[gnso-rpm-wg] TMCH Blog

Greg Shatan gregshatanipc at gmail.com
Thu Feb 2 19:56:28 UTC 2017

I didn't see anybody "upset" here.  However, the value of trademarks is
derived from the goodwill and reputation associated with the mark by virtue
of the quality and reputation of the underlying goods and services and that
of the company itself.  While some trademarks are stronger than others from
a legal standpoint, no trademark is more valuable than another until the
associated goodwill, etc. (or lack thereof) is taken into account.  Looked
at another way, the value of a brand is directly correlated to the
brandowner's time, money and efforts to increase goodwill, reputation,
recognition, secondary meaning, and association with the underlying goods,
services, and/or business.  While there are internal factors relating to
the brand (string, logo, etc.) that will contribute to (or detract from)
that value, that is a fairly modest "delta" and can be unpredictable (e.g.,
"With a name like Smucker's, it has to be good" was a slogan that took an
"unattractive" word mark and made it a positive attribute.  In any event,
the value of the Smucker's brand is primarily related to the goodwill
associated with their products and related elements such as customer
service, etc.).

I think that can be contrasted with the levers that affect value of a
domain name.  While it's my understanding there are things that a domain
name investor can do to maximize the value (or at least, the price) of a
given domain name, nearly all the value in a domain seems to be inherent in
the string itself (including the associated TLD).  That does not discount
the work and money that goes into selecting and acquiring high-value
domains, maintaining the portfolio, or determining how and when it's best
to sell them to get the best price.  If it was really easy, more people
would be doing it (or at least, doing it well).  But the fact remains that
the value of a domain name is largely inherent in the domain name, while
the value of a trademark is largely a result of the work done to build the
product or service or business.

One could contrast stock trading vs. owning businesses.  If I bought Apple
stock 20 years ago and sold it now, that would be a great thing,  But what
did I do to increase the value of that stock?  And what did Apple do to
increase the value of its stock and its brand?

But I digress....


On Thu, Feb 2, 2017 at 2:32 PM, George Kirikos <icann at leap.com> wrote:

