New Global Top Level Domains (TLDs) are coming online as soon as October of this year, to join .Com, .Net and others as a way to find businesses and brands on the Internet. Over the next 12 months, as many as 1000 new Top Level Domains such as .Camera, .Email, .Pets, .Kitchen, .Photos, .Business and may be added to the Internet and compete with the existing .Com and .Net extensions. The New gTLD program has been controversial and met resistance from many companies and industry groups because it will undoubtedly increase the time and money brands will have to spend policing their trademarks online, as well as make the online landscape infinitely more complex.

As a way to appease trademark holders, ICANN (the folks who manage the Internet Domain space) created the Trademark Clearinghouse (TMCH) to let brands register and protect their marks. Being in the TMCH means your trademark has been accepted  is acknowledged to have a limited set of protections against being taken in these new TLDs. Right now, the TMCH provides notification of Sunrise periods for New gTLDs, giving a trademark holder a right of first refusal to register a domain name that is an exact match to the trademark before anyone else. The TMCH will also notify you when someone registers your name. It doesn’t prevent the registration. Anyone who has a name taken will then have to take legal action – for example, a domain arbitration (a/k/a “UDRP”) or a “rapid takedown”. (DomainSkate is a TMCH agent, and can register your company’s marks).

Yesterday, 101Domain.com emailed us, as a Trademark Clearinghouse Agent, letting us know about a new online protection opportunity for brands. Donuts, Inc., a private equity-backed entity which has applied for (PDF link) over 300 New gTLDs (including all of the ones mentioned above), is offering a way for businesses with registered trademarks to further protect their brands online. As a pre-condition, a brand must be in the Trademark Clearinghouse.

Donuts is offering what might be considered a “next level” of protection, instead of registering lots of domains in a bid for TLD defensive registrations. For $2,995 for 5 years, or $5,695 for 10 years, Donuts will block the use of your exact trademark in any of their (yet-to-be confirmed) 200+ TLDs. So, if your company is ABCXYZ(™), Inc., and you are in the TMCH, buying Donuts’ new service would mean no one would be able to register ABCXYZ.Pets, ABCXYZ.Email, or ABCXYZ in any of their TLDs.

This $2995 five-year fee is theoretically cheaper than if you had to pay, $4000 ($20 per domain registration for each of 200 TLDs), assuming Donuts is awarded 200 or more TLDs. If they obtain 300 TLDs, it starts to look like a bargain. But, we don’t know what the cost will be per registered Domain for each of these TLDs. A good .Com domain can be found for as low as $3.98 per .Com at NameCheap.com, or $12.99 at GoDaddy.com. How much will a “.EMAIL” domain cost? $100? $1000? $5?

Depending on the price, you might be saving money at Donut’s deal or you might not. And with the Donuts offering, you don’t actually get the domain – you only get the ability to block anyone getting the domain. Of course, if you want to own the plural and any or all the variations of your name, at $2995 for 5 years for each term, that could get expensive quickly, and Donuts’ deal looks like a good one.

However, part of this discussion feels like a shakedown. Imagine one of Tony Soprano’s guys coming in saying “Hey, nice domain name. It would be a shame if anything happened to it. Why don’t you pay us to secure it?” You may remember all the defensive registrations that happened when the .XXX domains came online. Companies with multiple trademarks, and multiple variations of brands could find participating in this program very costly. Marriott might have to get Marriott.hotel, CourtyardByMarriott.Hotel, and on and on.

The ability to block anyone from registering that name – wasn’t that what the Trademark Clearinghouse was supposed to do in the first place? The new TLD owners are encouraged to be innovative, and provide services above and beyond what their agreements with ICANN mandate. Letting companies block others from registering a domain in a TLD, without having to pay full cost, is a potentially positive innovation.

Kudos to Donuts for figuring out a good, albeit potentially costly strategy to help companies. ICANN’s TMCH is a great start to help companies protect themselves, but it, in and of itself, not sufficient protection.

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