Forbes Calls New gTLD’s “Rich New Territories For Cybersquatters” & Why Forbes IS Wrong
The Forbes Article of course chats about Donuts which Forbes says “raised $100 million to take control of as many generic top-level domains as it could.”
The story goes on to quote Jeffrey Stoler, a partner with Holland & Knight, who complained that Donuts appeared to have close ties with Demand Media, a domain registry operator with a long history of complaints about cybersquatting, “typosquatting” (registering scam websites a character or two away from legitimate trademarks) and distributing malware”.
“Stoler noted, however, that Stahura applied for and Demand now owns Patent 7539774, which covers methods for obtaining large numbers of web addresses at low cost including near-misses to trademarked names.”
“With the patented technology, he complained, Donuts could “insert parking pages on such names, including on typographical variants of trademarks and generic names, at very low cost.”
Stoler said that ICANN “further compounded the problem” by consolidating applications for similar top-level domains so that the winner of .law, for example, would also win .lawyer and .lawyers as well.
“”With applications for nearly 2,000 new domain names outstanding, each one of which will function as a miniature .com registry under the control of the winning bidder, the new territories will be exponentially harder to monitor than the existing world of .com, .edu, .gov and a handful of generics like .travel and .museum”.
“”It’s going to be a very confusing, expensive and time-consuming process for trademark owners,” said Joanne Ludovici, a partner with McDermott & Will in Washington who’s among the many lawyers that will be trying to protect their business clients from losing control of valuable trademarks in the new wilderness of domain names. ”It’s a bigger enforcement landscape.”
We don’t think the cybersqatting is going to be a huge problem with the new gTLD’s (with one caveat).
There are several reason why.
The economics are unfavorable for cybersquatters.
The days where someone can register a famous long established trademark and sell it to the trademark holder are over and have been over for a many years.
The cost of registering a new gTLD domain name are going to be costly compared to .com.
Prices for new gTLD will be higher than .com in 98% of the cases.
$15-$30 its seems will be the sweet spot for most new gTLD’s registries although many will be priced higher.
So if a registrant of a domain can’t make money by selling the domain to the trademark holder the only other way they can make money is by parking the domain, or monetizing it in some way.
Problem is even the most bullish of new gTLD supports have to admit that its going to take years if ever for the new gTLD extensions to get meaningful random type-in traffic or typo traffic like .com’s domains experience.
The High cost of entry, the lack of a market to sell TM infringing domains to, and lack to random and typo traffic to monetize the domains is not an appealing business.
Couple that with cheaper, quicker and simpler ways that ICANN has approved to take domains away from domain holders and give them to trademark holders, know as the URS, all adds up to adds up to simply traditional cybersquatters are not going to come to play in the new gTLD space.
I promised a caveat to the above and here it is.
Free domains offered by a huge company like Google.
Google has been rumored that is will give away free domains for one or more of the 98 new gTLD applications it has applied for including a .FREE
If in fact Google gives away domain names for FREE using .FREE and/or other new gTLD then all bets are off.
At zero cost cybersquatter will play.
So Trademark holders should not fear traditional new gTLD operators they should fear FREE domains.