Typosquatting: A Brief Foray

Last week, CirlceID published an article titled "Measuring Typosquatting Perpetrators and Funders," based on the study by Tyler Moore of the Harvard School of Engineering and Applied Science and Benjamin Edelman of the Harvard Business School, "Measuring the Perpetrators and Funders of Typosquatting." The study identified at least 938,000 typosquatting domain names targeting the most popular 3,264 domain names according to Alexa's website popularity rankings. Despite the implementation of theUDRP and the enactment of the ACPA, the study demonstrates that typosquatting remains a significant problem and suggests that online advertising platforms, such as Google's AdSense, are better positioned to undermine typosquatting, rather than trademark owners.

The study is a fascinating read, but the supplementary documentation may be of even more interest to trademark owners and readers of this blog. The Online Appendix features a section titled "Estimating Visitors and Advertising Costs of Typo Domains," in which the authors estimate that extrapolating their findings from the 3,264 domain names in the study to the top 100,000 most popular domain names suggests that "typo domains collectively receive at least 68.2 million daily visitors." Furthermore, based on estimates drawn from SEC filings and a Google case study, the authors "estimate that Google's revenue from typosquatting on the top 100,000 sites is $497 million per year."

Beyond demonstrating that typosquatting remains an ongoing and significant problem, the estimate of Google's revenue related to typsoquatting represents the capture that trademark owners could achieve through acquisition of domain names that represent misspellings of brand owners' trademarks as domain names. While the intrinsic value of a single typo domain name will likely be minimal, the study shows that the value of a portfolio of typos could be significant, and therefore trademark owners that employ defensive registration and online enforcement strategies intelligently to acquire typo domains could benefit from a meaningful return on investment across multiple fronts including increased web traffic, reduced consumer confusion, lessened online advertising spend and lower costs in connection with affiliate marketing.

IDN ccTLDs One Step Closer

As mentioned below, ICANN is currently in the process of approving IDN ccTLD requests and recently announced that four internationalized domain names had been approved: Egypt, the Russian Federation, United Arab Emirates, and Saudi Arabia. The languages associated with the first four IDN ccTLDs to be approved include Arabic and Russian in Arabic and Cyrillic scripts, representing another step closer for IDN ccTLDs.

From the perspective of trademark owners, important considerations include: Do the referenced nations represent significant geographic areas in which the company does business or a natural area of business expansion? Has the brand owner registered and/or used a translation or transliteration of the trademark in either of these scripts?

It was also recently announced that the registry behind the application for the Russian Federation, incorporating the Cyrillic script, intends to begin operation in March of this year.

Important Dates for Trademark Owners in Early 2010: Pending Introduction of New TLDs

As referenced below, this blog is intended to keep trademark owners abreast of developments with regard to the introduction of new top-level domains. With the turn of the calendar to 2010, there is a lot coming around the corner of which brand owners should be aware. It is my intent to increase the frequency of posts as developments occur, but there are a number of impending dates important to this process.

On January 27, 2010, the public comment period closes regarding the draft model for Expressions of Interest for new top-level domains. Important considerations that may effect trademark owners include:
Participation in the Expressions of Interest is mandatory. If a trademark owner chooses not to participate, said trademark owner may not apply in the first round of new TLDs.
A deposit of $55,000 is required to participate. This fee will be credited against the proposed $185,000 application fee to register a new TLD.
The $55,000 deposit is refundable only if ICANN fails to act on the introduction of new TLDs prior to approximately the end of 2011.
The potential applicant, applicant contact information and to-be applied-for TLD will be made public.

On February 4, 2010, at the Special Meeting of the ICANN Board of Directors, the Board will consider the draft and public comments, and may vote to proceed with the draft model.

Here is a list of potential participants and applicants thus far.

With regard to Internationalized Domain Names, ICANN still intends to introduce new country-code top-level domains in non-Latin scripts in early 2010. At this point, there are 16 requests for IDNs in eight languages.

To reiterate, there is a lot coming around the corner for trademark owners with regard to the introduction of new TLDs. Brand owners should be sure to pay attention to the above deadlines and any changes that may occur in the near future. The intent is for this blog to serve as a clearinghouse of information and updates for trademark owners concerned with these issues.

Fear and the Introduction of New TLDs

I was intrigued by the title of this article, "How can you protect your brand online if new domains are created?" from SC Magazine when it came across my twitter feed from minds + machine's New TLD News. Unfortunately, without even dealing with the inaccuracies and/or misuse of legal terms in the piece, the tone of doom and gloom for trademark owners compelled a response. The truth is that trademark owners should not fear the introduction of new top-level domains, as such an introduction is inevitable and trademark owners prepared for the process will be better positioned to control the costs associated with new TLDs.

The truth is that the implementation of new top-level domains in some undetermined form now appears inevitable. New TLDs concern trademark owners for primarily two reasons: 1) the potential misappropriation of a trademark by a third party as either a new TLD (i.e. to the right of the final dot) or as a domain name registered in connection with a new TLD (i.e. immediately to the left of the final dot) and 2) the costs associated with either the registration and use of a new TLD that incorporates the trademark owner's mark or the defensive registration of domain names incorporating the mark in multiple new TLDs.

