SWORD Algorithm
The Sword Algorithm is the string similarity assessment tool adopted by ICANN to automatically determine if a new gTLD being applied for is not confusingly similar to a reserved name or existing TLD. SWORD, an international IT company expert in verbal search algorithm developed the tool to automate the process of examining the similarities of proposed and existing TLD strings. The tool is intended to provide an open, objective and predictable mechanism to determine the level of visual likeness between gTLDs.[1]
The String Similarity Panel is responsible in validating the results of the sword algorithm and determine whether the two or more strings really have high level of visual similarity that might confuse users. The panel will also decide if the strings should be put in a contention set or direct contention.[2]
How does the sword algorithm work? It uses the string similarity assessment tool, a proprietary software that calculates mathematically the visual similarity of string based on the length of the strings, number of similar letters within sequences of two or more letters, number of similar letters not in sequence, number of dissimilar letters, and length of common prefixes and suffixes if greater than one. The algorithm also use an image recognition program that supports most common characters in other languages including Arabic, Chinese, Cyrillic, Devanagari, Greek, Japanese, Korean and Latin. It is capable in comparing cross-script strings under the same group pf scripts.[3]
You may check the Sword Algorithm here.