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Growing maze of domain name protection

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John Swinson says a company’s business model must be known before it is possible to establish whether a similar domain name is cause for concern. Photo: Robert Shakespeare

Marianna Papadakis

A next generation online land grab has commenced with the US Internet Corporation for Assigned Names and Numbers (ICANN) deliberating over applications for new internet domains, but businesses are already starting to count the costs of cyber property prospecting.

ICANN, which co-ordinates the domain name system and manages generic and country code top-level domain names, is evaluating 1927 applications for new generic top-level domains (gTLDs) with intellectual property and trademark lawyers watching the program closely.

Time is running out for companies to wade through the applications and assess the risk the gTLDs pose to their brands before public submissions close on September 26.

While many new domain names, such as .monash, .latrobe, .apple or .google are brand specific, there are concerns about how more non-exclusive domains might be used.

Further concern centres on how the new internet land release could increase the costs to businesses of protecting their brands.

The internet domain name system (DNS) has more than 200 generic top level domain names (gTLDs) including .com, .org and .net and companies have traditionally protected their trademarks by registering in most or all of them to prevent misuse of their trademarks by fraudsters.

While a company might have about 10 active websites used for marketing products and communicating with clients, it also likely has about 100 more dormant sites registered merely to stop others from using its trademark.

According to registrars which deal with .XXX, the majority of the 10,636 registrations in Australia since that domain name was introduced last year were defensive, meaning most of the sites are not used for porn but rather to protect brands from association.

Companies could also opt for a 10-year “block” preventing others registering a domain name in .XXX.

Under ICANN’s trademark clearinghouse, the new gTLD operators must provide a sunrise period giving companies the first right to register their names or trademarks in the new domain names for active or defensive use. There is a further 60-day period to advise registrants of any existing trademarks, and to advise trademark holders where a proposal for a domain name matches theirs.

Melbourne IT, one of Australia’s .XXX registrars, says ICANN’s clearinghouse guidelines do not sufficiently protect trademark holders against cyber squatters, phishers and counterfeiters registering well-known trademarks in bad faith. It is calling for stronger measures to safeguard well-known brands before the new gTLDs are introduced from 2013.

Melbourne IT said companies would have little choice but to register their trademarks in every new generic gTLD to protect consumers from fraud or confusion. This could cost hundreds of thousands of dollars, he said.

The approval of more sex industry domain names like .SEX or .PORN was perhaps less of a concern to brands than more general applications such as .shop, .online and .buy.

ICANN has received more than 6000 public comments on new gTLD applications so far.

Melbourne IT chief strategy officer Bruce Tonkin said the company’s proposal aimed to strengthen the protections for organisations with high at-risk trademarks to better shield consumers from confusion or online fraud. A list of high-risk trademarks would be created and a scoring system developed to determine which brands should be eligible for greater protection.

In addition to the sunrise process, there would be stronger requirements for registrants and suspension and recovery of infringed domain names.

“What we are proposing is not radical, but instead a practical solution which can be built on existing protections,” Mr Tonkin said.

All this comes in the context of an ever increasing number of trademark and domain name disputes being handled by arbitrators and the courts.

While defensive registration has become the less costly and simpler alternative to legal avenues, there have been more than 40 proceedings determined by Australian geographic domain space regulator .au Domain Administration Ltd (auDA) this year and 179 since 2010.

There are a further four currently before the industry regulator.

At an international level there have been more than 7000 cases determined by World Intellectual Property Organisation (WIPO) arbitration and mediation centre since 2010, with 14 cases concerning .XXX, including one Australian matter.

Technology law expert at Macquarie University Niloufer Selvadurai said while more fine-grained requirements to validate the bona fides of registrants and their contact details was important, parts of Melbourne IT’s proposal could be difficult to implement. The onus should remain on the commercial sector.

“The commercial value of trademarks evolve with time and marketing investment, and it would be onerous for ICANN to keep an up to date listing of all high-risk trademarks,” she said.

A new database system could be introduced that enabled cross checking of domain name applications with registered trademarks so trademark owners could be notified of applications which either exactly matched their brands or were substantially similar.

Dr Selvadurai said the ICANN clearing house proposal had not fully addressed the problem of domain name applications which were not “exact matches” to registered trade marks but were substantially similar and hence also potentially misleading to consumers. The problem of substantially similar names resulted from applicants inverting the order of words, adding a preposition or dash or using misspellings get bogus websites approved.

auDA chief executive officer Chris Disspain said there was already a huge layer of protection in place for trademark holders including legal mechanisms to protect companies against passing off; where someone misrepresents another’s goods or services as their own.

He said companies were in effect seeking to extend trademark ownership to services or goods which fell across different classes.

Under trademark law, a company may register a new trademark that could be currently in use, if it applies to a different category of goods and services.

“The policy has gone as far as it can go without creating layers of costs,” Mr Disspain said. “If the cost of running a gTLD is increased because of protection measures, then the cost of domain names will increase. Those ones you do have to register will then cost you more.”

But King Wood Mallesons intellectual property and technology lawyer John Swinson said there had to be a balance between protecting the interests of brand owners, new applicants and registries.

The problem was that the business models of many new registries were not known; for example, how would .online .shop .app .study, .book, .film and .bond be used.

“Whether it’s a cause for concern for brand owners depends on the business models and whether they will be used aggressively to stop others from having domain names or not,” he said.

Some industry players are trying to focus on the positives that the new gTLD will bring.

Go Daddy views domain names as 21st-century real estate.

GoDaddy.com vice-president of product development domains Richard Merdinger said companies which focused strictly on defensive registrations could overlook real opportunities.

The new gTLDs would promote a flourish of business activity on the internet, with smart and creative ideas in the new domain spaces.

“More innovative companies will approach this issue opportunistically, looking for ways to uniquely improve their online presence and the experience for their customers,” Mr Merdinger said.

Article source: http://afr.com/p/technology/growing_maze_of_domain_name_protection_q82RinW5EKumQXjSU1xF2H. Creative Commons (CC)


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