With regard to misappropriation, the article quotes Charlie Abrahams, vice president and general manager EMEA at MarkMonitor: "Somebody else would get .barclays and sell it back to Barclays in the future, that is less of a concern as the costs can be high and it needs to be running for more than ten years, so that could be more than $1 million, and for a criminal this is a higher level of entry.” This is not a legitimate concern and Mr. Abrahams certainly qualifies this statement, but there are legitimate concerns for trademark owners, such as trademark owners that hold trademarks for terms identical or similar to trademarks held in connection with differing goods or services, i.e. the APPLE marks held, respectively, by Apple Computers and Apple Corps.

Another concern with regard potentially to misappropriation for trademark owners in this area is trademark terms that may be considered generic or descriptive terms in other contexts. To continue the above example further, a fruit-growing organization could potentially also apply for the .apple top-level domain.

Each trademark owner must be thinking about these issues now to determine best practices in connection with the implementation of new top-level domains. Nobody can credibly predict whether new TLDs will gain significant market share, as .com is still king. Nevertheless, nobody can similarly predict when ICANN will offer another opportunity to apply for new TLDs. The choice not to apply for a new TLD or to allow a third party to apply for the TLD associated with the trademark holder's mark could represent a missed opportunity for branding, marketing and advertising purposes that will not return for some time.

With regard to the costs attributable to trademark owners in connection with the implementation of new top-level domains, the article asserts, "there are instances where people get a desirable domain by paying for it and this has led to instances of people buying sites for high amounts of money." If the "people buying sites for high amounts of money" refers to trademark owners, then I think it is important to remember that we will not be returning to the ransoms paid by trademark owners for domain names associated with those marks prior to the implementation of the UDRP. The real concern for trademark holders is that the UDRP process is, itself, relatively expensive and the multiplication of multiple UDRP claims across various new TLDs could prove exorbitant.

First, it is not even clear at this point that the UDRP will be the most efficient procedure for contesting the registration and/or use of domains names registered to third parties that incorporate marks held by trademark owners. Second and most importantly, it is certainly not clear that many of the implemented new top-level domains will succeed to the degree that sufficient Internet traffic will be generated to justify the expense associated with a UDRP claim.

The fact is that new top-level domains are inevitable and the introduction of new TLDs poses particular concerns for trademark owners, both potential misappropriation and costs. Trademark owners that begin preparing for this implementation now, in partnership with counsel familiar with the myriad issues associated with this process, will be better positioned to deal with the concerns of misappropriation and costs. And those who prepare now will find that there really is nothing to fear in the introduction of new TLDs.

ICANN's IDN ccTLD Fast Track Process Updates

In relation to the discussion of IDNs below, ICANN is posting updates with regard to the IDN ccTLD Fast Track process here. So far 10 requests for IDNs have been submitted in five languages. Check back often to stay apprised of any information related to the introduction of new TLDs.

Suggestions for Protocols

In the previous post, the suggestion was made that trademark owners should treat the introduction of IDNs as a test run for the implementation of new gTLDs, which resulted in a couple of e-mails seeking suggestions as to what such protocols might entail.

New gTLDs are somewhat more complicated, but IDNs are similar to ccTLDs with regard to factors to consider in registration.

Do you have a trademark registration in the relevant country?
Do you conduct significant business in that country?
Is the country a likely prospect for expansion?
What would be your likely response if your trademark was registered as a domain name by a third party?

These are some of the questions trademark owners need to be considering as the introduction of IDNs comes closer to reality. The implementation of new gTLDs may be delayed, but new gTLDs are inevitable. The sooner trademark owners begin asking the above-referenced questions, the less painful the ultimate roll out will be.

Trial Run for Trademark Owners

Last week, the most-recent ICANN meeting concluded in Seoul, South Korea with a meeting of the ICANN Board, in which the Board approved the introduction of non-Latin character domains ("internationalized domain names" or "IDNs"). New IDNs could result in new country-code top-level domains ("ccTLDs") in scripts such as Arabic, Chinese, Cyrillic, Hindi, Japanese and/or Korean as early as mid-2010.

Moreover, during the Seoul meetings, ICANN made clear that the introduction of new generic top-level domains would be delayed beyond the first quarter of 2010, as delineated in ICANN's initial ambitious time line.

Many trademark owners were legitimately concerned with the possibility of ICANN introducing en masse up to 500 new top-level domains concurrently. While the implementation of new top-level domains now appears inevitable, the introduction of IDNs offers trademark owners a unique test case for the development and implementation of processes by which the trademark owner can determine whether to register domain names in new top-level domains.

In anticipation of the introduction of IDNs, trademark owners should now be developing such processes to treat the initial implementation as a trial run for the introduction of new generic top-level domains.