The Secondary Market in domain names plays a critical role in Internet commerce yet is often misunderstood. This article clear ups some of the common myths that frequently arise when discussing the Secondary Market.

The Secondary Market is a crucial feature of the domain name ecosystem which encompasses far more parties than domain name investors alone, who play an important but relatively modest part in it. Domain name investors help the Secondary Market to function better for the benefit of sellers, buyers and Internet users by providing liquidity and assisting in moving underutilized domain names to their highest and best use.

A competitive free market is the best system we have for allocating scarce resources such as domain names. Prices for domain names are established in the Secondary Market, not by domain name investors alone, but rather when buyers and sellers come to a meeting of the minds as to the relative value of a domain name. Domain name investors deal in desirable domain names that would be registered by someone, whether a domain name investor or someone else, and invariably whoever owns a domain name would only part with it if a satisfactory sale price was obtained. Ultimately, domain name investors are proxies for sellers by stepping into the shoes of the seller, staking his or her own capital and taking the risk and responsibility of reselling a domain name on the open market to a party who may have a more valuable use for it than the previous owner.

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We invite all ICA members to join Kate Buckley, Amanda Waltz, Tess Diaz, and Larry Fischer for a virtual ICA Member Event on how to get the most out of a broker/domain name owner relationship. Do you feel like you get the most out of your relationship with a broker? What can you do to help the broker do the best job for you? If you’re a broker, how do you assure a good relationship with your client? Join us to hear from and speak with these experienced brokers as they share valuable insights they collected over the decades spent working with buyers and sellers. The event will take place Wednesday, February 24th at 3 pm EST.

Not a member yet? We make it easy to join! For as little as $25/month, you can become an ICA member and gain access to this one and other similar events we organize, joining the over 100 individuals and companies who have already done so!

As each year, thanks to NamesCon’s generous support, the Lonnie Borck Memorial Award was presented during this year’s conference. The award was created to honor the memory of a well-respected and much-loved member of the domain community who was tragically lost far too soon and recognizes those who make an exceptional contribution to fostering a sense of community within the domain name community. This year’s winner, Michael Cyger, represents exactly that. Michael is the founder of DomainSherpa.com, and DNAcademy.com and has helped educate and inform many in the domain name industry. When the COVID pandemic shut down in-person gatherings, he put together a weekly Domain Industry Quarantine Social that allowed the industry to connect socially over Zoom. He has helped create a sense of community in the domain name industry that will continue to carry on.

The virtual format of the conference didn’t allow for an in-person award presentation, but thanks to Andrew Alleman’s readiness to step in, the ICA was able to surprise Michael with the award, and you’ll find excellent coverage of the award ceremony on dnjournal.com.

We were also fortunate to have Lonnie’s widow, Ronit, join us remotely and speak about what the award means to her and her family.

The ICA would like to congratulate Michael Cyger on the well-deserved award! We also want to thank everyone involved for your efforts in putting the ceremony together.

The nominations for the 2021 Lonnie Borck Memorial Award are now open. This will be the award’s fifth year, second since the award’s scope was expanded to honor those whose contributions have fostered a sense of community within the domain name industry. This change reflects Lonnie’s generous spirit and opens the nominations to a broader pool of people who can be recognized with the award. Last year’s award went to Ron Jackson of DNJournal.com, who was the first person to provide daily in-depth coverage of the activities of domain investors and to treat the business as industry worthy of coverage. His in-depth profiles of many participants in the industry helped us to get to know each other personally and to build a sense of community.

With NamesCon’s continued support, the 2021 Lonnie Borck Memorial Award will again be held during the conference. The nomination’s form will stay open until November 7th, and the nominations process is open to the entire domain name community. After the nomination’s process closes, ICA members will vote on the top 3 submissions and the ICA Board will select the winner.

We look forward to your submissions! Please help us by submitting your nominations and by sharing the form with your industry colleagues!

List of previous winners

2020 – Ron Jackson

2019 – John Berryhill

2018 – Kathy Kleiman

2017 – David Weslow

In an 8-1 decision, the Supreme Court of the United States agreed with the Internet Commerce Association’s position that under certain conditions, a generic .com domain name can obtain a trademark registration, albeit a very weak one, overruling the position advanced by the U.S. Patent and Trademark Office (USPTO).

The USPTO had taken the position that no matter what, a generic .com domain name could never serve to identity a particular business when used in connection with its generic meaning. The ICA argued in its amicus brief, and now the Supreme Court of the United States has agreed, that the USPTO’s blanket refusal to allow trademark registration of such domain names has no legal basis.  Instead, the correct standard is whether the domain name is identified with a particular company in the eyes of the consumer.  Thus, when consumers recognize that Booking.com refers to a particular company, rather than to booking services generally, Booking.com is eligible for a registered trademark.

The Supreme Court made clear that such generic .com trademarks are inherently weak and the scope of protection is limited so that granting such a trademark would not generally entitle the trademark owner to other domain names that employ the same generic word descriptively.

Many members of the ICA own valuable generic domain names. The Supreme Court decision, in our view, protects the value of generic .com domain names because the Supreme Court confirmed that they are now potentially registrable as trademarks with sufficient consumer identified association, an attractive feature for end-users. The decision also ensures the continued viability of domain name registrations which are similar to the generic .com if those domain names are used descriptively and in good faith, since the Supreme Court confirmed that a trademarked generic .com will be given a very weak and limited scope of protection.

The ICA again extends its gratitude to David Weslow from Wiley for filing an excellent amicus brief on behalf of the ICA.

