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Yves Rocher Comment on Closed Generic TLDs

  • To: "comments-closed-generic-05feb13@xxxxxxxxx" <comments-closed-generic-05feb13@xxxxxxxxx>
  • Subject: Yves Rocher Comment on Closed Generic TLDs
  • From: intellectual property <ip@xxxxxxxxx>
  • Date: Thu, 7 Mar 2013 16:49:04 +0000

Public comments regarding the « Closed Generic » gTLD Applications for BEAUTY, 
SKIN, MAKEUP, HAIR and SALON.



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 BEAUTY, SKIN, MAKEUP, HAIR and SALON Applications from L'OREAL.

The "Closed Generic" TLD Applications have the following characteristics:

-       the TLDs applied-for are generic terms, words 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 terms BEAUTY, SKIN, MAKEUP, HAIR and SALON are common words, 
constantly used by all actors of the cosmetic industry.

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



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 BEAUTY, SKIN, MAKEUP, HAIR or SALON trademark registrations, they would be 
refused for lack of distinctiveness. Trademark rights are compatible with free 
competition rules as long 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. Typical examples of "Closed Generic" TLD Applications

The Applications 1-1302-76087 for BEAUTY, 1-1302-80853 for SKIN, 1-1302-1511 
for MAKEUP, 1-1302-98299 for HAIR and 1-1302-58142 for SALON by L'OREAL are 
typical examples of "Closed Generic" TLD Applications. The Applicant is looking 
for an exclusive right to the TLDs BEAUTY, SKIN, MAKEUP, HAIR or SALON, despite 
the fact that these terms are common words and that its direct competitors also 
use them in their business, most of them even adding these terms to their 
trademarks.



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 BEAUTY, 
SKIN, MAKEUP, HAIR or SALON 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.



Intellectual Property Department

Laboratoires de Biologie Vegetale Yves Rocher S.A.

La Croix des Archers

56200 La Gacilly

FRANCE



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