> As for J. Scott's proposal,
> 1. it ignores the requirement for uniqueness, an important requirement for
> a namespace, and
> 2. it creates a single point of failure intermediary to redirect folks to
> a final desired destination
> 3. there's more to the internet than port 80 (i.e. the web). That system
> wouldn't work for email, etc.; there'd still need to be a way to *uniquely*
> identify a final destination (i.e. see point 1), especially for
> machine-to-machine communications without human intervention
> 4. Some domain names will always be better than others! Economics 101!
> Even MarkMonitor believes that, given they're now (shockingly!) selling
> their clients' surplus domains, at differing prices, rather than letting
> them expire:
> http://dotweekly.com/markmonitor-client-domains-sale-2/
> https://www.markmonitor.com/domains-for-sale/top-level-domains/
> 5. Why are some folks upset that some domain names are worth more than
> others, yet are not upset when trademarks, copyrights, and other
> intangibles are sold by companies for their market value, in IP sales,
> secondary market, etc.? We either live in a capitalist society, or we don't
> (and where I'm sitting, it's still a capitalist society). While other
> economic systems have been tried, they've failed miserably.
> Sincerely,
> George Kirikos
> 416-588-0269 <(416)%20588-0269>
> http://www.leap.com/
> On Thu, Feb 2, 2017 at 2:08 PM, J. Scott Evans <jsevans at adobe.com> wrote:
>> All:
>> Lori makes excellent points here.
>> Back in 1999, I suggested a possible solution to this issue that I
>> thought would end all the trouble. It was during a conference call the
>> commercial and business community had with the ICANN Board member selected
>> to represent our interest on the original board of directors for ICANN. I
>> believe the gentleman was from Dun & Bradstreet.
>> Here is my proposal:
>> Why not have a directory system not a first-come, first-served system?
>> That is, anyone can get any name in any space. This system accommodates
>> duplicate identical strings. As soon as two or more holders register the
>> domain, it is redirected to directory page (similar to the way
>> scrabble.com is handled). On that page, you’d find all the identical
>> domains with a brief description.
>> For example:
>> *D**ominos.com <http://ominos.com>*: A large sugar and
>> confectionary manufacture located in Sugarland, Texas.
>> *D**ominos.com <http://ominos.com>*: A pizza restaurant chain offering
>> the best home delivery pizza in the business.
>> *Dominos.com:* The International Association of Domino Players
>> organization. A non-profit group promoting the fun and benefit of playing
>> domino games.
>> Of course, the first-come, first-serve system pushes artificial scarcity
>> and allows speculators to run a robust (some might say extortionist) market
>> for highly sought after domains. Again, I will repeat, that the entire
>> public justification for expanding the DNS was that, “all the good domain
>> names were gone” and that SME’s and emerging economies were suffering
>> due to the lack of short, pithy domains. However, in the implementation of
>> the expansion ICANN allowed all new registries to create “PREMIUM NAMES”
>> specific to their top level domain. Basically, registries reserved all
>> the dictionary terms that might be most relevant to their top level domain.
>> These registries then charged premium prices or auctioned these domain
>> names off to speculators who then sought to sell them in the secondary
>> market. The problem is that ICANN has never tackled the REAL problem (IMHO)
>> which is that domains are a commodity and the companies that run the system
>> are also speculators in the market creating huge conflicts of interest and
>> a desire to retain artificial scarcity to keep prices on the secondary
>> market high.
>> J. Scott
>> *J. Scott Evans* *| Associate General Counsel - Trademarks, Copyright,
>> Domains & Marketing |*
>> *Adobe *
>> 345 Park Avenue
>> San Jose, CA 95110
>> 408.536.5336 <(408)%20536-5336> (tel), 408.709.6162 <(408)%20709-6162>
>> (cell)
>> jsevans at adobe.com
>> www.adobe.com
>> From: <gnso-rpm-wg-bounces at icann.org> on behalf of Lori Schulman <
>> lschulman at inta.org>
>> Date: Thursday, February 2, 2017 at 10:53 AM
>> To: George Kirikos <icann at leap.com>, gnso-rpm-wg <gnso-rpm-wg at icann.org>
>> Subject: Re: [gnso-rpm-wg] TMCH Blog
>> Recognition of the importance of protecting trademark rights in the DNS
>> has been essential to ICANN’s policymaking since before ICANN was
>> organized.   Per J Scott’s note, trademark rights are government granted
>> rights.  Domain names are not.  While some domain names can function as
>> trademarks in the legal sense of the word, domain names are licensed assets
>> with no inherent vested rights.  This makes them fundamentally different
>> than trademarks.  The difference creates the tensions that we see when
>> discussing how trademark rights should be addressed/recognized within the
>> domain system.  The UDRP/URS were designed to keep costs down for both
>> sides of a domain dispute as the administrative process contemplated is
>> much less expensive and onerous than a court driven process.  Having
>> managed very large and very small portfolios of trademarks and domains
>> throughout my career, I can tell you that this is empirically true no
>> matter the size of the business either as a plaintiff or defendant in a
