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gTLDs Opponents Create the Very Confusion They Decry

Alexa Raad

It's ironic and amusing that while a few well-connected opponents of the new gTLD program were testifying before the U.S. Senate committee, I was asked to help educate top executives of one of the largest global ad agencies and their major clients on the brand marketing and advertising implications of the program.

It was clear from the start that virtually all these high-powered executives knew about the program they had learned from the eleventh hour negative campaign. Many thought the program had little or no value for brands and businesses and feared having to apply defensively for their names.

There is confusion on the most basic facts. The arguments of the opponents of the new gTLD program are founded on the inaccurate presumption that gTLDs and second level domains are interchangeable and hence, to be evaluated in much the same way. This has led many senior marketing and brand executives, to conflate gTLDs and second-level domain names. One senior vice president of a large multi-national consumer package goods company said, "We have hundreds of brands. The cost for us to apply for each of these as a TLD to defend them would be huge."

Why would she believe she had to apply for every brand as a gTLD?

If you listen to the testimony from the ANA's Dan Jaffe, he estimates the cost to brands as "multi-billions of dollars," and then justifies how the ANA has arrived at this figure. He says, "Some have estimated that for a typical company the cost of acquiring a single new gTLD and managing it could easily exceed 2 million dollars. Companies that are forced into an auction with another potential applicant could face far higher costs. As companies have hundreds and even thousands of brands to defend, it's easy to see how these costs can spiral upward." Is he talking about gTLDs or second level domain names?

By the end of the seminar with major brands and their ad agency — and after correcting misrepresentations and discussing innovative marketing opportunities possible for some brands with new gTLDs — reactions were much different. Many found that they needed to see gTLDs as a competitive and strategic opportunity, not simply a defensive and tactical maneuver. We talked about involving other functions within their organizations to make a proper decision. For some, it was clear that they need not apply for gTLDs. Others began considering a generic term describing their vertical industry or market.

My morning in New York reaffirmed the notion that our entire DNS industry is faced with a massive communication problem that we must do a better job of addressing.

While it is fair to discuss the potential benefits of new gTLDs, we need to first address the misinformation and criticisms.

First, there are the trademark infringement concerns. There are comprehensive and collectively unprecedented protections afforded legitimate trademark holders in the new gTLD program. For example, once the applicants are announced and before ICANN even evaluates applications, there are opportunities for trademark holders to object. Specifically, trademark holders can use the Legal Rights Objection, using the WIPO Rules that are part of a larger dispute process laid out in module 3 of the Application Guidebook. Companies and associations can raise objections for both registered and unregistered trademarks upon which they believe the new gTLD application may infringe. So, for example, if an entity other than eBay applies for .eBay, it would likely be a costly exercise in futility.

As for generic strings, they are just that, generic, so no entity has trademark rights. If a company or brand chooses to apply for a generic string, it may be to defend their competitive business interests, but it is not to defend their trademark interests.

If on the other hand, the company or brand decides against applying for a generic string and finds later that another entity has applied, been evaluated and been awarded the same string, they still have options. They can choose whether to register second level domains, should be it applicable to their business. In that case, they are afforded protections such as mandatory sunrise provisions giving trademark and brand holders the first rights to apply for a domain name under a new gTLD. Should they choose not to register their second level names, additional and new mechanisms, such as the Centralized Trademark Clearinghouse, makes the task of guarding against potential violations much easier. The Centralized Trademark Clearinghouse provides them a mechanism to register their trademarks only once in a centralized database for all registries to reference as a source for validating applications. Should an potential infringement occur, they have quick and efficient recourse through the Uniform Rapid Suspension System and the Trademark Post Delegation Dispute Procedure. Bottom-line: It will be more difficult and costly than ever before for cybersquatters to attempt to register legitimate trademarks. That said, ICANN would need to ensure that this fear among trademark owners is unfounded.

A related issue is the cost of defensive domain name registrations to protect against cybersquatting. Unless the program is launched and the impact on defensive registrations studied, we will not know the exact cost. But if prior behavior is an indication, companies do not make a habit of registering their names in every conceivable TLD. A 2009 study showed that among the seven most common current gTLDs, less than 200,000 names were registered across all the TLDs — but only three percent were registered by the same entity, or about 6,000. Again these numbers are based on the current state and current gTLDs, many of which were launched without the comprehensive protections now afforded trademark and brands in the new gTLD program. Also, in extreme cases, the new ICANN rules facilitate trademark holders going directly after registries that sell names that infringe or have the potential to create confusion.

Last but not least, let's examine the claim of user confusion resulting from an "unlimited" number of new gTLDs deluging the market. This assertion is based on two assumptions: one, that unlimited number of gTLDs would be awarded, delegated and launched at the same time; and two, that many would be confusingly similar to one another. As for the first, ICANN has made a commitment to the root servers, operators and others in the security and stability community that the maximum number of gTLDs delegated in a year would be no more than 1,000. ICANN's new gTLD Application Guidebook has clear provisions for string confusion and string contention. So ICANN could not and would not award .shop and .shops.

Ironically, by their own misunderstanding, the opponents are spreading the confusion wider instead of curbing it.

It is our job as an industry to clear the smog of misinformation for the benefit of businesses, brands and consumers.

By Alexa Raad, CEO of Architelos. Architelos provides consulting and managed services for clients applying for new top-level domains, ranging from new TLD application support to launch and turnkey front-end management of a new TLD. She can be reached directly at araad@architelos.com.

Related topics: Cybersquatting, DNS, Domain Names, ICANN, Top-Level Domains

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