Valideus

Background

The domain name system (DNS) is divided into 24 generic TopLevel Domains (gTLDs) including .com, .net and .org and circa250 country code Top Level Domains (ccTLDs) such as .au for Australia, .be for Belgium, .cn for China. Whilst all ccTLDs aresovereign property, ICANN, the Internet Corporation for AssignedNames & Numbers, oversees gTLDs and manages the technicalco-ordination of the DNS. From its creation in 1999, ICANN’smission has been to introduce competition into the managementof the DNS. Therefore it is planning a liberalisation of gTLDs.Within the next 12 months any organisation can apply to run agTLD registry. Until now most corporations have positionedthemselves under the .com gTLD. In the future, ICANN predictsthat all major corporations will own a Dot Brand registry.

Who will apply?

Cities:

Barcelona, Berlin, London, New York, Paris, Rome,Sydney, Tokyo have all announced bids.

Regional & Cultural Communities:

From Bavarians to Scots,including some in IDN registries (holding domains in scriptsothers thanASCII) such as

عربي

. (DotArab).

Keyword speculators:

internet investors are lining up to bid for generic terms including .eco, .green, .family, .movie, .music,.radio, .shop, .sport or .web in the hope of getting rich. Somemarket leaders may also seek to dominate their industry sector (and search engine listings) this way.

Global brand owners:

Canon is the first intellectual propertyowner to announce a bid. (See www.canon.com/news/2010/mar16e.html).

Natural born applicants:

companies whose success is builtupon the rise of the internet. If Facebook, Twitter and YouTubeapply, how long before young people regard .com as“yesterday’s domain”?

IPowners

who compete on a day to day basis with 3rd partiesfor a key term registered in another country or another class of goods or services.

Innovators

seeking new models of distribution, for loyalty andreward programmes.

Corporations plagued by internet infringement

who want tosignpost authentic information & goods.

What are the benefits of applying?

Stability:

3rd party registries may be vulnerable to attack fromhackers, technical failure and can rarely turn away a court order.Your own registry can be based wherever you want it withrigorous procedures and management by a team that isaccountable exclusively to you.

Security:

You decide who is allowed to register under your gTLDand who you want to exclude. Competitors and infringers can bebarred. Your licensees and affiliates can be controlled. Your ownbrand gTLD will be trusted by consumers and clients because of its purity.

Market development:

when you allocate a domain in your registry you capture whatever information you like on your registrants. You can give away domains in exchange for loyalty,distribute priority offers, build mailing lists, run your own socialnetwork, build new revenues.

Search Engine Prioritisation:

Searching for widgets? Whatcould be a closer match than Dot Widgets in the world root of theinternet?A 100% match before any optimisation.

Cost reduction:

in time, having a Private Brand gTLD shouldmean that applicants can lapse thousands of non-commercecritical/defensive domain registrations and reduce brandmonitoring.

What are the risks of not applying?

Permanent string preclusion:

if your key term is registered by a3rd party, you are locked out forever. There’s no second chance.You can’t buy an active gTLD registry in the same way as youbuy a registration.

Commercial disadvantage:

if you do not apply in the FirstRound but your competitors do, you can’t catch up until theSecond Round opens which might not be until 2012.Asapplication and evaluation takes at least 14 months, this couldmean you can’t get your brand into a browser until 2014.However, there’s little risk of an infringer applying for a key markof yours at the Top Level. First they would need an identicalregistered trade mark to overcome you and second they would bedeterred by the high costs. In addition you can challenge anysuch application through the Legal Rights Objection process,administered by WIPO and costing from $10,000 or you could goto the courts.

What are the costs of applying?

The official ICANNApplication Fee is US $185,000. Successfulapplicants must also pay $6,250 per quarter plus $0.20c per domain per year on each term registered after a threshold of 50,000 domains. An Irrevocable Letter of Credit for the equivalentof the cost of maintaining the registry for three years must besupplied. If you withdraw your application after submission youcan get a refund of up to 70%.

What is the timing?

The ICANN new gTLD process is two years overdue. There willbe no major developments until the next ICANN Open Meeting inBrussels from 20 - 25 June 2010 when ICANN is expected topublish the 4th Draft Applicant Guidebook - the document thatincludes the rules of application, the registry operator’s contract,the application questions, the mandatory technical requirements,rules of objection and measures to protect Intellectual Propertyetc. The full and finalApplicant Guidebook is expected inSeptember 2010 which means that the 45 day Application Periodis likely to open in either November 2010 or February 2011. Toallow time to prepare an application and to earmark the ICANNfees of US $185,000 and the cost of expert advisory services,this gives you a maximum of six months to decide whether toapply or not.