Minds + Machines Survey Shows Brands Do Not Register Defensively in New gTLDs

A survey of the domain registration behaviour of Fortune 100 companies conducted by Minds + Machines reveals that they have not registered many of their trademarks in recently created generic top-level domains (gTLDs).

In the study it was found a sample of 1043 brands were registered in less than 30 per cent 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, Minds + Machines surveyed 1043 brands owned by the Fortune 100 companies.

Their 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, they were able to see which gTLDs are either registered in defensively (by brands) or cybersquatted by malefactors. Where many names are registered (e.g., .COM), it can be deduced whether defensive registrations and/or cybersquatting is prevalent.

The data shows that brand names are registered as domain names 87 per cent of the time in .com, .net, and .org; just 67 cent of the time in .INFO and .BIZ; and only 29 per cent 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 is not supported by the historical data the study found, which shows that they largely do not undertake defensive registrations in new gTLDs, nor is there any extensive cybersquatting in new gTLDs.

The study also looked at whether new gTLDs force brand owners to register names defensively?

In a previous study, Minds + Machines 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.

The study is was in response to a vocal group of brand owners who have repeatedly claimed that the cost of defensive registrations would be “astronomical” and a “major burden on U.S. businesses.”

The Minds + Machines provide, using submissions to ICANN, quotes from trademark holders on their concerns using terms and phrases such as “astronomical registration fees required to protect trademarks across new gTLDs.” (Overstock.com) Other terms used include “staggering”, “a fortune” and “billions.”

Countering the arguments of trademark holders was a recent study by Paul Stahura that, according to Minds + Machines, 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 concluded:
“The vast majority of trademark holders are not registering their trademark in all the current generic TLDs, let alone all the TLDs.”

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.”

As the report notes, 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.

To read more of this study, including methodology and results of the research and analysis, see:
www.mindsandmachines.com/2010/02/survey-shows-brands-dont-register-defensively-in-new-gtlds/ and a PDF version is available from www.mindsandmachines.com/wp-content/uploads/Analysis-of-Trademark-Registration-Data-in-New-gTLDs.pdf