Blog: cybersquatting

The .CO top-level domain made over $10 million in just a couple of months. What do the results of the .CO re-launch mean for new gTLDs?

Remember, .CO is the country-code TLD for Colombia. Until this summer, you could only register names under .com.co, .net.co, etc. You couldn’t register myname.co. Now anyone in the world can register a .co name, and register it directly under the top level. Remember also that as a country-code TLD, .CO was not constrained by ICANN rules, which means that they were able to (re-) launch their TLD relatively quickly. Even so, their rules and regulations closely hewed to the latest ICANN rules, especially in regard to cybersquatting.

The response to the .CO launch was tremendous. Let’s review:

• 11,000 names applied for during the Sunrise Period
• 28,000 names sold during the Landrush Period (closed July 15, 2010)
• Total paid by applicants for Sunrise and Landrush names: over $10 million
• Total .co names registered as of this writing: 440,000

What do these numbers mean for prospective new gTLDs? Obviously, they prove that there are lots of buyers out there if the value proposition is good, and that’s a very good sign. There is no indication that people have anything against new TLDs. Quite the opposite, in fact: if it’s a good one, they’ll flock to it in droves.

But .CO is somewhat of a special case. There are a few things to keep in mind:

First, although cybersquatting of brand names was dealt with aggressively by the talented .CO team, we have to assume that many of the registrations were done in hopes of getting traffic from people who forgot to add the “m” to a .com URL. No new gTLDs will be able to benefit from similar fat-fingered mistakes, because ICANN is running a “similarity test” to make sure that there aren’t such confusions. We won’t know how much typo traffic there actually is until it comes time to renew the names. Then, speculative traffic names will either be renewed (if they received typo traffic) or will be dropped (if they didn’t). So keep an eye on next July for interesting stats.

Second, the .CO team is really good, and did everything right. They hired smart veterans and spent a fair amount of time and money making sure that brand owners and registrars knew what was happening, what the rules were, how and when to apply, etc. This had the virtuous double effect of almost completely eliminating complaints about the process and also maximizing registrations. New TLD applicants, take note.

Third, .CO had the field to itself. When new gTLDs start launching, it will probably be on a rolling schedule, but nonetheless there is likely to be more than one launch at any given time.

These are the factors giving .CO an edge, but this doesn’t mean that new gTLDs won’t be able to duplicate or surpass their success. Many of these considerations are double-edged swords. The fact that .CO is a misspelling of .COM also means that fewer real sites will get built, fewer names will be renewed, and cybersquatting problems will be relatively larger than in most new gTLDs. The fact that .CO spent a lot of money means that their profit margin is lower.

Every new TLD launch will have specific considerations and circumstances that will both help and hinder its growth. Several new gTLDs, especially geographical names and communities, will have natural constituencies that will fuel registrations. Others will have worldwide appeal. Many will not measure their success in registrations, but instead on service to their communities.

Overall, the .CO launch should make prospective new gTLD applicants very happy indeed. It is a great proof of the market, and it shows (once again) that intelligent branding and marketing will go a long way to making a project a success.

A PDF version of this survey and analysis, with full data tables, is available as a downloadable PDF here.

Summary: A survey of the domain registration behavior of Fortune 100 companies reveals that they have not registered many of their trademarks in recently created generic top-level domains (gTLDs). A sample of 1043 brands were registered in less than 30% of the eight new open gTLDs created after 2001. If historical registration data is a guide, brands are unlikely to undertake many defensive domain name registrations in the proposed new gTLDs, and furthermore are unlikely to be the victims of cybersquatting.

With the help of DomainTools, we surveyed 1043 brands owned by the Fortune 100.

Our purpose was to discover to what extent large companies – which have been the loudest critics of ICANN’s new gTLD program – have actually registered their brands defensively in the already existing new gTLDs.

