.XXX Domain Update : what you need to know

The ICANN (Internet Corporation for Assigned Names and Numbers) has approved a new TLD (top level domain) being managed by ICM Registry, a Canadian company eastablished in Delaware.

XXX domains will be available for sale to the general public on December 6, 2011. Domain names using .XXX, as you can probably guess, are for use in connection with websites featuring adult content.

While the general gist of allowing Internet users to easily identify websites with adult content sounds fine and dandy, registered trademark owners need to take action to prevent the sale of their names to an unauthorized, third-party .

This can be done by filing to block .XXX domain names corresponding your trademarked terms - but the window is short. The opt-out period (called Sunrise B) for registered trademark owners began on September 7 and will end on October 28, 2011.

This “Sunrise B” period allows registered trademark owners to file an opt-out request with participating domain name registrars. The fees for this defensive registration are set by the registrar, and are currently around $200. Once granted, the Sunrise B applicant has the right to block others from using the domain for the life of the contract between ICANN and ICM Registry, which is currently 10 years. Keep in mind, this does not grant the applicant ownership of the domain itself.

Those that do not meet the eligibility requirements for a Sunrise B Period opt-out include pending US trademark applications, US registrations on the supplemental register, common law or unregistered trademarks and state trademark registrations.
The registered trademark forming the basis of the Sunrise B application must be valid as of September 1, 2011
Priority will be given to parties with domain names in other TLDs (.com, .net, .org) prior to February 1, 2011
Only a domain name that corresponds exactly with the trademark reflected in the registration may be blocked for sale

While it just doesn’t seem right to have to take action to defensively block a domain name that could harm your trademarked terms, it seems that it will be much more cost-effective for a trademark holder with mass recognition to obtain a defensive registration than to attempting to obtain or block the domain name from a third party later.

One example of a company that I have heard in this situation is Toys R Us, which could be damaged if used by an adult website.