Feature By Bruce Tonkin

Preparing for change – establishing a domain name strategy for the gTLD regime

Changes to the domain space have prompted • the growth in personalization of services – the more speculation about the potential threat to brand personalized the service, the more loyal the customer, which owners, yet many have still to review their domain means that brands need to use languages and language sc ripts name strategies to reflect the new online landscape. that meet the personal preference of customers. So where should they begin? The growth in the number of users of the Internet, and the number of businesses using the Internet to sell to and communicate with those users, means that online branding at every opportunity will take on increasing importance. This year marks the 25th anniversary of ‘.com’. Dramatic changes have taken place across the Internet in the past quarter of a cen tury Start with a list and, rather than heading into maturity, it is still undergoing a rapid The approach of registering major brands at the second level of all evolution. What this means for IP managers and owners of domains gTLDs and ccTLDs is not sustainable as more TLDs are in troduced, is that their domain name management strategy must evolve as well and is usually unnecessary for the majority of brands. The starting – not just with changes at the top level of the hierarchical domain point for developing a domain name management policy is name system (DNS), but also with underlying changes in how therefore a written brand strategy that sets out the major brands for consumers access and respond to information. a company and how these brands should be used. However, at While brand owners are being urged to prepare for the present, many organizations lack written policies outlining the forthcoming changes, for many the difficulty lies in identifying the domain names that should be registered for their core com pany industry changes that will drive domain name strategies going brands and the names that should be registered for short-term forward, and how to implement a strategy now which is flexible marketing initiatives. enough to take future changes into account. A sound domain name management policy will consider the The evolution of the DNS, with increased numbers of generic strategic registration of select keyword domains and common top-level domains (gTLDs) and country-code top-level domains misspellings of the key brand names in a major domain name space (ccTLDs) – as outlined in the box on page 85 – has occurred such as ‘.com’, and no registrations at all in a very focused domain alongside the proliferation of users and devices that connect to the name space with tight registration rules such as ‘.aero’. Internet at an incredible pace. These global trends are also h aving a A key element of the policy should be the measuremen t of user direct impact on domain name management strategies and include: traffic and behaviour for existing domain names in a portfolio , • the growth in mobility of people and the a vailability of which can be used to determine which names are no longer needed broadband wireless bandwidth in most major cities, which and which other names should be registered based on estima tes of means that users are more likely to access the Internet with potential traffic. small mobile devices; • the growth in the number of online channels to market for Why diversify? goods and services – including the connectivity of televisions Many companies have adopted the use of one pr imary domain and gaming consoles to the Internet – which means that brands name, which is optimized for access by search engines. This name is need to advertise and be present in many different online usually a major gTLD (eg, .’com’ or ‘.org’), or a major ccTLD (which forums; tends to be used where a company predominantly provides its • the growth in social networking – including in the over-35 services within a particular country). All content is then generally demographic – which means that brands need to be able to managed as sub-directories within the website referenced by the engage in such forums to interact with their customers; primary domain name. All other domain name registra tions tend to • the growth in the middle class (that are purchasing goods and be registered for brand protection purposes and are sim ply services online) in countries such as India and China, which redirected to the primary website, and not directly used in any means that brands must target their messages for different online or offline marketing. customer needs to exploit the growth; and This works quite well where most users access content via a www.WorldTrademarkReview.com August/September 2010 World Trademark Review 83 Feature: Preparing for change – establishing a domain name strategy for the gTLD regime

