Valideus
Summary of the New gTLD Opportunity
Background
The domain name system (DNS) is divided into 24 generic Top
Level Domains (gTLDs) including .com, .net and .org and circa
250 country code Top Level Domains (ccTLDs) such as .au for
Australia, .be for Belgium, .cn for China. Whilst all ccTLDs are
sovereign property, ICANN, the Internet Corporation for Assigned
Names & Numbers, oversees gTLDs and manages the technical
co-ordination of the DNS. From its creation in 1999, ICANN’s
mission has been to introduce competition into the management
of the DNS. Therefore it is planning a liberalisation of gTLDs.
Within the next 12 months any organisation can apply to run a
gTLD registry. Until now most corporations have positioned
themselves under the .com gTLD. In the future, ICANN predicts
that all major corporations will own a Dot Brand registry.
Who will apply?
Cities: Barcelona, Berlin, London, New York, Paris, Rome,
Sydney, Tokyo have all announced bids.
Regional & Cultural Communities: From Bavarians to Scots,
including some in IDN registries (holding domains in scripts
others than ASCII) such as ‫ يبرع‬. (Dot Arab).
Keyword speculators: internet investors are lining up to bid for
generic terms including .eco, .green, .family, .movie, .music,
.radio, .shop, .sport or .web in the hope of getting rich. Some
market leaders may also seek to dominate their industry sector
(and search engine listings) this way.
Global brand owners: Canon is the first intellectual property
owner to announce a bid. (See www.canon.com/news/2010/
mar16e.html).
Natural born applicants: companies whose success is built
upon the rise of the internet. If Facebook, Twitter and YouTube
apply, how long before young people regard .com as
V
“yesterday’s domain”?
IP owners who compete on a day to day basis with 3rd parties
for a key term registered in another country or another class of
goods or services.
Innovators seeking new models of distribution, for loyalty and
reward programmes.
Corporations plagued by internet infringement who want to
signpost authentic information & goods.
What are the benefits of applying?
Stability: 3rd party registries may be vulnerable to attack from
hackers, technical failure and can rarely turn away a court order.
Your own registry can be based wherever you want it with
rigorous procedures and management by a team that is
accountable exclusively to you.
Security: You decide who is allowed to register under your gTLD
and who you want to exclude. Competitors and infringers can be
barred. Your licensees and affiliates can be controlled. Your own
brand gTLD will be trusted by consumers and clients because of
its purity.
Spring 2010
Market development: when you allocate a domain in your
registry you capture whatever information you like on your
registrants. You can give away domains in exchange for loyalty,
distribute priority offers, build mailing lists, run your own social
network, build new revenues.
Search Engine Prioritisation: Searching for widgets? What
could be a closer match than Dot Widgets in the world root of the
internet? A 100% match before any optimisation.
Cost reduction: in time, having a Private Brand gTLD should
mean that applicants can lapse thousands of non-commerce
critical/defensive domain registrations and reduce brand
monitoring.
What are the risks of not applying?
Permanent string preclusion: if your key term is registered by a
3rd party, you are locked out forever. There’s no second chance.
You can’t buy an active gTLD registry in the same way as you
buy a registration.
Commercial disadvantage: if you do not apply in the First
Round but your competitors do, you can’t catch up until the
Second Round opens which might not be until 2012. As
application and evaluation takes at least 14 months, this could
mean you can’t get your brand into a browser until 2014.
However, there’s little risk of an infringer applying for a key mark
of yours at the Top Level. First they would need an identical
registered trade mark to overcome you and second they would be
deterred by the high costs. In addition you can challenge any
such application through the Legal Rights Objection process,
administered by WIPO and costing from $10,000 or you could go
to the courts.
What are the costs of applying?
The official ICANN Application Fee is US $185,000. Successful
applicants must also pay $6,250 per quarter plus $0.20c per
domain per year on each term registered after a threshold of
50,000 domains. An Irrevocable Letter of Credit for the equivalent
of the cost of maintaining the registry for three years must be
supplied. If you withdraw your application after submission you
can get a refund of up to 70%.
What is the timing?
The ICANN new gTLD process is two years overdue. There will
be no major developments until the next ICANN Open Meeting in
Brussels from 20 - 25 June 2010 when ICANN is expected to
publish the 4th Draft Applicant Guidebook - the document that
includes the rules of application, the registry operator’s contract,
the application questions, the mandatory technical requirements,
rules of objection and measures to protect Intellectual Property
etc. The full and final Applicant Guidebook is expected in
September 2010 which means that the 45 day Application Period
is likely to open in either November 2010 or February 2011. To
allow time to prepare an application and to earmark the ICANN
fees of US $185,000 and the cost of expert advisory services,
this gives you a maximum of six months to decide whether to
apply or not.