By counting which domain names had been registered, reserved, or otherwise made unavailable for new registration, we are able to see which gTLDs are either registered in defensively (by brands) or cybersquatted by malefactors. Where many names are registered (e.g., .com), we can deduce whether defensive registrations and/or cybersquatting is prevalent.

The data shows that brand names are registered as domain names 87% of the time in .com, .net, and .org; just 67% of the time in .info and .biz; and only 29% in .mobi, .asia, .cat, .jobs, .name, .pro, .tel and .travel – the newer ICANN-created gTLDs where it is easy to register a domain name, and may be attractive to cybersquatters.

Overall, the claims of brand owners that they will be forced to spend significant amounts of money performing defensive registrations in the proposed new gTLDs are not supported by the historical data, which shows that they largely do not undertake defensive registrations in new gTLDs, nor is there any extensive cybersquatting in new gTLDs.

Will new gTLDs force brand owners to register names defensively?

In a previous study, we found that the cost of enforcement of trademark rights in new gTLDs is likely to be small – on the order of $.10 per registered trademark, per year. The current study looks at the likely cost of defensive registrations to trademark holders.

A vocal group of brand owners has repeatedly claimed that the cost of defensive registrations would be “astronomical” and a “major burden on U.S. businesses.”

The following correspondence to ICANN provides a flavor of these claims:

• “…astronomical registration fees required to protect trademarks across new gTLDs.” (Overstock.com)
• “The new gTLD program raises substantial concern about costs to businesses, such as a need to file many defensive registrations, making this program like a nuisance tax which many companies cannot afford.” (Time-Warner)
• “[EOIs] would seem to be a premature invitation for mischief that will end up costing trademark owners big bucks one way or another.” (Cowan, Liebowitz, and Latman)
• “A more likely scenario would be for a business just to register site Web addresses [sic] pairing their brand name with any new extensions, such as fios.telephone or gillette.razor. But even that defense could cost marketers up to $1.5 billion, estimates the not-for-profit Coalition Against Domain Name Abuse.”
• “The scale on which owners of famous marks such as Microsoft will have to secure defensive registrations and pursue cybersquatters is staggering.” (Microsoft)
• “Brand owners are also registrants and have thousands of domains of which we use less than one hundred – all the rest are for protection. We spend a fortune to protect our brand.” (Unidentified brand owner)

Brand owners use words like “astronomical,” “staggering,” “a fortune,” and “billions.” But is it really true that new gTLDs will force trademark owners into registering new domain names that they don’t really want?

A recent study by Paul Stahura definitively concluded that the answer was a definite “no”, by examining which trademarks (in general) were registered across com, org, net, mobi, biz, info and us. Stahura concludes:

The vast majority of trademark holders are not registering their trademark in all the current generic TLDs, let alone all the TLDs.

Bhavin Turakhia of Directi agreed, and provided an explanation:

Trademark holders have no reason to register a domain name in a new TLD if the domain name is not going to get any traffic. Speculators have no reason to register a domain name in a new TLD if the domain name is not going to get any traffic, since they will be unable to generate revenue from it or sell it to the trademark holder.

Finally, Dennis Carlton, an ICANN-appointed economist, noted:

… claims that the introduction of new gTLDs will necessitate widespread defensive registrations appear to be exaggerated and are inconsistent with the oft-noted observation that there have been a limited number of registrations on gTLDs introduced in recent years.

These two sets of voices are completely at odds. On the one hand, the adamant insistence by brand holders that defensive registrations in new gTLDs are necessary and costly. On the other, equally insistent dissenting voices saying that brands neither register defensively in new gTLDs, nor do they need to. We attempted to look systematically at the data to try to determine who is correct, or if the truth is somewhere in the middle.

I. Methodology

In attempt to shed more light on the question, we took a look at the new gTLDs launched since 2000, and analyzed registration patterns of major brands across all open gTLDs.

