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Re:Marks on Copyright and Trademark

The gTLD Series (Post 3 of 3) – The Opportunity and Risks

Over the last two weeks, I blogged about the overview of the gTLD expansion, the application process, and the intellectual property issues.  In the last post of the series, we thought it would be helpful to outline some of the opportunities and risks associated with such a decision.

Opportunities and Risks of Brand-Based gTLDs (e.g. “dot-dlapiper”):

  • Opportunities
    • Assuming financing and technical back end are in place, application process for a trademark-based gTLD will be straight forward (low risk of objection/dispute)
    • Offers the ability to create a unified online brand presence under one umbrella
    • Demonstrates a first-mover advantage in the marketplace
    • Could potentially reduce impact of third-party cybersquatting activity if consumers are aware that all official content is located under the brand-based gTLD
    • Ability to effectively manage and leverage fan community and other customers
  • Risks
    • Unclear if consumers will accept new gTLDs or continue to assume that “dot-com” domain names are primary internet presence
    • High application and ongoing costs associated with operating the Registry
    • Large investment in expertise and technology required
    • Large marketing cost associated with educating pubic about existence of new gTLD
    • Essentially equates to an expansion into a new field of business activity that is peripheral to the company’s primary business

Opportunities and Risks of Generic gTLDs (e.g. “dot-law”):

  • Opportunities
    • Demonstrates serious market power in given industry as the gTLD most relevant to that industry is under your control
    • Demonstrates a first-mover advantage in the marketplace
    • May create a “halo” effect with consumers that raises profile of your brand’s other offerings in other product categories
    • Ensures that a competitor does not obtain and exploit the “halo” effect of gTLD ownership in your industry
    • Could potentially create a new revenue stream if public registration of second level domains is allowed and gTLD gains a foothold
    • Conversely, allows exclusion of competitors from second level domains under desirable gTLD if access to second level domains is restricted
  • Risks
    • High likelihood that other entities will apply for same or similar gTLD and auction may be required to decide ownership, thus increasing cost (potentially significantly)
    • Unclear if consumers will accept new gTLDs or continue to assume that “dot-com” domain names are primary internet presence
    • High application and ongoing costs associated with operating the Registry
    • Large investment in expertise and technology required
    • Large marketing cost associated with educating pubic about existence of new gTLD
    • Essentially equates to an expansion into a new field of business activity that is peripheral to the company’s primary business

We hope that our series on the ICANN gTLD process has been useful. As noted, the gTLD application process is extremely complex and cooperation between the Legal, Marketing and IT departments will be required to determine the best course of action. Given the technology-dependant nature of the process we strongly recommend consulting immediately with the CIO or IT department head to determine the feasibility to implementing the necessary IT infrastructure. Of course, we also welcome the opportunity to discuss the issues associated with the process in more detail at your convenience.

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