A new report by Mashable makes it clear that direct navigation to online retail websites is biggest driver of ecommerce sales. According to a study of over 75,000 online retail transactions recently released by Forrester, 30 percent of all online purchases from new customers result from direct navigation – users typing domain names directly into their browser bars to reach the retailers’ sites.

Organic and paid search were the next most prevalent purchase channels amongst new customers, while email was the clear winner amongst repeat customers, accounting for almost a third of all purchases.

For all the hype surrounding social media’s ability to drive online shopping, the study's figures were surprisingly low. Less than one percent of all transactions across both new and repeat customers were driven by social networks.

A number of factors could contribute to this tiny figure. First, while consumers might not make purchases directly from social media sites, the networks still serve as hugely influential marketing tools, influencing users in ways that aren't easily quantifiable. Second, Forrester's study focused on large online retailers, and the company notes that social media does factor into more purchases at smaller ecommerce outlets, which were not included in the study.

Brands should take note of the results of this study as the biggest online shopping period of the year draws closer. Anchoring branded online retail outlets to strong, intuitive domain names will continue to drive the highest volume of online purchases from new customers looking for a specific product. Companies looking to lure existing customers should make an effort to individualize email messaging as much as possible, based on past purchase trends.

Online shopping continues to gain traction over all purchase channels, and while trends are sure to change, it's clear that, at this point, direct navigation is still the key player in the world of online retail.

 
Most observers probably consider Old Spice's "Believe in Your Smellf" ad campaign to be a success. In the patented Old Spice tradition kicked off by the “Man Your Man Could Smell Like” ads, these spots have driven buzz on social media and clocked millions of YouTube views. But if you consider the ad campaign from a domain policy perspective, there have been a number of missed opportunities to further capitalize on this buzz to drive consumer engagement.

The primary faux pas came on the part of Wieden+Kennedy, the ad agency behind the campaign. The agency owns the domains Smellf.com and BelieveInYourSmellf.com, but isn't doing anything with them. Wieden+Kennedy clearly took the time to acquire the domains, but neither one resolves to a working website.

On the most popular social media sites, the agency doesn't appear to own any handles related to “Believe in Your Smellf” or “Smellf.” The “Smellf” username across Facebook, YouTube, and Twitter is owned, closed, and suspended, respectively. “BelieveInYourSmellf” is too many characters to be a Twitter username, but is still available on both Facebook and YouTube.

Considering its pedigree and size, Old Spice’s parent company Proctor & Gamble should have a formal domain policy in place. The bottom line is that Proctor & Gamble should own the domains associated with its product's ad campaign, and in this situation, they do not. A formal domain policy would help the company avoid situations like this, increase efficiency, and help Proctor & Gamble take all of the opportunities that this campaign presents. Should the company stop working with Wieden+Kennedy, it should make sure that it has the domain names in its own name.

Another issue is the non-use of the aforementioned domain names. Ideally, the sites would host content related to the "Believe in Your Smellf" campaign, but they should, at the very least, redirect to OldSpice.com. Social media pages should follow the same guidelines. YouTube.com/OldSpice is a popular, active channel, and if Proctor & Gamble doesn't want to divert traffic from that page, it should simply redirect YouTube.com/Smellf, which comes up as a "closed" page.

All companies should have an established, formal domain policy to prevent situations like this one. In order to protect their trademarks and brand reputations, companies must ensure that they own all relevant domains. Otherwise, they are susceptible to both cybersquatting and missed opportunities for both consumer engagement and customer conversion.
 

Pinterest, inarguably one of the fastest rising stars of the social media world this year (and the subject of a FairWinds Perspectives study this past spring), filed a comprehensive lawsuit against Chinese cybersquatter Qian Jin, citing a host of violations related to trademark infringement and cyberpiracy. The lawsuit, filed in a San Francisco court, accuses Qian of registering dozens of Pinterest-related domain names, using a number of different ccTLDs and misspellings of the Pinterest brand name, and attempting to trademark some of the names in both the United States and China.

The domains were registered over a six-month period in the second half of 2011, as Pinterest was just beginning to really hit its stride and gain widespread popularity. According to the lawyers for the Bay Area company, Pinterest is just the latest company in a long line of social networks that Qian has targeted. The lawsuit refers to Qian as a "serial cybersquatter who has registered and owns hundreds of infringing domain names," including some related to Facebook, Google, Twitter, and Foursquare.

The lawsuit seeks damages and an order preventing Qian or any associated parties from using the Pinterest name. Additionally, the company wants the trademark applications in U.S. courts for "Pinterest" and Pinterests" thrown out.