We took Fortune Magazine’s list of the top 100 companies in the United States. Then we found the major brands for each of these companies. Some companies had just a few brands, some had many. In the case where the brand was hyphenated, we also examined the non-hyphenated version of the brand (e.g., Wal-Mart and Walmart). Overall, we looked at 1043 brands and unhyphenated brand variants. On average, this works out to about 10 brands per company.

Then, with the help of DomainTools, we examined the whois records for each brand and brand variant across 13 different gTLDs, listed below. We looked at whether the brand name was available for registration, or if it had been registered, reserved, or was otherwise unavailable for registration. (We did not examine who the owner was, because our study is looking not at the frequency of cybersquatting or fair use registrations, but rather the interest in the domain name by anyone at all, whether by the brand owner or other registrant.)

Specifically, we looked at the following gTLDs, because anyone (either the brand owner or a cybersquatter) can register a name in them with minimal effort or cost:

• .com, .net, and .org. These pre-ICANN gTLDs are open for registration by anyone on a first-come, first-served basis.
• .info – Launched in 2001. Open to anyone.
• .biz – Launched in 2001. Technically only for businesses, but in practice available to anyone.
• .name – Launched in 2002, originally intended for personal names, but now open to general registrations.
• .pro – Assigned in 2002, launched in 2006. Initially designed for certified professionals, now easily registered by anyone through a number of ICANN-accredited registrars.
• .mobi – Launched in 2005 by mTLD, targeting the mobile internet. The restriction that .mobi sites follow mTLD-sponsored standards for mobile-device viewing was never enforced. Open for general registration.
• .travel – a TLD launched in 2006 targeting the travel industry, originally quite restrictive, but now essentially open. In the past 18-24 months, the criteria of qualification has widened and is easily obtained.
• .cat – Launched in 2006. The only requirement for a .cat is that there is some content somewhere in the Catalan language, a requirement that is trivial to comply with.
• .tel – Launched in 2008. Open to all registrants.
• .asia – Launched in 2006. Registrant must be based in Asia. Most F100 companies are eligible because they have Asian operations, but even if not, proxy services are easily available.
• .jobs – Launched in 2005. Specifically targeted at companies and brand holders.

We then tabulated the results, available as Appendix 1 of this study (download the PDF version of this study for the tabulated results).

II. Results and Analysis

Confirming the insights of Stahura, Turakhia and Carlton, we found that brands are not consistently registered across open gTLDs, and that most brands owners have not registered their names in most of the newer gTLDs.

Some specific results include:

1. Brand owners register their names religiously in .com.

Defensive registrations are a real phenomenon in .com. 100% of the 1043 brands and brand variations are registered in .com. Our earlier study on UDRP filings suggests that this is where the vast majority of cybersquatting also takes place.

2. Outside of .com, even in large and established gTLDs, registration patterns are haphazard. Brand owners do not register defensively here with any regularity.

After .com, the drop-off in registrations is steep. Of the larger, older open gTLDs, we found these percentages:

• .net – 878 of 1043 (84%)
• .org – 790 of 1043 (76%)
• .info – 723 of 1043 (69%)
• .biz – 676 of 1043 (65%)

3. In smaller open gTLDs only 29% of trademarks are registered. Brand owners largely ignore new gTLDs.

For all the rest the combined coverage was a mere 29%, or less than 1/3 of the combined coverage in .com, .net, and .org. In only one of the newer open gTLDs was coverage above 50%. The results in rank order:

• .mobi – 592 of 1043 (57%)
• .asia – 461 of 1043 (44%)
• .tel – 477 of 1043 (46%)
• .name – 341 of 1043 (33%)
• .pro – 182 of 1043 (17%)
• .jobs – 180 of 1043 (17%)
• .travel – 108 of 1043 (10%)
• .cat – 59 of 1043 (6%)

4. Brand names are more likely to be registered in heavily marketed TLDs.

Among the newer gTLDs, .mobi, .tel, and .asia, which have been the most heavily marketed of recent gTLDs, had by far the most registrations, beating out even the long-established .name.

