Protecting your brand under the new domain names

There is potentially a whole new world of online branding on our doorstep.  See, www.considerthelaw.com.  Historically, .com has ruled the internet and online branding.  But now, there are hundreds of new generic top level domain names (gTLD) ready to launch.  Many have already been rolled out.

gTLDs are the letters or other characters to the right of the dot.  For example, .com is a gTLD.  Some of the new gTLDs include .holdings, .camera, .technology, and .shoes.  Some are Chinese, Japanese, Arabic, and Russian.  These are approximately 150 new gTLD that have been approved.  Over 1,900 applications have been filed for new gTLDs.

This is a major development unfolding for online branding and promotion.  It is still not clear what it means for brand owners, but it certainly means there will be changes.  As with most issues on the internet, brand owners need to follow the new gTLD rollouts for at least two reasons.  First, the new rollout provides new opportunities for branding.  No longer are brand owners limited to marketing and offering products and services under the .com gTLD, as well as the other less frequently used gTLD.  Second, brand owners need to consider defensive strategies for protecting their brand.  The opportunities for abuse and misuse have just grown geometrically.

For example, prior to the rollout of new gTLDs, brand owners had to monitor the introduction of new domain names for cybersquatting, which is the use of the brand of another in a domain name.  Although there were virtually unlimited options for typosquatting, which is a form of cybersquatting by changing one or two letters in a brand and including the intentionally misspelled brand name in a domain name, now the potential for typosquatting may be multiplied by as many as the number of the new gTLDs.

Fortunately, there are opportunities available under the new gTLD program to protect brand owners.  Although there are also many opportunities for cybersquatting, there is at least some help.  Brand owners should seriously consider taking advantage of these opportunities.

There are procedures for protecting against the approval of a new gTLD that includes a brand that is federally registered as a trademark and to address registration of second level domain names that constitute cybersquatting.  A second level domain name is the characters to the left of the gTLD, but to the right of the @, for example “acme” is the second level domain name of john@acme.camera.  Historically, brand owners have monitored the internet for cybersquatting under a few gTLD.  If cybersquatting were discovered, and if the brand owner otherwise qualified for filing, the dispute could be resolved under the Uniform Domain Name Dispute Resolution Policy (UDRP).  Now, however, brand owners need to address cybersquatting in second level domain names under the .com gTLD, as well as the multitude of new gTLDs.  UDRP is still an option, but there are other options as well.

Brand owners should also consider whether it makes sense to apply for a new gTLD.  However, this will make sense for major brand owners only.  The application fee alone is $185,000, and the actual cost of filing the application and then operating the registry, if approved, is significantly greater.  Having a gTLD unique to one’s brand will be a significant opportunity, but the cost is enormous.

The launch of the new gTLDs will provide significant benefits to brand owners, but will also create significant headaches.  Brand owners should be vigilant and understand the implications of the new gTLDs, both from an offensive and defensive perspective.

Door opens for new competition in the domain name world

On June 20, 2011, ICANN (Internet Corporation for Assigned Names and Numbers), the international body that regulates domain names, approved the implementation of a procedure for the adoption of new generic top level domain names (gTLD).  Generic top level domain names are the letters to the right of the dot in a domain name, such as .com, .net, and .org.  Prior to this action, there were 22 generic top level domain names, but now there could be potentially thousands of new gTLDs.  According to ICANN, “Internet address names will be able to end with almost any word in any language, offering organizations around the world the opportunity to market their brand, products, community or cause in new and innovative ways.”

New gTLDs will be assigned based on a complex and expensive application procedure.  The initial filing fee is $185,000, and there is an annual fee of $25,000.  These are in addition to other application fees in some cases, and other expenses as well.  The application procedure guidebook is approximately 350 pages.  Applications may be filed between January 12, 2012 and April 12, 2012.  There may be additional rounds of applications, but the first will be the most critical, and it is not certain there will be additional rounds.  According to http://dot-nxt.com/applicants, there are currently already over 120 applications that will be filed during the application period, and some of the anticipated names are .mls, .music, .hotel, .canon, .hitachi, and .vegas.

