Wednesday, 23 February 2011

Yet More Domains

For the majority of businesses the .com and the country code remain the bedrock of domain extensions. It’s hard to get around it; these remain the most desirable domain properties. The statistic I regularly quoted to clients a few years ago was ‘there are now 26 million .coms registered, so finding a single English language word is extremely difficult’. Now there are 119 million registered, so the task is even harder.

The result - a more realistic and pragmatic approach to the domain name by adding a descriptive word, hyphenating etc. Some use another extension. It’s a moveable feast and ever changing.

The late 1990’s saw the introduction of sector specific domains such as .aero for the aerospace industry, .museum, .pro for professionals. Then there’s .info and .biz and .asia. All have their place.

What’s about to happen is the opening-up of a wide range of new generic domain extensions in Latin and other scripts. More extensions equal more availability and opportunity. But with this freedom will come some challenges and the potential for more disputes. Many brand owners are concerned about the impact on their brands and businesses.

Potentially there could be an unlimited number of new top level domain names (TLDs). We could have a .hotel, .insurance, .sport, .radio, .health. .music, .charity, .eco, .London. The list is potentially endless. Add to these non-Latin alphabets such as Cyrillic, Chinese and there are more options.

Having a domain like could be good as a means of distinguishing from other owners of ‘Eagle’ in different sectors. But not so easy if there is more than one Eagle brand for insurance in different countries.

Some brand owners are sure to set-up their own domains. For a business with an international operation or franchise this could be very good news, enabling them to use the domain as a form of endorsement or quality mark, denoting that those using it are ‘official’ and legitimate outlets. In effect ‘part of the family’. Just think of all Ford dealerships and suppliers using .ford. Those who aren’t signed up or don’t comply can’t. As part of the deal there could be a brand identity template to ensure the correct look and feel, use of the trade mark, on-brand communications.

ICANN will put stringent requirements and controls in place for the new domains. In reality a TLD owner will have to pay an estimated $1million in professional services and legal costs, plus the $185,000 application fee. This is likely to be a deterrent to a speculative extension grabber. The owner of a new extension will have to prove that they can operate a domain registration service and provide guarantees of continuity of service. It would be essential to ensure that businesses operating under a new extension would not be left ‘high and dry’ should it fail.

What is potentially problematic for brand domain names, is who gets to own them. It might appear obvious in the case of multi-nationals and famous brands, but there are many different legitimate owners of the same brand name for different products and services. If they are big businesses in their own right, then there’s the problem of business name verses brand. For example, should Group Lotus plc who own Lotus for cars, IBM who own the Lotus software brand or Festina Lotus who own Lotus for watches be allowed to own ‘.lotus’? They are all established brands and international businesses with trade mark registrations in place. So, would it be first come first served or could there be an arbitration process. Should it be based on turnover, extent of use internationally, number of marks registered, territories or regions covered, estimated brand value?  There’s going to be a Globally Protected Marks List (GMPL) relating to domain names operated through the IP Clearing System to be set up by ICANN. It appears that not being on the GMPL will not affect legal rights, but being on it will have possible advantages.

What is clear is that brand owners are very concerned at the ever-increasing commitment and spend on supporting rankings on Internet search engines, domain name registrations and trade mark defence.

At a recent intellectual property conference ‘Driving High Performance IP’ run by Thomson Reuters, a figure presented was the estimated amount of time that intellectual property professionals spend their time on different aspects of IP protection. The figure of 16% was given as the average time spent dealing with domain name issues. This was an estimated 5% rise on the previous year. It looks set to increase significantly. Despite the recession over two thirds of businesses have either maintained or increased their budgets for dealing with trade mark and domain infringement. With a 50% increase in online infringement and a 36% increase in enforcement in the last three years, the creation of new TLDs will add to the workload for brand owners and their legal representatives.

Domain factoids:
1985 15th March the first domain was registered -
1992 less than 15,000 .com domains registered
1998 ICANN founded
1999 the Uniform Dispute Resolution Policy (UDRP) introduced
2010 - 119 million .coms registered.
2010 - 243 top level country code extensions available. The most popular European country codes are .de (Germany),, .nl (Netherlands), .it (Italy), .pl (Poland).

by Pauline