I’ve written a few times for IPPro discussing the ground-breaking expansion of the domain name space as we know it. Throughout this time, there have been many delays, opinions, and trials, and quite frankly, most of us have become weary of hearing about ‘new gTLDs coming soon’.
We can now finally say that they are here: 5 February brought the first new TLDs released to the general public on a first-come, first-served basis and we are seeing a minimum of five new TLDs being released each week throughout the rest of 2014. It is definitely an exciting time for brand owners, investors, and internet users alike.
Here is where things stand by the numbers:
- New gTLDs that will be available: 600+
- Launching in February: 30+
- Already available: 15
- Domain names registered in first two weeks: 55,000+
These numbers are off to a healthy start and the programme is gaining momentum through public awareness and marketing efforts. Considering that 55,000 names have been registered in the first two weeks and this is only from 2 percent of the TLDs planned, a conservative estimate would put the programme at three million new domain name registrations in 2014 alone. The names that will prove to be most popular such as .email, .web and .shop won’t be released until late 2014 or early 2015. I anticipate the actual number of registrations to exceed five million names in 2014 alone.
However, with all of this change, let’s not forget about the existing domain name market. There are nearly 260 million domain names already registered and growing at an overall rate of 15 percent year over year, with most of the growth coming from country code domain names (such as .de, .co.uk, .cn, and .ru). As intellectual property professionals, you are most likely well versed with the issues that this vast global market creates on a daily basis—monitoring web content, enforcing trademark rights, recovering infringing domain names, and dealing with counterfeiting and phishing sites. None of these issues are changing with new gTLDs, except that the pool is becoming much larger and there are now more tools available at your disposal than ever to protect your trademarks.
Clients come to us on a daily basis asking for our thoughts on the best strategy to manage their domain name portfolio and how to approach the new gTLD programme. It would be simple to say there is a one-size fits all strategy, but there isn’t. Strategising with domain names, whether existing jurisdictions or new gTLDs, addresses questions such as:
- What is your annual budget?
- Have you experienced domain squatting, counterfeiting, or infringement?
- Does misdirection of web traffic affect your bottom line?
- What is your risk tolerance around your IP?
- Do you conduct business or plan to in other countries?
- Can you marketing team capitalise on unique opportunities with new gTLDs?
Answers to these questions really shape how you should develop a well-rounded and appropriate approach.
The wait and see approach
This approach requires the least upfront investment in protecting your brand in the domain name space. Many companies haven’t had to deal with trademark and infringement issues on the internet and this is a great thing for them. The reality may be that they will never have any issues or their company and brand flourishes offline, not online.
However, there are still a few things to keep in mind when employing this strategy. First, although most companies today conduct a trademark clearance search in their jurisdiction prior to using a new mark, many are checking additional jurisdictions abroad in the hope that they will grow their business across international borders.
Many fail to check important generic domain names as well as country code domain names in these countries, too. Many times, we’ve seen a company expand into a new country where their name has already been taken, and may even be in use.
Even though they may have a trademark, getting the domain name after the fact doesn’t always work out. One of the tests to file a successful Uniform Domain-Name Dispute-Resolution Policy (UDRP) proceeding to get a domain name transferred to a trademark owner is proving that a registrant registered the domain name in bad faith. If the name was registered before the use of the mark started or did not have presence or use in a particular jurisdiction when the domain name was registered, then they may be out of luck. Even more precarious and costly, some of the most popular country code domain extensions in the world do not have any sort of dispute policy, so the only options lies in civil court in that country.
The limited budget approach
Most well run companies operate on strict budgets and strive to be as efficient as possible to stretch those budgets. This is the most common approach we’ve found.
Concerning existing gTLDs and ccTLDs, it is actually quite cost effective to create a baseline defensive strategy for a single mark. Obtaining domain name registrations that cover the top 50 countries by GDP as well as internet users/penetration will cost around $3000 per year. This is a solid strategy to begin with.
Moving on to new gTLDs, I recommend validating the mark with the Trademark Clearinghouse (TMCH) first, which allows the brand owner to obtain desired or required new gTLDs in the sunrise phase.
A validated trademark gets the first chance to register the mark in any new gTLD, and it gains access to various blocking services offered by new gTLD registries. For an annual cost of $1000, it is possible to block a mark from being used in any new gTLD supported by Donuts or Rightside (formerly United TLD). Collectively, these two registries are responsible for almost half of the 600+ TLDs in the new gTLD programme.
This really is an easy decision for any company even slightly concerned about its IP rights around the new gTLD programme.
To recap, on a limited budget, a smart strategy would be focused on creating a domain name portfolio covering 90 percent of the world economy as well as nearly half of the new gTLD programme for under $5,000 per year.
The defensive approach
On the other end of the spectrum is the defensive approach. This approach fits well for companies whose brands, consumer trust and online reputations are of critical importance. Companies that fall into this category include banking and financial institutions, multinational corporations, Fortune 500 and Global 2000 companies, fast-growing ecommerce or social media companies, health organisations, and entertainment and media companies.
These companies typically have had multiple issues with domain squatting, infringement, phishing, and counterfeiting, and must be vigilant and aggressive in defending and monitoring their trademarks across the internet and around the world. Must dos include taking a very close look at the over 1500 ccTLD extensions already available, registering with the TMCH, utilising the blocking services from Donuts and Rightside, and registering new gTLDs in sunrise where they align with a particular industry.
Building a solid defensive portfolio involves partnering with a reputable domain name registrar with years of experience in handling and coordinating domain name registrations and management across the 250+ jurisdictions around the world, as well as supporting the entire new gTLD programme. A good corporate registrar will be able to advise you on proper strategy, risks, guidance through various requirements, and organisation of domain name launches and acquisitions.
New tools available to trademark owners
Regardless of the approach, it is important to be aware of the rights, protections, and enforcement mechanisms available as a part of the new gTLD programme. Much of the policy development prior to new gTLDs launching focused on brand owners’ rights and protections. A few important mechanisms were borne out of this:
- Trademark Clearinghouse: a centralised system to validate a trademark to be used during sunrise and blocking phases of every new gTLD being launched. Costs $150+ per year.
- Trademark Claims Notice: a feature of the TMCH. This alerts the registrant of a domain name that the name they are registering potentially infringes a validated mark. The service lasts for 90 days after a TLD launch and alerts the owner, too. Many legal experts believe this will be immensely helpful in establishing registration in bad faith, a key element to a successful UDRP and Uniform Rapid Suspension (URS) claim. Cost included in TMCH validation.
- UDRP: the long-standing dispute process required by ICANN for every new gTLD as well as existing gTLDs. Costs $2,500+ per filing.
- URS: a streamlined version of UDRP meant for very clear cases of infringement. The name is not transferred to the complainant, but it is put on hold to expire. Costs $300+ per filing.
When dealing with clients or brands, it is important to understand all of the options available to craft the appropriate strategy. Times are changing and you don’t want to be left behind.