5. The cost of defensive registrations to brands results in part from the 300% markup over street price that they pay for their domain names.

Brand owners, for reasons best known to themselves, pay a significant premium over retail to register domain names through brand management companies, and this is a large component of their costs, which would be much lower if they paid street prices. Overstock.com, for instance, estimates “a conservative annual registration fee of $30 per domain name.” However, as of this writing, the retail price for a .info domain name is $.89,.biz $5.99, .net $5.99, while a .com domain name is $7.29 per year.

IV. Examples of brand registration patterns.

For the purposes of illustration, we examined the largest brands of some of the more vehement opponents to new gTLDs. We found that they do not practice blanket defensive registrations.

Verizon has vocally opposed any expansion of the new gTLD space and is a clear opponent of new top-level domains. One the key brands of Verizon is “FIOS.” Fios.com, fios.net and fios.org are all registered to Verizon. But Verizon has not registered fios.name. For under $15.00 per year, anyone can, today, register that name:

Microsoft is also a leading opponent of new TLDs and EOIs. It has, however, not registered “win32,” one of its key brands, in .tel:

Disney does not protect its theme-park brand. Disneyparks.com is registered, but disneyparks.biz is available for $8.99, as is disneyparks.asia:

Philip Morris has pre-registered its key cigarette brands across all gTLDs. But many of its non-cigarette brands are readily available, such as “triscuit”:

There are many such examples, as our study shows.

Large brands, and their brand protection agencies such as Mark Monitor, heavily concentrate defensive registrations in .com, and are far less interested in other TLDs, and when it comes to the newest TLDs, they have shown very little interest at all.

V. Conclusion

If past behavior is predictive of future actions, we will see a minimal amount of defensive registration activity in new gTLDs by brand owners, and new gTLDs will be largely ignored by cybersquatters.

Summary – A quantitative analysis of UDRP data for all open gTLDs concludes that the introduction of new gTLDs will result in approximately 316 new cases of cybersquatting, and that the resultant cost to trademark holders, overall, will be $870,000 per year – less than less than $.10 for each trademark registered worldwide, or about $.44 per trademark registered in the United States. The data show that cybersquatting correlates to registration volume across all open gTLDs, not to the number of gTLDs, but is more prevalent in .com.

A downloadable PDF of this study is available here.

A Quantitative Analysis of Trademark Infringement and Cost to Trademark Holders in New gTLDs

Will New gTLDs Increase Cybersquatting?

A vocal group of brand and trademark owners has lobbied ICANN, the US Department of Commerce, and the ICANN’s Government Advisory Committee (GAC) claiming that new gTLDs would unleash a tide of lawlessness that would cost brand holders a fortune to combat.

Owners of trademarks and brands have claimed that a new round of gTLDs would leave them facing an onslaught of cybersquatting and typosquatting, and that their policing and enforcement costs would be substantial. Here is a recent representative statement of that view:

It is possible that the new gTLD program could lead to hundreds, if not thousands of new gTLDs. This is likely to cause brand abuse, such as cyber squatting, to grow exponentially. As a result, the legal costs for brand owners associated with monitoring, registering, and enforcing domain names are likely to raise substantially. [Source: Leo Longauer, Head of Group Intellectual Property for UBS AG]

This campaign has been so effective that even intelligent observers like David Maher, Senior VP for Policy at Public Interest Registry, accept it at face value:

… there is a connection between the creation of large numbers of new gTLDs and the public interest in preventing a vast increase in cybersquatting and the spread of fraudulent practices. [Source: CircleID]

But is it really true that new gTLDs will bring a “vast increase in cybersquatting”? A wealth of relevant data allows an empirical test of this claim. Both the World Intellectual Property Organization (WIPO) and the National Arbitration Forum (NAF) keep excellent records of claims of trademark infringement brought through ICANN’s Universal Dispute Resolution Policy (UDRP).

