NB: This is a guest article by Peter Matthews, founder and managing director of UK-based digital agency Nucleus.
I’ve likened .brand domains to haemorrhoids. No-one wants them, but many will end-up getting one.
The proposed .brand domains are the most controversial of a glut of new gTLDs (global Top Level Domains), being released by ICANN, the international body that in 2004 allowed us to register .eu, .asia, .mobi and .travel domains.
Any of you use those?
The latest plan for .brand gTLDs has wider implications for brand owners than anything previously considered. In practice they will allow brands to ‘own’ and manage private internets. The unintended consequences of this approach are simply mind-boggling; some say it marks the beginning of the privitisation of the internet.
With a few exceptions brand owners are not keen. The US Association of National Advertisers (ANA) claims the plan “is likely to cause irreparable harm and damage” and has not ruled out legal action to force ICANN to abandon its plans.
ANA’s stance is backed by many more trade bodies representing the majority of the largest brands on the planet.
Speak to a domain name registrar and you’ll find that some of the same brands are talking to them about their gTLD strategies. This should not be taken as affirmation, just that some brand owners are prudently preparing to defend their intellectual property rights, if they must.
Here at Nucleus there is lively debate with both positive and negative views argued. You can certainly see the benefit for some brands.
But you can also see it’s not in the interest of the vast majority. Travel brands that could benefit are those with complex structures that want to organise their offerings with one masterbrand suffix, like a large hotel group.
Likewise brands with many group brands that wants to move brand equity up to a parent brand, perhaps like TUI; or a large OTA that wants to "own" a category. Think Booking.com, Orbitz and Expedia competing for the generic .hotel extension.
While big brands consider this dilemma, smaller brands will simply not be able to afford .brand gTLDs. ICANN is asking $185,000 to acquire a .brand domain, plus $25,000 a year.
In addition, you will need global infrastructure and systems to operate gTLD domains and DNS securely, available 24/7, 365, worldwide.
We reckon the cost will be between $500,000 and $1,000,000 in the first year and $000,000s a year for the initial 5 year term.
Many big brands will conclude they simply have to bid for their .brand domain to defend existing intellectual property rights. So, how will ICANN arbitrate on these matters?
Well, it has a complex process as you’d expect, but it’s not convincing. Take a .brand domain such as .polo where many trade mark owners have parallel rights in different geographies, or in different trade mark classes.
And there are more questions:
Will ICANN give the domain to the Federation of International Polo; or to Volkswagen for it’s Polo brand; or to Nestlé for Rowntrees Polo; or to Ralph Lauren for its apparel brand?
- On what basis is ICANN going to rule?
- Is it qualified to take such huge decisions?
- Does it realise the consequences?
- How likely is it that ICANN will have to fall back on awarding it to the highest bidder?
- And how huge a figure will that end up being?
The process will fill the coffers of ICANN, lawyers and
WIPO, the World Intellectual Property Office, which has already set its fees at $2,000 per single objection, plus $8,000 for a single panel review and $20,000 for a three panel hearing for single objection. Get the picture? gTLDs will be territory for only the deep of pocket.
Then there’s the important issue of what consumers want. ICANN and its advisers seem to have missed that we now live in a world of links. Heard of LinkedIn? Facebook? Twitter? Blogs? Bookmarks? Shortened urls?
Domain names just aren’t as important as they were. When we do use them is www.travel.globalgateway.ba actually any more intuitive than www.ba.com/travel/globalgateway?
...except BA won’t even be allowed to have a .ba domain as two-letter .brands are not allowed…
Wouldn’t ICANN be better off putting their weight behind clearing up cybersquatting than pushing on with making the domain space even more expensive and complex?
If ICANN introduced non-use terms along the lines of trade marks, it would free-up plenty of useful high-level domains.
As there are no plans to do this, there will be two main outcomes for .brand gTLDs. If the brand lobby makes its points clearly and forcefully, maybe ICANN will reconsider its plans; if not, highly expensive IP wars will break out in cyberspace for the right to buy a brand haemorrhoid, or sue for trade mark infringement if someone else gets there first.
NB: This is a guest article by Peter Matthews, founder and managing director of UK-based digital agency Nucleus. Follow on Twitter at @nucleuslondon