This week, the Wall Street Journal reported on businesses’ struggle to protect their brands on Twitter. Many are concerned about unauthorized uses of their brand name on popular social media sites—Phil recently wrote a post about usersquatting, the uncertainty of harm that usersquatting inflicts and the ambiguity of enforcement mechanisms to put an end to these infringements—and as a result, many are defensively registering usernames to retain control over their brand. In the WSJ’s article, the sentiment offered by Lee Alexakos, Cedar Fair’s corporate vice president of marketing and advertising, "Our name is our brand, and like any company, we're concerned with protecting that."

This Twitter free for all—unauthorized registration and consumer confusion—can be expected in an unregulated space. Such behavior should get one wondering about how things will be in a newly expanded, unregulated domain name space.
 
The most recent issue of Marketing News briefly mentioned a survey released by the CMO Council about the concerns that marketing executives have over brand hijacking. The third page of this pdf has some information on the survey. Participants were asked to identify the three types of counterfeiting, trademark infringement or online scams that hurt their businesses most. Cybersquatting was the top response at 28.4%. Also on the list was online scams and phishing using hijacked brands and trademarks, at 19.5%. Among respondents who tracked the financial damage involved in this type of hijacking, 39.6% said the cost was greater than 5% of sales and 8.2% said the cost was greater than 20% of sales.

As more and more brands struggle to recover from the damage inflicted by cybersquatters and brandjackers, it becomes increasingly obvious that the best way to deal with these issues is to prevent them from happening in the first place and being choosy about which 3rd party infringements to address and which to ignore.

A quick report of some of the most important developments coming out of ICANN’s meeting Sydney:

Despite concerns over the way in which ICANN is moving forward with the new TLD launch, it appears that ICANN is poised to start accepting applications for new TLDs in February 2010. If an application is accepted, it is predicted that it will take about 7.5 months before the TLD can be used.

At the meeting, there has been talk of applications for new TLDs such as .MUSIC, .BERLIN, .WEB, .LOVE, .RADIO, .NYC, .BASKETBALL, .ECO, and .FOOD. Wolfgang Puck was even flown out here to promote .FOOD, which was covered by National Journal: Celebs Endorse ICANN Domain Plan.  Even Sydney’s mayor announced that he is looking to get .SYDNEY. Seeing that there is some interest in new TLDs, it is discouraging that ICANN is not slowing down to make sure that if TLDs are introduced, they are done so in a way that does not jeopardize the safety and stability of the Internet. The TLDs should also add value to the space.

There are still questions hanging over the TLD launch process that should be addressed before any applications are accepted. For example ICANN’s new TLD policy stated that a TLD must be a least three characters. How will they implement this guideline with IDNs (Internationalized Domain Names)? “Characters” function differently when using non-ASCII characters. Does the guideline need adaptation? Furthermore, while IRT discussions are very active here in Sydney, the board canceled their IRT briefing meeting. Since the IRT report concerned itself with protection mechanisms, questions remain as to how they will adapt the report to recommendations offered by the Internet community.

While new TLDs remain the hot topic at the ICANN meeting, other serious policies are also being discussed. ICANN has publicly shown that it is committed to ending the Joint Project Agreement (JPA) that exists between it and the US Government, which is set to expire September 30, 2009.

The meeting has also touched upon the idea of vertical integration, which would allow registrars to become registries and could have major consequences on Internet users and on market performance as competing registrars may resist offering TLDs sponsored by their competitors.

Overall, the policies being discussed at ICANN all address complex issues that require thoughtful and thorough consideration. However, as Steve DeBianco wrote in his own blog entry, “ICANN often deems that meeting its own deadlines is more important than achieving real consensus on serious issues.”

Anybody who has had a friend sneak onto his or her Facebook profile and change the information knows the heavy reputational damage that can come from being misrepresented on a social media site.

But this harmless prank has a much nastier relative: Userquatting.  Similar to cybersquatting, usersquatting is when Internet users register usernames on popular websites to mislead others as to the true identity behind the username.  With the openness and ease of use of most social media sites, usersquatters can impersonate anyone from your next-door neighbor the CEO of a major company to the President of the United States.  In fact, during the 2008 campaign, a member of the RNC reportedly set up a fake Facebook page in Barack Obama’s name. 

Now that many companies have realized the utility of establishing a presence on social media sites, consumers have become accustomed to seeing different brands sending out tweets on Twitter or setting up Facebook and MySpace pages.  And unless the usersquatter is engaging in blatantly outlandish behavior, there is little to tip off other users that these accounts are being operated by anyone other than a brand representative.  The National Arbitration Forum did an analysis of the top 100 global brands on and concluded that out of those that did have a presence on Twitter, only nine are controlled by the actual company, while 27 are controlled by individuals that likely have no affiliation with the company. 

