ICANN has published the Proposed Final Applicant Guidebook which sets out the rules, requirements and process of applying for a new gTLD.

On 12 November 2010, ICANN published the Proposed Final New gTLD Applicant Guidebook. This 360 page document, which is open for comment until 12 December 2010, can be found at www.icann.org/en/announcements/announcement-2-12nov10-en.htm.

Like the four previous versions, the Proposed Final New gTLD Applicant Guidebook or PAG provides detailed information about the rules, requirements and process of applying for a new gTLD. In his introduction to the document, ICANN CEO Rod Beckstrom says, “The Guidebook is the product of countless hours of dedicated effort by ICANN’s multi-stakeholder community which includes registries, registrars, intellectual property experts, ISPs, businesses, governments, non-commercial entities such as universities and nonprofit organizations, and individual Internet users. More than 1,000 public comments have been taken into consideration, and strong trademark protections and malicious conduct mitigation measures are now in place”.

At its forthcoming Board Meeting in Colombia on 10 December 2010, the Board will “Make a decision regarding the timing of the launch of the New gTLD Program. The Board can approve the Guidebook or direct that changes be made”. This is an ambitious goal, especially as the Comment period on Proposed Applicant Guidebook (PAG) does not actually close until 12 December 2010. Once the timetable is confirmed, a four month communication campaign will commence.

As the ICANN Board passed a resolution at its October 2010 meeting instructing the staff “to adopt as a working plan the Launch Scenario with launch date of Q2 2011”, we do not expect the launch date to be any earlier than June 2011 or much later than September 2011.

There are few material changes to the Guidebook that will be of concern to brand owners other than the elimination of cross-ownership between registries and registrars. Whilst it is a good thing  that private brand registry operators will not have to pay a third party to place names into their own registry, it is worrying that some of the bad actor registrars who have sheltered serial infringers could now become registry owners. Remember that the ICANN Compliance Department is leaderless and numbers fewer than 10 people.

In relation to the Uniform Rapid Suspension Scheme, rights owners are more likely to be concerned about what has not changed. The URS has been speeded up a little in that registrants now have 14 instead of 20 days to file a response but we calculate that despite this change the process could still take up to 40 days which is five days more than the fastest eUDRP (and there is the possibility of a De Novo review for two years). For a process conceived to tackle slam dunk cases of cyber squatting, this is too slow. We also wonder which organisations will apply to run the URS as ICANN views $300 as the appropriate level of fee for a panellist who might have a 5,000 word complaint to review.

In earlier drafts of the Applicant guidebook, ICANN managed to propose a model for the Trademark Clearinghouse that discriminated between trademarks from jurisdictions which do and do not undertake what it calls “substantive evaluation”. In the PAG, ICANN finally provides a definition of what it means: “Substantive evaluation upon registration has essentially three requirements: (i) evaluation on absolute grounds to ensure that the applied for mark can in fact serve as a trademark; (ii) evaluation on relative grounds to determine if previously filed marks preclude the registration; and (iii) evaluation of use to ensure that the applied for mark is in current use.” We are pleased that word marks from countries that undertake substantive review and those from countries that do not, provided they have been validated by the Clearinghouse operator, are eligible for inclusion in the Clearinghouse without discrimination but we don’t like the idea that ICANN is leaving it to the Clearinghouse operator or its agent “to develop and publish a list of the countries that conduct substantive review upon trademark registration”.

ICANN appears so confident that the new gTLD process will be a success that it is making a contingency plan to batch applications for processing should there be more than 500 in the first round. In such circumstances it anticipates “A process external to the application submission process will be employed to establish evaluation priority. This process will be based on an online ticketing system or other objective criteria.”

The message for brand owners is clear: get ready for change. The ICANN Board is determined to deliver what it calls “the next era of online innovation”. We don’t expect the Board to accept many substantial changes to the PAG and we do anticipate the cost of on-line protection to increase as new registries launch. However, we also see more and more brand owners considering the value of investing in tomorrow’s internet real estate. Despite the flaws in the new gTLD process, we expect that the number of brand owners who apply in the first round will exceed 100 and may even go as high as 200.

ICANN Board presses on under influence of GAC

EOI cancelled as measures to protect IPR enter final phase & communication plan launches

“We’re not focusing on a launch date. What we’re focusing on is getting the issues resolved”. With these words, ICANN Chairman Peter Dengate Thrush set the tone for the 37th ICANN Open Meeting held in Nairobi, Kenya from 7 – 12 March 2010 when he addressed an audience depleted of many ICANN regulars because of concerns over security.