Although the practice of cybersquatting almost as old as the domain name system itself, squatters constantly seek new ways to capitalize on emerging trends or habits to make money. Cybersquatters like Qian, for example, are actively targeting rising tech companies that didn’t have the foresight to procure potentially valuable domain names when they first set up shop. This lawsuit will certainly be a lesson for Pinterest, as the company will want to ensure that they won't have to spend this amount of time or money on similar cases in the future.

Other brands, especially those with explosive success like Pinterest, should look at this as a cautionary tale. Keeping tabs on your domain portfolio from the outset will save you from having to go through legal battles to prevent opportunistic third parties from benefitting off of and potentially tarnishing your brand.

Given Qian’s history of cybersquatting and Pinterest's rights to the intellectual property in question, they should come out on top in this case, but legal battles like this are easily preventable with forward thinking.
 

On Monday afternoon, GoDaddy.COM, the largest ICANN-accredited registrar in the world, suffered a major outage, which resulted in a blackout for millions of websites and hosted email accounts. Although Anonymous Own3r, a member of the Anonymous hacking collective, has taken responsibility for the attacks, GoDaddy disputed these claims and attributed the blackout to internal technical problems. GoDaddy offered credits for one month of free service to all customers and allowed competitor VeriSign to host its DNS servers. By now, all off sites seem to be back online, but the disruption of service underscores the ongoing struggle to keep bad actors at bay online.

Does extending your brand through social media carry risk for your company? According to a recent article by eMarketer, many companies believe that social media is one of the top five sources of risk over the next three years, and the most popular social sites have the most potential for risk.

eMarketer analyzed results of studies by Deloitte and Forbes Insights in which American executives ranked social media the fourth greatest potential source of risk in coming years. 27% of executives surveyed named social media as a risk, placing it behind only the global economy, government spending, and regulatory changes.

In a separate study the Altimeter Group surveyed companies about which sites were potentially dangerous and how executives believe these sites could negatively impact their brands. Facebook, Twitter, and YouTube, the most popular social sites, were chosen as the three riskiest social media sites in that order.

In terms of specific concerns, companies named reputational damage as the greatest risk followed by release of confidential information and loss of intellectual property. The individuals surveyed by the Altimeter Group all deal with social media as part of their jobs, giving them an extensive knowledge of the specific risks associated with different social brands.

As social media continues to evolve, brands need to consider which, if any, specific sites could be beneficial. At its core, social media is a medium for companies to connect with customers and clients in an honest, open manner, bridging the gap in a way that was much more difficult without these sites. This open communication, however, also leaves companies vulnerable to a certain level of risk from critics and users looking to tarnish the reputation of a brand.

Using social media effectively can have a huge positive impact on brands in terms of awareness, media coverage, and public perception, but missteps can also prove costly. Companies shouldn't fear entering the social space, but they should just make sure that they have the tools in place to use the medium in the most effective way – owning the right usernames and handles on the right platforms is the first step.

According to an article in The Guardian, the number of UDRP decisions overthe past 12 months is the highest figure since 2007.

Since July 2012, the World Intellectual Property Organization (WIPO) has decided nearly 3,000 cases of domain disputes. So far this year, the body has ruled on almost 2,000 cases and is on pace to surpass last year’s mark of 2,764, with one of the busiest decision-making periods of the year still to come.

The Guardian attributes this rise, at least in part, to the increasing importance of e-commerce, as a number of high-profile fashion houses have looked to WIPO to seize domain names this year. Armani, Burberry, and Dior are just a few of the brands that have filed multiple complaints with the organization this year in attempts to combat trademark infringement and the sale of counterfeit goods.

British Vogue reports that Gucci, for example, has already submitted six UDRP complaints this year, earning victories that resulted in the transfer of over 100 different domain names. Most of the contested domains employ similar combinations of the trademarked name and words like “cheap,” “sale,” and “shop” to try to maximize hits from Internet users looking for specific brands.

Most of the brands in question will not use the domains in question to sell goods or services themselves. They typically are seeking to prevent cybersquatters from using their trademarks for personal gain. As cases like the National Arbitration Forum’s (NAF), recent decision on the domain MyFakeOakleySunglasses.com show, however, only specific cases fall within the guidelines of a UDRP complaint. NAF ruled that, despite the inclusion of the Oakley mark and the obvious bad-faith use of the domain name, the inclusion of the word “fake” prevented the mark from being “confusingly similar” to users and qualified this as a case of copyright infringement, not domain dispute. Brands looking to win domains through UDRP complaints should consider WIPO and NAF their allies against cybersquatters, but they should also make sure they are correctly using the UDRP tool when they do so.