As of this weekend, Facebook began offering vanity URLs to its users, much in the same way MySpace did a while back.  A New York Times article reported that since the release late last Friday night, close to 6 million users have registered vanity URLs.  But not all of them chose to register their own names.  Some chose names of celebrities, like “facebook.com/snoopdog” and “facebook.com/georgebush,” while others opted for a more tongue-in-cheek approach: one user scooped up “facebook.com/twitterisbetter.”  The article also mentioned that Assetize, a marketplace where members can sell their online accounts, is auctioning such URLs as “facebook.com/iphones” and “facebook.com/hpcomputers.” 

One of the biggest problems behind this issue, in addition to the damage that it can inflict on brand equity, is the fact that enforcement for usersquatting is generally ambiguous and not uniform across different sites. In another New York Times article, Howard H. Weller, trademark lawyer at Mitchell Silberberg & Knupp in New York, commented that “these are all new avenues for abuse, and it’s more resources trademark owners need to devote to policing and enforcement.” And since much of the value of the vanity URL is speculative, brands only time will tell if the scramble is worth it.

As the debate over new TLDs rages on, more and more people are joining in the discussion and offering their two cents.  Just the other day, former New York City mayor Ed Koch announced that he is behind the .nyc top-level domain.  He went so far as to call .nyc “the best real estate opportunity since the Dutch bought Manhattan,” and asserted that he could not wait to register edkoch.nyc and mayorkoch.nyc.  Koch even noted that .nyc would create jobs and provide much needed money for city programs, a message that has a special resonance in this economic climate. 

Back in March, I wrote a blog post on a similar topic, about Al Gore’s endorsement of a .eco TLD.  Even the Pope weighed in on this issue, arguing that dot-RELIGION domains like .catholic or .buddhist will lead to bitter disputes over who has the right to each of these TLDs. 

The important thing to remember when it comes to this issue, no matter who comes out for or against the new TLDs or how famous that person is, is that the debate is still fraught with uncertainty and disagreement. 

ICANN announced on Friday that it has teamed up with the National Opinion Research Center at the University of Chicago (NORC) to undertake a study on the accuracy of WHOIS contact data for domain names.  The study will test the WHOIS data from a sample of domains from across different TLDs and different countries, and rank the accuracy of the name and contact information of each WHOIS registrant. 

There is an overall lack of accountability in the domain name space and false WHOIS data is a part of the problem.  When registrants use fake names or addresses, it becomes extremely difficult to track them down in pursuit of transferring the domains to those who have legitimate rights to them.  This not only costs brand owners time and money, but also decreases the level of fair and open competition in the entire domain name system, which is one of the central principles that ICANN seeks to uphold. 
 
This study is a great start to addressing the issue of false WHOIS data—unfortunately, given the current scope of the problem, this step has come much too late in the game. As I’ve said in previous posts, while it is always encouraging to see progress towards better policy, the pace at which steps are taken at ICANN is disheartening. Studying a problem is not the same as fixing it, and ICANN needs to find a solution to this problem sooner rather than later. I’m eager to see how ICANN plans to utilize the findings of this study and what actions it will take in the future to address the issue of false WHOIS.  

Last week, when I attended Rep. Boucher’s congressional hearing on the relationship between Internet governing body ICANN and the U.S. government, I was encouraged to see how many representatives are informed on this topic and are looking to get at the source of the cybersquatting problem.

There’s a great opportunity here- Congress is listening. Concerned about their constituents, congressional members are looking to better understand Internet governance, how it is broken and what can be done to fix it. Brand owners, used to bearing the burden of policing the space, now have a sympathetic (and powerful) ear.

As government leaders are educating themselves on domain name abuse, brand owners need to be vocal about their experiences. By providing an accurate representation of the domain name landscape as it exists today, brand owners can show policy makers the magnitude of the problems that they are facing and spur action in the national arena.
 

I read an interesting and pretty amusing article in AdAge that compared big brands in social media to Seinfeld’s George Costanza.  The author, Reuben Steiger, CEO of brand marketing firm Millions of Us, cited the episode in which George decides that all of his instincts are wrong and that the answer to improving his life is to do exactly the opposite of what he normally would do. 

Steiger uses George’s situation as an analogy for how big brands should operate in social media.  In short, he says that the traditional marketing mindset does not work in these spaces. Brands can no longer remain larger than life, untouchable entities.  This made me think back to an earlier post I read on Mashable, where Tom Smith, the founder of Internet trend consultancy Trendstream, discussed eight ways that the presence of big brands in social media actually benefits consumers. 
 
Both articles get at the same issue: big brands need to utilize social media.  With the advent of Web 2.0, consumers have the ability to engage in unprecedented levels of interaction with brands.  From reviewing existing products to collaborating on the development of new ones, consumers are constantly getting involved with brands in new and different ways.  Social media sites often give consumers a glimpse into companies that would have been impossible only a few years ago.  But these developments don’t just benefit consumers; if they play their cards right, big brands will be able to capitalize on these trends as opportunities for growth and improvement. 
 
Participation in social media gives brands unique insight into consumer attitudes and behaviors, which in turn enables companies to develop products and services that match up with consumer preferences.  The higher levels of transparency that are an inevitable aspect of social media participation can increase trustworthiness of the brand and improve consumer confidence.  This is particularly true in the current economy, where many consumers are forced to choose where to spend their money. Brands that use social media are likely to develop a distinct advantage over those who do not. 

