New Top Level Domains. Chaos, Confusion And Cash….

(cash for the registrars that is!)

The upcoming and ongoing release of thousands of the TLDs (Top Level Domains) has created quite the stir with brands all over the internet.  The worst one seems to be the .sucks domain now available at a large sum which is not intended for folks to actually buy to produce websites, but rather to extract large amounts of money from brand owners to protect their reputation.  Think Pepsi.sucks.  Walmart.sucks. Obama.sucks.  You the the picture….

A recent post from DailyReporteronline.com (not .sucks) sums it up nicely, saying:

As the Internet continues to expand, with more and more words after the dot, brand owners must constantly assess online threats to their brands.

Just within the .com registry, there are seemingly limitless domain names that could include a brand owner’s brand. If Purple Unicorn Inc. registers purpleunicorn.com, then a cybersquatter can register purpleunicorn1.com. If Purple Unicorn Inc. registers purpleunicorn1.com, a cybersquatter can register purpleunicorn1a.com. And if Purple Unicorn Inc. registers purpleunicornsucks.com, a cybersquatter can register purpleunicornreallysucks.com.

On Feb. 25, the Internet Corporation for Assigned Names and Numbers (ICANN) green-lighted the top-level domain “.sucks.” This is known as “delegation.” Beginning June 1, .sucks domain names will be available to the general public on a first-come, first-served basis. Many brand owners will want to secure mybrand.sucks to prevent someone else—a competitor or a customer—from purchasing and controlling the domain name.

Vox Populi Registry Ltd., the owner of the .sucks registry via ICANN’s new generic Top-Level Domain program (TLD), will provide a way for some brand owners to purchase and control their mybrand.sucks domain name. Brand owners that have verified their brand ownership through ICANN’s Trademark Clearinghouse (TMCH) can pre-purchase mybrand.sucks before it is available to the public. This pre-purchase period is known as a “sunrise period,” and is mandatory under ICANN’s rules for TMCH participants. The sunrise period for .sucks began on March 30 and ends on May 29.

Purchasing a .sucks domain name during the sunrise period will be expensive relative to other domain names. The retail price of a .sucks domain name during the sunrise period is a whopping $2,499, an amount that has surprised many brand owners and raised concerns across the Internet. The .sucks domain names will cost $2,499 to renew each year, as well.

ICANN, under intense pressure from brand owners, has asked the U.S. Federal Trade Commission and Canada’s Office of Consumer Affairs to investigate whether Vox Populi’s pricing practices are “predatory, exploitative and coercive.” In the meantime, as June 1 quickly approaches, brand owners must decide whether to .suck it up and lay out $2,499 for the first year, or roll the dice and attempt to purchase it during the first-come, first-served “land rush.”

If a brand owner wants to own and control mybrand.sucks, but does not wish to pay $2,499 for this privilege, the brand owner can attempt to purchase mybrand.sucks beginning on June 1 instead of during the sunrise period. At that point, the brand owner can purchase mybrand.sucks for use as an active website for $249 per year, or purchase mybrand.sucks to block it from being used as an active website by someone else for $199 per year.

Practically speaking, even at $249, a brand owner is likely to be more motivated to purchase mybrand.sucks than a disgruntled customer. But there are no guarantees in first-come, first-served domain-name registrations. To a clever competitor or a savvy cybersquatter, purchasing yourbrand.sucks for $249 could be a drop in the bucket.

Even if brand owners are not the first to register mybrand.sucks, many of them may be able to recover mybrand.sucks through the Uniform Domain-Name Resolution Policy (UDRP) or country-specific laws, such as the Anti-Cybersquatting Consumer Protection Act in the United States. The UDRP has existed for many years—long before the new TLD program—to combat cybersquatters and is the most common way that brand owners recover domain names.

To recover a domain name, the brand owner must show:

• that the contested domain name is confusingly similar to a trademark owned by the brand owner,

• that the domain-name registrant does not have a legitimate right in the contested domain name, and

• that the contested domain name was registered and is being used in bad faith.

While .sucks domain names are yet to be litigated, those used as legitimate gripe sites may be more difficult to recover than other sites containing brand names, because using a brand owner’s trademark within the domain name for a gripe site is rarely considered bad faith.

If, however, brand owners choose to ignore mybrand.sucks altogether, beginning Sept. 1, Vox Populi will make unregistered .sucks domain names available to consumers—but not corporations—for $9.95 per year. According to Vox Populi’s website, the domain name www.ProductA.sucks will resolve to a discussion forum on Everything.sucks specific to Product A. The purchaser will have the ability to customize various settings within the forum.

The ability for a disgruntled customer to obtain a .sucks domain name for less than 10 dollars may motivate brand owners to secure mybrand.sucks while it is still on the open market, albeit for $249.

Like many TLDs so far, .sucks may prove to be much ado about nothing. After all, disgruntled customers can just as easily resort to Twitter or Facebook or hundreds of other sites to air their grievances. They don’t need a dedicated .sucks domain name for this purpose. In other words, owning mybrand.sucks does not prevent customers from complaining about your company.

Nevertheless, many TLD decisions are driven by fear of the unknown. And because no one can predict whether .sucks is the “next big thing,” many brand owners will fork over between $199 and $2,499 to own and control the mybrand.sucks real estate on the Internet.

We really knew this was coming when ICM Registry pushed for 10 years to get .xxx through the ICANN process, and past the massive amount of vocal opposition from the porn industry that knew a lot of bad things could happen from this.  But, ICM prevailed, .xxx is a viable TLD which has not rally damaged much at all, but the consequence was opting the floodgates for what is happening now.

Being one of the companies that fought so hard against ICM for a decade, now seems like a fun moment to replay a PSA that we produced about five years ago against the passive the the new TLDs and GTLDs at ICANN.  Enjoy!