TLT LLP: Comment on "Closed Generic" gTLDs

[Andrew Cave <Andrew.Cave@xxxxxxxxxxxxxxxxx>]

Dear Sirs,

Thank you for seeking public comment on the subject of "closed generic" gTLD 
applications. Several of our clients would be adversely affected by "closed 
generic" gTLDs, and we hope that their acceptability will be reviewed.

We consider that "closed generics" are incompatible with the underlying values 
and principles of the new gTLD programme. Applicants for "closed generics" 
effectively seek a global monopoly in relation to a single, generic word which 
is widely used by economic entities around the world. As such, these 
applications are also incompatible with the fundamental principles of trademark 
law around the world.


ICANN's Principles

We refer to the Final Report on Introduction of New Generic Top-Level Domains 
dated 8 August 2007 and produced by the ICANN Generic Names Supporting 
Organisation: 
http://gnso.icann.org/en/issues/new-gtlds/pdp-dec05-fr-parta-08aug07.htm  ("the 
Report").

As is set out in the Report, Principle C is:

"The reasons for introducing new top-level domains include that there is demand 
from potential applicants for new top-level domains in both ASCII and IDN 
formats. In addition the introduction of new top-level domain Application 
process has the potential to promote competition in the provision of registry 
services, to add to consumer choice, market differentiation and geographical 
and service-provider diversity."

This principle is based upon paragraph 3 of ICANN's Mission, and Core Values 
4-10, incorporated as Article I of ICANN's Bylaws (as amended 16 March 2012).


ICANN's Core Values

ICANN's Core Value 4 recognises the "functional, geographic, and cultural 
diversity of the Internet".

ICANN's Core Values also include:

"5. Where feasible and appropriate, depending on market mechanisms to promote 
and sustain a competitive environment", and

"6. Introducing and promoting competition in the registration of domain names 
where practicable and beneficial in the public interest."


ICANN's Affirmation of Commitments

ICANN's Affirmation of Commitments includes ICANN's commitment to "promote 
competition, consumer trust, and consumer choice in the DNS marketplace".


Incompatibility of "closed generic" applications with the above principles, 
values and commitments

We consider that "closed generic" applications should be refused as being 
incompatible with ICANN's Core Values. To award an applied-for "closed generic" 
monopoly to a single economic entity would be to ignore the diversity of the 
internet and of the commercial use which is already made of the applied-for 
generic term. Further, it is feasible and appropriate to allow market 
mechanisms to promote and sustain a competitive environment in respect of any 
generic gTLD. It is not necessary or appropriate to allow a generic gTLD to be 
used by a single economic entity for its own benefit, nor is such a monopoly in 
the public interest because it is the antithesis of a competitive environment.

In relation to ICANN's stated commitment to increasing and promoting 
competition, we note that applicants for "closed generics" seek to avoid there 
being a marketplace in domains within their applied-for gTLD. Rather than 
increasing competition and consumer trust in the DNS marketplace, they seek to 
foreclose their chosen part of that market. The operation of a restricted 
registry for a widely-used generic term amounts to the creation of a new 
monopoly right in the DNS marketplace, which will stifle, rather than promote, 
competition and consumer choice in that marketplace.

It is self-evident that the applications for "closed generic" gTLDs, if 
successful, would amount to the award of monopolies and would not promote 
competition. By contrast, if these generics was not closed, and third-parties 
could apply for domains within the generic gTLD, then that would promote 
competition.


Incompatibility of "closed generic" applications with trademark law

We also note that it is a fundamental principle of trademark law, around the 
world, that one party should not be able to gain a monopoly over a generic 
term. For example, the Court of Justice of the European Union explained, in 
case C-150/02 (STREAMSERVE), that (at para 25):

"[b]y prohibiting the registration as a Community trade mark of signs or 
indications which may serve, in trade, to designate the characteristics of the 
goods or services for which registration is sought, Article 7(1)(c) of 
Regulation No 40/94 pursues an aim which is in the general interest, namely 
that such signs or indications may be freely used by all. That provision 
accordingly precludes such signs or indications being reserved to a single 
undertaking as a result of the registration of the trade mark..."


Conclusion

We hope that this issue will be reviewed in light of ICANN's stated principles, 
values and commitments, and with the general principles of international 
trademark law, with which "closed generics" are clearly incompatible.

Yours faithfully,


TLT LLP

Andrew Cave
Associate
for TLT LLP

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