ICANN now accepting new gTLD applications; are cybersquatters still a real risk?

ICANN logoToday marks the opening of a revolutionary registration program at the Internet Corporation for Assigned Names and Numbers (ICANN). The new generic top-level domain (gTLD) registration programme is open to those who can afford the $185,000 (£120,000) evaluation fee.

ICANN is growing the Domain Name System (DNS) system by seeking registrations of any word, including non-Latin and non-English characters, as a suffix. This expansion provides relief to the DNS and the existing 20 odd gTLDs (including .com, .org and, recently, .xxx). Interested applicants have three months to register their choice.

Rod Beckstrom, CEO and President of ICANN, has stated the new gTLD rollout is “the biggest change in the Domain Name System since dot-com”.

However, the path to today’s launch has not been without challenge, and ICANN have suffered numerous setbacks.

In December, the US Federal Trade Commission (FTC) criticised the programme, citing the risk of abuse of the new gTLDs, specifically through existing scams such as phishing sites.

Risks posed by cybersquatters and typosquatters have also been high on the agenda of trademark brand owners. They fear they are being forced into this expensive process by defensively registering a domain for their brand in order to prevent cybersquatters buying it.

Trade body, the Association of National Advertisers (ANA), has been particularly vocal in its criticisms. It recently suggested the creation of a “Do Not Sell” list which would create a temporary log of brands to be protected during the registration period.

The high registration costs, long bureaucratic process for approval and pricey registry management overheads seem an obvious barrier to traditional opportunistic cyber/typosquatters. However, well funded parties may still pose a risk.

Changes ahead signNevertheless, ICANN has created provisions to tackle the cybersquatting issue.

Formally, all applications are published with a 60-day public comment period and trademark owners have 7 months to challenge these.

ICANN has also setup a Trademark Clearinghouse. This service stores and disseminates information on trademarks, with the aim of preventing registries breaching IP owner rights with new gTLD registrations.

With formal disputes, the ICANN Uniform Domain-Name Dispute-Resolution Policy (UDRP) process and new fast-track Uniform Rapid Suspension System (URS) are the routes for aggrieved brand owners seeking redress.

The UDRP has long been criticised for its promotion of forum shopping and bias towards IP rights holders. The new URS offers even fewer procedural safeguards.

Despite the legitimate interest in protecting against cybersquatting, these protections have collateral legal implications.

ICANN, the UDRP, URS, Trademark Clearinghouse and the new gTLD system have global scope. Yet trademark laws protecting brands are normally jurisdiction or region specific.

Extending trademark protections onto a global platform negatively impacts smaller players. Control of generic terms by big businesses, like .sky, .apple or .canon, could have negative effects for Small/Medium Enterprises (SMEs) with legitimate interests in these domains.

It could be argued that extensive use of search engines limits the importance of these new gTLDs. SMEs, particularly, may get similar exposure through sponsored search terms and metadata.

For individuals though, the new suffixes force reassessment of established perceptions of risk. Registration of generic terms like .shoes, .car and .jacket, in addition to recognised brands, may distort indicators of legitimate sites with users increasingly placing unfounded trust in dubious domains.