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International - Are brands taking the right approach to defensive domain registrations?

By Trevor Little
April 20 2012

While the trademark community continues to look at the issue of protection at the second level of new gTLDs, the latest industry research provides an insight into how defensive registrations are currently approached by brand owners – and how prevalent the cybersquatting problem actually is.

The study, conducted by DomainIncite PRO over the past two months, surveyed the domain name ownership and usage patterns of the world’s 100 most-valuable brands (as identified by Interbrand) in six gTLDs introduced since 2001 – ‘.asia’, ‘.biz’, ‘.info’, ‘.jobs’, ‘.mobi’ and ‘.pro’. Across the dataset, 70.1% of the domain names matching the surveyed brands were owned by the respective brand owner or an authorised agent, with 17.7% appearing to be in the hands of third parties (whether for legitimate or potentially infringing use).

The precise levels of third party ownership vary according to the particular gTLD. In ‘.asia’, for example, the level of brand-owned domains was higher (87% v 5% belonging to third parties). By contrast, ‘.pro’ represented the most heavily-cybersquatted space (55% of the brand terms surveyed were in the hands of third parties).

Two things particularly stand out for trademark counsel. First is the likely level of cybersquatting. The study notes that some third-party ownership does seem legitimate, but almost a fifth of the domain names corresponding to the names of the world’s top 100 brands are not in their hands across these gTLDS – and this is without considering typosquatting, false claims of affiliation and other forms of online infringement. 

Second is the use of the domains companies have defensively registered (or recovered). Drilling down into the 424 brand-owned domains, only 5.4% were proactively developed by the brand owner and/or its authorised agent. Of course, companies may not wish to develop sites for every domain registered but almost half of brand-owned domains (47.6%) either did not resolve, or resolved to a blank page or web server error (4.7% resolved to a brand management company).

Again, the report breaks down the precise level in different gTLDs, but the headline figure suggests that a high percentage of defensive registrations are essentially sitting unused. Commenting on why this is the case, Bruce Tonkin, chief strategy officer at Melbourne IT, told WTR: “There is a myth that brands protect their name everywhere, but most do take a strategic approach. In some gTLDs the traffic is seen as so small that it isn’t worth worrying about. It may seem sloppy to have pages that don’t resolve but it may equally not be seen as an issue by some brands. Companies will often focus on ccTLDS and the major TLDs, and ensure these are the ones that do resolve.”

The challenge of assessing which new gTLDs to defensively register in, and how to use these registrations, is one trademark owners will shortly have to grapple with and the assessment will have to go beyond traffic levels. This process has already started to some degree, with Tonkin pointing to take-up during the ‘.xxx’ sunrise, which he notes was “less about traffic and more about reputation” and predicting that “other instances like that will happen. What you will need to look at is whether a gTLD is one that you proactively register in or one which you monitor to check usage. For instance, if a search engine giant launched ‘.web’, you would probably want to register in that, and HSBC, say, would likely want to register its name at the second level of ‘.bank’. But registering HSBC in ‘.shoe’ would perhaps not be as crucial, as consumers are less likely to be confused and think it is genuinely HSBC.”

ICANN has yet to announce if the planned April 30 gTLD applications reveal date is still on. In the meantime, the research provides food for thought for those brand owners currently reviewing defensive registration strategies in anticipation of the upcoming domain space expansion.

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