Yves Rocher Comment on Closed Generic TLDs

["Emmanuel Harrar" <emmanuel.harrar@xxxxxxxxxx>]

Public comments regarding the « Closed Generic » gTLD application for ROCHER

 

The following comments are submitted on behalf of Laboratoires de Biologie
Végétale Yves Rocher S.A. (Yves Rocher).

 

Since 1959, Yves Rocher, one of the leaders in cosmetics market and
well-being industry in France, is a family-run group, profitable and
independent. Controlled at more than 96% by the founder’s family, the Group
is animated by an “entrepreunarial & creative” spirit and proactive in
environmental respect and sustainable development. Yves Rocher is well
established in the world with a presence in more than 80 countries with
almost 2,000 retail outlets and well-known in several countries with about
40 million customers worldwide. Yves Rocher is the No. 1 Beauty Institute in
France (Most visited Beauty Institute in France. Source : TNS Sofres –
Esthetic Services Study – 1072 women, 15 years and older, representative of
the French population – September 2010).

 

The Internet is with no doubt one major channel of sales, from information
to the purchase of a product. According to the website Statistic Brain,
online sales in the US have reached $255,600 billion in 2011 and $763,200
billion worldwide (http://www.statisticbrain.com/total-online-sales/). 83 %
of online user has made an Internet purchase, and 56% have made a purchase
multiple times. 

 

Yves Rocher is the No. 1 e-commerce website in France for Hygiene, Health &
Beauty, Fragrance, Skin Care and Make-up (Source : Barometre FEVAD –
Mediametrie//NetRatings - 3221 persons,  representative of Internet users,
15 years and older  - May 2011). 

In 2012, Yves Rocher also won the “Best e-commerce website of the year”
award in France, category Beauty website (Source : FEVAD).

 

In an increasingly digital world, it is now second nature for most consumers
to start their search from their computer or mobile device. Running
attractive and efficient websites built on easy to remember domain names are
a key to access a good SEO ranking on search engines.

 

Yves Rocher is extremely concerned by the “Closed Generic” TLD Applications,
in particular the ROCHER Application from Ferrero Trading Lux S.A.

The “Closed Generic” TLD Applications have the following characteristics:

-       the TLD applied-for is a generic term, a word of common language,
closely linked to an economic sector;

-       the Applicant is a major stakeholder in the same economic sector;

-       the Applicant plan to restrict the registration of domains under the
TLD to itself or to a limited number of partners (subsidiaries, affiliates,
business partners).

 

Why are these “Closed Generic” TLD Applications a source of concern?

 

1. The generic term ROCHER is a common word, a family name and a type of
chocolate!

Some of these generic terms describe a category of products 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 public domain that is equally accessible to all. 

The delegation of a generic term matching an economic sector to one single
player could lead to establishing a monopoly by excluding the direct and
indirect competitors.

Furthermore, some generic terms may be just common terms or family name.
ROCHER is the French translation of rock. ROCHER is also a common family
name. According to Journal des Femmes
(http://www.journaldesfemmes.com/nom-de-famille/nom/186900/rocher.shtml),
ROCHER is the name of almost 10,000 people and the 436th most common name in
France.

 

2. The Applicant is looking for a monopoly

Some of the applicants for these generic terms have chosen to reserve the
name spaces for themselves rather than offering registrations to everyone.
These applicants seek to operate them 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. Very often, applicants have
chosen to apply for closed control of a generic term representing or closely
linked to their own economic sector.

 

3. A similar application in the brick and mortar world would be denied

Trademark regulations including the Lanham Trademark Act or the EU Directive
2008/95/EC forbid the registration of trademarks which consist exclusively
of signs or indications which have become customary in the current language
or in the bona fide and established practices of the trade. If the Applicant
were to file a ROCHER trademark registration, in a French speaking country,
it would be refused for lack of distinctiveness. Trademark rights are
compatible with 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 regulations should apply to new gTLDs.

 

4. A typical example of “Closed Generic” TLD Applications

The application 1-1126-33363 for ROCHER by Ferrero Trading Lux S.A. is a
typical example of a “Closed Generic” TLD application. Based on its famous
product Ferrero Rocher, the Applicant is looking for an exclusive right to
the TLD ROCHER, despite the fact that ROCHER is a type of chocolate and that
its direct competitors also sell that type of chocolate, most of them adding
the term ROCHER to their trademark.

 

5. A risk increased by the terms of the Revised Registry Agreement

In connection with the operation of the registry for the TLD, in principle,
the Registry Operator must not register domain names in its own right. As an
exception, closed applications for generic TLDs can be filed in application
of 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: “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”. 

These provisions were originally intended for “dot-brands” applications.
However, at the time, no distinction between commonly used words and brands
was made by ICANN.

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 regards 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 consistent with the protection of public interest? 

 

6. Monopoly situations are detrimental to consumers

The main risk of delegating of theses TLDs under the rules requested by the
applicants is the capture of a generic term by a single stakeholder.

This would surely have 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.

Monopoly situations are tackled by legislation or regulations because they
are detrimental to consumers. A monopoly on a TLD would probably be in
breach of antitrust regulations including the Sherman Antitrust Act in the
United-States or the antitrust provisions of articles 101 and 102 of the
Treaty on the Functioning of the European Union.

 

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

 

We therefore urge ICANN to resolve the ambiguity surrounding these
applications, decide that « Closed Generic » TLD Applications such as ROCHER
are potentially detrimental to consumers, do not comply with the limited
scope of the exception mentioned in the Code of Conduct of the Revised
Registry Agreement and should not proceed any further.

 

Best regards,

 

Nathalie Dreyfus

Dreyfus & associés

Conseils en Propriété Industrielle - Intellectual Property Attorneys

78 avenue Raymond Poincaré - 75116 Paris - France - Tel. +33 (0)1 44 70 07
04 - Fax +33 (0)1 40 06 99 64