DigitalBrandNews

Whether or not to acquire a .brand Top Level Domain (or gTLD) depends on an organization’s brand and marketing strategy, market position, customers and possibly even its partners and channels.  The big question though is what will those elements look like five years from now?  Five years is beyond most strategic business plans and in Internet time is an eternity. 

Why a five year horizon?  First, it will be over a year from now before any newly applied-for gTLD goes live.  Then, it could be two to three more years before the next application round. The .brand gTLDs that get through the process quickly will have the most time to gain user adoption.  And if successful, that could increase interest from other companies in applying in subsequent rounds as they attempt to catch up. 

For companies there are essentially three approaches to new gTLDs: 

1. Take no action / wait and see
2. Apply for a .brand gTLD for marketing potential
3. Apply for a .brand gTLD to keep the name from being registered by another entity 

The first approach would likely be the preference for most organizations – let the early adopters test the water and then determine if new gTLDs do in fact develop brand power.  However, the reality is that the universe of unique names is limited. Waiting out the first round creates the risk of competing in a more crowded field in the next round. 

Companies that invest heavily in marketing and advertising will want to consider the second approach.  The ability to have a consistent brand strategy for URLs and the ability to create them on demand will provide significant value. But there are other additional benefits that can and will also be explored from a marketing standpoint. 

The last option is the safe bet for companies that value their brand, especially where there are multiple brands in the world with identical or closely similar spellings.  It still requires completing the ICANN application and evaluation processes.  If successful, the company will be required to enter into a relationship with ICANN for the gTLD and to maintain a registry (however the cost of maintaining an idle registry may be considered reasonable).  This option will ensure the appropriate gTLD is in the brand portfolio and the company can then consider its options later when there is more clarity around the potential use and applications.

The Applicant Guidebook published by ICANN makes provisions for basically two types of gTLD applications, community-based and standard applications. The apparent appeal of a community-based gTLD is that in the event of multiple applications for the same name string, a community-based applicant may have the option of electing a community priority evaluation. On the outset, the difference seems subtle and could be satisfied by a creative interpretation of “user community”.     

As an example, a brewery might in fact serve a large “community” of beer drinkers. But that alone would fall short of meeting the full intent of the ICANN’s requirement for dot beer (.beer) to qualify for a community-based gTLD designation. According to the Applicant Guidebook, community-based applications are “intended to be a narrow category for applications where there are unambiguous associations among the applicant, the community served and the applied-for gTLD string.”  To be eligible for a community-based application, the applicant must be able to substantiate its status as a representative of a clearly delineated community. Further, supporting documentation in the form of community endorsement must accompany a community-based application.   

A litmus test to consider a community-based designation would be to ask whether the operation of the proposed gTLD is for the benefit of the defined community rather than the applying entity. Only if the answer is definitively “yes” would exploring a community-based application be worthwhile. Community-based applications will likely undergo a very thorough review by the evaluators to ensure each application meets the requirements for the designation. A single for-profit entity would likely find it very difficult to state its case for a community-based gTLD designation. Trade associations, certain consortiums, and social and ethnic organizations that exist to represent the members of the “community” will be the likely candidates for the community-based designation. 

Even if multiple organizations apply for the same name string, the outcome doesn’t necessarily have to be an “all or nothing” proposition decided by the highest bid. Where companies from different industries apply for the same name string, an option to explore could be an arrangement between the parties to partner in the gTLD.  The more applications there are for the New gTLDs, the greater the possibility of potential name string contention.  This has the potential to become a more significant issue in each subsequent application round.  A thorough analysis of the advantages in applying in the first application round should be a key factor to take into account when considering a New gTLD and when to apply.

More companies are giving serious consideration to a .brand now that a definitive timeline for New gTLDs has been established by ICANN.   There are a number of strategic factors in determining if a gTLD is warranted, with significant weighting on an organization’s brand and online marketing strategy. The below statistics compiled from organizations which have expressed interest to Melbourne IT DBS may provide a high-level benchmark for comparative purposes[i].

Of B2B and B2C companies, consumer facing companies are the most interested in a .brand (65%).  Across both groups, 92% are interested in applying for their primary brand, and 9% for a product brand(s).  11% indicated interested in applying for a generic term.

The purpose for applying is nearly evenly split with 48% considering an application primarily to protect the brand and 45% to create a competitive marketing advantage.

The most interest by industry segment is:

• Entertainment, publishing and media industry (19%)
• Financial services (19%)
• IT and Telecom (15%)
• Travel and tourism (7%)
• Consumer goods industries (7%)

ICANN’s Board of Directors approved proceeding with the new generic Top Level Domain (gTLD) program 20 June 2011 in Singapore, paving the way for the new domains.

“ICANN has opened the Internet’s naming system to unleash the global human imagination. Today’s decision respects the rights of groups to create new Top Level Domains in any language or script. We hope this allows the domain name system to better serve all of mankind,” said Rod Beckstrom, President and Chief Executive Officer of ICANN.

