Franchisors Will Have 50 Days to Block Domain Names on New Adult Entertainment Domain
On March 18, 2011, the Internet Corporation for Assigned Names and Numbers (ICANN) approved the formation of a new .xxx sponsored, top level domain (sTLD) for the adult entertainment industry. The .xxx domains are scheduled to go live later this year. The domain's operator, ICM Registry, has developed a procedure to enable owners of registered trademarks to block third parties from registering these marks as .xxx domains and, accordingly, prevent adult entertainment companies from associating prurient services and products with well-known brands.
Beginning on September 7, 2011, and continuing through October 28, 2011, trademark owners, including franchisors, will have the opportunity to take simple measures to prevent misuse of their brands by blocking domain names that contain their marks on the .xxx domain. During this 50-day sunrise period, the Sunrise A category will be open to verified members of the adult entertainment industry seeking registration of domain names who: (a) possess verifiable trademark rights, or (b) own exact matching domain names in other TLDs. At the same time, Sunrise B will allow brand owners who are not members of the adult entertainment industry to block (or "reserve") .xxx domain names corresponding to their registered marks for at least the length of the 10-year contract term between ICM and ICANN. A reserved domain name will resolve to a standard informational page indicating the status of the name as reserved through ICM's intellectual property program; the reservation will not result in ownership of the corresponding domain name. ICM will charge reserving parties a one-time fee of approximately $160, and individual registrars may add supplemental fees to that amount.
During Sunrise B, ICM-approved registrars will accept reservation requests only for .xxx domain names corresponding to the entire text of a registered trademark. For the purpose of Sunrise B eligibility, a qualified registered trademark must be a live trademark registration of national or regional international effect issued prior to September 1, 2011. Eligible marks do not include federal registrations on the U.S. Supplemental Register; state registrations; trade names; or International Registrations obtained under the Madrid system, unless these are based on or have resulted in a registered trademark of national effect.
At the close of the sunrise period, if no conflicting application by a Sunrise A applicant has been made, the reserved name will be blocked from registration. If both Sunrise A and Sunrise B applicants have applied for the same domain name, the Sunrise A applicant will be given the opportunity to withdraw its application. If it does not, priority will be given to the qualified Sunrise A applicant to register the domain name, and the Sunrise B brand owner applicant may later institute appropriate procedures to stop use of the name.
A two-week landrush period for registration of .xxx domains at premium pricing levels will open on November 8 to members of the adult entertainment industry who did not qualify during Sunrise A; this period will conclude with a closed auction for competing applications. There will not be a corresponding reservation process for brand owners during this period.
Finally, on December 6, 2011, approved registrars will open general first come, first served domain reservation to members of the adult entertainment industry. Brand owners (regardless of qualifications such as qualifying registrations) who are not members of the adult entertainment community may submit an application to register a non-resolving domain name in the .xxx sTLD during general registration. Queries on these domain names will return a nonexistent or non-resolvable result.
ICM has not yet publicized specific details of post-registration .xxx dispute resolution procedures. ICM has announced, however, that the procedures likely will include a 48-hour take-down procedure for obvious infringements, and that it expects that the cost of various dispute procedures to be between $750 and $1,500. Thus, reserving a domain name during Sunrise B or registering during the landrush period will almost certainly be less expensive and provide more certainty than waiting to file a dispute resolution procedure.
Franchisors are advised to determine if they may be eligible to take advantage of the Sunrise B defensive reservations, and through submit applications from September 7 through October 28. First, check if your company's brands are protected by federal trademark registrations. If applications for such marks are pending, check to see if they are in a position to be advanced to registration prior to September 1. Owners of marks not eligible for Sunrise B reservations should consider submitting registration applications for non-resolving names once general registration opens on December 6. Franchisors also should ensure that their domain monitoring services are covering the .xxx domain space to watch for potentially infringing uses.
 This launch is unrelated to the launch of new gTLDs discussed in the June 21, 2011, Franchise Alert.