There has been concern that additional top-level domain names will substantially increase the risk associated with online brand protection. However, the facts don’t support this. The risk for a particular TLD is related to both its popularity among registrants and users, and the cost and ease of registering in the namespace

search engine and are referred to the w eb page that is most relevant Getting defensive to the user. However, if the results show a long domain string typical In addition to the registration of domain names for direct of a sub-directory within a website, it can deter users. A significant commercial benefit through proactive use of the names in online number of users scan the domain name displa yed in search results and offline advertising, organizations need to assess their strategy for to decide whether they trust the result enough to click through to deciding which domain names should be proactively registered to the relevant website. reduce risks to a brand and what steps should be taken to monitor A primary brand strategy can also limit marketing effectiveness. registration and use of related domain names by third parties. Providing an easy-to-remember domain name to access directl y the It is well known that domain names are misused by parties th at desired content without having to navigate through a complex seek to trade off the brands and repu tations of well-known primary website to find the content is a key consideration, especially organizations – either through malicious approaches such as for offline advertising purposes. This is what has essentially driven phishing and malware or through earning money from pay-per-click the popularity and market price of generic domain names. advertising that is related to the organization (including advertising Examples of how domain names can be used in differen t forums competitor products). However, there are also many legitimate uses include the following (these are simply examples and do not of domain names by third parties that relate to the brands of indicate the plans of any companies mentioned below): organizations. • Media-specific names such as ‘bmw.tv’ suit consumers that like Whereas a domain name is globally unique, company names and to view videos of cars as part of their decision-making process trademarks are not. The same trademark or organiza tion name may and also suit access from mobile devices where a short, simple be registered to different organizations operating in different name is easier to remember and enter into the device. categories of business or different countries. So while gTLD and • Abbreviated names for use in social media interactions such as ‘t.co’ ccTLD managers have been progressively improving protection suit use in services such as Twitter or text messages, where only a against misuse of domain names – through processes for dealing limited number of characters are available within a message. with phishing and malware, and dispute resolution processes for • Geographic-specific names such as ‘coca-cola.com.cn’ allow trademark disputes – there is nothing stopping legitimate use of delivery of content that is relevant to users in that area, domain names that may match an organization’s brand. displayed in the local language. There has thus been concern that additional top-level domain • Language-specific names such as ‘ .com’ (‘xn--zfvo28e.com’ – names will substantially increase the risk associated with online translated as ‘travel.com’ in Chinese) are also available, although brand protection. However, the facts don’t support this. The risk for a few major brands currently use domain names in particular TLD is related to both its popularity among registrants and internationalized formats. internet users and the cost and ease of register ing in the namespace. • Category-specific names can provide additional information Since the introduction of new gTLDs in 2000, data shows that about a company’s activities – for example, ‘.sport’ could highlight a motor company’s involvement in the pre-existing domain name spaces – ‘.com’ is both the most motor sport, while ‘.charity’ could provide popular domain name space and the easiest to register in, posing the information on how the company provides support for charities greatest risk from a brand protection point of view. Many of the new (something that would generally be difficult to find from a gTLDs have not achieved widespread recognition, so users are far less primary company website or by using a search engine). likely to click through to an unfamiliar domain name type. • Brand-specific names such as ‘drink.’, ‘diet.’, ‘.’, ‘testdrive.’ and registration processes (eg, ‘.travel’ or ‘.museum’), which discourage ‘stayat.’ allow memorable use in offline advertising misuse. From an online marketing perspective, it is a similar issue to on television, radio, advertising billboards, newspapers and considering whether additional radio stations or pay-television magazines, as well as on product packaging, where a short, easy- channels increase the need for advertisers to advertise in all forums. to-remember name assists users in recalling the ad vertiser’s The reality is that advertisers choose to advertise in forums whose name later when entering it on a mobile or home com puter. The users match their customer base. This is also the case online, w here brand at the top level can clearly identify the website as official. brand owners should proactively register their brands in domain