Throughout the meeting, there was evidence of a desire to move away from the controversial to the substantial. Gone were the unilateral determinations and ambitious timelines beloved of ICANN staff who enjoyed an extraordinary decade of executive freedom under the distant oversight of the US Department of Commerce. Instead, there was a refreshing commercial reality as the newer Board members came into the sun, chairing meetings, listening closely to a range of stakeholders beyond what we call the “family of ICANN”, aware perhaps that with enhanced remote participation facilities, the eyes of the world were truly upon them. It was as recent as September 2009 that the Affirmation of Commitments confirmed ICANN’s role as a multi-stakeholder, not-for-profit organisation whose work is scrutinised by a Government Advisory Committee instead of the DoC, but the impact of the revitalised GAC is clear.

Take heart IP owners. Whilst the old ICANN may have interpreted its mandate to introduce competition into the domain name space by creating an unlimited number of new gTLDs, the new ICANN may yet surprise you. Who knows how differently it will behave when both the Registry community and its Board feature representatives of some 250 Private Brand Registries?

Consider what happened to the Expressions of Interest concept. Designed to help ICANN to assess demand for new gTLDs, the model proposed by staff would have accelerated the start date of the process whilst requiring interested applicants to pay $55,000 and to reveal the character string they desired. In its Nairobi Communiqué of 10 March 2010, the GAC turned a withering eye on this concept: “The mandatory nature of the currently proposed Expression of Interest (EOI) model turns it into a slot reservation step and not a mere data-gathering exercise as initially intended and presented. Opening slot reservation and conferring certain rights to the participants against payment of a fee would constitute a de facto launch of the new gTLD application process….the GAC formally advises the Board to launch it only after the overarching issues have been resolved and the Draft Applicant Guidebook (DAG) finalized.”

What was the result of this intervention? At the Board Meeting on 12 March 2010, to gasps of surprise, the Board “withdrew the EOI from consideration” citing “the GAC questioning the benefits of pursuing further a separate EOI”. Board Member Raimundo Beca explained why he had voted against the EOI: “When I came to Nairobi, I was decided I was going to vote in favour of the EOI… But I got given the GAC communiqué, I got persuaded that the mandatory nature of the EOI had not (sic) consensus in the community”. Bruce Tonkin, Board Member and arch-supporter of the EOI put it another way, “It’s clear that there’s no consensus in the community on either the concept of the EOI or especially its implementation.”

With the EOI out of the way, the spotlight is turning on IPR protection once again. A workshop on “Trademark Protections in the new gTLDs” was notable initially for the composition of its panel. As the Intellectual Property Constituency had held its meeting in New York in response to the security concerns, there was no representative of a trade mark owning corporation on the panel. As the panel wandered through the ragged remains of the “Tapestry of interwoven measures” that had been initially proposed a year ago by the Implementation Recommendation Team (IRT), peace broke out once again. On the Trademark Clearinghouse, panel chairman and Board Member Mike Silber said, “We now understand it is not a rights protection mechanism but, rather, it’s an automated database against which verification can take place, either for sunrise registrations or for IP claims…We seem to have a few rough edges which need to be smoothed over, but we have pretty good consensus.”

One of roughest of these edges concerns the status of trademarks filed at registries that do not undertake substantive examination. Some registry operators and a vocal majority of non-commercial representatives want such marks excluded from the Clearinghouse because they fear that domainers with spurious trade mark registrations for dictionary terms (such as the score of marks filed under the Benelux regime for “Sex”) will make a land grab for the best terms. As well-intentioned as this might be, the effect in Europe alone would be to exclude trade marks filed in Austria, Benelux, France, Germany, Italy, Spain, Switzerland and of course OHIM. Depending on the definition of “substantive examination” which ICANN has never attempted, the UK would also be excluded.

When it came to the Uniform Rapid suspension Scheme, a faster, cheaper little brother of the UDRP for slam-dunk cases of bad faith registration, ICANN Chair Peter Dengate Thrush summed up the harmonious view of the panel discussion: “I just want to warn the community that there’s a real danger of this mechanism actually having been agreed and the board voting on it and us moving on…We really are getting close on this one…so just a warning. We may actually be ready to move on this one.”

Fortunately, there is still the opportunity to comment on both the Clearinghouse and the URS. Go to http://www.icann.org/en/public-comment/public-comment-201004-en.htm#tmc. We would like the Clearinghouse to accept trademarks equally from all registries of national or international effect, provided they are current. We would like the URS to feature an option for mark owners to reclaim a name that they have successfully challenged rather than simply having it frozen until the expiration date. The closing date for comments is 1 April 2010 so act fast, for, as Mike Silber said in Nairobi “Upon the conclusion of the current public comment process, the models will be finalized for inclusion in what will then still be the draft applicant guidebook, until such time as we move to the pure applicant guidebook… so your comments need to be in pretty damn quick”. All it takes is one email.

