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[Insert Your Trademark Here].sucks – Is Your Brand at Risk?

In recent years, the Internet Corporation for Assigned Names and Numbers (ICANN), the non-profit entity responsible for maintaining the Domain Name System of the Internet, has begun to introduce hundreds of new top-level domains.  Top-level domains (TDLs) are the last part of a domain name, some of the most common being .com, .org, and .edu.  Now, ICANN and affiliates are garnering serious criticism for a highly controversial new top-level domain – .sucks – that is currently being rolled out.

Although the .sucks TDL allegedly provides an avenue for consumers to provide valuable feedback and criticism to companies, there are widespread accusations that the .sucks TDL is really just a way to shakedown holders of valuable trademarks.  The outcry stems from the complex and exorbitant pricing structure for .sucks domains.

Vox Populi, the company that purchased the right to register .sucks from ICANN, has decided to offer domain registration in two initial waves, and to levy a surcharge on the holders of the most valuable trademarked domain names.  First, Vox Populi has opened a “sunrise” period for registering trademarked .sucks domains.  During the March 30 – May 29 sunrise period, only holders of trademarks registered with ICANN’s Trademark Clearinghouse, which researches and validates trademark owner’s intellectual property rights for all TDLs, can apply to register a domain.  However, Vox Populi is charging a minimum price of $2,500 for trademarked .sucks domains, and is charging above and beyond that for an undisclosed list of “Premium” trademarked domains, which are almost certainly the most valuable trademarked domains.  That fee also automatically renews at the cost of $2500 per year.  That fee is hundreds of times the cost to register a trademarked domain for other TDLs that are being rolled out; for example, the .nyc TDL for trademarked domains only cost $15 more than a non-trademarked domain.

Adding to the coercive feel of the pricing structure, as of June 1, when Vox Populi moves into the second wave of general availability, the public can register a trademarked domain for either $250 per year or a subsidized cost of $10 per year if they opt to host the domain at (which Vox Populi describes as a central clearinghouse for consumer complaints, but otherwise has provided no details about).  Finally, anyone during the general registration period can pay $199 per year to block the use of a trademarked domain.  However, the cost for the most valuable trademarked domains will stay high for even the general public, with yet another list of undisclosed “Sunrise Premium” domain names that cost $2,500 per year in perpetuity.

Therefore holders of trademarked domains are put in the unsavory position of giving into what could be categorized as extortion – paying $2500 or more per year – rather than taking a risk that a disgruntled employee or customer will register their trademarked .sucks domain.

One of the most interesting sources of pushback to this pricing structure has been a letter written by the Intellectual Property Constituency of ICANN, dated March 27, 2015, which disclosed that Vox Populi paid ICANN a large sum for the right to register the .sucks TDL.  In response, ICANN has stated that it required financial protections given the parent company of Vox Populi’s history of defaulting on payments to ICANN, and has in fact asked the Federal Trade Commission to determine whether Vox Populi is violating any laws or regulations.  To date there has not been a response from the FTC.

Given the on-going controversy and complexity around the .sucks registration, and the additional questions it raises around the next wave of controversial TDLs, trademark holders are well advised to discuss their options with counsel.

Related topics: Intellectual Property, Retail, Technology