The two main costs of domain names for trademark holders are:

1. the cost of pre-emptively registering brands in new gTLDs
2. the cost of monitoring and enforcing trademarks in new gTLDs

This study looks at enforcement, the second category. To understand the cost of enforcement, we studied the 10-year UDRP data on existing “open” gTLDs. We used the data from WIPO and the NAF, which together comprise the overwhelming majority of UDRP cases files. The sample is statistically relevant, comprising 8 new TLDs since 2001, with over 8 million domain names under management. (The study does not include Czech ADR, ADNDRC, or cases from former providers CPR or eResolution Cases. Inclusion of these cases, which deal almost exclusively with .com, .net, and .org domain names, would show an even greater incidence of infringement in legacy gTLDs compared to new gTLDs.)

This study is the first of several in which we will quantitatively examine the likely effects of new gTLDs on trademark holders.

Infringements Per Million (IPM)

A study of the UDRP case data for the last 10 years for both existing (pre-ICANN) open gTLDs (.com, .net, and .org) and for newer ICANN-created open gTLDs shows that the number of infringements within any open gTLD is quite predictable, depending primarily on the number of registrations within that TLD. (For the purposes of this study, we looked at those top-level domains introduced since 2001 that are either “open” — no restrictions on registrants — or whose restrictions are so easily circumvented, or so loosely enforced, that they are effectively “open.” Because trademark owners have not complained as loudly about restricted TLDs, we did not include them in our study. Not examined, therefore, were truly restricted gTLDs: .int, .gov, .mil, .edu, .museum, .coop, and .aero.)

To help understand the relationship, we introduce a new metric: IPM (infringements per million). The data show that among current gTLDs, IPM varies between about 15 and 40, with .com having by far the highest IPM at 41.71 infringements per million registrations.

Domain name growth across all TLDs has for the past ten years grown at a fairly steady 10 – 15% annually (Source: VeriSign Domain Name Brief). Past introductions of new gTLDs have not changed that overall growth. The new round of gTLDs, which foresees an increase of approximately 300 gTLDs (see page 6 of the 2009 ICANN Root Scaling Study, for instance), may, because of intensive marketing, increase this growth rate, but not by orders of magnitude. Based on historical data, the average IPM for the new open gTLDs listed in Table 3 below is 22.47, and 24.15 for .com, .net, and .org. Table 3 lists the IPM for each TLD.

The Data

Legacy open TLDs — .com, .net, and .org — account for the vast majority (94%) of all WIPO and NAF UDRP cases. This percentage has not changed significantly over the 10 years of data, as Table 1 below shows. (The anomalies here, in 2002 and 2007, are due to .info price promotions, where names were offered for free or near-free, which did increase infringements. Price of new TLD registrations – but not the existence of new TLDs – does increase speculative activities of all kinds.)

Table 1: Com, Net and Org as % of all UDRP Cases

Year	CNO	Other	Total	CNO %
Total	23595	1452	25047	94%
2001	2383	18	2401	99%
2002	1814	189	2003	91%
2003	1635	83	1718	95%
2004	2346	150	2496	94%
2005	3039	134	3173	96%
2006	2406	116	2522	95%
2007	2938	356	3294	89%
2008	3196	227	3423	93%
2009	3817	178	3995	96%
2010 (partial)	21	1	22	95%

 

Table 2, below, shows UDRP claims filed in new open gTLDs.

Table 2: Non .com, .net, or .org UDRP Cases by Year

Year	asia	biz	cat	info	mobi	name	pro	tel	Total
Grand Total	8	385	4	860	155	24	11	5	1452
2001	0	2	0	16	0	0	0	0	18
2002	0	74	0	115	0	0	0	0	189
2003	0	33	0	50	0	0	0	0	83
2004	0	90	0	59	0	1	0	0	150
2005	0	50	0	83	0	1	0	0	134
2006	0	27	0	76	9	4	0	0	116
2007	0	38	4	245	62	7	0	0	356
2008	2	47	0	120	52	5	1	0	227
2009	6	24	0	95	32	6	10	5	178
2010 (partial)	0	0	0	1	0	0	0	0	1

Finding 1: Infringement correlates closely to registration volume, but .com has the highest rate.

