xxx Domain Registration : Brand Protection or Unnecessary Expense
Introduction
The adult industry has been working on the .xxx domain registration since the 1990s. It was a long fought process that eventually became available in September 2011. Since that time there have been over 600,000 domains with the .xxx extension purchased. Additionally, there have been numerous instances of non adult related businesses encountering problems with non-related companies purchasing domain names and then trying to sell them at an inflated rate. There are numerous protections in place for businesses with and without registered trademarks. These protections fall under both cybersquatting and copyright laws. The question is should businesses spare the expense to purchase these domains and negate any legal process that would occur if they became the target of exploitation?
Analysis
The establishment of the .xxx domain brought about lengthy arguments and debates. Those who lobbied for the domain claimed this would easily distinguish adult industry sites from non adult industry sites. They also stated it would make it easier for parental and other internet monitoring software to filter or block those sites. What many in the internet industry have discovered is most of the .xxx domains being purchased are not by adult related businesses but by businesses outside the adult industry protecting their brand. Many adult entertainment sites do not want to be easily filtered because even accidental visits generate hits and revenue on advertisements.
The cost of the .xxx domain registration is much greater than the standard domain extensions. According to a major domain registration vendor, registering an .xxx extension is $99 per domain per year, which is roughly 10 times higher than a basic .com domain registration. The basis for the cost increase was to ensure only serious adult based businesses would establish themselves online under this extension. For some businesses, trying to predict and purchase all possible domain names with the .xxx extension can be quite expensive. The University of Kansas, for example, spent an estimated $3000 researching and purchasing all .xxx domains related to their brand. This is a cost they will have to incur annually in order to remain in control of the domains.
Businesses with and without registered trademarks have several legal protections to prevent an act of exploitation related to their brand. According to cybersquatting.com, an online resource dedicated to information on the laws related to cybersquating, “(cybersquatting) refers to the bad faith registration of a domain name containing another person’s brand or trademark in a domain name.” This law also applies to purchasing a domain with an intentional misspelling in an effort to capture visitors who might accidentally misspell a company name in a web browser. This means no company or individual can legally approach a brand with the intent to sell a domain at an inflated price. The only exception to this rule is when a legitimate business is operating with an online presence and another business approaches them about acquiring the domain. This would be a business transaction and the value of the domain would be determined based on varying factors in business negotiations and law.
Federal law also prohibits the inflated sale of a domain when a live web page is used to damage a brand or reputation. An individual cannot legally purchase a domain, create a generic or damaging site and then try and sell the domain at an inflated price. There is protection under federal cybersquatting laws and basic copyright laws, whether the brand is a registered trademark or not. According to the United States Patent and Trademark Office (USPTO), “You can establish rights in a mark based on use of the mark in commerce, without a registration.” This gives brands protection under basic federal law whether they are officially trademarked or not.
Conclusion
Our professional advice to our clients is to buy all primary domains associated with the business.
From an expense standpoint, the purchase price is likely small when considering overall legal and public relation expenses associated with displacing a cybersquatter or a domain opportunist. Even though act of purchasing a corporate .xxx domain and using it to defame any brand is illegal and the company is protected under numerous state and federal laws. When we weigh the time and legal costs associated with defending the company should an issue a rise it would probably be in the company’s best interest to prevent any long term issues. The legal red tape issues aside, another scenario to consider would be possible public relations and customer service situations. Illegal or not, once brand reputation is compromised it takes time for the public to forget. Additionally, if articles are published online they remain searchable through search engines indefinitely.
Our suggestion is to outline all primary URLs associated with your brand and purchase those immediately. This may cost you $1,000 a year, but in our eyes it is cheaper than any form of litigation.
We hope you find these white papers helpful. If you do not please let me know and I will remove you from my executive list.
If you have any thoughts or questions please feel free to email me ggragg@graggadv.com
Sources
“Trademark Basics.” United States Patent and Trademark Office. Web. 14 Feb. 2012. http://www.uspto.gov/trademarks/basics/.
Cybersquatting, Domain Law Resource – Cybersquatting.com – Lawsuits and The Domain Law Resource. Web. 14 Feb. 2012. <http://cybersquatting.com/>.
Bradley, Tony. “XXX Domain Registration Begins: Should You Buy One? | PCWorld Business Center.” Reviews and News on Tech Products, Software and
Downloads | PCWorld. Web. 14 Feb. 2012. http://www.pcworld.com/ businesscenter/article/239646/xxx_domain_registration_begins_should you_buy_one.html.
19, December. “Why Defensive .XXX Registration Is Only the Beginning of a Branding Nightmare.” Social Media News and Web Tips & Mashable & The Social
Media Guide. Web. 14 Feb. 2012. <http://mashable.com/2011/12/19/xxx-domains-defensive-branding/>.
9, December. “University Spends $3,000 on .xxx Domain Names to Save Face.” Social Media News and Web Tips & Mashable & The Social Media Guide. Web. 14
Feb. 2012. <http://mashable.com/2011/12/09/university-xxx-domain/>.
