Accor Comment on Closed Generic TLDs

[Dreyfus & associés <contact@xxxxxxxxxx>]

The following comments are submitted on behalf of Accor.

 

 

Public comments regarding the « Closed Generic » gTLD applications for
HOTEL, HOTELS, HOTEIS and HOTELES

 

 

1. Accor, the world’s leading hotel operator and market leader in Europe, is
present in 92 countries with more than 3,500 hotels and 450,000 rooms under
various hotel brands including Sofitel, Pullman, MGallery, Grand Mercure,
Novotel, Suite Novotel, Mercure, Adagio, ibis, ibis Styles, ibis Budget,
Hotel Formule 1, hotelF1 and Thalassa sea & spa. With more than 160,000
employees in Accor branded hotels worldwide, the Group offers its clients
and partners nearly 45 years of know-how and expertise.

Accor operates several websites through which Internet users can quickly and
easily find and book hotels.

 

There is no question that the Internet has taken center stage as a hotel
reservation method across the world. The use of travel agents and dial-in
phone reservations continues to rapidly decline. In an increasingly digital
world, it is now second nature for most travelers to start their search for
a hotel destination from their computer or mobile device.

 

Online booking is a critical tool for marketing hotels in a global market.
According to several market studies:

- 83% of leisure travelers and 76% of business travelers plan online
(http://www.thinkwithgoogle.com/insights/library/studies/the-2012-traveler/)
;

- over 50% of travel bookings are made online(
<http://www.statisticbrain.com/internet-travel-hotel-booking-statistics/>
http://www.statisticbrain.com/internet-travel-hotel-booking-statistics/);

- over 45% of travelers use OTA search capabilities (
<http://www.thinkwithgoogle.com/insights/library/studies/the-2012-traveler/>
http://www.thinkwithgoogle.com/insights/library/studies/the-2012-traveler/)

 

 

This booking model based on the internet reservation system is used
internationally by an extremely large range of accommodation providers,
including:

- hotel operators

- independent hotels & hotel chains

- tourist boards, travel agents & travel companies 

- holiday villas

- guest houses

- self-catering apartments

 

 

2. A number of companies have applied for TLDs consisting of generic terms
and referring to a particular business or industry category.

 

Some of the applicants for these generic terms have expressed the intent to
reserve the name spaces for themselves rather than offering registrations to
everyone. These applicants seek to operate these generic TLDs in a
completely closed manner and to capture the exclusive use of these generic
terms for their own business. If allowed to register as closed domains, a
single player could control the entire domain string related to a generic
word and prevent others from registering domain names within such string.

 

Furthermore, certain applicants have chosen to apply for closed control of a
generic term designating a particular industry while they are in fact
already engaged in the conduct of business activities in that particular
industry, thereby increasing the risk that the delegation of a generic term
matching an economic sector to one single player could lead to a monopoly by
excluding direct and indirect competitors.

 

Some of these generic terms are critical for the conduct of an activity and
should not be reserved for, or monopolized by, a single stakeholder in a
business category. Generic words used in a generic way cannot be reserved by
and in favor of a single organization. Words as parts of language are our
common heritage. It is obvious that language, and its specific uses, have to
be protected as a public domain that is and should remain equally accessible
to all.

 

 

3. Among the applicants seeking to obtain a monopoly on a generic term
representing or closely linked to their own economic sector , the online
travel agencies Booking.com B.V. and Despegar Online SRL applied for the
generic terms HOTELS, HOTEL, HOTEIS (hotel in Portuguese) and HOTELES (hotel
in Spanish):

- application # 1-1016-75482 for HOTELS by Booking.com B.V.;

- application # 1-1249-36568 for HOTEL by Despegar Online SRL;

- application # 1-1249-87712 for HOTEIS by Despegar Online SRL;

- application # 1-1249-1940 for HOTELES by Despegar Online SRL.