The current figures show that brands are becoming increasingly active in protect their trademarks online, a trend that should only continue through the rest of the year. However, while there are some big opportunities to reclaim valuable names, it is unsustainable and unnecessary to pursue all opportunities. Brands should prioritize reclaim according to the value of the domain.
 

Craigslist, the popular U.S.-based classified host site, recently filed a UDRP complaint against Craig Solomon Online Services over the domain name Craigslists.com. The three-person National Arbitration Forum (NAF) Panel denied the complaint on a number of grounds in a case that should serve as a lesson to all brand owners.

At first glance, the complaint would appear to be an easy victory for Craigslist on the basis of the domain name being confusingly similar to the company’s “Craigslist” mark. The site that Solomon operates appears to be a deviation of a standard pay-per-click (PPC) site, with only a simple introductory header at the top differentiating it from the standard PPC pages we usually see. The aforementioned reasons would give Craigslist a strong case, but a combination of a delay in filing and a clever Respondent resulted in a surprising loss.

Craigslist’s primary mistake was waiting until 2012 to file this UDRP complaint, without any explanation of the delay. Craig Solomon has operated his site since 2003, and while he may have questionable motives (past iterations of the site do a worse job of hiding its PPC roots, as evidenced by the screen shot below), he has maintained this domain for nearly a decade without hearing from the Complainant. Because of this delay, Solomon invoked the laches defense, claiming that he would suffer prejudice if the domain were transferred.

While the delay might have been the primary reason for Craigslist’s loss, Solomon was also able to convince the Panel that his enhanced PPC site is a directory for residents of the Cayman Islands. The Panelists agreed and stated that because he was operating a legitimate site and because his name is Craig, the respondent had rights to the domain and was not engaging in typosquatting, as Craigslist claimed. It seems as if the Respondent opportunistically used his personal name and a very clever twist on the standard PPC website to force the UDRP panelist’s hand.

The most important takeaway from this case is that all organizations, no matter how big or small, should be cognizant of domains similar to their own and, when necessary, take action as quickly as possible. According to FairWinds’ estimates, Craigslists.com pulls over 100,000 visitors a month, a huge number for any site, but especially a glorified PPC site. Craigslist is missing out on visitors who are trying to access its services, but because it waited so long in filing the UDRP complaint, a victory here would have been hard to come by.

Google is taking a big step towards combating online piracy, announcing a change in its search algorithm that will favor legally downloadable content over pirated materials. The search engine will begin taking into account the number of valid copyright removal notices when determining the rank of pages in a specific search, thereby theoretically pushing sites that receive the most notices to the bottom of the heap. This announcement will certainly come as good news to groups like the Motion Picture Association of America, the Recording Industry Association of America, and other major entertainment industry groups and lobbying firms, some of whom have criticized Google for not taking a stand against copyright violators. This new aspect of the search engine's algorithm joins the nearly 200 other factors that Google already uses in determining the results and order of search queries.

Although the update is not scheduled to take effect until later this week, it raises a number of immediate questions for brand owners. Will this new element of the algorithm only account for Digital Millennium Copyright Act (DMCA) notices filed through Google, or is Google able to determine how many notices are filed directly with individual websites? Will this new element cause major media sites like YouTube — which is owned by Google — to get lower search rankings due to the sheer number of DMCA notices filed every day, or will other elements be sufficient to maintain high rankings? Will this element look at all filed notices or only successful ones? This question is especially pertinent for sites like YouTube, because it is possible for a website to defend a DMCA notice, and it would seem unfair to count notices that have been successfully defended.

The announcement also brings up certain ethical issues in regards to competition. Will companies start cluster bombing Google with questionable DMCA notices for their competitors' sites just to activate this element of the algorithm and game the system? Would a site owner have a potential legal claim against Google if it diligently takes down noticed content, or successfully defends many notices, or reports a competitor for notice–bombing yet still gets a lower ranking? How Google handles these issues might not be immediately apparent, but they are important questions going forward.

Of course, we won't know the answer to any of these questions until the new algorithm is in place, and even then, it will probably require some tweaking to produce the exact results it should. Regardless, it should be a boon for brand owners and corporations looking to protect their content, as their authentic material should rise to the top of the long list of search results.

A recent UDRP complaint filed by Dr. Ing. H.c. F. Porsche AG with the World Intellectual Property Organization (WIPO) over the domain names PorscheDXB.com and PorscheInDubai.com, was denied. The Panel's decision stemmed from the fact that the Complainant was unable to prove that the Respondent had no rights or legitimate interests in the domain names, or had registered and used them in bad faith.

