Reports

Volume 6, Issue 5 December 12, 2011

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Get it while it's Hot: Which Fortune 500 Companies Participated in the Sunrise Period for the .XXX Top-Level Domain

In March 2011, the Internet Corporation for Assigned Names and Numbers (ICANN) Board approved .XXX, a new sponsored top- level domain (sTLD) targeting the adult entertainment industry. ICANN's approval of .XXX came after more than ten years of rancorous debate that pinned the unlikely bedfellows of governments, the adult entertainment industry and religious and conservative groups against ICANN and ICM Registry, the company that runs .XXX. Advocates of .XXX herald its approval because it will open up domains that are unavailable in the .COM space (such as Casting.XXX or Live.XXX – warning, both domains currently host adult sites), while at the same time creating a clearly delineated online space for pornography.

For businesses and adult companies with an established digital presence in .COM or other existing extensions, however, .XXX is a less than welcome development. With each new top-level domain (TLD), sponsored or generic, that is added to the Internet, the opportunity for trademark infringing and brand diluting activity like cybersquatting increases dramatically. Cybersquatting is the bad faith act of registering domain names, particularly those identical or confusingly similar to existing trademarks, with the intention of reselling them at an inflated price or otherwise profiting from them. In order to protect their brands' trademarks, businesses need to proactively register their marks as domain names across a broad spectrum of TLDs, as well as country-code TLDs.

Setting a New Standard for Sunrise Periods

ICM Registry launched the .XXX TLD with unprecedented trademark protection services. Given its objective to serve the adult community, .XXX threatens a particularly unique and damaging iteration of cybersquatting that other, more innocuous TLDs do not. Just imagine the public relations fiasco that would be engendered by the bad faith registration of a trusted brand like, for example, Disney.xxx. So ICM went above and beyond to give trademark owners the chance to protect their marks. As Becky Burr, an attorney who has advised ICM Registry, told FairWinds, "The last thing ICM wanted was a fight with trademark owners."

In light of this concern, ICM Registry implemented a new domain registration policy that allowed trademark holders to completely block their trademarks in the .XXX space. Before opening up .XXX to registrations to the general public, ICM Registry launched a three-phase preregistration process. During the Sunrise Period A, qualified members from inside the adult entertainment industry were able to apply to reserve their trademarks.

During the concurrent Sunrise Period B, registered trademark holders from outside the adult entertainment industry had the opportunity to proactively register their marks as domains. Under ICM's system, all registrations made during Sunrise Period B would automatically resolve to a generic informational page, pictured below. Besides protecting brand owners' trademarks, this solution solved the delicate question of where businesses should point a defensively registered .XXX domain.

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Screenshot of FairWindsPartners.xxx, which we reserved in the Sunrise Period B  [+]

Moreover, trademark owners had to pay a one-time fee of approximately $200 per domain to permanently block their marks in .XXX. This fee is historically low in comparison to other Sunrise registration periods. Following Sunrise Period B, qualified members of the adult community were able to register domains during what ICM Registry dubbed the Landrush Phase.

On December 6, 2011, after the close of the Landrush Period, .XXX became available to the general public and all preregistered domains went live. FairWinds was curious to learn which of America's biggest companies had taken advantage ICM's new, domain-blocking registration feature.

Our Approach

We decided to look into which of the Fortune 500 companies had participated in the .XXX Sunrise Period B to protect one or more of their trademarks. We began by looking at all 500 companies' "primary domain names," those they use for their homepages and advertise to the public. We also looked at their company names as .XXX domains. Because ICANN requires that all two-character domains be initially reserved in newly delegated TLDs, including .XXX, for companies that are known by two-character monikers, like General Electric (GE), Procter & Gamble (PG) or General Motors (GM), we substituted their longer names.

For businesses that are holding companies or parent companies to other well-known brands, we also checked whether those business units' names had been reserved in .XXX. For example, Berkshire Hathaway owns the well-known insurance company Geico, so we checked Geico.xxx in addition to BerkshireHathaway.xxx. Our list is not exhaustive, but captures a sufficient amount of data to reveal which companies participated in the .XXX Sunrise Period B.

To see whether companies had blocked their domains, we typed each of the .XXX domains into our browsers to check whether or not they resolved to ICM's "Reserved" page (pictured above). We also cross-referenced the domains with ICM's .XXX WHOIS records, available at ICMRegistry.com/WHOIS.

Results

In total, we found that 321 of the Fortune 500 companies reserved their primary domain names in .XXX. That amounts to 64.2 percent.

