Lawyer: Kellogg et al have nothing to gain and everything to lose from expansion of internet top level domains

Reed Smith partner Douglas Wood was speaking to FoodNavigator-USA yesterday as internet domain name overseer ICANN opened up its controversial registration scheme enabling firms to apply to register new suffixes from .kellogg to .food.

The scheme would permit applicants to claim virtually any word as an internet top-level domain. TLDs are everything to the right of the dot, such as .com and .org.

Under the new system, firms wishing to register new TLDs such as .pepsico or .walmart have to present a detailed case as to what they plan to do with the new domain and cough up a cool $185,000. They have until April 12 to submit applications.

It’s just a huge waste of money​

But firms such as Coca-Cola, ConAgra and Kellogg would gain no benefit from registering .conagra or .kellogg beyond preventing others from doing so, said Wood, who is also general counsel for the Association of National Advertisers.

“It’s just a huge waste of money. Firms have already spent a fortune on registering all the variations of their names and brands under the present system to stop cyber squatters from undermining their brands. ​

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“At a time when everyone’s budgets are tight, spending potentially large sums of money purely as a defensive tactic just makes no sense.”​

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The recent move to allow the top level domain .xxx – designed to ringfence adult entertainment sites on the net – was a perfect example of why this approach was flawed, he said.

“In the end, many of the applicants for .xxx second level domain names were not porn sites at all but people and firms just registering defensively to stop others from undermining their brands by associating them with the .xxx suffix.”​

Second-level domain names​

Perhaps the most worrying aspect of this was the prospect of firms registering generic TLDs such as .food or .nutrition and then becoming the domain name registrar with the right to sell second-level domain names such as Kelloggs.food or Coca-Cola.nutrition, he said.

“I can see people saying, ‘I know it’s $185,000 but I can sell a boatload of second-level-domains and easily get my money back’.”​

The more top level domain names there were, the more opportunities there were for cybersquatters to buy up second-level domain names that potentially undermined companies and brands, he said.

And while Kellogg could take legal action against a firm flogging counterfeit Kelloggs cereal through a new kelloggs.food website, the onus was still on Kellogg to defend its name and brands, he added.

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“The pressure will be on to register all of the variants of your brand as second level domains attached to generic TLDs like .food just to avoid things like this happening.” ​

He added: “Who actually asked for this? It is not as if people search for companies or anything else by typing in the URL – they just go onto a search engine and look it up.”​

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Excessive cost and harm to brand owners?​

Several major food companies including Coca-Cola, ConAgra, Kellogg, MillerCoors and Nestle USA plus associations including the American Beverage Association, the Food Marketing Institute, the Grocery Manufacturers Association and the National Confectioners Association, have signed a petition sent to the Department of Commerce publicly stating their opposition to the expansion program.

As members of the Coalition for Responsible Internet Domain Oversight (CRIDO) these groups and companies argue that the proposal is deeply flawed and will cause ”excessive cost and harm to brand owners​”.

The Association of National Advertisers’ suggestion that ICANN allow firms to get their brands registered, without cost, on a temporary ‘Do Not Sell’ list, just to see if unwelcome applicants wanting to use their brand names emerged, was rejected, said Wood.

So what happens next?

Opposition to the scheme is so strong that a legal challenge appears likely, predicted Wood. “ICANN is not off the hook by any stretch of the imagination.”​

What is ICANN?​

ICANN stands for the Internet Corporation for Assigned Names and Numbers (ICANN) – a not-for-profit organization that assigns internet domain names. To find out more about the TLD expansion program, click here​.