Release of new generic Top Level Domain extensions

The Internet Corporation for Assigned Names and Numbers (ICANN) is scheduled to increase the number of available generic Top-Level Domains (gTLDs) in 2012. 

Presently, there are 22 gTLDs.  Most common gTLDs are ‘.com’, ‘.org’, ‘.info’ and ‘.net’.  The release of a new range of gTLDs (.car or .[your brand]) will significantly expand the suite of domain names that brand owners may be able to register with a result of increasing consumer brand awareness in an already very overcrowded electronic marketplace.

How to get a new gTLD

The application period for new gTLDs commences on 12 January 2012.  It will end on 12 April 2012.  If a gTLD is approved by ICANN, the applicant of the approved gTLD may commence 'delegating' (effectively exploiting ownership through licence) by permitting domain name registry operators to register domain names using the approved new gTLD extension to third parties.

Despite the above simplicity of the new gTLD release, ICANN has ensured that the application process is not so simple.

The application process

First, there are eligibility requirements applicants must meet.  Only ‘established corporations, organisations or institutions in good standing’¹ can apply for a new gTLD.  This excludes natural persons and as-yet-unformed legal entities.

Second, there is a limitation as to time.  ICANN anticipates that a ‘straight-forward’ application, in respect of which no objection is filed, would take about nine months to process after the initial application date has closed.²  However, if a gTLD is disputed, a dispute could take up to two years to resolve.  If a gTLD application is the subject of one or more objections, then a successful applicant may not be delegated permission to use the new gTLD extension until three years after the application period has closed.

Finally and perhaps most significantly, a gTLD application is costly.  The application fee for a new gTLD is approximately $170,000.  This fee must be paid in full at the time of making an application.  Businesses can apply for as many gTLDs as they like, subject to paying a separate application fee for each proposed gTLD.  It follows that if a gTLD is objected to, the applicant can expect to incur further cost by virtue of the ICANN dispute resolution process.  If a gTLD is approved, successful applicants will also need to pay an ongoing maintenance fee (anticipated to be approximately $23,000 per year).  While these costs may not be so significant for large or multi-national organisations, few smaller business operators will be able to absorb this cost.

Furthermore, applicants will need to ensure that the choice of proposed gTLD does not infringe third party intellectual property rights.  This can be particularly tricky when trade marks are involved.  For example, the name ESKY and VELCRO are not generic words to describe portable coolers or hook and loop fabric fasteners.  These names are protected trade marks in Australia (under trade mark numbers 170377 and 171553, respectively) and other countries around the world.  An application for a gTLD for a .esky or .velco extension will not succeed if the applicant of that gTLD can not demonstrate a connection or right of entitlement to that particular name.

Exploiting specific gTLDs

Some entrepreneurial businesses may choose to take an alternative approach to the new gTLD release and apply for the delegation of a right to a domain name extension that reflects their particular product or service offering (‘.car’, ‘.legal’ or ‘.food’, for example).  Essentially, the owner of that gTLD (if approved) could exploit ownership rights for that gTLD by allowing other similar service or product providers to register domain names using that extension for an on-going fee licence fee, much in the way that .com and other extensions are licensed in Australia and globally.

Using your brand in your domain name

If all of the above sounds commercially unsustainable for your business, it is still important to appreciate the benefit that a domain name will bring to your business.  Whether your domain name is followed by a new gTLD or the more commonly known gTLD extensions, either way, a domain name should form part of any branding strategy.

A well chosen domain name will give a brand-owner more ways to promote a business. 

Registering a domain name which complements a trade mark, is the most inexpensive way to increase brand exposure to a consumer market in Australia and elsewhere around the world, depending upon your approach.  For example, McDonald's restaurants have a protected trade mark for the name ‘McDonald’s’ in many countries.  In addition, McDonald's also owns domain names in a number of different countries.  For example, (Australia), (Japan), (United Kingdom), (Hong Kong) and the list continues.  Many of the domain names also host a website which is in the native language of that particular country.

The many languages of gTLDs

In the case of country coded domain names, brand owners can now apply for a domain name in a number of different languages without being restricted to Latin (or Roman) alphabet and Arabic numerals.  Simplified Mandarin and Chinese, Arabic, Japanese, Hebrew and Cyrillic languages are just some of the recognised scripts that brand owners can now apply to register a domain name in. 

Lavan comment

ICANN’s decision to allow a process of application for new gTLDs is demonstrative of the power of the Internet.  However, the cost and potential difficulties of registering a new gTLD may well be prohibitive to many businesses.  This does not mean that a business should not maintain an electronic presence through the registration of its brand name(s) by using the commonly known gTLDS or country code extensions. 

If you would like to know more about the benefits of owning a domain name and how to apply for a domain name in countries around the world, including Australia, please contact:

Wayne Zappia Nada Maltaric
Partner  Associate
(08) 9288 6931  (08) 9288 6998
Disclaimer – the information contained in this publication does not constitute legal advice and should not be relied upon as such. You should seek legal advice in relation to any particular matter you may have before relying or acting on this information. The Lavan team are here to assist.