The vast majority of infringement occurs in pre-ICANN legacy TLDs, not in the newer TLDs. To understand what is likely to happen with the new round of gTLDs, we need to better understand these numbers.

The key metric this regard is “Infringements per Million,” or IPM. Table shows 3 the IPM across open gTLDs for 2009.

Table 3: 2009 Infringements Per Million (IPM) by TLD

TLD	UDRP Cases	Millions of Registrations	IPM
com	3502	83.97	41.71
net	192	12.63	15.12
org	124	7.93	15.64
info	95	5.5	17.27
biz	24	2.1	11.94
mobi	32	.935	34.22
asia	6	.215	27.91
tel	5	.238	21.1

Cases are calculated not by case number, but by number of domain names. The .cat and .pro TLDs are omitted from this table because for these purposes they are statistically insignificant.

We see that the number of UDRP cases is correlated with the number of registrations in the underlying TLD zone, varying from a low of 11.94 IPM (.biz) to a high of 41.71 (.com). To the extent that there is variation, the outlier is .com, with a higher IPM. Only 4% of all cases (178 out of 3817) occur in non-CNO (com, net, org) gTLDs. Only 1.5% (59 out of 3817) occurred in non-CNOIB (com, net, org, info, biz) gTLDs.

Intuitively, this makes sense: because most large brands and high volume websites operate in .com, one would expect a somewhat larger impact of typo-squatting and other infringement, even relative to the installed base. The next level of TLDs: .info, .biz, .net and .org, which cater to smaller websites, and are less viable as typo-squatting targets, have less than half the IPM ratio.

The newer group of TLDs — .mobi, .asia, .tel — fall within these broad parameters, with .mobi and .asia having a slightly higher IPM, perhaps because they were marketed to the domainer community. Nevertheless it is clear that across all TLDs the results broadly correlate to registration volume.

Finding 2: New TLDs will generate an estimated 316 new UDRP cases per year. Infringements will depend on total domain registrations, not the number of new TLDs.

Our first finding shows that the average IPM for open gTLDs created since 2000 is 22.47. What will the rate be going forward, what will be the total number of infringements, and what will be the corresponding enforcement cost to trademark holders?

Using the average 22.47 IPM for TLDs created since 2000, the new round of gTLDs would create 316 new infringements. This is calculated based on a rosy registration scenario for new TLDs; very likely, they will be less successful, and infringements will be fewer.

Last year, growth across all TLDs was 12%: this includes ccTLDs, which grew at 17% (Source: VeriSign Domain Name Brief). This is very much in line with historical growth of domain names, and we predict that the same growth trend will continue. For gTLDs, this will mean a growth from a combined total of 113 million today to 127 million in February 2011, or an additional 13.6 million names. If these additional names are distributed according to current market share, .com would go from 83.97 million names to 94 million names, .net from 12.63 million to 14.14 million, and so on.

In the past, the introduction of new TLDs has not significantly affected the growth of existing TLDs, and this dynamic is unlikely to change, at least in the short term.

Now, let us turn to the introduction of new TLDs. Suppose that with major marketing efforts the new gTLDs manage to double the growth rate of the overall market from 12% to 24%, and to capture 10% of the market in one year. (Again, this result is extremely optimistic for new TLDs.) The results would look like those presented in Table 4:

Table 4: Projected Registrations after Introduction of New gTLDs
(24% increase in market growth, but new gTLDs capture 10% of market)

Existing TLDs	Current Registrations (millions)	+1 Yr Total
com	83.97	93.71
net	12.63	14.10
org	7.93	8.85
info	5.50	6.14
biz	2.01	2.24
mobi	.935	1.04
asia	.215	.240
tel	.238	.270
New TLDs (combined)		14.07

Finding 3: The expected total annual enforcement costs for new gTLDs will be less than $870,000 per year, or less $.10 per trademark worldwide.