84 World Trademark Review August/September 2010 www.WorldTrademarkReview.com The evolution of the DNS system

The top level of the DNS has been gr adually evolving over the past 10 years. In the 1990s there were three main generic top-level domains (gTLDs) – ‘.com’, ‘.net’ and ‘.org’; a set of over 200 country-code top- level domains (ccTLDs), such as ‘.uk’, ‘.de’ and ‘.cn’; and some special-purpose TLDs such as ‘.gov’, ‘.edu’ and ‘.mil’. Since 2000, 14 new gTLDs have been created (eg, ‘.biz’, ‘.info’, ‘.travel’, ‘.name’, ‘.cat’, ‘.asia’ and ‘.museum’), and se veral new brands and services provided by the company (eg, some companies ccTLDs have been created (eg, ‘.me’ and ‘.eu’). have many product names that can be clearly associated with the Several ccTLD operators found it advantageous to revise their common brand – ‘.’)? registration rules from requiring registrants to be associated with the • Is the equivalent ‘.com’ or major ccTLD band name already taken corresponding country (eg, ‘.tv’ and Tuvalu, ‘.me’ and Montenegro, by another party, resulting in a sub-optimal second -level name and ‘.co’ and Colombia), to allow registrations by registrants outside being used (eg, instead of using ‘example-services.com’, getting of the country and thus market their ccTLDs as commercial generic ‘.example’)? terms (eg, ‘.tv’ for television, ‘.me’ for ‘me’ in English for personal • Are there many significant second-level names that are easily names and ‘.co’ for company). confused with the brand (eg, if ‘example.com’, ‘example1.com’ and Other changes have allowed the creation of fully international ‘example 2.com’ all exist, instead getting ‘.example’ to domain name (IDN) versions of some existing ccTLDs this year. The differentiate clearly)? first to be created include ‘. ’ for Russia using Cyrillic characters, • Is there a need for enhanced security (eg, for use in banking or ‘ for Saudi Arabia using Arabic and ‘. ’ and ‘. ’ for online transactions), where the use of the DNS security China using simplified and traditional Chinese characters. This has extensions (DNSSEC) at the top level would be a benefit? the potential to make the Internet more accessible to several million • Is there enough return on investment to justify the application more users. fee, annual licence fee and operating costs? In the next decade it is expected that several hundred new IDN and standard versions of gTLDs and ccTLDs will be created. A diverse There are also issues to consider when evaluating the risks of not range of potential applicants have stated their interest in applying registering a major brand at the top level. First, the combination of for internet terms such as ‘.web’ and ‘.blog’, industry categories such high entry costs and thorough vetting of applications means that the as ‘.sport’ and ‘.music’, geographic regions such as ‘.sco’ (Scotland) risks at the top level are far lower than the risks within major open and ‘.africa’, and brand names such as ‘.canon’. TLDs such as ‘.com’ or ‘.uk’. Accompanying the TLD expansion, changes are also being made There are also strong protections for trademark o wners which to make domain names more secure by associating digital signatures provide a significant disincentive for a third party to apply for a with domain name records (referred to as DNSSEC). This new security name matching a brand and use the name in breach of trademark measure will provide assurance that the translation from a domain law (eg, dispute mechanisms are planned for the application process name to an internet address is correct. These changes are being as well as post-delegation of the domain name). rolled out to the top level of the hierarchy for all new gTLDs, and The most important risk to consider is whether a third party several gTLDs (eg, ‘.org’) and ccTLDs (eg, ‘.se’) have also adopted could legitimately register a name at the top level and use it in a way DNSSEC capability. This means that organizations wishing to use that may affect the reputation of the brand or cause confusion to the domain names as part of financial tr ansactions can choose names user base. For example, a brand associated with an organization that that are supported via DNSSEC to enhance protection. As systems are makes and sells children’s products may also match a brand that modified to take advantage of the new DNS standards, it will become corresponds to an organization that operates casinos. An important a necessity for existing gTLDs and ccTLDs to add DNSSEC capability. consideration then is whether there are other companies that use the same brand and have the resources to apply, and would gain a clear benefit from using the brand at the top level (eg, a casino operator name spaces that are most likely to be used by their target customers. may wish to move into online gambling). So, for example, a sporting shoe company might choose to register ‘.sports’ (assuming that ‘.sports’ becomes popular or is Registration at second level of DNS likely to become popular), but need not register ‘.food’. Again, the starting point for considering registration at the second Where an organization does not proactively register a domain name, level (eg, ‘example.com’, ‘example.uk’, ‘example.sport’) is the written the organization can have a monitoring process in place to detect strategy for deciding what domain names to register at the second registrations of related domain names, and trigger follow-up checks level, which should identify the major brands and domain names to see how these related registrations are being used and where the that the organization currently has registered and the approach for use is likely to be deceiving users as to the organization operating the registering names in the major gTLDs and ccTLDs. In an domain name or damaging the brand. environment where there are many additional top-level domains – including internationalized domain names and new gTLDs and Registration at top level of DNS ccTLDs – the strategy must be regularly updated to take into account The starting point when considering registration at the top level is a the new names (eg, on a quarterly basis). written strategy for deciding what domain names to register at the For each new TLD, the strategy c ould create a rating that takes second level. The written strategy should identify the major brands into account factors such as general popularity (measured in terms and domain names that the organization currently has registered. of both number of second-level registrations and usage through Typically, most strategies identify some core brands that should be DNS traffic), relevance to customers, level of protection against registered in major gTLDs and ccTLDS, and some brands that may be malicious use of domain names, and cost and ease of registra tion. registered in only a small number of TLDs. A number of questions For example, ‘.cn’ may be a popular domain name for users in China, should be considered when registering a domain name at the top but an organization may not market its services into China or have level for branding and marketing purposes. These include the many Chinese-speaking customers. Similarly, ‘.sport’ may be highly following: relevant to Nike, but of no relevance to a banking organization. • Would a top-level domain name be significantly shorter and easier Regular review is important, as a rating for a particular domain to use (eg, ‘.melbourneit’ is not significantly better than name space may vary over time as registration rules change and the ‘melbourneit.com’), for either website addresses or email addresses? name becomes more popular. • Could the top-level domain name be used effectively with other For a particular brand, a decision can be made based on its o wn www.WorldTrademarkReview.com August/September 2010 World Trademark Review 85 Feature: Preparing for change – establishing a domain name strategy for the gTLD regime