One of the important objectives of ICANN in adopting the new gTLD was to avoid cybersquatting, and other trademark and intellectual property infringement.  In the early days of the Internet and the use of domain names, cybersquatting became a significant problem, and finding remedies was a challenge.  In response, Congress passed the Anticybersquatting Consumer Protection Act, and ICANN adopted the Uniform Dispute Resolution Procedure.  Under the new procedure, the application fee alone will be a significant deterrent, but there are other procedures and protections built in as well.  Not only will the application process attempt, through an evaluation procedure, to identify any potential infringement and misuse, but there will be procedures for third parties to protect their own intellectual property and other rights.  The policy includes a trademark clearinghouse and sunrise procedure, as well as dispute resolution procedures.  However, there is no crystal ball to identify what problems will arise, and how successful these procedures will be in protecting rights and avoiding problems.

The adoption of this new policy and the implementation of new gTLD could be revolutionary.  Consumers will no longer be left to finding products and services using potentially confusing second level domain names and domain names.  For example, a search for a Nissan automobile at nissan.com will be disappointing.  Computer products and messages about Nissan Motor’s litigation against Nissan Computer are available at Nissan.com, but Nissan automobiles will only be found at nissanusa.com.  Nissan Motors may be highly motivated to apply for the new gTLD .nissan to avoid the problem going forward.  Brand owners will have a unique opportunity to secure a strong position on the Internet, and will no longer need to compete with others for domain names within the .com gTLD.  Communities of people and organizations may have a unique and strong presence online, such as organizations supporting a .eco gTLD.

There are at least two significant implications for brand owners and others doing business in an online world.  Businesses need to seriously consider either banding together with others to develop a community or generic domain name, such as financial institutions adopting the gTLD .bank, or consider adopting a brand gTLD, such as .canon or .deloite.  However, applying for and adopting a new gTLD will not be for everyone.  In addition, brand owners will need to be vigilant in making sure that others do not trample on their rights when adopting new gTLD, and take appropriate action.  Some appropriate actions are to monitor applications filed, submit comments to ICANN on applicable applications, including as part of a community, file objections and lawsuits, if necessary, and participate in other procedures, including trademark clearinghouse and sunrise procedures.  This significant development is also a good opportunity to review current online brand strategies to see if any changes or modifications are appropriate.

Significant changes in the world of the Internet, in addition to bringing positive changes, also usually yield unintended consequences.  Unintended consequences are likely with the venture as well.  But, the potential for brand and community awareness is huge.  Brand owners and community participants will need to be vigilant and aware of developments and the implications for them as this policy and application process unfold, and new gTLDs launch in cyberspace.

Caution when protecting domain names

A common concern with domain names is the use of very similar domain names by others, which drives traffic intended for one site to another.  One example is typosquatting, which is the practice of registering and using a domain name that is the likely result of mis-typing a domain name.  Traffic is then driven to another website by the mistaken typing of the intended domain name.  Another common concern is the use of a trademark of another in a domain name, again with the intent to drive traffic to another site with the trademark.  There are several ways to protect against such problems.

The Uniform Dispute Resolution Policy adopted by ICANN provides a means for a domain name to be assigned to a trademark owner if the domain name is confusingly similar to a trademark and the domain name is registered in bad faith.  Similarly, the Anticybersquatting Consumer Protection Act provides remedies for trademark owners.  A practical way to protect a domain name and trademark without having to hire a lawyer is to register several iterations of the domain name to prevent others from registering and using them, or registering them and trying to sell them.  When registering such iterations to protect a website, there is a temptation to use the additional domain names as redirects, so that if a user types in one of the additional domain names, it takes the user to the original intended website.  By doing so, the website owner can have several domain names all leading users to one website.

Here is the caution: if the website to which traffic is being driven using one of the additional domain names as a redirect collects any personal information, including a user identification and password, to access an account or other information, the website owner should not allow the registration of the other or additional domain names to lapse, or allow the domain names to be placed for sale by a registrar or used by another.  Why?  Because the new domain name owner could use the domain name as a redirect to his or her website, and users accustomed to typing in the additional domain name may not recognize that they have been redirected to a new website.  This is true, particularly if the domain name includes a trademark, or name that is confusingly similar to a trademark.  Users will believe that they are using the website of the original intended owner and happily type in personal and confidential information at an unknown and unintended website.  The new owner of the domain name could then collect the information on the new website and use it to access accounts and other information from the original website.  Fraud and identify theft are the natural results.

The bottom line is caution should be used when developing a plan for protecting domain names and the use of trademarks in domain names.  There is no question that a plan should be established, but it needs to include consideration of these issues.