On Jan. 29, Donuts Inc. launched the first seven of what will be some 1,000 new generic top-level domains or GTLDs, rivals to the familiar .com, .com and .edu endings that now populate most of the known Internet.
Six days later, at 2:04 a.m., Venura de Zoysa of Kingston in New South Wales, Australia, used GoDaddy.com to register the domain name
What do these nobodies scattered around the globe have to do with the famous brand names they registered? Not much, probably. De Zoysa responded to Forbes.com with a curt “no” when asked if he was an Adidas representative . None of the others responded to inquiries via the contact information they supplied Godaddy.com, and some provided invalid e-mail addresses and phone numbers, a clear violation of Internet policy.
They still might profit by snapping up domain names that happen to belong to well-known consumer brands. With the cost of dislodging a cybersquatter starting at a few hundred dollars and quickly escalating past $10,000 – with no possibility of imposing those costs back on the loser without engaging in even more expensive litigation -- brand owners might find it easier to pay them to go away.
“It’s a severe game of whack-a-mole,” said Brad Newberg, a partner with Reed Smith in Falls Church, Va. “It’s no harder to monitor than the dot-com system, but it magnifies the cost by 1,000 new GTLDs.”
Newberg recently looked up domain names registered under the .bike GTLD (chosen because the bicycle industry is fairly concentrated with a limited number of global brand names). He found that 13 of the 20 top brands were registered to “third parties who seemingly have no relation to the brand owner” – squatters, in other words. Trademark lawyers cringe at this, since trademarks are a bit like a piece of land. Unlike copyright, where owners can pick and choose who they go after, trademark owners must defend their turf everywhere or lose the right to eject trespassers from their property.
Fans of the new domains, including domain-name registrars like GoDaddy.com and registry operators like Donuts, say Newberg is burying an important fact: Not only is it no harder to police the GTLDs than the dot-com system, but arguably a lot easier. Unruly top-level domains like .ru are almost impossible to control, and will remain so, they say.
“There are a few trademark attorneys who have been peddling this `sky-is-falling’ narrative for a long time and it just isn’t coming true,” said Mason Cole, a spokesman for Donuts, which makes money by keeping a registry of all the domain names associated with new GTLDs.
In negotiations with trademark owners proponents of the new domains agreed to put in new mechanisms for registering brand names and speeding the process of evicting cybersquatters from names they have appropriated. GoDaddy, for example, has a team of examiners who will look into complaints about people like Nawas, who appears to operate from two cities simultaneously and has at least one non-working phone number associated with his registration.
“We certainly don’t like people abusing our systems,” said James Bladel, senior policy director at Godaddy, which charges a few dollars to $40 a year and registers one domain name a second.
Newberg said GoDaddy’s offer sounds nice in principle, but it and other registrars offer Privacy Protect services that allow registrants to mask their identities. Trademark owners also can register their names in the trademark clearinghouse, a central database that registrars like Godaddy use to warn people they are about to register a protected name and to proceed at their own risk. There are 25,000 marks in the clearinghouse so far and it has sent out warnings to almost 9,000 owners that somebody else has attempted to register their brand.
Donuts offers a Domain Protected Marks List service for $3,000 that allows trademark owners to block the use of their names across all the domains Donuts administers, “at a fraction of the cost of defensively and individually registering the terms,” the company notes. (Do a whois search for
A cheaper alternative is the Uniform Rapid Suspension System, which allows trademark owners to file a complaint and potentially boot a cybersquatter off their name within 24 hours. It costs $200 plus legal fees, but those costs can add up fast.
“If a brandowner like a Proctor & Gamble or GE or
The Intellectual Property Constituency at the Internet Corporation for Assigned Names and Numbers or ICANN, fought for and lost a proposed registry that would block trademarks across all the new GTLDs. One reason, Newberg says, might be the lucrative fees registrars can charge for “sunrise” registrations in advance of opening a new GTLD to all comers. Only companies that have registered their trademarks on the central clearinghouse list are eligible, but registrars can charge what they want.
United Domains, for example, will register names under the new .sucks domain expected to go live next year. Newberg said the sunrise fee for .sucks is believed to be $25,000 per year, although United Domains told me pricing hasn’t been established yet. On its website, the firm tells potential customers “there will always be customers ready and willing to scrutinize and criticize them,” and .sucks provides a tool for companies to “reign in (SIC) and monitor …discourse by creating customized, recognizable open forums on which their customers can air their grievances.”
That’s one possibility. But the high expected price reflects another one. People with a beef about a company could squat on their brand name in the .sucks domain and claim they need it to exercise free speech.
“That one in my mind is almost pure extortion,” Newberg said, since the practical costs will be immense for defeating a cybersquatter who claims he is engaging in political speech by taking, say,
