Big Business Fighting Top-Level Domain Change

(MoneyWatch)  The next big Internet land-grab is about to begin, and the fight between big business fearing trademark infringement and new companies poised to exploit virgin territory is heating up.

The Internet Corporation for Assigned Names and Numbers (ICANN) is planning to issue new top-level domains (TLDs) as early as 2010, authorizing the likes of .eco, .nyc and dot-just-about-anything-under-the-sun.

And therein lies the rub. While domain registrars are getting ready to apply for these TLDs, which could be a boon to new businesses, established businesses are scared silly by perceived threats to their intellectual property.

Someone like Tony's Pizza would get more business with a URL that ends with .nyc than one that ends with .com. This is why Al Gore has called the opportunity for a .eco TLD "truly exciting."

Established trademark holders, on the other hand, say they are concerned about maximizing "competition and consumer choice, [and] minimiz[ing] consumer confusion," as a questioner put it during ICANN's public meeting held in Mexico City this week.

"Consumer confusion" is code for established companies fearing that they will have to protect their brands over a whole new slew of TLDs, rather than simply .com, .net, .org and the various national TLDs (like .fr).

The danger of name-grabbing at the first stage and the concern that trademark owners will be pressured to protect their brands in hundreds of new TLDs led to a flurry of critical comments during the comment period last year for the first version of the Applicant's Guidebook to the new domains. Even the US government called into question the need for new gTLDs asking for studies on the issue of market demand and market impact.

Cooley Godward Kronish LLP, a lawfirm specialized in trademark issues, summarized the threat to IP owners thus:

With the new TLDs, trademark owners will continue to bear the burden of policing their marks. Proposed TLDs are not supposed to infringe on others' existing legal rights. However, ICANN will not maintain a trademark registry or filter against any database to prevent such registrations. ICANN also will not affirmatively check whether the applicant is the rightful trademark owner. Therefore, trademarks will not receive automatic protection from third party registration; owners must rely on their own policing efforts and raise timely objections. Consequently, increasing domain space will very likely require significant additional investments in policing efforts for mark holders.

Recognizing this as a stumbling block, Peter Dengate Thrush, chairman of the ICANN board, asked the IP community to come up with a proposal no later than May 29 of this year, so that the organization can begin the process of assigning the TLDs.

I had lunch today with Antony Van Couvering, CEO of Minds + Machines, a consultant to organizations hoping to establish new TLDs. In his view, new TLDs are hugely important to a varied range of constituencies, ranging from regions like Wales and Brittany which don't have their own TLD, to organizations like those trying to launch .eco (for whom Van Couvering is a consultant).

"They're invisible on the Internet. Even [Channel Islands] Jersey and Guernesy have [TLDs], but not them. There's nothing worse than invisibility, and now's their chance," he told me.

The U.S. government's position at this point is unclear. This issue falls under the aegis of the Commerce Department, which former Washington governor Gary Locke was just named to head; Locke's position on protecting IP will be closely watched by both sides of the debate.

Despite his previous support for the .ORG Foundation, which was established to serve the needs of non-profit organizations, his support for new TLDs is not a given.

Van Couvering told me that "IP rights are paramount on Capitol Hill" because "IP is the only remaining U.S. export."

Established companies, he said, "don't want to have to police their marks in new TLDs."

Insurgents, however, would stand to benefit greatly.

There would certainly be a certain amount of chaos, but there could also be a lot of wealth creation. It will be interesting to see where the new Commerce Secretary stands, and I would also like to hear more from both sides. I invite your comments.