New domain names: great new opportunities, virulent new risks

As of this writing, the first of hundreds of new gTLDs — the suffixes to the right of the dot in domain names — have begun to be approved for release on the Internet. In an international move that hasn’t been widely publicized in the U.S., ICANN has been sifting through some 2,000 applications for new domain name suffixes, alternatives to the dozen or so we’ve all become familiar with, such as .com, .net and .gov. Suffixes like .bargain, .deal, .blackfriday, .london, .nyc — even, would you believe, .ninja — are being rolled out and put into use in e-commerce and e-marketing.



This adds up to a virtual rewinding of the Internet clock, providing an explosion of creative opportunity for companies, particularly for those who didn’t participate in the Internet land grab 18 years or so ago, or failed to defensively buy up names relating to their own brands. It’s also a brilliant new marketing tool for companies with specific versions of their brand in different geographies. So, as a hypothetical, if Barney’s, the luxury fashion retailer, continued expanding into new global markets but wished to make its appeal local, and were to land the gTLD .barneys, it would be able to have distinct sites for paris.barneys, newyork.barneys, beijing.barneys, tokyo.barneys and so on.



While the initial round of gTLD applications is now closed, there will soon be hundreds of new possibilities from which to build an infinite number of platforms to the left of the dot. The new gTLD lineup includes not only brand names, but also cities, industries and other fields. Retailers will be faced with a huge new set of online variables to sift through and determine whether they might add relevance and security to a brand’s online presence.



Security risks posed by the new gTLDs

On the other side of the equation, along with this great new opportunity comes equally great risk. Suddenly there will be hundreds of thousands of possible domain name permutations and search terms for any brand, and potentially more loopholes for cyber criminals to slink through. Today, brands are constantly fighting with spammers, counterfeiters and other trademark infringers. Counterfeiters will go to great lengths to use legitimate brand names and assets for cybercrime. Brand owners also have to stake claims against legitimate holders of trademarks in other industries or geographies. Take the name “Polo” for example. In Ralph Lauren’s world, it’s a fashion brand, in Volkswagen’s industry, it’s the name of a car and in England, it’s “the Mint with the Hole.” So even with legitimate brands, there’s a question as to who stakes the claim on a gTLD. Either way, domain names are valuable properties that provide platforms for transacting business. So it would seem that thousands of new opportunities to lay a stake on a name, whether legitimate or otherwise, require great watchfulness on the part of the brand owner.



Fortunately, a number of mechanisms are being put in place to help brands to protect themselves in this newly opened field. One such mechanism is ICANN’s launch of the Trademark Clearinghouse. The TMCH is a virtual organization — an evolving database of submitted and validated trademarks — and the first to directly integrate a brand’s trademarks and domain registrations. If someone tries to register a domain under a new TLD that exactly matches a trademark already lodged in the TMCH, the trademark owner will be given warning of the potential infringement, and will be notified if that registration takes place up to 90 days after the launch of a new TLD



While the TMCH should not be thought of as a primary defense mechanism, there’s really no good reason for a brand not to avail itself of the TMCH. For companies with a small number of trademarks, it’s a relatively inexpensive measure, and should form the first part of their online brand protection strategy. But a good rule of thumb is that big brands should only register marks in the TMCH that they wish to actively register under new gTLDs.



Online brand risk management in the brave new world of gTLDs

While each company’s objective is to deliver its products or services to customers in a trustworthy and consistent way, each company also has to manage its own risk. When transacting business online, a large part of that is preserving and protecting the integrity of its brand and platform. Risk management involves identifying and assessing uncertainties and prioritizing them. Which risks are more threatening and, therefore, in a more critical position to demand resources to be allocated toward their mitigation? This becomes a critical issue in the current gTLD expansion. How can brand owners and trademark protectors monitor and minimize the risks around purchasing too many gTLDs or too few?



Back when there were only a handful of available gTLDs, the prevailing wisdom was to take a defensive move by buying all the suffixes available, thereby protecting the brand from cybersquatters. But now, with countless possible domain name permutations, buying up all possible gTLDs is no longer the most viable, financially feasible strategy to take. Between the question of search and the mandate of brand protection, the variables are almost infinite. Where should companies start?



How to choose which domain names

We would suggest that there exists a measurable and deliberate approach to prioritizing a brand holder’s choice of domain names, and with that approach, some risks. Companies in the know are understandably concerned about the impact these new gTLDs will have on their brands’ searchability. It is as yet unclear whether Google and other search engines will give equal priority to the new gTLDs versus the tried and true suffixes such as .com. Google has soft-pedaled its answer to this question by saying that initially not much would change in its search rating system. However, we are beginning to see some changes in this regard. Our colleague Stuart Fuller points out that previously, in generic searches, Google had given more weight to those optimized websites that use the most popular gTLDs, such as .com, .net, .org and .info. More recently, however, Google has widened the pool of domain name suffixes that it considers "generic" to include the likes of .dj, .fm, .la, .me and .tv.



While the Trademark Clearinghouse provides an early warning system to protect companies as they try to optimize their domain names, companies need to think strategically about how their current trademarks and brand names map to the gigantic new searchable gTLD landscape in an objective and consequential way — rather than adopting a gold rush mentality and trying to grab all open TLDs. We advocate a methodology that involves looking at the brand owner’s specific business interests, determining which interests are most relevant and separating them from the least relevant ones.



Prioritization is key — companies must develop a way of ranking the new field of possibilities by relevance. The idea is to apply a set of rules and conditions that allow brand and trademark owners to go through all the variables and sift through the suffixes, identifying which ones might mean something to the brand, which might be less meaningful and which should be outright discarded in light of such metrics as product or industry, lines of business, geographies, brand names and the existing portfolio of online assets. The questions around domain name acquisition, such as “How many is too many?” and “How many is too few?” may be answered through a logical and rigorous anal