At first glance, the site appears to be a legitimate fan site for Porsche car owners or enthusiasts. But in addition to this content, the site also contains a number of paid ads. The Respondent claimed that these ads generate very little revenue, which is merely used to offset the cost of hosting the site, and submitted financial documents as proof of that claim. Ultimately, the WIPO Panelist determined that these ads were merely "incidental commercial activity," and did not qualify as infringement on the Porsche mark. However, I feel the Panelist's view takes a very shortsighted approach. By allowing such "incidental commercial activity" on the Respondent's website, the Panelist in this case applies a rather narrow yet possibly dangerous precedent.

First, not all of the ads on the site relate to Porsche and there are ads for other businesses, some of which are also in the auto industry (e.g., Volkswagon, Kia, Intuit, solar power panels, etc.). This is the very essence of trademark infringement and may harm the Porsche brand regardless of how much revenue the ads generate. Second, although the site's ad revenue may be small now, there's no guarantee it won't grow in the future and Porsche will never know that unless it files a lawsuit at some point in the future and subpoenas the Respondent's records.

The Panelist's decision, therefore, forces Porsche to either live with these competing and possibly growing ads or undertake the extraordinary expense of pursuing the Respondent in the courts – one of the main things the UDRP was designed to avoid. The only silver lining in this case was that the Complainant was not found guilty of Reverse Domain Name Hijacking, despite the Respondent's allegation.

Last January, I wrote a post on this blog about the issue of laches in the Uniform Domain-Name Dispute-Resolution Policy (UDRP). Laches, for all the non-attorneys out there, is a legal doctrine that can provide a defense when a brand owner has unreasonably delayed in asserting its rights, and the defending party’s reliance on that delay results in harm to that party.

In most domain name disputes, both UDRP and others, Panelists have typically asserted that the laches defense doesn’t apply since the harm an infringing domain name inflicts on the brand owner is ongoing despite that brand owner’s delay in pursuing enforcement.

In what could be the first case of its kind, and a tectonic shift in this perspective for domain disputes, a WIPO Panelist denied an otherwise thorough and well thought-out claim against the owner of the domain VictoriasSecrets.com.au based on the defense of laches. In this case, Victoria’s Secret, the ever-ubiquitous lingerie purveyor, sent a demand letter to the domain name owner, but then sat silent for seven years after the owner (now the Respondent) asked the company to provide evidence to support the claims made in its letter. It’s worth noting in this case that the domain name currently resolves to a website advertising “Sydney’s Finest Ladies & Escorts” in connection with a brothel service in Sydney, Australia.

In referring to the second element of the .AU dispute policy (which is very similar to the UDRP), the Panelist said he "believes that delay can, in exceptional circumstances, contribute to the Respondent acquiring through its subsequent bona fide use a right or legitimate interest in a domain name even though it had no such right or legitimate interest at an earlier time."

Here, after the passage of seven years from the Respondent’s reply to Victoria’s Secret’s initial demand letter, the Complainant provided no further information nor did it initiate any legal action. As such, the "Respondent was entitled to conclude that the Complainant had ceased to press its allegations of trademark and trade practices infringement. From that time forward, it became possible for the Respondent to acquire a right or legitimate interest in the disputed domain name through subsequent use of it, so long as that subsequent use was bona fide."

Taking a very fluid approach to the concept of bona fide use and legitimate interest, the Panelist found that "this continued use of the disputed domain name became bona fide use a reasonable period of time after the Complainant failed to take any further action against the Respondent, because the failure to press the allegations of infringement led the Respondent to understand that the Complainant no longer objected to the Respondent’s behavior." In other words, use that was once considered improper became bona fide over time because Victoria’s Secret did not pursue additional action. The Panelist explained, however, that just as formerly improper use could become bona fide in this manner, it could again become improper if the Respondent started selling lingerie, fragrance or other products on its website which compete with the products of Victoria’s Secret.

While this seems to be a very rare exception to the view that laches don’t apply to domain disputes, it leaves the door open just a crack for future Panelists to find other circumstances where a long delay might bar an otherwise good claim. Brand owners must be prepared for this and aggressively pursue claims against infringing domains or risk being shut out of the dispute arena some years later. While this may not result in great harm to the brand in every case, it should be considered as part of a sound enforcement strategy.

Update, 8/16/12: Steve's insights on this topic were featured in the World IP Review article, "Domain Arbitrator Lashes Brand Owner in Cybersquatting Row." Read the full article here.