.CLUB Responds to MarkMonitor: Why Brands Are Missing The Boat
In its quarterly report, MarkMonitor analyzed the state of the .CLUB brand space and noted that many registrations of brand names were not held by the brands themselves. This is indicative of the missed opportunity faced by brands that did not participate in our Sunrise period or register their names cost-effectively during General Availability.
As MarkMonitor states:
“Some NgTLDs are appealing for both Retail and Business – We found .club to be the most squatted of all NgTLDs in this focus, with over 50% of the sampling found to be registered to someone other than the company or brand-owner. Dot CLUB was released in early 2014, so while it has been available for some time, it has also been through its first round of yearly renewals, and finds itself not only in the list of our most squatted NgTLDs, but still in the top 5 most registered NgTLDs in the retail space as a whole.”
In the wave of TLD launches, the brands misread the future popularity of .CLUB and neglected to do an individualized TLD-tailored cost-benefit analysis. Brands underestimated the future popularity and broad scope of use of .CLUB in the first months after launch, leading to an insufficient cost/benefit analysis for registering their brand.CLUB. For the cost of filing a single UDRP (around $3,000), a registrant could register 300 .CLUB domain names for one year, 30 .CLUB domain names for 10 years, or one .CLUB domain name for 300 years. The cost/benefit of registering the primary .CLUB of a famous brand seems like common sense. Note to Twitter’s lawyers: TWITTER.club is currently in the pending delete file.
Additionally, the brands did not consider the fair-use implications of the .CLUB extension and the potential hurdles this would place in front of recovering the domain name from third-party registrants. Under the Nominal Fair Use doctrine, under certain circumstances, one may make use of a brand’s valid trademark to refer to the brand, without infringing on the trademark. This can be done in the form of a fan site, a tribute site, or a criticism site. The most prominent example of fair use substantially increasing a brand’s risk when not pre-emptively registering a domain is the .SUCKS registry. The .SUCKS registry has charged what the IPC characterizes as exorbitant rates for the registration of .sucks, and the brands have, by-and-large, paid for the domains. It is highly unlikely that Comcast would pay sunrise/brand premium pricing for .SUCKS if Comcast’s lawyers thought that it could just UDRP for the domain during its lifecycle.
The brands, thus far, have paid far more attention to the criticism component of fair use–.sucks, .gripe, .feedback, and far less attention to “friendly” or tribute fair use, such as .community, .fan, and .club. This focus on the negative may cause brands to miss out on recovering a .CLUB name because of the potential fair use status of community and club websites in the .CLUB space, and further, brands are missing out on not only protecting their brand but also obtaining a domain name asset they can put to beneficial use. For example, watchmaker Swatch registered Swatch.club during our Sunrise period and logically points it to a deep link on their website with information about the Swatch Club. This is a beneficial use of a .CLUB domain for any brand or business with a loyalty, reward or affinity program. Others simply point their .CLUB domain to a company Facebook page, representative of their community or “club.”
To put it succinctly, the brands missed out on their .CLUB name because they underestimated .CLUB’s wide adoption and the simple, cost-effective beneficial use case for a brand.club domain beyond just brand protection. The good news is that many brand names remain unregistered and available in the .CLUB namespace at a very reasonable price.