Although there was consensus on the panel on the need for a mechanism to tackle “bad actor new gTLD registry operators” , the staff version of the Post-Delegation Dispute Resolution Procedure (PDDRP) has moved so far from the original scheme suggested by the IRT, that it was not clear how to go forward. In the current PDDRP, ICANN proposes limiting its liability by delegating the responsibility of policing a registry that systematically encourages cybersquatting to an external panellist who has the power to investigate and penalise such registries, imposing what could be significant fines. Such draconian measures are not popular with current or prospective registry operators: “ICANN is very good at asking registries and registrars for service- level commitments, and I think it’s time for us to demand that ICANN make those same service-level commitments to us” said Jeff Neuman, former member of the IRT, on the staff at registry-operator NeuStar. Concluding the discussion, Mike Silber said, “This is an area that still seems to need a fairly significant amount of work, whether it’s just a question of language which needs to be improved …or whether it’s a conceptual issue”. Watch this space and expect WIPO to reappear in the process.

It’s not a perfect world and the IPR protections that ICANN is bringing forward are very far from the tapestry that the IRT envisaged a year ago. Certainly the refusal of ICANN to provide research into the viability of a Globally Protected Marks List recommended by the IRT leaves the largest trade mark owners exposed to second-level infringement. As former IRT member and IP barrister Zahid Jamil said in Nairobi, “The only post-launch, ongoing bad-faith registration remedy that we have is that whack-a-mole game known as the URS.”However, there is a sense that things are improving for IP owners. It might be a false dawn, but has the ICANN Board ever before expressed great appreciation “for the development of both the Clearinghouse and URS proposals in the furtherance of trademark protection”?

Is this the influence of the GAC? In its Nairobi communiqué, the GAC made it clear that it wants measured progress towards the new gTLDs, not a head-long rush: “While noting the widespread concern that the introduction of new gTLDs is not happening as early as originally envisaged, the GAC nonetheless expects ICANN to ensure that the opening up of the gTLD space is undertaken in a way that does not compromise the resilience and integrity of the DNS and serves the global public interest. All significant outstanding community issues of concern must therefore be resolved or mitigated before the first steps are taken to implement the new gTLD application framework, consistent with Article 9.3 of the Affirmation of Commitments.”

What issues was the GAC referring to? A short-list of matters of importance to IP owners includes:
“The need to explore track differentiation between categories”: When evaluating new gTLD applications, surely it makes sense for cities to be considered againstcities, for Private Brand Registries to be measured against other Private Brand registries?
The Morality and Public Order objection process: “The GAC questions the appropriateness of the phrase “morality and public order” and is unclear how the proposed mechanism would work in practice”
Security & Stability: “The root scaling implications arising from the scale and rate of change of any introduction of new gTLDs at the same time as other changes – notably deployment of DNSSec in the root, the introduction of IDNs and IPv6 transition – and the rate of these changes, must have no negative impact on the resilience, security and stability of the DNS” say the GAC.

Nor did the GAC hesitate at supporting greater rights protection mechanism: “It is important to ensure that intellectual property rights are properly respected in the new gTLD space consistent with national and international law and standards. The GAC expects that the proposed Trademark Clearing House should be made available to all trademark owners, irrespective of the legal regime they operate under, and that an effective and sustainable Uniform Rapid Suspension (URS), with appropriate remedies, and a Post Delegation Dispute Resolution Policy are established to ensure appropriate trade mark protection. While these initiatives are broadly welcomed therefore in serving to help address the concerns of brand owners, the GAC believes that they require further refining. In particular, “substantive examination” should be re-defined so that registrations examined on “absolute grounds” are included in order to ensure broader availability of the URS”

It might be May or it might be just before the 38th ICANN Open Meeting in June that the New gTLD Draft Applicant Guidebook vs. 4 is published. When it finally appears, expect to see final versions of these measures to protect IP as well as clarity on the timescales. In the meantime, listen out for the beating drums as the Board in Nairobi gave the green light for a global Communications Programme to promote the new gTLD process. Ever the evangelist, ICANN CEO Rod Beckstrom rubbed his hands with glee as he pleaded for co-operation: “We need assistance to get the word out on the new gTLD program. We have received many excellent ideas and suggestions for how to do that, but we need the entire community’s assistance to get the message out far and wide through your networks, your relationships.”

You may not like the idea of new gTLDs. You may have decided that it brings nothing but risk and confusion in the short-term. Alternatively, you may be interested in the advantages your own registry could deliver in terms of security and stability, or what you can do if your brand is in the browser whilst your competitors are languishing behind under .com. Whatever your position, now is the time to get to grips with the implications of the ICANN new gTLD programme. We expect the launch date to be in Q4 of 2010. That’s only six months away.