ICANN: Growing pains of Internet domain expansion


John McElwaine and Paul McGrady

ICANN: Growing pains of Internet domain expansion

INTA is working to promote the public interest in the introduction of the forthcoming new gTLDs and helping trademark owners manage their exponential growth. John McElwaine and Paul McGrady report.

Some 15 years ago, the Internet Corporation for Assigned Names and Numbers (ICANN) was formed to transition the management of Internet resources to the private sector. Today, with more than two billion people enjoying access to the Internet, some may call this experiment in a multi-stakeholder organisation a smashing success.

But with ICANN’s performance in managing the Internet’s address system, known as the ’domain name system’, having a profound impact on trademark owners and the consumers, this massive growth in and dependence on the Internet has experienced some growing pains.

Probably the most discomforting of all has developed in recent years with the increased scrutiny—and criticism—of ICANN over its introduction of the new generic top-level domain (gTLD) programme. With several unintended glitches and unpredictable course changes in developing the programme, questions about ICANN’s governance raise the spectre of the crippling of the Internet’s stability. 

"These new GTLD applications have made significant investments in acquiring .brand gtlds, and share the consumer protection concerns common to the entire INTA community."

How did we get to this point, and what can trademark owners and organisations such as the International Trademark Organization (INTA) do to mitigate the problems?

Trademark owners weigh in on new gTLDs

As a founding member of ICANN’s Intellectual Property Constituency (IPC), INTA supports ICANN as the appropriate technical coordinator of the Internet’s system of unique identifiers, aka domains, and works within ICANN’s multi-stakeholder model to represent the views and interests of trademark owners. ICANN’s previous expansion of the TLD system in the early 2000s occurred within an environment where cybersquatting and malicious use of domain names was eroding consumer trust in the Internet marketplace.

Consequently, in 2009 INTA’s board of directors adopted a Resolution on the Creation of New gTLDs and Trademark Protection which unequivocally stated that the introduction of new gTLDs should be responsible, deliberate and justified.

INTA was not alone in its concerns, which included the continued stability and security of Internet infrastructure. Other organisations, such as ICANN’s IPC and Business Constituency (BC), the US Department of Commerce and the European Commission admonished ICANN on what was considered a highly risky initiative.

ICANN’s shortcomings prompted its Government Advisory Committee (GAC) to express concerns regarding inadequate consumer protections at a special consultative meeting held in 2011 between the GAC and the ICANN board of directors.

In an effort to address these widespread concerns and in particular those related to inadequate trademark protections in its programme, ICANN requested the IPC to form an implementation recommendation team (IRT). Although the IRT provided a comprehensive set of recommendations for protecting IP, referred to as rights protection mechanisms (RPMs), ICANN struggled to implement the measures effectively.

To address trademark protection concerns, ICANN mandated that all new gTLDs implement a minimum of two RPMs to safeguard IP rights. The RPMs consist of a sunrise period and a trademark claims service. On the advice of the IRT, the Trademark Clearinghouse was developed as a central repository for trademark rights that would be used to implement such RPMs.

However, to date, the Trademark Clearinghouse remains underused by many trademark owners, while they continue to weigh the costs against the potential benefits.

It remains to be seen whether recent enactments to the RPMs will increase or decrease the popularity or effectiveness of the Clearinghouse. Furthermore, a number of applicants for new gTLD registries are seeking to offer additional registration periods and rules that may interfere with the established RPMs. ICANN must ensure that the trademark protections embedded in its new gTLD programme are not devalued or rendered ineffective during the implementation process.

New gTLD programme is launched, but concerns persist

Fast forward to August 2013, and ICANN is facing mounting and difficult security, stability and legal rights issues as the various provisions of the new gTLD programme are being implemented. Exacerbating the situation are the shifting positions of various stakeholders. The GAC issued its Beijing and Durban Communiqués providing advice on certain new gTLDs.

These included objections to a number of applied-for strings that some in the Internet community argued were without basis in generally accepted principles of law. In a first move to help inform this process, the ICANN board solicited comments on the Beijing Communiqué from the community on how it should address some of the issues raised by the GAC.

