June 29, 2015
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Nelligan O'Brien Payne gratefully acknowledges the contribution of Alex Dezan, Student-at-Law in writing this blog post.

Last year, the Internet Corporation for Assigned Names and Numbers (ICANN) approved over 500 new “top-level” domains. Although a number of them, like dotPorn and dotAdult, have stirred up controversy online for obvious reasons, none have attracted the business community’s attention quite like the recently approved dotSucks domain.

Vox Populi, a division of Momentous, won an ICANN auction to operate and sell dotSucks domains. Vox Populi has claimed that “each dotSucks domain has the potential to become an essential part of every organization’s customer relationship management program.” Although the company likens the domain name to a “central town square…to help consumers find their voices and allow companies to find value in criticism”, many corporations are more fearful of the domain’s potential negative business repercussions than its communal capacity for compiling complaints. After all, doesn’t the Internet do that pretty well anyway?

Detractors have been quick to note that although Vox Populi alleges that the domain has a noble purpose, the pre-registration or ‘sunrise’ period allows registered trademark owners early access to domain names for a whopping $2500. This price indicates a very real divide between those who can afford to control their critics and those who cannot. Vox Populi extended the sunrise period to June 19, claiming “far too many intellectual property lawyers, company executives and brand owners were unaware of the registry, the availability of its names or the Trademark Clearinghouse”. The Trademark Clearing House (TMCH) is the process whereby Vox Populi allows registered owners to protect their name by checking the rights of their companies and reserving their rights for them if they are so entitled.

Realistically, registered trademark owners are understandably less concerned about creating a new forum to have a relationship with their clients than they are about protecting their brand. Most businesses already have mechanisms for fostering healthy client relations on their own websites, or through customer service departments that directly help clients with problems. Furthermore, there is certainly no shortage of forums and websites online for people to vent their frustrations about anything and everything. As such, companies seeking to purchase a dotSucks domain name, whether in the sunrise period or later, are contemplating the move to pre-empt criticism, not encourage it.

Many assert that this “defensive registering,” as it has been called, is in fact just the trap that Vox Populi intended all along. In late March of this year, the Intellectual Property Constituency (ICP), which represents major companies and industry groups in the field, called the domain name “predatory”. In spite of the fact that Vox Populi will offer consumers the right to a dotSucks address for $250 following the sunrise period, the ICP says the threat of an average business owner having to deal with someone else registering their business’ dotSucks site is “an essential element of Vox Populi’s coercive scheme”.

Shakedown or not, small and medium-sized business owners are faced with a real challenge. As the ability to control one’s brand in a critical online community is difficult, the question becomes, can or should small and medium-sized businesses with registered trademarks invest during the sunrise period? Is it even worth the $250 dollars during the regular registration period?

This September, Vox Populi will introduce yet another layer to its pricing scheme. Businesses and individuals can purchase dotSucks domains for only $10. However, domains purchased at that rate will not be completely owned by their purchasers, as they will automatically be re-routed to a discussion forum on “everything.sucks.com”. Without ultimate control, is that $10 fee even worth it?

Although $250 is a clear saving when compared to the sunrise period cost, it must firstly be noted that the sunrise period is only available to registered trademark owners. Secondly, the harmful effects of abstaining from purchasing the domain, whether in the sunrise period or otherwise, are not entirely known. If you do not purchase your domain name, it is possible that someone else will. Maybe they will not do anything with it, which would not harm your business. However, there is no guarantee that would not happen down the road. Although the obvious conclusion is that they may use it to complain about your brand, it is also possible that they could use the domain for some other purpose. This could create additional complications, particularly for small and medium-sized business owners who face more rigorous financial constraints and difficulties controlling their own brand to begin with.

Having another person or organization own your dotSucks domain name creates the further complication of needing to police your own brand. If you own a registered trademark that becomes associated with a dotSucks domain name owned by someone else, you will need a program in place to monitor your brand and potentially enforce your trademark rights. Although court action or settlement resolution may be an option if a company felt that their trademark was being misused, these may become prohibitively expensive (and complicated) if the domain name is registered in a country where trademark laws are less likely to be enforced.

Whether an actual trademark conflict or not, brand dilution is one of many examples proving that small and medium-sized businesses may have more difficulty overcoming the risks associated with dotSucks domains than those with the means to pre-empt the threat to begin with. These organizations should be particularly vigilant to the popularity of the domain name generally, and to the potential for their own name to be used specifically, in the post-sunrise period after June 19.

This content is not intended to provide legal advice or opinion as neither can be given without reference to specific events and situations. © 2017 Nelligan O’Brien Payne LLP.

Service: Business Law