANN

The Obama administration has set out to cede oversight of ICANN to a global multi-stakeholder body. Any attempts at reforming ICANN to better serve overall U.S. commerce (and global commerce) must begin with a concentrated effort to keep it under U.S. control. Proponents of ceding control argue that the fragmented system we have in place now doesn’t benefit anyone. With all do respect to other nations, its hard to imagine that an organization so critical to global commerce would be better off being controlled by anyone other than the U.S. exclusively. Even President Clinton has recently defended our continued control over ICANN and has pointed out that the U.S. “has been by far the country most committed to keeping the Internet free and open and uninterrupted.” Our First Amendment freedoms and culture of anti-censorship may put the U.S. in the best position to benefit the global community. Should the rest of the world desire to fix what isn’t broken in terms of oversight? Reforms should be made, but the economy that leads the world and is impacted the most by the ICANN policies from many different standpoints should remain squarely in control.