Applications for new gTLDs will be accepted from 12 January 2012 until 12 April 2012. ICANN will post the list of applications on its website and will begin reviewing applications once the application period closes. It is unlikely further applications for the new gTLDs will be accepted for at least 2-3 years following the initial application period.

The expansion of the Internet naming space will create new applications and opportunities for companies. The most apparent will be establishing the company’s primary brand as a top level domain. For some companies key sub-brands or generic product or category term may be appealing for category dominance.

Some of the benefits a .brand can offer:

•               Enhanced brand recognition

•               Nearly unlimited ability to create URLs on demand

•               Increased consumer trust

Current estimates are that between 300 and 1,000 new TLDs could be created under the new program. A common concern among trademark holders is the expansion of the naming space will require thousands of defensive registrations for second level domain names in the new, generic category gTLDs. However, with the additional rights protection mechanisms being required by new gTLD operators, cybersquatting in new gTLDs will likely be less of a concern than initially thought.

Melbourne IT DBS will be presenting a series of informational webinars over the coming weeks to help companies and organizations understand the relevant issues in order to prepare the correct strategy for their business. For any questions please send an email to brandedgtld@melbourneitdbs.com.

New gTLDs made news stemming from a US House of Representatives subcommittee hearing on “ICANN Generic Top-Level Domains (gTLDs) Oversight Hearing” and comments by Assistant Secretary for the US Department of Commerce, Larry Strickling, at the Global Internet Governance workshop at the American University in Washington.

In the House of Representative subcommittee hearing, Kurt Pritz of ICANN received tough questions and little praise in regard the new gTLD program.  Witnesses representing trademark and IP interests made the appeal to delay the launch of the new gTLDs, but didn’t present any new information to help support their arguments.  Comments by Larry Strickling in a keynote to the audience at the American University focused more on governmental concerns, namely ICANN “address(ing) the collective concerns of governments, as expressed through the Government Advisory Committee (GAC).”  He also stated “We (the US) remain committed to the ICANN model as the best way to preserve and protect the security and stability of the DNS.”

The US Department of Commerce terminated its direct oversight of ICANN in 2009 in support of a multi-stakeholder model for Internet Governance, which includes governments. The US is now just one of the countries represented by the GAC.   As such the US Government has a strong interest in improving the effectiveness of interactions between the ICANN Board and the GAC, but would likely not be in favor of any one government having veto power over ICANN initiatives.

ICANN will be meeting with the GAC on 20 May 2011 to take in final feedback.   The next version of the guidebook is due on 30 May 2011, and ICANN envisages approving the final guidebook on 20 June 2011.
References:
Speech transcript of Larry Strickling: http://www.ntia.doc.gov/presentations/2011/Strickling_GigaNet_05052011.html 
US House of Representative subcommittee hearing recording: http://judiciary.house.gov/hearings/hear_05022011.html

The ICANN Board and its Government Advisory Committee (GAC) spent three days in Brussels discussing the implementation of the new gTLD policy.  Prior to the meeting the GAC provided a “scorecard”, with their list of concerns, to the ICANN Board.  The list contained 12 primary issues that encapsulated a total of 80 sub points.  At the meeting ICANN presented a summary of its position and reasoning on each point, and expressed willingness to compromise in some areas. 

 Of the 80 sub points, ICANN responded that their position was either consistent with the GAC’s advice on 25 of the sub points or consistent with GAC’s advice with some revisions needed on 28 of the sub points.   There remain 27 sub points for further discussion with the GAC over two days in San Francisco during the next ICANN meeting of 12-18 March 2011.

 Of interest to major trademark owners included:

• an agreement that the GAC as a whole will be able to review the new gTLD applications and provide early advice to the ICANN Board prior to the assessment of the new gTLD application by the ICANN Board,
• that the clearinghouse could store marks other than registered trademarks for potential use by registries,
• that any registered trademark can be used in a sunrise process or URS proceeding, provided that information on use of the trademark is provided to the clearinghouse, 
• that during the Intellectual Property (IP) claims procedure, a rights holder will be informed once an applicant has acknowledged an IP claim and submitted an application for a name during a registry start-up process,
• that a word limit of 5000 words will be replaced with a word limit of 500 words for a complainant in an IP claims process,
• an examiner will not be required to consider possible defences from a domain name registrant’s perspectives when assessing a URS proceeding,
• ICANN will provide additional resources for the contractual compliance function for registries and registrars

 The GAC expressed a need for more time to discuss and consider the issues and included in their written response to the ICANN Board “The GAC is committed to taking whatever time is required to achieving (these) essential public policy objectives”.   The ICANN Board stated that the meeting in San Francisco will be on resolving the remaining areas of contention and signal the “final stages in (our) consultations”.   

