Paradigm Shift in the Use of Domain Names: The Rise of New Generic and .BRANDS Domain Suffixes
Since the rise of the Internet, the .COM top level domain (TLD) has dominated the domain landscape. A majority of the 271 million domain names registered worldwide are .COM domains (42%). The next closest TLD is .NET, at around 5.5%. However, this is expected to change quite quickly due to the Internet Corporation for Assigned Names and Numbers’ (ICANN) expansion of the domain name playing field in 2014.
Why Add New Domain Suffixes?
The Internet has seen tremendous growth over the past 20 years, and the .COM domain is crowded. Relevant and meaningful domain names are few and far between, evidenced by the fact that the average length of a new .COM domain since 2013 is more than 15 characters. In addition, the registration of .com domains has been in steady decline. The new domain system has been implemented to spur growth by providing more relevant, meaningful, and valuable domains to the expanding Internet user community (more than 2.6 billion people worldwide).
New Generic TLDs
Over the past two years, a number of new generic TLDs (gTLDs) have been created. Experts believe the descriptive nature of the new gTLDs is generally more intuitive than the .COM structure and will allow users to directly navigate when they already have a specific website destination in mind. Some notable examples of new gTLDs are .sucks, .feedback, .wealth, .app, and .bike.
The response to this new system has been tremendous. In 2015, the number of new generic top level domains (TLDs) skyrocketed from 4 million in January to 11 million by the end of December. This gTLD tracker shows that almost 16 million new gTLDs have been registered to date.
Of course, registration of new gTLDs does not indicate that Internet users have become accustomed to using these new domains. However, it appears likely that over the next few years, the new gTLDs (at least the popular ones) will be gradually adopted as a significant if not primary source of Internet content.
In 2012, ICANN opened the .BRAND domain space and over 600 brand holders signed up. Experts believe that by 2020, it will become normal for companies to manage their own space on the internet, and these .BRAND websites will become the starting point for browser navigation moving forward.
The .BRAND owner is free to set up a closed ecosystem of related websites and direct traffic along its virtual community however it wishes. Such freedom allows a mark owner with a .BRAND domain to make a new page to immediately capitalize on any trending social media patterns and ad campaigns, something previously made difficult by the need to find an available .com or .net webpage. It also allows these brands to beef up their online security.
Large brands have already begun using their .BRANDS domains, and a number of different approaches have emerged. Last year, BNP Paribas switched over from its .net and .fr TLDs to .bnpparibas. Barclays soon followed and now manages its online presence from .barclays and .barclayscard. Both banking conglomerates attributed their move in large part to the added layer of security for consumers, who now can check the TLD to ensure that they are at an authentic BNP or Barclays website.
Microsoft (home.microsoft), Cisco (security.cisco), Bridgestone (wsc.bridgestone), and E. Merck (company.emerck) have also begun their dot brand transitions, though some of these domains merely redirect back to a .com website. Some companies have even leveraged their dot brands for interactive advertising and social media: Sony promoted the release of the film “Spectre” through the assistmoneypenny.sony address, which featured an interactive James Bond game.
Yet, there are still a significant number of mark owners that have yet to migrate. On top of the hefty ICANN fee, mark owners might be unwilling to risk alienating less tech-savvy consumers who are conditioned to using .com and .net addresses. Moreover, some companies own hundreds of websites, which for the time being might not be worth the significant time and expense needed to migrate over to a new TLD. It seems, at least for now, that the .BRAND domains are only affordable for large companies.
Interestingly, many .BRANDS owners have not rolled out their sites at all. Such behavior suggests that the primary concern of these brand owners is to prevent cybersquatting and the inevitable consumer confusion that follows, rather than to actually make use of their TLDs.
These new TLDs offer numerous opportunities for domain name hijackers. Although the general public may not yet appreciate this, this creates an enormous challenge for companies wishing to maintain and improve their online brand presence. It will likely be impossible, or at least extremely expensive, for brand owners to register every trademark in every domain extension.
What Can Brand Owners Do?
As the domain landscape changes over the next decade, new strategies should be implemented to capitalize on this opportunity. At the same time, brand owners must take steps to protect brands from infringement and cybersquatting. So, brand owners should evaluate whether any new gTLDs or .BRAND domains make sense from a business perspective. In addition, brand owners should anticipate unauthorized, confusion-engendering uses of their mark on TLDs they do not control. To that end, mark owners should consider monitoring their trademark marks to make sure they are not used in connection with new generic gTLDs.
This article is for informational purposes, is not intended to constitute legal advice, and may be considered advertising under applicable state laws. This article is only the opinion of the authors and is not attributable to IPLA, LLP, or the firm’s clients.