Category: Domain Names

ICANN Delays Introduction of New Top Level Domain Names: Six Actions Brand Owners Can Take Now In Advance of Launch

The Internet Corporation for Assigned Names and Numbers (“ICANN”), the entity that oversees the Internet domain name system, has once again delayed the introduction of new generic top level domain names (“gTLDs”) until likely sometime in 2011. The chief issues continue to revolve around brand owners’ concerns over trademark protection and costs associated therewith, of which I have blogged about. (ICANN’s Proposal For New Generic Top Level Domain Names: Should All Brand Owners Be Concerned?) 

As brand owners await ICANN’s imminent launch of various new gTLDs they should be reviewing and, if necessary, revising current domain name policies to meet anticipated new challenges. Below are six actions brand owners can take right now to ready themselves for the potential deluge of hundreds (and some argue thousands) of new gTLDs.

1. Determine annual budget. What’s the annual budget for 2011 for reserving or maintaining domain names that point towards active sites or redirect to active sites and for pure defensive plays (those domain names reserved for the purpose of keeping them out of the hands of cyber squatters and Domainers)? Once you have that number, plan accordingly.

2. Conduct periodic audit of domain name portfolio. An audit should determine which of your current domain names could be dropped due to little or no activity. If there’s little or no activity on certain sites, than those domain names probably have little or no value to cyber squatters anyways. Consider letting those go in lieu of more “valuable” domain names.

Maintain those .COM – and possibly those .BIZ, .NET, .INFO and country code – domain names that correspond to common misspellings of brand names (consider new devices on market and what typos are being made), for key brand names in key territories, for generic product names (i.e., runningshoes.com for running shoe company) and for potentially damaging sites such as yourtrademarkSUCKS.com. Dot COM domains are still the most coveted of gTLDs by Domainers and cyber squatters. I suspect that cyber squatters would prefer NIKEapparel.com over Nike.gardening or FORDvehicles.com to FORD.movies.

Add new domain names that correspond to newly adopted gTLDs that are likely to result in misdirected Internet traffic and potential lost profits. For example, automakers should reserve domain names that correspond to .AUTO, .CARS and .TRUCKS gTLDs. However, I really can’t think of a valid business reason why auto manufacturers would want to allocate funds to reserve domain names that correspond to unrelated gTLDs, such as Highlander.food and F150.gardening. Unless there’s an issue of dilution, those funds should probably be allocated to enforcement activities.

Also, as new brand names are launched, reserve priority domain names that correspond with those new names. For those brands that go to the graveyard, consider allowing those corresponding domain names to expire in due time.

3. Establish policing policy. In addition to compiling a healthy domain name portfolio, brand owners must also actively police third party registrations of potentially harmful domain names. A global watch program can cost thousands of dollars annually, so plan accordingly if such a service is desired or is necessary. Alternatively, brand owners can opt to conduct periodic in-house searches.

4. Establish consistent policy for enforcing brands. Create a policy for taking action against third parties that reserve potentially harmful domain names. The policy should be detailed. Determine in advance – outlined in policy – which “infringements” warrant action. When a credible threat is detected, take quick and decisive action. However, pick your battles as funds are likely limited.

5. Don’t overprotect. Brand owners simply cannot reserve all domain name permutations. It’s just too costly. That will become more evident as new gTLDs are launched. A better approach is to combine a healthy domain name portfolio with consistent monitoring and enforcement.

6. Take a deep breath and relax. For most brand owners, the launch of new gTLDs will likely go unnoticed. For those same brand owners, there will likely be bigger fish to fry in 2011.

To read more about this issue, check out Economic Considerations in the Expansion of Generic Top-Level Domain Names: Phase II Report: Prepared for ICANN that was released this month.

More Puzzling Statements in National Arbitration Forum UDRP Decision: The New York Times Company v. Name Administration Inc. (BVI)

I’m so fired up over this one that I had to break from another project to write this post. The recent Uniform Domain-Name Dispute-Resolution Policy (“UDRP”) decision in The New York Times Company v. Name Administration Inc. (BVI) has me amped for two reasons – none of which relate to the holding itself in favor of BVI.

