Category: Domain Names

New Version of ICANN’s gTLD Applicant Guidebook Upsets Domainer Community

On May 31, 2010, Internet Corporation for Assigned Names and Numbers’ (“ICANN”) recently issued the 4th Edition of the generic top-level domain name (“gTLDs”) Applicant Guidebook, which has raised serious concerns within the Domainer community.

Specifically, ICANN has introduced a new subsection to Section 1.2.1 (Eligibility) that provides for additional grounds for disqualifying a gTLD applicant. That Section now reads, in parts, as follows:

Circumstances where ICANN may deny an otherwise qualified application include, but are not limited to, instances where the applicant, or any partner, officer, director, or manager, or any other person or entity owning (or beneficially owning) 15% or more of the applicant:

(iv) is the subject of a pattern of decisions indicating liability for, or repeated practice of bad faith in regard to domain name registrations, including:

 (a) acquiring domain names primarily for the purpose of selling, renting or otherwise transferring the domain name registrations to the owner of a trademark or to a competitor…;

(b) registering domain names in order to prevent the owner of the trademark from reflecting the mark in a corresponding domain name;

(c) registering domain names for the purpose of disrupting the business of a competitor; or

(d) using domains with the intent to attract, for commercial gain, internet users to a web site or other online location, by way of creating likelihood of confusion with a trademark as to the source…

Domainers are wondering what’s a pattern of decisions? One case? Maybe three cases? Perhaps ten? And who will make that determination? Domainers are asking why business partnerships would assume risks of objection to a gTDL simply because a Domainer may own 15% or more of the applicant. Such objections would delay the issuance of gTLDs and would cost additional time and money – in excess of the already inflated application and registration price of $185k, not to mention to tens/hundreds of thousands more needed to launch a gTLD. Domainers are on edge because such a provision would likely have a chilling effect on Domainers’ participation in partnerships seeking gTLDs – even those Domainers with clean track records.

I recently posted the following comments on The Domains web site:

1. It would seem to me that a “pattern” must be supported with evidence of “clear” bad faith intent. In my opinion, a few “close” loses — that could have gone either way — should not result in disqualification. Take the recent Hayward case, for example. But maybe I’m just talking common sense, which seems to be a lost trait these days on this planet.

2. It’s not necessarily about choosing a Domainer as a partner but rather choosing a Domainer with a clear bad faith track record as a partner. Does any business want a partner with a track record of violating third-party rights? One must then choose partners wisely. There must be a mechanism for brand owners to defend against those Domainers that are clearly bad actors. Any better ideas out there?

I think I’m right. For those Domainers that are bad actors – they should not be entitled to own gTLDs (at least not as much as 15%).

The question: Where is that “bad actor” line drawn?

Any thoughts?

Six Actions Brand Owners Can Take To Prepare For Potential Deluge Of New Generic Top Level Domain Names

As brand owners await ICANN’s imminent launch of various new generic top-level domain names (“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 of new gTLDs.

1. Determine annual budget. How much funds are being allocated for reserving domain names that point towards active sites or redirect to active sites, may be used in the future and are pure defensive plays (those domain names reserved for the purpose of keeping them out of the hands of cyber squatters and Domainers)? Then 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 would have little or no value to cyber squatters anyways. Consider letting those go.

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), key brand names in key territories, generic product names (i.e., runningshoes.com for running shoe company) and potentially damaging sites such as yourtrademarkSUCKS.com. .COM domains are still the most coveted of gTLDs by Domainers and cyber squatters. I suspect that cyber squatters would prefer NIKEapparel.com to Nike.gardening or FORDvehicles.com to FORD.movies. Wouldn’t you agree?

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 reason why auto manufacturers would want to allocate funds to reserve domain names that correspond to unrelated gTLDs, such as Toyota.food and Ford.gardening? For most companies, those funds should 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 desirable. 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.

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.

Stay tuned as I’ll be reporting from Boston May 22-26 at this year’s International Trademark Association conference where we’re expecting over 8,000 trademark attorneys from around the planet to gather to make new friends, business relationships and memories.  New England, I’m coming home!