By Trevor Little
February 20 2012
While questions remain over who has applied, how delegation will take place and who will run the trademark clearinghouse, one month into the gTLD application window, details of application patterns are becoming more apparent.
Adrian Kinderis, CEO of ARI Registry Services, told WTR that - based on the applications his company has been dealing with - brands have shown the strongest interest. He predicts that “two thirds of all applications are expected to be for a .brand. This is followed by entrepreneurs, who are seeking to profit from generic terms like .shop or .hotel, who make up roughly 30% of our clients. The remaining 10% come from governments and other groups wanting to represent their city or region online with a geographic TLD like .sydney, .paris or .tokyo.”
Turning to what types of companies are showing most interest, he predicts: “The first round of new domains will be dominated by technology brands (20%), as the IT industry recognises the huge opportunity to innovate. This will be closely followed by banks and other financial service providers (11%) who are jumping at the opportunity for the increased online security and trust that comes with a .brand domain.”
The critical question – as it will impact both the delegation process and the timing of the second round – still centres on how many applications are likely in the window. Speaking to WTR, Russell Pangborn, associate general counsel for trademarks, Microsoft, summed up the current confusion: “If we believe what we are hearing from industry, the application numbers will be on the higher side of expectations - some are saying it could be 1000+. So the timing of the second round remains a question. This whole process started in 2008 and it is now 2012. It has taken four years to get here, and they now have to delegate and engage in testing, before launching the second round. So we don’t know what this will mean. We are still not even sure how they will delegate.”
For its part, ICANN has stated that, as of February 13 2012, the number of successful registrants in the online TLD application system stood at 100 (each registrant can apply for up to 50 gTLDS so this doesn’t provide a figure on the true state of play). While it provides a partial glimpse of take-up, it does not allow the calculation of the likely number come the end of the window. When speaking to WTR before the opening of the application process, Steve Crocker, chairman of the ICANN board, predicted: “We do not expect an initial rush of applications – it is a 90 day window and if there is a rush, it will probably be at the end.”
Considering the applications ARI Registry Services has assisted in, Kinderis agrees with this prediction: “Following the opening of applications on 12 January, we certainly witnessed an influx of enquiries and 21 contracts had been signed by the end of the first week. The opening of the application window clearly motivated applicants to get moving on this unique, yet limited opportunity. Although demand has not sustained those levels, we expect to have 100 applications by the time the application window closes on April 12. The unfortunate reality is that many potential applicants are only now realising the full potential of this opportunity and I expect there will be a mad rush to the finish line the closer we get to the deadline.”
The feeling that many brands are only now waking up to the reality of gTLDs is seconded by Pangborn, who notes: “For those of us who have been involved in the IRT and policy discussions, it has been a real issue for a while. But since ICANN approved the programme, it became real for all and there is concern about the confusion it will create. But those voicing concerns now are raising issues similar to those the trademark community have voiced already.”
He adds that the confusion is not helped by the shifting nature of the regime: “It is frustrating when they change the goalposts - the application guidebook, for example, changed the day before the application window opened.”
However, brand owners would be advised not to rush an application through – in addition to the wider considerations over owning a branded online space (as Fabricio Vayra, assistant general counsel, intellectual property, trademarks at Time Warner, summarises: “Time Warner is being asked to go from a company that uses technology and the internet, to one that actually owns the internet.”), the technicalities of the application are a considerable undertaking.
Speaking at the recent McCarthy Institute and Microsoft Corp trademark symposium in New York, Com Laude’s Nick Wood noted: “The first question alone, who will apply, creates a number of issues companies have to think about. Will it be the company that owns the trademark right or a holding company. If a holding company, does it have a balance sheet, which will help answer the later financial questions? Each of the 55 questions opens up many considerations.
To date applicants are still keeping their cards close to their chests, although Singaporean-based communications company StarHub and the Australian Football League have joined such brands as Canon, Deloitte and Hitachi in announcing their intention to run a ‘.brand’.
Oliver Chong, assistant vice president of brand and marketing communications at Starhub, explained: "We believe the '.starhub' Top-Level Domain will deliver clear marketing and advertising benefits to StarHub, such as improved online brand recall and a more intuitive consumer experience with easy to remember domain names such as 'mobile.starhub'. We also anticipate potential search engine optimisation benefits by operating a more targeted and relevant naming system that is clearly matched with our website content."
AFL’s general manager of strategy and marketing, Andrew Catterall, also outlined the AFL’s plans: “We think '.AFL' could be a key asset to support our major strategies around national expansion, fan development, strengthening the AFL clubs, supporting community participation and growing our presence in digital media. Ultimately, '.AFL' will make it easier for our audience to access trusted online content that is endorsed by the AFL brand."
Prior to the unveiling of other applicants in May,other aspects of the regime should become clearer. At the end of this month ICANN is scheduled to secure the Trademark Clearinghouse Service Provider and delegation processes are still to be announced. Yet the May announcement of who has applied for what will be most avidly scrutinised.
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