ICANN claims that the roll out of new TLDs is designed to encourage healthy competition in the domain name space, but the organization has repeatedly failed to provide evidence that substantiates these claims. Furthermore, ICANN has not put forth any evidence to suggest that the new TLDs will be even somewhat beneficial to the wide Internet community. I regularly work on these issues and have read countless documents and letters pertaining to the TLD launch.  There are two documents from a few months back that are of particular interest. The first is a letter from the Department of Commerce to Peter Dengate-Thrush, the chairman of ICANN’s Board of Directors. The second is a letter from the Department of Justice to the National Telecommunications and Information Administration (NTIA). Both letters provide a laundry list of areas where ICANN needs improvement, better foresight, and an overall reality check.
 
The DOC’s letter states that while they acknowledge “the effort and hard work involved in producing the documents currently out for comment, it is unclear that the threshold question of whether the potential consumer benefits outweigh the potential costs has been adequately addressed and determined.” One of their recommendations is that ICANN must “ensure that the introduction of a potentially large number of gTLDs, including internationalized top level domains, will not jeopardize the stability and security of DNS.” Given the rampant cybersquatting that occurs among the current TLDs, and the amount on .com alone, I don’t know how ICANN will justify introducing even more TLDs without first addressing the existing problems. 
 
Then there’s the issue of competition. The letter from the DOJ points out that the overwhelming popularity of .com is far too valuable to ever actually be constrained by new TLDs. Even in the current system, most domain owners register other TLDs in order to augment their Internet presence, not as a substitute for a .com name. Both letters implore ICANN to reevaluate the demand for new gTLDs and to better account for the interests of consumers. The brand owners and individuals who register domain names are, in this case, the consumer. Yet ICANN seems to be moving full steam ahead toward this initiative. If ICANN is not listening to consumers or to the government that acts as its advisor, who is ICANN actually listening to? With the DOC joint project agreement scheduled to terminate this September, what is the likelihood that ICANN will be listening to anyone in the future?

 It seems like everyone is feeling the economic crunch to some degree. The New York Times reports that even though there are encouraging signs in the economy, the latest disappointment in retail sales signal that people remain cautious. In down markets, individuals and companies alike look for new opportunities to make the most of what they have and to cut back on waste.

 
Honestly, that’s the up side of difficult times. They force you take a hard look at your personal practices and business practices and make adjustments that are necessary today, but were a good idea yesterday and will still be a good idea tomorrow.
 
Our clients are cutting back on unnecessary waste by reevaluating their domain name portfolios- it’s a simple way to make a company leaner and it amounts to significant cost-savings. For example, I estimate we have saved our clients over $5MM in fees they were needlessly paying to keep unnecessary domain names. We’ve also helped them recover over 20MM previously misdirected site visitors, which has lead to incalculable new sales, leads and opportunities. One client is putting a price tag on the value of their cost savings and it's shaping up to look like an eight-figure amount USD per year.

Tightening the belt now and getting rid of wasteful spending won’t just help in the current economic setting- when the good times come again, they’ll be that much more profitable.  

Southern Company (Southern), a Fortune 500 company that provides energy related services in the South, filed for an injunction against Dauben, Inc, a corporation that owns over 600,000 domain names, to suspend its use of the domains sotherncompany.com and southerncopany.com. Southern, which is a Fortune 500 gas & electric utility, had filed a lawsuit against Dauben over the registration and use of sotherncompany.com and southercopany.com—Southern claimed that Dauben was engaged in typosquatting and was therefore in violation of the Anti-Cybersquatting Consumer Protection Act (ACPA).  The district court found that Southern was likely to prevail in its lawsuit and awarded the injunction to prevent any further damage to the company until the matter was officially resolved.  
 
An appeal filed by Dauben, however, vacated the injunction. The appellate court found that the district court was too quick to assume the likelihood of Southern prevailing in its lawsuit against Dauben. Looking to ACPA, the appellate court determined that Dauben may succeed in its defense using the Act’s “fair use” clause and that the district court did not adequately consider how Dauben’s use of the domains caused “irreparable injury” to Southern.
 
I’m not a trademark lawyer, but in reading the decision, the language that particularly struck me centered around the appellate court’s dismissal of the “irreparable injury” claim. The appellate court stated that the district court inaccurately assessed the confusing similarity of the typo domain names to southerncompany.com and determined that “the likelihood of confusion test in trademark infringement law is different, and more comprehensive, than the test for ‘confusingly similar’ under ACPA.”
 
CADNA has been pushing for a more comprehensive ACPA for years now. In order for ACPA to be an effective piece of legislation—in other words, a piece of legislation that creates a deterrent against cybersquatting, which is what it was intended to do when it was passed a decade ago—it needs to be brought up to date. Cybersquatting techniques have evolved and continue to evolve; we need ACPA to evolve along with them or else cybersquatters will continue to find loopholes to avoid accountability.