If all 316 new infringements were filed as UDRPs, at an average cost of $5000, the cost of enforcement to trademark holders would be $1.58M. There are 1.97 million active and pending trademarks in the U.S. Patent and Trademark Office, so on a per-trademark basis (for the U.S. only – clearly there are many more trademarks globally), the cost of new gTLDs would be $.80 per U.S. trademark, and if the 2.4 million registered trademarks in China and the 825,000 European Community trademarks are included, the cost of new gTLDs is $.30 per trademark.

But we can expect trademark holders to make use of the new Uniform Rapid Suspension (URS) process, which will have a cost of $500, not $5,000. What percentage of UDRP claims would be adjudicated through the URS process? We suspect that a majority of the cases that would have gone to the UDRP will now go through a URS proceeding. The number is hard to predict, but a reasonable estimate is that 50% of the claims that are now filed as UDRPs would be filed as URS proceedings. If so, the average cost of enforcing a trademark in the domain name arena will go from $5000 to $2750, or $869,000 – that’s $.17 per trademark registered in the U.S., Europe, and China. If all the world’s trademarks were included, the cost of new gTLDs would be under $.10 per trademark worldwide.

Conclusion

Trademark and brand owners will be faced with only minor enforcement costs from the introduction of new gTLDs. While the overall cost of UDRPs today is high ($19.5 million per year) – the culprit is .com – not the 10 new gTLDs that have been introduced over the last 10 years. (Cost of defensive registrations is not considered in this paper but will be covered in a later study.)

We estimate the total enforcement cost resulting from new gTLDs to be $869,000, or under $.10 per trademark registered worldwide.

Contrast this cost to the benefits of new gTLDs. The benefits of new gTLDs have been well rehearsed, but are worth repeating here.

• Ordinary web users (as well as brands) will not be forced to spend over $10,000,000 annually to purchase .com domains in the secondary market at inflated prices.
• Major cities such as .nyc, .paris, .berlin and .london want new TLDs. They see millions in revenue, increased tourism, increased efficiency in providing Internet services to their residents.
• Thousands of jobs will be created, because each new registry will need to employ 5 – 10 people at a minimum. (As a point of comparison, Afilias, which manages .info and provides registry services for .org, has over 200 employees.)
• Linguistic communities such as .gal (Galicia), .eus (Basque), and .bzh (Brittany) see huge cultural benefits.
• Vertical TLDs with strong user bases such as .eco expect to use proceeds from registrations to help solve problems such as global warming.

The data show that new gTLDs are less likely to be involved in UDRP claims than .com. An expansion of new gTLDs is not likely to significantly increase UDRP costs for trademark holders. If ICANN introduces the Uniform Rapid Suspension (URS) provisions currently under consideration, trademark enforcement costs for new gTLDs will sink even further.

I recently wrote a paper to which I gave the super-fun title Community Scoring in ICANN’s Draft Applicant Guidebook: How to Make Sure that New Top-Level Domains Are Meaningful and Useful.

I also submitted it as a comment to ICANN’s IRT (Implementation Recommendation Team).

Warning! This is very long. Worth studying every word, of course…

Summary: The new top-level domains (TLDs) from ICANN have the potential to usher in a much more useable Web, but ICANN needs to define a “community” TLD better so that existing communities of interest can create and manage their own TLDs. As it stands, these communities will be shut out and many new TLDs will become meaningless replications of .COM. We recommend tweaking the scoring in ICANN’s Draft Applicant Guidebook to make it easier to qualify as a community.
(more…)

The World Intellectual Property Organization (WIPO) asserted on Monday that new gTLDs from ICANN would unleash a global crime wave. This dire warning was bolstered by an astonishing statistic: a whopping eight per cent (8%) increase in UDRP complaints from 2007 to 2008!

