Those who were worried by uncertainties surrounding ICANN’s new gTLDs will have been further disturbed by apparent glitches in the application system. TB&I takes a look.
The champagne was on ice. The deadline edged closer, and by the end of April 12, 2012, the last chance to apply for a generic top-level domain (gTLD) would have passed. A three-month window, which some had thought would never open, was set to close. But then the news came, bringing with it almost an air of inevitability: “We have learned of a possible glitch in the TLD application system software that has allowed a limited number of users to view some other users’ file names and user names.”
The message from the Internet Corporation for Assigned Names and Numbers (ICANN), which is accepting new gTLD applications, was an immediate worry for all applicants. For onlookers, it was astonishing that such an error could occur—had anyone seen their competitors’ applied-for name? ICANN, amid the panic, shut down the online application system until at least April 30, saying it would be open for five more business days upon reopening.
In many ways the delay was unsurprising, occurring under the stewardship of an organisation that has missed several deadlines since approving this third gTLD round in 2008. And while ICANN said it had resolved the problem, that no application data were lost or compromised, and that it had contacted all affected applicants, the leak was yet another reason for applicants to worry.
For many businesses applying for a .brand gTLD, the journey ahead is already uncertain. This journey, which was set to resume on April 30 until the data leak, will restart when ICANN publishes the full list of applications.
“As soon as the applications go public I think we will see a lot of people rattling the sabres to show that they have the best trademark right,” says Bruce Tonkin, head of strategy at Melbourne IT, which advises gTLD applicants. Indeed, rival brands sharing the same trademarked terms, and companies not applying but watching to ensure that no-one applies for their name, will all plunge into battle.
Some have already begun this fight: Planet.eco, an emergent applicant for the .eco environmental gTLD, has filed a lawsuit in California against two other applicants, claiming ownership rights over .eco.
While this squabbling will not affect companies applying for a unique brand name, they could face other hurdles once ICANN publishes the list of strings. The first is ICANN’s Governmental Advisory Committee (GAC). The GAC will be running over each application with a fine-toothed comb to ensure that strings are not capable of violating national laws or causing sensitivities.
This could certainly affect ICM Registry, the company that manages the .xxx domain (covering adult content) and is applying for .sex, .porn and .adult. In particular, brands applying for generic terms will be wary that the increasingly powerful GAC can stand in their way.
Then comes the public. After reveal day, ICANN opens a 60-day public comment period. “Anyone who has a particular grudge against a brand can make that grudge public,” says Tonkin, who joined Melbourne IT in 1999. “There is a degree of managing reputation here because people may say ‘you shouldn’t trust this company’ or ‘this company is dishonest’. They may air their dirty laundry.”
When ICANN publishes the list, some brands will, for the first time, actually begin developing their gTLD strategy: a challenge in itself.
“Some say ‘we’re not quite sure what we’re going to do with it yet but we don’t want to take the risk that someone else might take our name in the future’,” says Tonkin, whose company is advising around 150 clients. “That’s very much driven by their legal department: the legal department does the applying and then hands it over to the business unit to work out what to do with it in a year’s time,” he said.
Tonkin, who is also an ICANN board director but cannot vote on gTLD policies, explains that the obstacles don’t end there. Before evaluators can begin assessing applications in June 2012, ICANN must place them into batches. The organisation is expecting at least 1,000 applications—and there at least 839 registered bids—but evaluators can manage only 500 applications at once. This means that ICANN must create the batches fairly: for some companies, being in the first batch and gaining ground on competitors is essential.
“RIVAL BRANDS SHARING THE SAME TRADEMARKED TERMS, AND COMPANIES NOT APPLYING BUT WATCHING TO ENSURE THAT NO-ONE APPLIES FOR THEIR NAME, WILL ALL PLUNGE INTO BATTLE.”
After dismissing random selection—owing to fears it would invite lottery lawsuits in California—and ruling out first-come-first served, ICANN directors voted for ‘digital archery’ in March 2012. Under this system, which has an opt-out provision, applicants pick a time and date in the near future. Then, on that date they have to click a ‘submit’ button on ICANN’s website as close to the chosen time as possible.
The closer to the time, the higher they will rank. ICANN will rotate through its five geographic regions picking the best times, followed by the second-best times, continuing until all applicants have been ranked.
The system has not been popular. It was highly criticised at ICANN’s public meeting in Costa Rica, with one gTLD policymaker saying she was “bewildered” at the decision. Some say it is no different from a first-come first-served system; others say it favours applicants with the best technology. In a similar vein, Tonkin said it was not ideal for many of his clients, which include banks and online brands.
“We would prefer something that is more predictable. The problem with the current system is that corporate companies are asking us ‘what does this mean?’,” he says. “They’ve gone through the whole process and are keen to go live—but we have to tell them it depends on which batch they’re in and explain that they might not be in the first batch. This causes a lot of uncertainty.”
Picking a universally popular mechanism is not easy, however. Some people believe internationalised domain names, ie, those in non-Latin scripts, should come first. Others, Tonkin said, want the generic names first because they will have the most second-level registrations and the greatest benefit.
Others still would say the brands should have priority because they will be the simplest to process, he said. “Everyone has a different view on who goes first,” he said, highlighting the difficulty ICANN has in keeping such a broad range of stakeholders happy.
Tonkin says that Melbourne IT, like its rivals, will provide a service to ‘maximise’ its clients’ chances of landing in the first batch. “A lot of domain nameoriented systems are based on getting in there first, or getting in there by a particular time—so most of the industry participants have experienced that.
"Until more details are released on the specifics of the user interfaces and how you log in, then it’s very hard for anyone to say how they would do it,” he says. “What you can say is that most of the IT-orientated organisations will put a team of people on it and come up with something effective.”
From June, all applications must pass demanding reviews. First, ICANN teams will review whether string names are too similar to current TLDs or would cause disruption to the domain name system. Then, KPMG and Ernst & Young will assess whether applications meet the requisite financial and technical standards for running a registry. Although applicants, especially those who employed specialist consultants, will hope they meet these standards, achieving a pass is not guaranteed.
What can be said though, with a strong degree of certainty, is that a wide range of brands, whether they apply for a gTLD or not, will face strategic challenges in the new domain name era. “The launch of new gTLDs is likely to cause an unprecedented shakeup to the domain name system and the Internet in 2013 and beyond,” said David Taylor of law firm Hogan Lovells.
“Although the aim is to enhance diversity, choice, competition and innovation, it will inevitably put a considerable burden on rights owners across the globe, who will need to reconsider their online strategies carefully.” While we don’t know exactly who will apply for a .brand, apart from a handful of companies such as Canon and Hitachi which have announced their plans, we do know that businesses will face a completely altered domain name system from 2013, when the first registries are expected to open.
This article was first published on 01 May 2012 in World IP Review
gTLDs, ICANN, ICM Registry, domain names