Have you ever thought about who owns dot-coms or dot-nets? Most of us don’t think about it when purchasing a domain, but 2011 is going to make us think about Domain Names or TLDs, which stands for Top-Level Domain Names. ICANN, the Internet Corporation for Assigned Names and Numbers, a non-profit that manages all the domain names, has cleared the way for a new company to deal with 500 new “generic Top-Level Domain Names” known as gTLDs. There are currently 21 TLDs and 270 country codes. (Those are called ccTLDs for country code Top-Level Domain Names.)
In the past decade, the smart entrepreneurs have selected new company names partially based on whether the domain extension dot-com, dot-net and a few other popular extensions were available. It is almost considered a whimsical blunder to incorporate a company and not check out the competitive domains. It is an important aspect of the perception of your business.
Let’s look at an example before we talk about what is going to happen in 2011. You purchase domain X-dot-com, but another company has a trademark for “X.” If you use the company’s name on your domain, which you legally own, are you in trademark violation? It is possible. You should not escape legal advice, but there are some smart steps you can take. Go to the USPTO and search the word that is the name of the company you want to register or know about, in this case “X”. (*Note – that the USPTO is not the only search vehicle but it is a place to start.) If X comes up registered, then you need to do some investigating. It does not mean it is dead in the water, though it does bring up a yellow flag of caution and the need for expert opinion.
The The first aspect of concern is the issue of being “confusingly similar.” If you are in the same business as “X” as it is registered then you likely have a problem.
Your options are:
1) Ignore the trademark and face legal penalties if discovered.
2) License the mark or make an agreement for usage.
3) Find a legal way around the problem.
Trademarks may refer to writing (sometimes called a word mark), so if you refer to your company as “X” in dialogue and trademark your company “XYZ” with a picture logo or service mark, you might be able to be incorporated as “X” with or without the trademark “X.” For example, the PepsiCo Company, who own Pepsi, but both have their own mark of identification. The reason for the example is that the gTLDs are generally going to be trademarked companies. Pepsi could now buy dot-Pepsi.
The new gTDNs can be:
– Generic – like “book,” “appliance,” “law,” “beverage”
– Corporate – the name of a company as we discuss below,
– Geographic and Community – like your town dot-washingtondc
The gTLD option is being opened up to companies for the first time. The current cost is $185,000 per domain and $6,250 yearly to maintain the domain. It is obvious that since a dot-com or dot-net can be as little as $4.95, that those who get a gTLD are going to be large firms or the start-up venture capital deals. You are going to be able to pull up – PowerAid.pepsi, just by typing that exact word in the url box. The new domains will hold 50-thousand registrants.
The effect? The effect is called cross-ownership. Will it weaken the dot-com? Suppose Forbes, the investment portfolio company purchases a dot-Forbes gTLD. If you look up the word “Forbes,” here are some examples of what is active at the USPTO: Forbes for alcohol, Forbes for luggage, and Forbes for candy. Does this mean that the domain dot-Forbes will infringe upon the other companies or will they infringe on Forbes?
The confusion might come with the fact that Trademarks are based on Common Law, or the rights are vested in Common Law and first to use. This pertains to the federal registration and to states rights where commerce may be local or within a state. For instance, a local pet groomer, with no website owns “Pet Smart” since 1960 in the state of North Carolina. Along comes the company “Pet Smart” expanding the classes of commerce, but it is still involved in grooming. Who is violating whom? Maybe no one. The local “Pet Smart” figures it gets free advertising from the confusion, and since they were in NC first, the damages are small if any. National “PetSmart” will wait to see if there is a violation, but local “Pet Smart” will have to sue and it is costly.
What if PetSmart takes a gTLD dot-petsmart? Will local Pet Smart be able to purchase it? The answer is yes, if PetSmart the owner of the domain allows it. What will happen under these circumstances is exposure. Everyone who uses the word “Pet Smart” and signs up for dot-petsmart will now be exposed to the big guys with all the legal departments and money to litigate.
Registering gTLDs are no easy picnic. They will have to report to the Trademark Clearinghouse. This means that you are going to see domains like dot-cbs, dot-nbc, dot-abc and so forth, and just think about how many companies we know use those acronyms? This is a very good example of how our domestic business is involved in the global economy even if we should try to avoid it.
The recommendation for deep pocket clients is apply now. If you are not a big company, you better establish your trademarks, especially with regard to their presence on the Internet.