 

Both applicants are online travel agencies. They claim to hold significant
market shares in the business of online travel agencies/hotel reservations
and have organized their applications on a closed registry model. They do
not plan to allow the public or members of the hotel community to register
domains using the extension. To the contrary, they intend to be the sole
possible registrants for second-level domains. As a result, they will hold
an exclusive right to these new generic TLDs. 

 

The main risk of delegating theses TLDs under the rules requested by the
applicants (who are not even hotel operators but act merely as
intermediaries between hotels and clients) is the capture of the whole hotel
online booking system by one or few operators.

 

This would surely have serious anticompetitive consequences and limit
consumer choice across the Internet:

- competitors will be prevented from using those generic TLDs to compete
with the string owner;

- consumers will have access to offers coming from one single player only,
which means that they will be captive of one single online travel agency.; 

 

This monopoly, which will likely raise serious issues in many countries from
an antitrust regulations standpoint, will produce a distortion of
competition between online reservation platforms, allowing Booking.com B.V.
and/or Despegar Online SRL to choose which hotels will be offered a domain
name under their TLDs and to dictate their commercial conditions to partners
and hotel stakeholders. In addition, use by the applicants of third party
trademarks and trade names could lead to consumer confusion at best, unfair
competition at worst.

 

 

4. Under applicable trademark law (e.g. the U.S. Lanham Trademark Act or the
EU Directive 2008/95/EC), if Booking.com B.V. and/or Despegar Online SRL
were to file a trademark for “hotel” they would have no chance to obtain
registration in the end since it would be refused for lack of
distinctiveness. Indeed, the word is too generic for anyone to be given a
monopoly over it. 

There are obvious reasons why an application for a trademark “HOTEL” would
be rejected: trademark rights are compatible with the free competition rules
in as much as registration of a trademark does not confer an exorbitant
right to its holder, preventing its competitors from using a generic and
necessary term in their business. The same rules should apply to the new
TLDs: closed generic TLDs should not be delegated to an entity operating in
the market described or related by these terms.

 

 

5. In connection with the operation of the registry for the TLD,  the
Registry Operator must not register domain names in its own name. As an
exception, closed applications for generic TLDs can be filed pursuant to the
Registry Operator Code of Conduct as set forth in Article 6 ( Specification
9) attached to the ICANN Revised New gTLD Registry Agreement, which provides
that“Registry Operator may request an exemption to this Code of Conduct, and
such exemption may be granted by ICANN in ICANN’s reasonable discretion, if
Registry Operator demonstrates to ICANN’s reasonable satisfaction that (i)
all domain name registrations in the TLD are registered to, and maintained
by, Registry Operator for its own exclusive use, (ii) Registry Operator does
not sell, distribute or transfer control or use of any registrations in the
TLD to any third party that is not an Affiliate of Registry Operator, and
(iii) application of this Code of Conduct to the TLD is not necessary to
protect the public interest”. 

This provision was drafted in the first place specifically in order to
create “dot-brands”. However, at the time, no distinction between commonly
used words and brands was made by ICANN.

 

Therefore, unfortunately, any applicant who wishes to operate a closed
generic TLD can file an exception request to operate the TLD for its own
purpose. Such exemptions may be granted by ICANN at ICANN’s reasonable
discretion. In particular, the Registry Operator must prove that there is no
infringement or at least no risk with regard to the public interest.

 

Although “public interest” was not defined by ICANN, could an application
seeking exclusive access to a common generic string that relates to a market
sector be deemed consistent with the protection of public interest?

 

ICANN is a governance system with inter alia the responsibility for
protecting and promoting public interest and consumer trust.

 

We therefore urge ICANN to resolve the ambiguity surrounding these
applications and to decide that « Closed Generic » gTLD applications such as
HOTEL, HOTELS, HOTEIS, HOTELES do not comply with the limited scope of the
above-mentioned exception.

 

 

Best regards,

 

Nathalie Dreyfus

 

Dreyfus & associés

Conseils en Propriété Industrielle - Intellectual Property Attorneys

78 avenue Raymond Poincaré - 75116 Paris - France