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from www.worldtrademarkreview.com – As ICM Registry prepares to open up the ‘.xxx’ top-level domain (TLD) to registrations by those in the adult entertainment industry, brand owners are busy calculating how many of their trademarks they want to block from the space. Any decision requires a serious cost-risk analysis, as brand owners will be charged up to $300 per mark for participation in the brand protection programme, known as Sunrise B, which commences in September. Ahead of a detailed policy announcement due next week, ICM’s chief executive Stuart Lawley spoke frankly to WTR about his approach to trademarks and the numbers behind his unique sunrise policy.
Q: Do you think the contentious new gTLD policy development process, with regard to trademarks, has helped or hindered your plans for ‘.xxx’?
I think us launching a round at the same time as the new gTLD process is getting us publicity which will help us. Most other new TLDs have not done terribly well, so this will get it into consumers’ minds that there are other TLDs out there. I think the whole ‘.xxx’ saga has definitely focused a lot of interest and attention. And you’ve seen the fights going on within ICANN for the new gTLD round. We work very closely with Steve Metalitz, Kristina Rosette and Claudio di Gangi in the IP Constituency (IPC). Not many people are going to call us poster childs, but I think that some of the things that ICM Registry was planning to do all along have been included in the new gTLD Applicant Guidebook as better practices. I’m sure the IPC would be very pleased if every registry did what we did and authenticated every registrant.
Q: A successful Sunrise B application results in a domain name that is blocked but nevertheless resolves. What do you say to brand owners who remain concerned over this apparent association between their brand and the ‘.xxx’ space?
That’s a very interesting perspective and I think – if I may say so –it’s arse over tit. At the moment, if a name is on a reserve list or is not registered (and that’s what we could have done – just not registered them), you get a ‘NXDOMAIN’ (non-existent domain name) answer when you try to go to it. The problem is, depending on what browser and internet service provider you use, an NXDOMAIN results in a different page being displayed. We did this the other day with ICANN at their Washington DC offices. When we typed in ‘www.ICANN.xxx’, we got served not a 404 error, but a page from Comcast, the internet service provider. Comcast had realised that ICANN was something to do with domain names, and that xxx was to do with porn, so the page said, “Are you looking for porn domain names?”
Q: So from a brand owner’s perspective, a domain name that resolves to a blank page is a lesser evil than one that doesn’t resolve at all?
Correct – brand owners were worried about two things: what’s going to happen on the page and having their name in the Whois. Most of the brand owners we spoke to didn’t want to be associated with ‘.xxx’. They wanted to reserve it, but not have any one know that they had reserved it. So we’re just putting “ICM Registry” in the Whois and, for the page that it lands on, we’re planning to display words to the effect that the name is not available for registration.
Q: You won’t be monetising it?
No – even I couldn’t get away with that!
Q: The fee for Sunrise B is $200-300, a flexible range because it’s down to the registrar how much they charge for their portion of the service. Brand owners are already not happy about having to pay, so wouldn’t a transparent fee structure be better?
Registrars never want us to disclose our wholesale price, because then everybody can work it out. But we have a wholesale price of just over $160. Our pricing [for Sunrise B] has always been on a cost-recovery basis. This is not a profit generator for us. The price is made up of two elements. One is a variable cost to look up literally every domain name registration we receive. And the second is administrating this Sunrise B programme – advertising in the IP press, going to INTA, and building the servers and the technical infrastructure to do this. That has cost us $1 million. So we’ve amortised, and guessed in our heads how many Sunrise B applications we think we can get. We’ve amortised that $1 million over 10,000 domains – some sunrises have done 5,000 or 7,000. Originally we were going to charge [a wholesale Sunrise B price of] $250, because we thought we’d do 5,000. But then we thought, ‘no, we’ll get more’ – so $1 million divided by 10,000 applications equals $100 fixed cost, plus the variable.
Q: So if you get more than 10,000 applications, you’ll be in profit?
Yes, but then if I do 5,000, no one’s going to cry for me. If I do 5,000, I’ll have lost half a million dollars.
Q: But if you do 20,000, that’s a million-dollar profit.
I guess, but have you got a better solution? We’ve wracked our brains long and hard and this is what we came up with. We could have just said: “You can buy the names and pay us $75 per year for the next 10 years.” No other registry has done this system. If there’d already been a Trademark Clearinghouse in effect then we could have reduced the cost of it, but there wasn’t. We’ve been the good guys here.
Q: Details of the post-launch rights protection mechanisms are vague. When will you be outlining the Rapid Evaluaiton Service (RES) and Charter Eligibility Dispute Resolution Policy (CEDRP)?
We’ve got the terms written; we’re just deciding who implements them. We’re talking to various service providers, but I can’t say which ones, to see who can do it the fastest and in the most cost-effective way. The RES will be for clear-cut cases of abuse: within 48 hours you’ll be able to get a website taken down. The CEDRP is for when someone registers a domain name they shouldn’t have. By our own policies, any bad actors will be banished from the space permanently.
Q: Is the RES everything brand owners wanted the Uniform Rapid Suspension (URS) system to be?
Yes, I would say it is. The URS got watered down way too much. If you add all our policies together, you can see that we’re trying to protect brands.
Q: When can we expect to see details of post-launch policies and cost?
We’re trying to find that out. We’re having an internal dispute whether in the next 10 to 14 days we produce the rules without the name of the provider and pricing, because that’s subject to whether we go with WIPO, NAF or somebody else. I’m for doing that, so that it’s out there. But other memnbers are saying we should sort it all out before making an announcement. So we’re in frantic discussions with both providers. It’ll probably be the same provider who does both the RES and the CEDRP, but one could be announced within two weeks, and if we have to wait for the other, it could be as late as mid-August.
Q: So we’ll know before the sunrise begins, or at least before it ends?
Absolutely. I want to get it out sooner rather than later.
Q: Many brand owners say that their having to pay to block their names amounts to extortion. How do you respond to that?
We have developed the most cost-effective method for members outside our sponsored community to protect their brands. There is no obligation to do that. No one is seriously going to go to ‘www.brand.xxx’ expecting to find the brand itself. This is going to be an issue with every new gTLD launched and I believe we’ve gone the extra mile to offer brands protection.
Q: You’ve said you’ll introduce a way for brands to block terms after the registry’s launch, especially for new brands that appear in the future. How much will that cost and what’s the process?
At the moment, the only thing that will be in place at launch will be the ability for non-members of the community to buy and secure non-resolving domain names. It’s not a block, like under Sunrise B; it’s a domain name at the same price as resolving domain names, $75, but it just doesn’t work. We may develop something else next year, but we would have to go back to ICANN because that wasn’t fully elucidated in our initial application.