domain name registration policy. For a minor brand, a TLD would dispute resolution process, the organization should measure the need to have a high rating in terms of popularity and relevance for an traffic associated with the domain name to determine w hether the organization to register that brand in the TLD, whereas for a major cost of having the name transferred was warranted. Over time, this brand that is a relatively generic word and used by multiple provides data for an organization in refining its rating system. organizations (eg, ‘crown’), the organization may have a low threshold The introduction of internationalized domain names will make for when the brand should be registered in a particular TLD . the task of monitoring more difficult as many existing systems cannot easily determine names that are similar to brands in Weighing up your options different languages and language scripts. At the same time, global Given the increase in the number of TLDs, an effective monitoring trends and growth in users on the Internet are reinforcing the value and brand protection policy is necessary. It is not sufficient merely of online brands, while the changes that the domain name system is to monitor for exact or similar matches to a brand name; it is also undergoing provide both new opportunities and risks to manage. important to define an approach for managing the da ta. The starting point, then, is to have a documented domain name An organization should therefore decide which brands, and in management strategy that identifies major brands and domain which TLDs, to monitor, based on the domain name management names, and identifies policies for registering, protecting and policy, which takes into account the rating for each TLD and the monitoring domain names at both the top level and second level of relative importance of each brand. Similar to the ra ting system used the domain name hierarchy. This domain name management to decide when to register domain names, a domain name strategy then needs to be regularly reviewed as new TLDs are management policy needs to incorporate rating systems for created, and as the registration rules and takedown processes evolve determining when an infringement or other damage to a brand for each TLD. warrants taking further action. Such a rating system would include With an effective domain registration strategy in place, the nature of the infringement (eg, phishing or malware versus use organizations will be well positioned to exploit emerging online of a similar logo on a website), the nature of the content (eg, trends through intelligent domain registrations to optimize and pornography or politically sensitive material), and an estimate of protect their brands in a competitive online marketplace. WTR the number of users visiting a particular website (perhaps in relation to a widespread email spam campaign). Where a domain Bruce Tonkin is chief strategy officer at Melbourne IT name is transferred to the organization as the result of initiating a [email protected]

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