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However, that figure is not completely indicative of which Fortune 500 companies took advantage of the Sunrise Period B. Certain companies use a variation of their names for their primary domain names; for instance, the Apollo Group uses ApolloGrp.edu. The company did not reserve ApolloGrp.xxx, but rather ApolloGroup.xxx (Apollo.xxx was also reserved). Companies may have a variety of reasons for using variant primary domains. But all reservation requests submitted during ICM Registry's Sunrise Period B had to correspond to a registered trademark or service mark of national or regional international effect. The domain names had to correspond directly to the registered mark. So in other words, a company like Amerigroup could register Amerigroup.xxx, but not MyAmerigroup.xxx, as corresponds to its primary consumer-facing domain, MyAmerigroup.com.

Additionally, we found that various parent or holding companies chose not to reserve their company names as .XXX domains, but rather the names of major brands or products. For example, as mentioned above, Berkshire Hathaway reserved Geico.xxx but not BerkshireHathaway.xxx. Similarly, VF Corporation registered Wrangler.xxx, NorthFace.xxx, Timberland.xxx and the majority of its other brand names, but not VFC.xxx or VFCorporation.xxx. Certain companies didn't just stop at their primary domain name, though, and reserved other major brand names. Yum! Brands, for example, is the parent company of popular quick service restaurants like Pizza Hut, Taco Bell, KFC and Long John Silver's. Yum! not only reserved Yum.xxx, but also PizzaHut.xxx, TacoBell.xxx, KFC.xxx and LongJohnSilvers.xxx. Other companies including Procter & Gamble and PepsiCo took similar actions.

Some companies registered variations of their primary domain names in addition to their primary domains. Southwest Airlines reserved both Southwest.xxx and SouthwestAirlines.xxx, while Levi Strauss reserved LeviStrauss.xxx, Levi.xxx and Levis.xxx.

When we account for these subsidiary brands and other domain variations, we find that an additional 58 companies that also preregistered .XXX domains. When you take these additional instances into account, we find that a total of 379 of the Fortune 500, or 75.8 percent, took advantage of the Sunrise Period B for their major trademarks and brands.

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What we found curious, however, was that certain companies opted to register certain brand names in .XXX but not others. Kraft Foods, for one, reserved Kraft.xxx, Oreo.xxx, Jello.xxx and certain drink brands like KoolAid.xxx and MaxwellHouse.xxx, but not CapriSun.xxx for another of its other drink products.

We also found that variations of 21 more companies' brand or product names had been reserved in .XXX, but we cannot say with certainty that the companies themselves were responsible for the registrations. This is because ICM's WHOIS records do not display who filed the reservation request, but rather just the message "This domain name is reserved from registration" (see the screen shot below). In these 21 cases, the brand or product names are also trademarks of other companies or organizations, so we cannot be certain which company applied to reserve them. For example, Duke Energy did not reserve DukeEnergy.xxx, but Duke.xxx was reserved. This action could have been taken by Duke Energy, or by another entity such as Duke University. Fortunately for Duke Energy, though, it can enjoy the same protections for its "Duke" mark, regardless of whether it registered or not.

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In reality, because ICM Registry has not publicized the list of applicants who reserved domains during its Sunrise Periods, we cannot say with absolute certainty that any of the companies on our list reserved these domain names, but rather, we can only infer from the registration data, WHOIS records, and trademark information, which companies reserved their domains.

Discussion

On November 1, when the Sunrise Periods A and B had closed, ICM Registry announced that it had received nearly 80,000 applications to block domain names. According to ICM, this figure even surpassed the level of participation in the Sunrise Period for the recently rebranded and relaunched .CO Colombian ccTLD. Of course, ICM has not published the exact breakdown of applications between Sunrise Period A and Sunrise Period B, but we can assume a significant portion of the applications came from members of the adult entertainment industry during Sunrise Period A. We studied the Fortune 500 because we thought it would present a fair cross-section of how U.S. businesses had responded to the approval of .XXX and its advanced Sunrise Period trademark protection mechanisms. In all, 379 out of 500, or three-quarters, of these businesses participated in the Sunrise Period in some manner. This high level of participation indicates a significant level of awareness among major businesses of .XXX and the trademark protection mechanisms it offered. 

What this Means for Brands in the Future

This awareness is encouraging in light of the fact that ICANN's New gTLD Program is set to kick off next month. All new gTLDs launched through the Program will be required to provide a Sunrise Period. Given the nature of the .XXX extension, ICM Registry's launch received a great deal of media coverage, and trademark protection was at the top of many discussions about the extension. Other new gTLDs are not likely to receive as much attention from the press, so brand owners will need to be sure to stay abreast of the details of the Sunrise Periods that accompany the launches of relevant new gTLDs. For those brand owners that did not, or could not, register their brands or other important domains in .XXX during the Sunrise Period B, ICM Registry has officially launched the open registration period. Brand owners should move fast to proactively register domains that they feel could be harmful if cybersquatted in this extension. And fortunately, ICM Registry offers registrants outside the adult community the chance to register domain names and have them not resolve to content, so brand owners won't have to face the difficult question of where to point the .XXX domain of their CEO's name.