>> dispute.    Forcing trademark owners into court will force domain
>> registrants there too and in much higher number than we see today.   The
>> UDRP is a reasonable alternative to what would otherwise be an endless
>> stream of lawsuits overloading already burdened court systems.  The use
>> issue forms the fundamental core of trademark protection and different
>> jurisdictions have different standards for when use must be demonstrated
>> and what qualifies as good use.  This requires deep expertise and knowledge
>> of trademark law.  If we were to create some kind of  use test in the TMCH
>> beyond what is already there, costs would significantly increase as you
>> would need essentially a trademark office-like system for review and
>> dispute resolution.  In terms of gaming the system, so far, I have seen
>> much more gaming by investors than I have seen by brands…as brands have
>> been targeted by the investors in very well publicized instances.
>> In terms of your math, George, I would be absolutely be in favor of
>> lowering the costs of a UDRP as it would lower barriers of entry for small
>> businesses and noncommercial organization who are continually victimized by
>> cyber squatters.
>> Lori S. Schulman
>> Senior Director, Internet Policy
>> *International Trademark Association (INTA)*
>> +1-202-704-0408 <(202)%20704-0408>, Skype: lsschulman
>> [image: cid:image005.jpg at 01D270D2.1801CD20]
>> *From:* gnso-rpm-wg-bounces at icann.org [mailto:gnso-rpm-wg-bounces at ic
>> ann.org <gnso-rpm-wg-bounces at icann.org>] *On Behalf Of *George Kirikos
>> *Sent:* Thursday, February 02, 2017 1:36 PM
>> *To:* gnso-rpm-wg <gnso-rpm-wg at icann.org>
>> *Subject:* Re: [gnso-rpm-wg] TMCH Blog
>> Hello,
>> (and trying to combine multiple responses in one email)
>> On Thu, Feb 2, 2017 at 12:51 PM, <trachtenbergm at gtlaw.com> wrote:
>> > I think you are trying to apply domain speculation thinking where it is
>> all about monetary value to protection of trademark rights, which is not
>> necessary focused or valued in terms of specific monetary value. They are
>> not the same thing.
>> >
>> > If life isn’t fair is an acceptable justification then why change the
>> current system because it is not fair that some may have gamed it by using
>> trademark registrations obtained solely for the purpose of registering
>> valuable domain names during sunrise? You can’t have it both ways.
>> 1. The "domain speculation thinking" is your term for what is simply
>> rational economic decision-making. Even for trademark protection,
>> rational trademark holders prioritize enforcement based on a
>> comparison between the economic benefit of stopping the abuse relative
>> to the economic cost of that enforcement.
>> 2. The "life isn't fair" in my statement was referencing the fact that
>> not everyone has the same wealth. That is entirely different from
>> those misusing trademark registrations obtained solely for the purpose
>> of registering valuable domain names -- those TMs would be invalid in
>> jurisdictions requiring use (and thus shouldn't have been granted in
>> the first place).
>> 3. Some folks continue to dance around the issue, and ignore the
>> economics completely. Each and every time you try to add a wrinkle to
>> the procedure (i.e. "tweaks" that seek to give better proof of use, or
>> other modifications), all that does is slightly change the "costs" for
>> some actors, but doesn't change the underlying economics by much. i.e.
>> it attempts to impose a "price" indirectly, rather than explicitly and
>> directly setting a price that would actually change behaviour.
>> 4. For those saying "small" trademark holders would be affected ---
>> fine, change the economics accordingly --- should the quota be 10,000
>> marks? Should the cost be $1? Once you make the cost explicitly be $1,
>> that just says "Fine, we're going to accept all the gaming behaviour,
>> because we're prepared to look the other way!" That's an invitation to
>> those who are misusing the sunrise periods to continue doing what
>> they're doing.
>> While some constituencies in the GNSO might be fine with that balance
>> (i.e. accept every TM, and allow all kinds of abuse of the sunrise
>> periods), other constituencies might draw the line for that balance
>> elsewhere.
>> 5. Let me give you an example -- ACPA allows damages of up to $100,000
>> for cybersquatting. That's an explicit cost on cybersquatters that
>> they take into account, and has a deterrent effect. What if that limit
>> instead was $500? Behaviour would obviously change accordingly,
>> because cybersquatters are rational.
>> 6. A further example -- it costs $1000+ to file a UDRP (on top of
>> legal costs, so a number like $5000 might be more relevant for those
>> who use lawyers). If the total costs were $300, there would be a lot
>> more filings (which would reduce the benefits of cybersquatting, and
>> thus change the economics of abuse).
>> In conclusion, the economics of all the actors are paramount, and seem
>> to be mostly ignored. By focusing on those economics directly, as
>> policymakers we can precision-target the policies to directly target
>> those behaviours, and reduce all the "collateral damage" on the
>> innocent actors.
>> Sincerely,
>> George Kirikos
>> 416-588-0269 <(416)%20588-0269>
>> http://www.leap.com/
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