Legal Bulletins

The next few months present you with a few decisions about protecting your brand name on the internet. We are in the midst of the first large expansion of “generic top level domain names” (gTLD) to add to the existing group that includes .com, .net and .info. Immediately, you need to decide if you will block an adult site from using your registered mark with the .xxx extension (such as hilton.xxx). The expansion also requires trademark owners, and those who want to become deeply involved in controlling a brand or their industry, to determine if and how much they will spend, both affirmatively and defensively, to ensure that they, and no one else, can use their trademarks in gTLDs (such as .hilton or .hotel).

You can stop anyone from using your registered trademark as part of the new .xxx adult entertainment site for a few hundred dollars. You can also purchase the generic Top Level Domain that matches your brand name or a generic name of your industry, if you are willing to pay at least $185,000 and set up a system to be a domain name registrar.

Between now and October 28, 2011, if you own a federal trademark registration, you can file to block anyone from using your mark with the .xxx extension as a domain name. As of 2012, websites showing adult content will be able to use the .xxx extension, and might try to catch internet users by adding brand names before the .xxx. To protect your registered mark, you can pay a filing fee (approximately $300) to prevent all adult sites from using your mark. The filing has a few nuances to it. Only registered marks are entitled to the protection, so if you use a brand without having registered it, you cannot benefit from this “Sunrise” period. You instead would have to stop an infringing use through the normal dispute resolution process or in the courts, if someone adds your mark to their .xxx extension. The filing only disallows others from using your brand; you cannot use the domain name yourself unless you want to run a website with adult-based content. The “hold” lasts for ten years, with no good information about what happens after that.

While paying the fee seems a bit like extortion, it may be cost-effective to pay the fee so you have fewer worries about infringers or about your customers/clients hitting upon a porn site when they are looking for you. If you have so many registrations that the fee would become expensive, or if you believe your mark(s) are not that attractive to the adult entertainment business, you might be more willing to take your chances with an adult site not using your name, or rely on the dispute resolution process down the road. You could also consider sending a letter to the registrar that is distributing the .xxx names and warn the registrar that any use of your name would be deemed an infringement. No cases have determined if such a letter would be effective, but it seems like a plausible option for those with nationally famous brands

If your business model includes controlling your market, then you should consider applying to own a generic Top Level Domain that includes your industry name (.hotel) or your brand name (.hilton). Beginning January 12, 2012 anyone interested in owning a gTLD and running a registrar for that gTLD can pay the $185,000 filing fee (and $25,000 annually) and bid on a gTLD. To be awarded a gTLD you must prove that you have a rational connection to the gTLD and the support of your industry. You must also show you have the financial and technical wherewithal to operate as a registrar (such as Go Daddy or Network Solutions). You will then be the one through whom anyone registers their domain name that includes the extension you own.

The purpose of opening new extensions is to recognize that there is somewhat of a shortage of usable domain names, and to create diverse spaces that attract certain industries. It remains to be seen in the short run and the long run whether the popularity of the .com extension will dissipate, and whether internet users will eventually become more used to having domain names with varying gTLDs. However, the difficulty in finding a viable .com domain that is not already registered may increase the popularity of the new gTLDs.

The vetting process for awarding gTLDs is fairly extensive, and a guide is available at the www.icann.org website. Be sure to access the newest guide dated September 19, 2011. Key aspects of the application process include consideration if more than one entity bids on the same name. If both candidates are qualified, the parties enter a bidding process, so the cost of the gTLD might rise significantly for a popular name. The process also includes a system for trademark owners to object to applications for gTLDs that might infringe on their marks, and a process for dispute resolution.

Depending on how important your brand is to you, or how much you want to control the use of your industry’s name, you may want to spend the money for the only opportunity you may ever have to capture the name as a generic Top Level Domain.

For more information, contact Gordon Feinblatt’s Intellectual Property and Technology Group: Ned T. Himmelrich (410-574-4171 nhimmelrich@gfrlaw.com) or Martha Lessman Katz (410-576-4053 mkatz@gfrlaw.com).