In this case, The New York Times sought transfer of the domain name dealbooks.com from BVI. The New York Times argued that it began using the mark DealBook in 2001 under common law and secured federal trademark registration of that mark in 2006. BVI reserved the subject domain name in 2004. BVI asserted that it used the subject domain name in connection with a web site that advertises online gaming with travel booking. In September 2010, The New York Times filed its UDRP complaint requesting transfer of the subject domain name. There are other facts to this case, of course, but for today’s post, I’m only concerned with those basic facts.

The UDRP policy requires a complainant to prove each of the following three elements to obtain an order for transfer of a subject domain name:

1. The domain name registered by Respondent is identical or confusingly similar to a trademark in which Complainant has rights; and

2. Respondent has no rights or legitimate interests in respect of the subject domain name; and

3. The domain name has been registered and is being used in bad faith.

The Panelists first turned to prong one of the UDRP test. Although Complainant’s mark, DealBook, and subject domain name, dealbooks.com, are confusingly similar – the Panel had to also decide whether Complainant had trademark rights in its mark at the time BVI reserved the subject domain name in 2004.

Since The New York Times didn’t own a federal trademark registration as of the date on which BVI reserved the subject domain name, The New York Times didn’t have presumptive trademark rights in its mark DealBook. Accordingly, The New York Times had to establish that it had common law trademark rights in its mark as of the date on which BVI reserved the subject domain name. After reviewing the evidence of record in support of The New York Time’s claim of prior common law rights, the Panel decided that such evidence didn’t support a finding that The New York Times had acquired common law trademark rights in its mark prior to the reservation of the subject domain name. Accordingly, the Panel held in favor of BVI. In so holding, however, the Panel also went on to make the following odd statement:

“As Complainant was computer savvy regarding Internet usage and domain names as well as knowledgeable concerning trademark law, Complainant’s failure to secure and register the disputed domain name or seek governmental registration of its mark until 2006 supports a conclusion that Complainant did not deem that it had any exclusive rights to enforce until that time. Thus Respondent’s registration and use predates Complainant’s rights in the mark.”

What? Because Complainant failed to seek federal registration of its mark until 2006, Complainant didn’t deem that it had any exclusive trademark rights to enforce until that time? How does the Panel know what The New York Times thought? There are plenty of reasons why brand owners choose not to seek federal trademark registration for their marks. Is that a new factor in determining trademark rights under the UDRP policy? I find that statement to be bazaar and, quite frankly, misguided.

Another interesting issue raised by the Panel in this case regards the issue of laches. In this case, BVI raised the defense of laches. Laches is a defense to a claim of trademark infringement. The essence of the laches defense is that a complainant has unreasonably delayed in asserting its rights and, as a result, the complainant is no longer entitled to its claim.

Although UDRP policy doesn’t specifically express the recognition of a laches defense, this Panel, contrary to just about every other UDRP panel, stated in its decision that laches should be a recognized defense in UDRP cases. The Panel went on to state:

“The Panel does believe that the circumstances of this case are the type that support a decision for the Respondent based on laches.”

The Panel went on to make the following contradictory statement:

“Where such a Complainant fails to police its claimed mark and does nothing for a substantial time while a Respondent develops an identical domain name for its own legitimate purpose, laches should bar that Complainant from turning a Respondent’s reliance to its own unjust enrichment.”

But wait! If a Respondent develops its own “legitimate” business purpose in connection with a domain name – then UDRP policy mandates—under prong two (and three) of the test – that Respondent prevail in a UDRP proceeding. In such a case, laches is irrelevant. Furthermore, if a Respondent is found to have misappropriated a brand owner’s trademark and in so doing deceives the consuming public and profits off of a brand owner’s goodwill, then why should a cybersquatter be entitled to hide behind the defense of laches? Who’s truly being hurt here? A cybersquatter!

Although laches may reflect the strength of a complainant’s case – the reality is that laches should not be dispositive evidence that a complainant has approved or condoned a respondent’s use of complainant’s mark in a domain name. The fact that a brand owner has sat on his hands while a cyber-thief has made ill-gotten gains should not bar a brand owner from protecting its trademark rights and brand in a UDRP proceeding – late or not. Period!