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Jun 17, 2015

What You Need to Know About .Sucks Domain Names

Over the past two years, more than 500 new top-level domains (TLDs, or the words to the right of the dot in a domain name, such as .com or .edu) like .attorney, .consulting, .menu, and even .rocks have launched. But none has garnered the attention and concern of the business community as much as .sucks, a TLD launching this year and being billed by its registry (the appropriately named company Vox Populi) as a place where consumers can find their voice.

While several large organizations like Google and even celebrities like Taylor Swift and Oprah have taken pre-emptive steps to protect their brand by preregistering for their domains, criticism of the .sucks TLD has remained strong. Former U.S. Senator Jay Rockefeller called the .sucks TLD offering “little more than a predatory shakedown scheme.” Amidst mounting pressure from large corporations within its Intellectual Property Constituency, the Internet Corporation for Assigned Names and Numbers (ICANN), which originally approved .sucks, even asked the U.S. Federal Trade Commission (FTC) for a review of the legality of the TLD, which ultimately offered up an array of precautionary recommendations to ensure better IP protection.

The Controversy

The main reason for concern is the so-called “predatory, exploitative and coercive” pricing scheme that has been put in place for businesses and individuals to acquire a .sucks domain name.

Prior to the .sucks TLD opening up registration to the general public on June 21, Vox Populi is hosting a sunrise period, during which trademark owners can acquire their marks’ .sucks domain names in order to preempt anyone else doing so later. Normally, registrations for other domains during this type of period have carried a premium of about $300 each, with annual renewal at a lower cost. However, sunrise pricing for a .sucks domain name comes with a much heftier fee of $2,499 (which actually is down from an initially stated $25,000) per year.

After the sunrise period, anyone can purchase a .sucks domain name for $249 per year, though some popular domain names like divorce.sucks or life.sucks will be designated “Registry Premium” and will have individualized pricing while other domain names like certain popular trademarks will be designated “Market Premium” and priced at $2,499 per year. Also at that time, organizations can choose to purchase a block on the registration of .sucks domain names not designated Registry Premium or Market Premium for $199 per year.

Simply, what this means is that the most popular trademarks will never be eligible for blocking and will never decrease in price… to the trademark owner. However, later this year, Vox Populi plans to sell registrations for unclaimed Market Premium .sucks domain names to non-corporate individual consumers at a highly subsidized rate. This plan is meant to further incentivize trademark owners to pay the higher rate to acquire their name prior to this period. Vox Populi has stated that those individuals purchasing trademarked .sucks domain names at a subsidized rate this fall will be required to redirect the domain name to a discussion forum on that mark maintained by Vox Populi. It is currently unclear how this forum will be moderated and what Vox Populi will do with such domains after they expire and if they can ever go back on a premium list or be sold again.

What should my organization do?

Alongside your marketing and legal teams, you should assess the risk of registering versus not registering your .sucks domain name of choice while (1) considering the potential negative ramifications of a third-party registering it and (2) weighing that against participation in a registration process that could encourage similar offensive TLD sales in the future. Additionally, this would be an opportune time to develop an ongoing domain risk assessment and acquisition strategy. Currently, your six options with regard to registering a .sucks domain name are to:

  • register your trademark during the sunrise period, running through June 19, for a $2,499 fee;
  • register your domain name during general availability, starting on June 21, for a $249 fee if the domain you want is not designated as Registry Premium or Market Premium;
  • register for a block on your domain name during general availability, starting on June 21, for a $199 fee if the domain you want is not designated as Registry Premium or Market Premium;
  • register your domain name during general availability, starting on June 21, at an individual price if it is designated Registry Premium;
  • register you domain name during general availability, starting on June 21, at $2,499 if it is designated Market Premium; or
  • not register at all.

In weighing your business and legal risks, keep in mind that with the abundance of criticism thus far, it seems as if there is little doubt that this issue will end up in court, pitting the trademark holder’s rights against the registrant’s claimed right to free speech. In several cases, individual registrants claiming a free speech right have prevailed (Lucas Nursery & Landscaping, Inc. v. Grosse; Name.Space, Inc. v. Network Solutions, Inc.). However, the courts have also treated those deemed to be “cybersquatters” (individuals or businesses who register trademarked domain names for the sole purpose of profiting from them) differently than those who register a domain to create a noncommercial forum for free speech (Panavision v. Toeppen).

In summary, the .sucks domain inevitably will pose numerous legal and brand management challenges in the months and years to come. While some organizations may want to register to potentially protect their brand, others may not want to incur the substantial fees that come along with doing so or encourage the existence of offensive TLDs such as .sucks by paying the fees. As mentioned above, the question of whether to register your .sucks domain name should be answered only after an individualized, careful, thoughtful analysis within your organization.

For more information, please contact:

Charles M. Kelley
804.775.1914

Brad R. Newberg
703.712.5061