New Internet Domain Suffix Ready For Business

Would you pay to deter someone from creating a website called “[yourcompany].sucks?” The company selling the new internet domain name is hoping that the answer is yes for the owners of many well-known brands.
April 15, 2015

Would you pay to deter someone from creating a website called “[yourcompany].sucks?” The company selling the new internet domain name is hoping that the answer is yes for the owners of many well-known brands.

As previously discussed on the Scarinci Hollenbeck Business Law News Blog, the international body responsible for regulating the Internet, ICANN, continues to roll out new generic top-level domains (gTLD) that expand the Internet from the traditional .com and .org domains. While the new gTLDs offer new and exciting branding opportunities, they also come with legal headaches for trademark owners.

The latest gTLD to roll out is one of the most controversial: .SUCKS. Starting on March 30, 2015, the 30-day “sunrise period” for the gTLD opened, which gives trademark owners the first opportunity to register .SUCKS using their marks. After June 1, 2015, the new domain will be available to the general public.

While many of the new gTLDs have generated concerns about cybersquatters —entities that seek to turn profits by hijacking the trademarks and domain names of well-known companies — critics are also raising concerns about how the .SUCKS domains are being sold.

Under the pricing scheme established by Vox Populi, companies that are already registered with the Trademark Clearinghouse (TMCH) must pay $2,500 to register the domain during the sunrise period and again every year they renew (nearly $12,500 for a 5-year sunrise registration). Companies that do not take advantage of the early registration but are dubbed “premium brands” will also pay the same hefty registration fees to protect their intellectual property. Meanwhile, the general public can scoop up a website for less than $250.

While the .SUCKS domain is touted as a means to foster consumer advocacy, critics maintain the negative impact on businesses will outweigh any public benefits.

Last year, then-U.S. Sen. John D. “Jay” Rockefeller IV characterized the domain as “little more than a predatory shakedown scheme.” In his letter to ICANN, the lawmaker raised concerns that the business model behind the domain was designed to force well-known companies and organizations to “pay ongoing fees to avoid seeing the phrase ‘sucks’ appended to their names on the Internet.”

More recently, the Intellectual Property Constituency (IPC) sent a letter to ICANN asking it to halt the rollout of the new .SUCKS gTLD. It maintains that Vox Populi’s predatory pricing scheme was devised solely to make money off the backs of brand owners. It further alleges that the pricing structure “creates a mockery of the new TLD process and calls into question the very ability of ICANN as an organization to be able to administer the new gTLD program.”

Despite the public pressure, ICANN is unlikely to halt the registration of .SUCKS. So if your budget allows, and your brand merits it, you may want to at least consider “defensive” registrations. As noted above, registering the new domain is expensive, particularly since you are unlikely to use it. However, it is the best way to help ensure that another company does not capitalize on your brand or trademark.

Prior to joining Scarinci Hollenbeck, Dan Brecher was the head of the Securities and Investment Banking Department of a 250 lawyer Manhattan firm and ran his own boutique securities and investment banking law firm in Manhattan. Mr. Brecher’s experience ranges from general counsel of New York Stock Exchange and NASD/FINRA member brokerage firms to representing public and private companies in securities offerings and advising institutional and high net worth investors. He is currently Counsel at Scarinci Hollenbeck, Chair of the firm's Investment Banking practice and chief editor of Business Law News.

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