If you are thinking of applying in the first round,
what should you consider?
Your resourcing: this is an expensive, complex, time consuming
process with the potential to impact on many aspects of your
brand. Have you the bandwidth to co-ordinate an application?
● The availability of Back End registry service providers and the
importance of finding a partner who will prioritise your
application over, for example, their own applications.
● The complexity of the application process: there are 50
questions to be answered, a Business Plan to be prepared,
very detailed technical submissions – and a minimum of 14
marks out of a possible 16 to be achieved if you are to pass
the scrutiny of the evaluators.
● Whether others in your organisation who are exposed to the
marketing ICANN has planned will ask you to submit a last
minute application once they have been exposed to
ICANN’s PR.
● Taking advice on the strength of the character string you wish
to apply for.
● IP protection - can you protect the name of your registry?
● ICANN contracts under Californian State Law. Does this suit
you? Could there be Anti-Trust issues if you apply for a
generic term?
● Whether you will incorporate a new vehicle to hold your
registry and where it should be based?
● Your business model: will you sell or give domains to your
clients, customers, licensees, distributors, fans, the public?
What might you charge? How do you recoup your costs?
● How you will cope with Contention (a clash with another
applicant for the same character string) or Objections filed by
an external party challenging your application.
● Your strategy if you find yourself in an auction for your selected
term with another applicant who has passed evaluation.
● An overview of the policies of your registry from the allocation
of names to Rights Protection, whether you will operate
second level domains and how much data you will feature in
your whois. How can you reflect these policies in your
registry’s Terms & Conditions?
● Exactly what does running your own new gTLD registry
involve? If you want to, when can you move your email or
website under your new gTLD? What are the implications of
such change?
Will your domain strategy change after the launch
of the new gTLD process?
When the DNS expands from 24 gTLDs to perhaps 250 or 500
gTLDs how can you secure your trade marks? Will you have to
●
register in every new extension? What will the costs be?
To assist rights owners to secure marks in Sunrise schemes,
ICANN is planning to create a Clearinghouse to hold current
●
validated trade marks that can be pushed to registries where
you may want to register your terms. Placing your mark in the
Clearinghouse will prevent you from having to pay for the
same information to be validated time and time again across
all the registries but you’ll still have to cover the cost of the
registrations and renewals.
Will the URS (Uniform Rapid Suspension scheme) be an
effective tool against abusive registrations? Proposed as a
●
fast, inexpensive version of the UDRP, it features a pro-forma
complaint, the locking of the domain within 24 hours and its
suspension for the life of the registration plus a year, all
for $300.
Valideus
New TLD Application & Management Services
The importance of domain name watching will increase after
the process launches but how can you cope with the advent of
●
IDN gTLDs?
How can we help you?
We have developed a modular service suite featuring:
● Consultancy to evaluate the opportunity and to ensure there
is an understanding in your organisation of the implications
of running a gTLD registry.
● The management of the application process featuring the
drafting of answers designed to exceed the needs of the
evaluators, the submission of your application through
ICANN’s on-line system and payment of your official
application fee.
● With our selected technical partners, the day-to-day
management of your registry, connected to the world root of
the internet, 24/7. We have a GateWay registrar solution so
it should not cost Private Brand Registry applicants to add
names into their own registry.
● Licensing ICANN compliant registry management software
should you want to run your registry within your own
infrastructure.
● ICANN compliance after launch.
Our charges typically feature:
● $20,000 for the Evaluation Workshop and consultancy, 50%
discountable if you decide to proceed plus travel and
accommodation if applicable.
● From $76,000 for managing the formalities of the
application. We charge a one-time signing on fee of $36,000
then a modest monthly fee as we work with you on the
application.
● For Day to Day Registry Management of a Private Brand
Registry (not selling domains on open market but supplying
them to staff, licensees etc) from c. $30,000 per month
● For Day to Day Registry Management of an Open Brand
Registry (that offers domains on the open market) from .c
$40,000 pcm + a fee per domain name depending on
volume (e.g. $1.50 per domain per year reducing in line
with volume)
● ICANN compliance: $2,000 per month which includes
representation for you in ICANN’s Registry Constituency.
● Licensing of our software by discussion
(Note the above prices are subject to change in line with ICANN’s
requirements)
In order to ensure that we can deliver service of the highest level
that reduces the risk of an application failing, we are limiting the
number of new gTLD applicants we can work with and we are
prioritising Private Brand Registry operators.
To learn more about our services, contact Nick Wood, Managing
Director, Valideus Ltd. Email: Nick.wood@comlaude.com
© Valideus Ltd April 2010
Valideus Ltd.
116 Long Acre, London WC2E 9SU, United Kingdom
T: +44.2078360070 F: +44.8700118187
www.valideus.com