It’s time to start thinking more seriously about protecting your brands and trademarks in the online world. Businesses expend significant time and resources developing and protecting brands in the physical world, but are not as careful in the online world. Brands are frequently included in domain names, and are often the dominant part of domain names. Although domain names may not by themselves communicate a strong message, because they are simply an address for a website, they are the gate through which consumers get to your business, and they directly impact the goodwill of your brand.
Cybersquatting is as active today as ever, and it is going to get much worse. Under the old regime of a few top level domain names (the name to the right of the dot, such as .com or .org), cybersquatting was a concern. But with the introduction of thousands of new generic top level domain names (ngTLDs), the potential for misuse of brands will increase exponentially.
There were 1,930 applications submitted for ngTLDs (prior blog post) in the first round, and of those 1,930 applications, 417 ngTLDs have launched, and almost 1,200 are in the contracting stage, which means they will be available for launch soon. Some of the ngTLDs that have launched include .homes, .auto, .loans, .global, and .toys. It is anticipated there will be additional rounds of applications for ngTLDs.
Some of the risks to your brand if you do not protect against cybersquatting include sale of counterfeit goods, phishing, loss of goodwill, and brand tarnishment. Recently thousands of websites were forced down because they were selling counterfeit Oakley products. The websites in many cases included the brands of others. In the complaint filed by Oakley Products, the plaintiff alleged that bogus websites are estimated to receive tens of millions of visits per year and to generate over $135 billion in annual online sales. The U.S. government seized over $1.26 billion in counterfeit goods in 2012, up from $1.11 billion in 2011. The magnitude of the problem is huge.
Phising occurs when a cybersquatter posts a bogus website using a domain name similar to a brand owner’s trademark, and collects data and personally identifiable confidential information. Loss of goodwill can occur in many ways including having a variation of a brand or trademark used on multiple websites that are not owned or controlled by you, the brand owner. Cybersquatters do not only display brands in domain names, but they display the brands on bogus websites. Tarnishment can occur when a website is posted using a brand, or variation of a brand, and the website displays inappropriate and or provocative images or content inconsistent with the goodwill associated with that brand.
Part of any strategy dealing with cybersquatting should include registering, in the trademark clearinghouse, federally registered trademarks. I have viewed this as so critical that our law firm has become a trademark agent of the trademark clearinghouse, so we can submit trademarks to the clearinghouse without having to use a third party service. When a trademark is accepted in the trademark clearinghouse, the brand owner may register domain names under ngTLDs during the sunrise period. The sunrise period is a period for registration of domain names before the general public can register domain names.
In addition, following the sunrise period, there is a claims period. During the claims period trademark holders will receive notice of any domain names that are registered under a ngTLD by a third party. This will provide an opportunity to take appropriate action early in the process. The person registering the domain name will also receive notice that the domain name being registered is the trademark of another person or business. Hopefully, this will have some deterrent effect, although that is not likely.
There are other strategies available as well, but for now, the best action to take is to file valuable federally-registered trademarks in the trademark clearinghouse to obtain some protection against cybersquatters under the potentially millions of new domain names under the ngTLD that are increasing weekly. Although not all brand owners will want or need to take aggressive steps, filing in the trademark clearinghouse should be part of a good domain name management strategy. Unfortunately, doing nothing and hoping for the best is naïve and will weaken the value of your trademark.