Like it or not, intellectual property protections are a part of life if you plan to start a new TLD. Designing a clear, simple, and appropriately-priced Sunrise period can make the difference between smooth sailing and disaster. A smooth Sunrise will make your Landrush launch that much simpler; mismanage it, and you’ll have a lot of bad publicity and suspicion right at the start of your new venture.
The Sunrise Period is a special period prior to the general launch of a registry where trademark owners can claim names that are the same or similar to their trademarks. Typically, only trademarks that have been around for a while (usually a year to eighteen months) qualify, in order to prevent people from rushing out to register them for the sole purpose of getting a domain name during Sunrise.
Trademark owners nurse a suspicion that registries are started in order to get them to pay (again!) for names they own anyway. Most people who have started a registry will tell you that the revenues don’t even begin to cover the costs, although they can bring in revenue right at the beginning of your operations, when it’s needed most. Not only do you have to design systems to handle Sunrise names, you have to make sure to communicate your policies to the intellectual property community.
Although owners of large numbers of trademarks are usually wealthy companies, many are very price-sensitive, because they often feel that new gTLDs are a legal form of extortion. In other words, it’s not the money, it’s the principle. Therefore, if you can justify your pricing as a function of your costs, you will go a long way toward alleviating any hostility you may encounter. Remember also that your price is going to determine volume: many trademark holders will not register all their brand names, just the important ones. If you are able to convince them that your price is fair, they may go deeper into their list.
Be prepared to answer the “what if” questions that lawyers love. “What if” our trademark is owned by a holding company we set up in the Bahamas? “What if” our trademark is a design mark, and not a word mark? “What if” we have a common law trademark instead of a registered trademark? And so on, and so forth. There’s no way that you’re going to answer all these questions in advance, so you need to reach out to the intellectual property community and be prepared to set up seminars, conference calls, and other ways of keeping your lines of communication open.
Don’t forget that corporate registrants are likely to be substantial participants in your Landrush period as well. Johnson & Johnson, for example, may own the trademark “Pampers,” but they might also want to register “diapers,” “nappies,” and other generic words that go along with their brand, but which are not eligible for the Sunrise period. So it’s a good idea to keep these customers happy.
Some costs to keep in mind: you will want to have someone, probably an intellectual property law firm with expertise in these matters, validate the Sunrise applications to make sure that the applicants have followed the rules. Their trademarks should be valid, the jurisdiction in which they got them should conform to your rules, and so on. You may also want to hire someone to help you identify the legal issues as you put together your Sunrise plan. Depending on your TLD, you might well be looking at over $100K in costs. If you write to me, I will be glad to put you in touch with some good people I know.
Finally, doing the Sunrise correctly can save you a lot of money in legal fees later. Both .INFO and .BIZ had to substantially rework their Sunrise periods after the fact, at tremendous cost. .INFO didn’t screen trademarks, and (surprise!) got lots of bogus registrations, which they had to later invalidate. .BIZ was found by the courts to have conducted an illegal lottery, and they too had to re-do their Sunrise allocations.
The Intellectual Property Constituency at ICANN has put together a very useful booklet that describes the Sunrise periods (they call them “pre-launch Rights Protection Mechanisms”) of previous TLDs in some detail. You can download a copy of “The Perfect Sunrise” (PDF). If you are designing a Sunrise period, you would be very well served to study this in some detail.
Dealing with trademarks is a vexing problem throughout the life of a top-level domain registry. Despite ICANN’s Uniform Dispute Resolution Policy (UDRP), an arbitration process that handles domain name intellectual property squabbles, trademark owners intermittently attempt to insist that registries and registrars have a duty to proactively police the namespace for trademark violations. Putting together a Sunrise period that acknowledges the rights of trademark owners and provides them with a simple application process at a reasonable cost will set the tone for your future dealings with them. Whether or not you agree with trademark protections, they are a fact of life for a registry, and you can save yourself a lot of trouble down the road by doing your Sunrise period right.