Comments on "defensive registrations" by Minds + Machines

[Antony Van Couvering <avc@xxxxxxxxxxxxxxxxxxxx>]

Dear ICANN,

Thanks for allowing comments on the question of defensive registrations.   Many 
brands are genuinely worried about losing the rights that come with a 
trademark.  Many of those seeking new gTLDs in order to defend their brand or 
trademark, however, are doing so without an accurate understanding of the risks 
and benefits.   We have spoken to many brands and have encountered an 
disturbing lack of understanding of the process.

On the other hand, as you are no doubt aware, there are still rearguard actions 
being pursued to try to gut the new gTLD program by changing the rules to give 
veto power to brands.   That should not be allowed -- the rules and procedures 
in the Guidebook regarding legal rights objections is in our opinion well 
balanced and should not be changed. 

There are good reasons and bad ones for brands to seek "defensive 
registrations."  It might be useful for brand owners reading these comments to 
hear the perspective of a service provider. 

GOOD REASONS TO APPLY FOR A DEFENSIVE .BRAND
There are legitimate reasons for applying for a new gTLD from a defensive 
posture.  These are:

1. Your trademark is very common.  Trademarks such as Delta, United, Genesis, 
and others are owned by many different companies in many jurisdictions.  In 
these cases, the chances are much higher that a contending party, who cannot be 
defeated through a legal rights objection, will apply and own "your" trademark. 
 Whether that will dilute your trademark, or hurt your business, is another 
story.  But if the thought of that other trademark holder owning the TLD keeps 
you up at night, you might want to apply.  

2. You don't know whether this gTLD thing will take off, but if it does you 
don't want to be left out.  A conservative estimate of the timing of Round 2 of 
new gTLD applications is at least three years - it could be much longer.  It 
took six years to get this round off the ground, and an equivalent amount 
between the initial release of .info, .biz, etc. and the release of .mobi, 
.travel etc.   The GAC has demanded (and it will have) economic studies to 
determine whether this round was successful.   The answers to Question 18 will 
be reviewed to see if the TLDs in this round met their goals.  The same forces 
that delayed this round so long will continue in force.  So even if you don't 
know what to do with your .brand TLD now, you might consider applying because 
you realize that a new gTLD might have some value later, and you don't want to 
regret that you didn't apply. 

3.  Your trademark is also a generic word, especially one of those pegged as 
"big" TLD, and you really really care if someone else has a TLD of the same 
name even though you aren't in the domain name business. If you have a 
trademark on "blog" in the class of industrial chemicals, or perfumes, or 
sports equipment, you may not prevail in a legal objection claim against 
someone who wants to start .BLOG in order to sell it to bloggers.   If for some 
reason you think that your brand "Blog Perfume" is going to be harmed by yet 
another service for bloggers, then you might want to consider applying.  

BAD REASONS TO APPLY FOR A DEFENSIVE .BRAND
1. You don't have a popular trademark, but you're still worried that someone 
will come out of the woodwork.   In our opinion, they won't.  We see enough 
deal flow to know that most of the brand owners applying for .brand TLDs are 
Very Big Companies.  Remember, $185,000 is still a lot of money.   It's not 
something that most small or medium-sized businesses will consider a good use 
of their funds -- especially when they might meet you in an auction, which they 
are likely to lose.   This is a case of mistaking any risk at all for a 
realistic one.

2. Your consultant is telling you this or that about the ICANN rules that has 
you convinced you must apply.  I've had brand owners repeat to me as fact some 
truly arrant nonsense that they heard from their consultant.  Do yourself a 
favor - read the Guidebook yourself.  It's not that hard, and it's all there in 
black and white.  In particular, read about legal rights objection (Section 
3.5.2).  It's pretty clear that if you have legal rights, and the applicant 
doesn't, and the TLD is likely to be confusing to the relevant sector of the 
public, you will likely win.  Remember, just because calls him or herself an 
expert doesn't mean that they are one -- save yourself some money and read the 
Guidebook yourself. 

A MIDDLE WAY
If you really have no interest in running a TLD, but you just have to make sure 
no-one else gets it, then you can simply apply and if there are no competitors 
for the string, you can withdraw.  You will get $130,000 back from ICANN if you 
withdraw before the evaluation period is over.  Cost: $55,000 (more if you 
employ expensive consultants).  If there are contenders, and they concern you, 
you're you're in the game and won't need to depend on a legal rights objection. 
 Basically, you pay $55,000 to see everyone's cards at the table and preserve 
your place in line.

ICANN should not amend its legal rights objection procedures or criteria for 
successfully objecting to a TLD.  Trademark holders should realize that their 
competition is only likely to come from major companies, and that in the case 
of any actual infringement of their trademark rights they are well protected by 
the legal rights objection process.  But if they just want to prevent someone 
else, who is not in their line of business, from a getting a name they weren't 
planning on using anyway, then in that case they should pay the money to apply 
defensively. 

Which is as it should be.

Antony Van Couvering
CEO, Minds + Machines