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news 18 Jul 2017

GTLD's increases costs for trademark owners

Due to the rise of generic domain names , the costs of trademark protection are rising. This is according to research done by the International Trademark Association (INTA). What is the backstory of these rising costs and which brand owners are affected the most?

Generic Top Level Domains are extensions that can consist of geographic indications or general terms such as .bike or .museum. Besides, it is possible to register a trademark as a top level domain, such as .BMW and .Shell. This kind of domain names were introduced in 2012 because of the decreasing amount of domain names. One would say that this is a good thing for trademark owners, who can now choose from more domain names. However, there are also disadvantages.

Defensive registration

Take for example a huge brand such as BMW, who owns the domain name BMW.nl in our country. BMW feels its compelled to register the generic domain name BMW.cars, simply to prevent others from using it. The same goes for domain name extensions that can be of negative influence to the reputation of the brand, such as .xxx and .sucks. Research conducted by INTA concludes that most trademark owners register generic domain names for defensive reasons. The owners do not use the names, yet still pay for them.

Higher cost trademark protection

Moreover, INTA’s research shows that generic domain names lead to higher costs of trademark protection. This is due to trademark owners spending more time on screening the internet and the fact that more and more actions against infringers are necessary. The size of the company does not matter in this case. According to the research, the familiarity of a trademark mostly determines the level of promotion and protection of the trademark.

Research

The INTA-research is published on the ICANN community wiki and can be downloaded as a pdf-file below.

INTA report: Cost Impact GTLD 2017
pdf - 1.44 MB