 The impact on timing will likely be that a new version of the guidebook may be published sometime in April that incorporates changes agreed between the ICANN Board and the GAC, along with other changes resulting from the public comment process on the guidebook published in November 2010.  

 The summary prepared by the GAC to the ICANN Board from the Brussels’ meeting can be accessed here>

The summary of the Board’s response can be found here>

The ICANN Board and the Government Advisory Committee (GAC) are scheduled to meet for two days beginning February 28th in Brussels to discuss differences in positions on a number of the provisions of the new gTLD program and to reach agreement on possible improvements. 

Key issues at the center of the discussions will include broader protection of geographic words, additional protections for trademark owners and avenues governments can take to address what could be viewed as politically sensitive name strings.  Of these three issues, the last one is obviously difficult to define at the present, let alone predict what could fall into that category in the future.

Any compromises from the Brussels meeting will likely be presented for community consideration at  the ICANN public meeting being held in San Francisco  (March 12 – 18) ahead of ICANN and the GAC formally reconvening on  March 17th to discuss any remaining disagreement.   During that meeting the proposed .xxx TLD is also likely to be discussed for a final time.   

Any new or modified provisions will require an update to the draft applicant guidebook and subsequent posting for public comment again before being approved by the ICANN Board.  Establishing a timeline for the final guidebook and program launch now appears highly dependent on substantial agreement between ICANN and the GAC by the close of meeting in San Francisco.

Brand names have the potential to become Internet dominating categories. Brand names in place of .com in URLs  can differentiate domains from the more than 80 million URLs ending with .com. Proprietary research indicates .brand URLs have a significant potential to convey authenticity, trust and prestige in the minds of Internet users. 

A survey of U.S. Internet users conducted by Melbourne IT Digital Brand Services found that 42 per cent of respondents believed the new generic top level domain names (gTLDs) ending with a company brand (such as .canon) would simplify their ability to navigate websites.  It also found 60 per cent of respondents prefer to enter a web address they have seen in a TV or print advertisement directly into their browser’s address bar, reinforcing the value of short, memorable domains, and 44 per cent of respondents indicated having websites grouped by category (e.g. .sport or .cars) would make searching and navigating to a site much easier.  

Organizations need to consider what is important for their brands not only today, but five years from now and understand the risks associated with not registering. In the longer term, top level corporate brand names may become more commonly used domains which customers look for first. 

Find out more about .brand gTLDs by visiting http://www.brandgtld.com

On November 12, 2010 ICANN published its Proposed Final Applicant Guidebook for public comment.  The public comment period is open until December 10, 2010.

 The majority of redline changed in the guidebook serve to clarify existing provisions.  There are a number of points outlining increased scrutiny applied to identify any applicants with a history of criminal or fraudulent activity to minimize the potential for abuse in the new gTLDs. 

 The term “Morality and Public Order objection” in previous versions of the guidebook has been changed to “Limited Public Interest Objection”.  According to the new guidebook,  “An expert panel hearing Limited Public Interest objection will consider whether the applied-for gTLD string is contrary to general principles of international law for morality and public order.” 

 The New gTLD Agreement has been modified in accordance with the ICANN Board resolution made November 5, 2010 regarding cross-ownership of gTLD registries and ICANN-accredited registrars.  In addition to clarifying language, the agreement also contains the proposed “Registry Operator Code of Conduct “ to prevent abusive business practices where the registry will also operate as its own registrar.  A corporation can now can perform the roles of both registry and registrar, although it must still treat all registrars on a non-discriminatory basis.

 As the name of the document indicates, this version of the New gTLD Applicant Guidebook is proposed as the final draft that will allow the new gTLD program to get underway next year in accordance with the time proposed by ICANN last month.  Discussions regarding this will take place at ICANN’s next meeting that convenes in Cartagena de Indias Colombia on December 10, 2010.

Since the spring there was ittle indication of a definite timeframe for new gTLDs but now ICANN has released a timeline showing May 30, 2011 as the date the first applications will be accepted.

How many new gTLDs will ultimately be proposed is still anybody’s guess, but in our estimation few will create any significant trademark protection issues. Historical data published by WIPO (the World Intellectual Property Organization) shows the vast majority of infringement cases are related to .com domains. In the long run this may actually work in favor of new TLDs. Many new gTLDs will be targeted to specific interests, categories and groups that will be identified by the extensions themselves.

With .brands being added to the mix, consumers can also be expected to become educated to the changing nature of domains. This was made clear in our proprietary research of Internet users where 39% of a broad audience stated they would trust a website with a known brand name used at the end of a URL more than one ending in .com. Even more, 44%, said having a .brand URL would make it easier to navigate to their desired destination.

As we all know, the Internet is fluid and domain names will constantly be adapted as new and innovative applications are developed. Like the Internet and the underlying technology in general, domain name management will become more technical and complex and require greater coordination across enterprises. The challenge of managing all this intersects at the IP manager’s office.