The last decade in IP (3): The Controlled Chaos Strategy


    by Stuart Fuller (CentralNic)

    After looking at a strategy for brand holders based on educating their clients and one based on educating staff to the dangers of intellectual property abuse, the third approach that could be deployed by an organisation is based on a theory extoled by Napoleon Boneparte. The Controlled Chaos Strategy.

    Boneparte understood that the most critical elements in any battle were speed and adaptability. The ability to move and make decisions faster than the foe will always give you the upper hand. For brand holders and intellectual property guardians this means having a balanced strategy to manage digital assets. Whilst we have discussed the need for defensive and counter-attacking measures in the previous two strategic approaches, the pro-active elements should never be ignored.

    Structure is the key element in this strategic approach. By understanding the weaknesses in an existing IP portfolio, an organization can pro-actively mitigate the risk and harm of any future abuses.

    With the expansion of the domain name space under the new gTLD programme, there has never been a more important time for an organization to review its digital assets to ensure there is consistency and more important, coverage, across their products, services and markets. One starting point for such a strategy is to review how effective existing trademarks are when it comes to enforcing domain name infringements. Due to the speed at which domain names can be registered, it is advisable for organizations to register domains before filing for trademarks, patents and new brands. Miscreants monitor trademark and patent applications and look to register corresponding domain names before the IP holder can act, which due to the significant limitations of existing IP legislation covering domain names, can prove difficult, costly and time consuming to recover. Prior use is a powerful defensive manoeuvre that any brand holder could and should include in their strategy.

    Fortunately, a number of new tools have been introduced in response to concerns from the IP community over the launch of over 1,200 new generic Top Level Domains. The Trademark Clearinghouse offers both a warranty notice for potential infringers of registered marks, as well as a notification process whereby the trademark holder is informed if someone registers an infringing name. Whilst there are limitations to the product (such as notifications/warranties only being served for the first 90 days of a new gTLD), you cannot really argue with the success it has provided for over 42,000 trademark holders so far. Whilst more than 250,000 claims notices have been sent to trademark holders as of the end of March 2017, highlighting domain name registrations that potentially infringe on a trademark, it is estimated that there have been ten times as many warranty notices served. When you consider that any valid registrations made by trademark holders are included in these numbers, then the effectiveness of the Trademark Clearinghouse against potential IP infringement is in the 90th percentile.

    Another proactive step with regard to the new gTLD programme is the launch of the Domains Protected Marks List (DPML). This product, designed by the US-based registry Donuts and replicated by Minds + Machines, offers a comprehensive blocking strategy across more than half of the new gTLDs. As long as a brand holder has a valid registration within the Trademark Clearinghouse, they can automatically block the registration of their IP (and any string that includes their IP) from only $2 per Top Level Domain. For brands who suffer the most through IP infringements and abuse, the DPML is one of the most cost-effective, proactive strategies they can take.

    All of these options are available today for organizations to proactively combat intellectual abuse in the new gTLD programme, yet still only a small number of brand holders have a strategy that takes advantage of these tools. Global brands have made the headlines for the wrong reasons by failing to plan or replicate their offline strategies in the online world. IBM, Lufthansa and Harley Davidson are three global organizations that failed to implement a strategy and then saw their brands infringed within days of specific new gTLDs being made available to non-trademark holders.

    In the case of the German airline, the domain that was infringed was, one of a number of TLDs that were registered by third parties using its valuable intellectual property. In the same industry, Virgin Australia saw its intellectual property infringed in the .holdings domain, within hours of the launch of general availability. Whilst both organizations have taken steps to have the domain names removed from the Internet, the fact that it took Virgin six weeks to sort out its problems cost the company significantly more than it would have done to implement a proactive, Chaos Controlled Strategy, not to mention the adverse publicity and potential brand damage resulting from one of its key trademarked terms sitting in the control of a third party.

    A strategy that not only looks at the present, but creates a vision for the future is one that can be defined as having a strong measure of control. In the current economic climate, where the online world is becoming more and more important to every organization, defining and executing a proactive Controlled Chaos Strategy is not only prudent, but sends a warning to potential intellectual property infringers that you mean business.