Opening Statements

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IP lawyers take note: a major expansion of Internet addresses is expected to bring a host of creative branding possibilities for businesses along with a major enforcement headache.

The Internet Corporation for Assigned Names and Numbers, the governing body for Internet domain names, plans to sell an unlimited number of new top-level domain names—those letters to the right of the last dot in a website address like .com, .edu or .biz—in the second quarter of 2009.

Currently only 21 generic TLDs are available on the Web. But come April, anyone with an extra 185 Gs to spare can buy individual domain names that include brand names (.burgerking), business categories (.bank) and geographic locations (.berlin). New domain name holders also will be able to sell subdomain names such as chasemanhattan.bank. And, for the first time, top-level domain names can be in non-English-language characters.

The new domain name availability is expected to trigger disputes between companies in different fields with similar-sounding brand names. Imagine if Delta Airlines, Delta Faucets and Delta Dental all want .delta on their websites.

ICANN says its goal with the new domain name possibilities is not to create legal havoc but to better serve the needs of companies and individuals. Up to now, many businesses have had to settle for unwieldy, hard-to-remember website names because so much Internet real estate is already occupied with the 80 million existing dot-com addresses.

Attorneys warn that the domain name expansion will increase the time and expense involved in monitoring trademarks, not to mention the costs associated with buying up top-level domains and subdomains to protect their marks and shield their customers from fraud.

Minneapolis lawyer William D. Schultz thinks the cost of the new domain names will likely prohibit most companies from registering each of their brand names. But the good will of legitimate trademark owners may be abused if proper restrictions aren’t in place, he cautions.

ICANN was accepting public comment through December on the planned expansion of domain names before launching the new system. It plans a contract-based process to protect against trademark infringement and cybersquatting, says Eric Fingerhut, a partner in the Washington, D.C., office of Howrey.

Before being awarded a domain name, applicants will have to argue their rights to the name as well as make a business case for it. This requirement is aimed at helping prevent someone other than Beaverton, Ore.-based Nike, for example, from registering .nike, says Fingerhut.

In addition, ICANN has outlined four kinds of objections that interested parties can make to potential registrations of the new, top-level domain names, Fingerhut says, and each objection has its own dispute resolution system. The objections include those based on string confusion (i.e., .nke), legal rights, morality (.xxx) and community objections (.redskins).

While ICANN’s proposed guidelines require the parties to use spec­ified ADR providers to resolve the dispute over the domain names, Fingerhut says it is unclear whether the arbitration is binding.

Despite these mechanisms, Schultz worries that the new domain name system will complicate enforcement.

There’s a genuine risk of brand name dilution, he says, and businesses will have to strike a balance “between having to enforce the brand or letting the brand weaken.”

Companies that do not monitor their trademarks under the new domain system risk losing them, Fingerhut says. “This obviously creates additional policing burdens. How much remains to be seen.”

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