One of these issues relates to ICANN’s central mission to preserve and enhance the operational stability, reliability, and security of the Internet’s domain name system. On August 5, 2013, ICANN released a study on ‘name collisions’ that identified two strings that, given their high frequency of appearances in queries to the Internet root zone, would likely cause problems if delegated. These strings are .home and .corp; they are considered ‘high risk’ strings given that they occur an order of magnitude more often than other strings.

However, ICANN is also reporting an ‘uncalculated risk’ identified for 20 percent of the applied-for strings. Additionally, several of the potentially at-risk strings include well-known trademarks. ICANN’s proposal to mitigate name collision risks remains open for public comment until September 17, 2013.

With the launch of branded new gTLDs there are more opportunities for the trademark community to participate within ICANN.

These new gTLD applicants have made significant investments in acquiring .brand gTLDs, and also share the consumer protection concerns common to the entire INTA community.

However, ICANN has been reluctant to address the issue that trademark owners who have applied for a .brand gTLD require  a separate registry agreement because of the unique operation of a ‘single registrant registry’—a registry that is restricted to only affiliates of the brand owner registry operator.

While progress is being made with respect to certain portions of the registry agreement that can be amended to reflect this reality, it remains unclear if ICANN can accommodate the contractual requirements that established brand owners need to operate TLDs.

Governance, costs and hope

All this activity is occurring against the backdrop of an ICANN governance structure that lacks the full representation of the public interest and is tilted towards its own contractual business partners. The influence of these contracted business partners (upon which ICANN’s budget is based, collected through fees imposed on domain name registrants) is disproportionate to the interests of the public at large. As a result of these imbalances, IP concerns are all too often minimised in policy outcomes.

Unlike the name collision issue, which is an engineering problem related to the use of an applied-for new gTLD term that may also be used in private networks, there has been no study by ICANN of ‘brand collisions’ within the new gTLD framework.

If ICANN has run clearance searches on the applied-for strings to determine whether consumer confusion might occur if the string were operated by someone other than a party that owns an underlying trademark that corresponds to the gTLD string, the results of such searches have not been made public. ICANN has done little empirical research on trademark protection and consumer confusion in the domain name system.

None of this bodes well for the trademark owners' budget in light of new gTLDs. Even ICANN’s own limited research demonstrates that the external costs likely to be imposed by new gTLDs will be significant with regard to monitoring, defensive registrations, and enforcement actions. Although the technical risks such as name collisions have been identified, it is only at this late stage that potential mitigation measures are being proposed. Last, ICANN’s decisions in allowing certain strings to co-exist, and decisions in legal rights objections, may further increase the likelihood of consumer confusion.

Risks caused by the new gTLD expansion are on the horizon. But there is still hope that the system will continue to benefit consumers. As described by ICANN’s economic studies, consumer choice may be enhanced, provided ICANN properly manages the scope and scale of new gTLD programme with appropriate safeguards. One of the most visible potential benefits may come in the form of internationalised domain names, or TLDs based in non-Latin scripts, and .brand domain spaces which may serve to increase consumer trust and offer innovative online experiences.

INTA will continue to work on promoting the public interest in the introduction of new gTLDs. Upcoming INTA initiatives, including publications, educational programmes, and the development of a TLD policy database portal, will help trademark owners manage the exponential growth of new gTLDs.

So how can trademark owners help improve ICANN’s implementation of the new gTLD programme? Participation in ICANN’s IPC is a good place to start. ICANN’s last public meeting of 2013 will take place in Buenos Aires, Argentina, November 17 to 21. Trademark owners also can reach out to INTA for suggestions on how to connect with and participate within the ICANN policy development process during these important times. 

John McElwaine is a partner at Nelson, Mullins Riley & Scarborough LLP. He can be contacted at john.mcelwaine@nelsonmullins.com

Paul McGrady is a partner at Winston & Strawn LLP. He can be contacted at pmcgrady@winston.com

This article was first published on 01 September 2013 in World IP Review

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