ICANN (the Internet Corporation for Assigned Names and Numbers) is currently developing new policies in relation to the allocation of new top-level domains (TLDs) including generic domains, and country-code domains. These proposed changes have already been severely criticised by bodies such as the BBC, ebay and Microsoft in relation to the impact the policies will have on brand owners, particularly in the current economic climate.
In the past, generic Top Level Domains (gTLDs) were limited to 21 domains including .com, .org and .net. However, ICANN is currently developing a program to expand the number of available gTLDs, whereby applicants will be able to propose and apply for domains that are associated with their particular brand or business sector, for example .superdry or .marksandspencer. The second facet to this is that an entity may purchase a more generic domain such as .store, for which domain names could be bought, such as superdry.store or marksandspencer.store.
The release of new gTLDs has the potential to create an explosion in the number of gTLDs, and has important implications for the fashion industry in terms of brand protection. There is concern amongst brand owners that there is likely to be an associated explosion in domains being registered by counterfeit operators passing themselves off as being associated to the bona fide brand. This is of particular concern to luxury brands, many of whom are already in dispute with companies such as Ebay and Google for use of their brand. Retailers who have transactional websites will also be at risk of counterfeit transactional websites being set up and creating a great risk of confusion with the true brand’s website.
These implications may lead to:
- brands being forced to purchase a gTLD to prevent others from doing so, at a cost of around 185,000 USD; and/or
- brands being required to police the launch of each gTLD and the possibility of extensive disputes where unforeseen domains are registered and used by other organisations in competition to their own
ICANN says that this expansion is crucial to maintain the level of competition within the system, thus providing increased access to members of the public. However, brand owners are not so sure, given that it will almost certainly result in the need to purchase, for defensive purposes, more domain names, which for many will be financially impossible. Secondly, the expansion will inescapably lead to the requirement for increased vigilance and policing of online sales, all of which incurs costs which ultimately may be passed on to the consumer.
This article was written by Simon Bennett a Partner in the Commerce & Technology Department and Maxine Lavin, a trainee in the Commerce & Technology Department both are members of the Fox Williams Fashion Law Group