But WIPO’s press release tells only a very little of the truth. Astonishingly, the UDRP system actually works pretty well. Judging by the data, it is not only effective in policing cybersquatting, it also discourages new cybersquatting. In fact, compared with the growth of domain names, cybersquatting allegations have actually decreased every single year since the UDRP was implemented.

Let’s compare WIPO’s claim that the sky is falling with the actual data, helpfully provided by WIPO itself.

WIPO shouts Record Number of Cybersquatting Cases in 2008, and calls the introduction of new gTLDs a “genuine concern for trademark holders.”

WIPO’s press release was picked up by many in the echo chamber, and various reporters and pundits, being deeply steeped in all matters relating to domain names, contributed to the total body of knowledge by opining that maybe ICANN was being a bit hasty with this new gTLD thing.

This predictable naivete from the press is why people bother to issue press releases in the first place, and I can’t fault WIPO for using tools so readily at hand.

But what do WIPO’s own statistics actually show? When examined as a function of registered domains, they show that (alleged) cybersquatting is getting to be LESS of a problem, not more. The rate of growth in UDRP filings consistently lags behind domain name registrations, and as a percentage of names registered, UDRP filings have gone down in every year since ICANN’s inception.

Here’s a little data sheet, a combination of WIPO’s stats compared to gTLD stats (.com, .net, .org, .info, .biz). This data compares all WIPO’s UDRP filings, including ccTLDs (13% of their filings last year), compared to just a subset of gTLDs — .com, .net, .org, .biz. I did it this way simply because the data exists in a easily-retrievable form. An apples-to-apples comparison would show an even greater decline in UDRP cases in relation to domain names registered.

Examining this data, WIPO could have have trumpeted several alternative headlines, with perfect adherence to fact. In fact, comparing UDRP filings to actual domain name data is far more useful than looking at UDRP filings in a vacuum, as the WIPO press release did.

Alternate Headline #1: Cybersquatting Cases Continue Decline

WIPO could have pointed out that as a percentage of total domain names registered, UDRP filings show a constant decrease. Remember, WIPO stats include ccTLD filings, while the domain name totals I’m using are just a subset of gTLDs. So the decrease is in fact much greater than this chart shows:

One two-hundredths of one per cent? One UDRP for every 200,000 domain names registered? This is what is sending WIPO into fear-mongering mode? The quest for perfection has been held as admirable since the Knights of the Round Table and the Imitation of Christ, but aren’t we being a bit picky?

Alternate Headline #2: Cybersquatting Trends Show Constant Decline

Instead of whipping up fear among easily-confused bloggers and journalists, WIPO could have noted that the growth rate of UDRP filings is down compared to the domain names, as they have been in every single year since the UDRP was instituted.

Compared to the rate of growth among the total number of registered gTLDs, cybersquatting cases are in constant decline. Of course UDRP filings go up as the total number of domain names grows, but they don’t grow as fast as the domain names do. A more penetrating look at these numbers would also ask why the UDRP cases are growing. Is because there is more cybersquatting? Or is it because WIPO has been successful with its public relations, thereby increasing filings? Or have complainants just become more litigious?

Alternate Headline #3: WIPO Records Smallest UDRP Increase Since 2004

Even when separated from domain name numbers, UDRP filings are trending downward. The rate of growth in UDRPs has been declining precipitously since 2006, and the 2008 numbers are the lowest since 2004.

Abuse of intellectual property rights is real, and cybersquatting definitely occurs on a regular basis. On the other side, some argue that much abuse has been perpetrated against the fair-use rights of the public by trademark holders who litigate to prevent common use of everyday speech. Wherever the abuse occurs, those affected should have mechanisms to protect themselves. The UDRP is one such mechanism, and it has worked well despite gaming on both sides.

As we try to promote the expansion of the Internet, it would help if institutions with respected names, such as WIPO, would not twist statistics to score rhetorical points. Susceptible bloggers will just regurgitate it.