Summary of the Case

On June 30, 2020 the United States Supreme Court issued its decision in United States Patent and Trademark Office et al. v. Booking.com B.V. The case concerned the eligibility for federal trademark registration for “Booking.com”. The USPTO had refused registration, and the trademark applicant, Booking.com B.V. went to court. The lower court determined that Booking.com, unlike the term, “booking” standing alone, was not generic, and the appeals court agreed with the lower court’s decision. The USPTO then appealed to the Supreme Court, in a final attempt to affirm its contention that as a rule, combining a generic term like “booking” with a “.com” still yields a generic composite that is not eligible for trademark registration. In the 8-1 ruling, the Supreme Court rejected the USPTO’s contention, and determined that ultimately, there could be no blanket rule that prohibits a generic .com from trademark registration, as if the generic .com was perceived by consumers as a brand associated with a particular company, then it effectively qualifies for trademark status.

Before the Booking.com Decision, Were All Generic .com Domains Ineligible for Trademark Registration?

No. As the Supreme Court pointed out, the USPTO previously issued trademark registrations for generic .com domain names in some circumstances. The Supreme Court pointed out that for example, ART.COM had already obtained a registered trademark on the principal register for “online retail store services” offering art points, original art, and reproductions”. The Supreme Court also pointed out for example, that the USPTO already issued a trademark registration for DATING.COM on the supplemental register for “dating services”. There are numerous other examples of this, including WEATHER.COM, LAW.COM, and even HOTELS.COM. In the latter case, Hotels.com in fact has three registered trademarks, inter alia for travel agency services related to transportation, for computer software and applications for information on travel, and travel agency services for entertainment and event bookings. HOTELS.COM was however, previously found by an appeals court to be ineligible for a registered trademark for ‘travel agency services for hotel reservations’, because despite substantial evidence of consumer identification of HOTELS.COM as identifying the particular company, the combination of HOTELS.COM was still generic when it came to hotel reservations. Accordingly, before the Bookings.com case there was significant inconsistency when it came to which generic .com domain names were eligible for trademark registration, with some registrations being permitted, and some not. The USPTO wanted to solve this by making a general rule prohibiting all such registrations, but the Supreme Court decided that in some instances there should be a registration granted, but it turns on the facts.

So if Generic .com Domain Names were Trademarkable Before, What was the Controversy with the Booking.com Case?

The USPTO wanted to create a new rule; a broad prohibition on registered trademarks for generic .com domain names. In other words, the USPTO wanted to make it so in the future, there was zero chance of ever getting a trademark for a generic .com.  The Supreme Court rejected this approach and instead affirmed the longstanding approach of determining eligibility on a case by case basis based upon consumer perception of a particular generic .com.

What is the Key Test for Registrability of a Generic .com Domain Name?

The primary consideration is whether a generic .com is perceived by consumers as being identified with a particular company. As long provided for in the Lanham Act, the key to this is consumer perception, i.e. the primary significance of the mark to the relevant public. The term “booking” itself was agreed by all concerned to be a generic term for booking hotel reservations. The question then arose whether adding “.com” changed that, since the entire mark must be viewed as a whole. The evidence was that BOOKING.COM was perceived by consumers to be a particular provider of booking services, rather than a generic term referring to booking providers. The Supreme Court noted that no one would ask to be referred to a good “Booking.com” provider, as an indication that when taken as a whole, Booking.com did not really refer to a generic “thing”, but rather to a particular service provider, and was therefore not a generic name to consumers.

The USPTO argued, and the Supreme Court rejected, the contention that every generic .com was generic regardless of consumer perception. The USPTO as aforementioned, wanted to bar all generic .com domain names from becoming registered trademarks, generally, arguing that “generic .com” was no different than “Generic Company”, in other words that Wine.com is equivalent to “The Wine Company”. The Supreme Court found that to be a faulty premise, since there is in law no absolute bar to registration of generic terms per se; rather it is always matter of consumer perception as to whether a particular term is in fact, generic. Moreover, the Supreme Court noted that on the Internet, there can only be one “generic .com” since the domain name is associated with a particular website, whereas there can be numerous “Generic Companies”, thereby adding to the possibility of a generic .com being potentially perceived as a distinctive and particular source, rather than a generic term.

The Supreme Court also rejected the USPTO’s argument that no matter how much money or effort has been poured into promoting a generic .com, it cannot rise to the level of being identified with a particular company. The Supreme Court said that there is and can not be any “automatic” prohibition, since the relevant criterion for registrability is always a matter of consumer perception.

What Proof of Consumer Perception of a Generic .com’s Being Identified With a Particular Company is Required?

Consumer surveys can show that a generic .com is perceived by consumers as identifying a particular company rather than a genus, although the Court noted that care must be taken when evaluating such surveys. The Court also stated that dictionaries, common usage by consumers and competitors and any other source of evidence bearing on how consumers perceive a term’s meaning can also assist.

Will Generic .com Domain Names be Automatically Entitled to a Registration?

Like before the Booking.com decision, when it comes to a generic .com, the USPTO will generally require proof that a mark is perceived by consumers as being identified with a particular company, so there is no automatic right to a trademark for a generic .com domain name just because it is used in commerce. It will continue to be a generally demanding threshold to overcome the initial assumption that a generic .com domain name is merely a composite of two generic terms.

Will My Generic .com Domain Name be Eligible for Trademark Registration?

That will depend. The Booking.com case made it clear that your generic .com domain name may be eligible, but whether your generic .com will be eligible will depend on the facts and circumstances. Are you able to show that through extensive use, promotion, sales, and marketing that consumers have come to associate your generic .com with your particular company? If you have only registered the generic .com and not extensively used and promoted it over a considerable length of time, and do not have substantial evidence to back up your claim of consumer identification, then your application would likely be rejected, especially if the applied for goods and services were closely associated with the generic term itself. It will be continue to be very tough for a generic domain names to be registered as trademarks, but based on the Booking.com case, the owner has a chance to prove that consumers identify the domain name with the owner’s particular company and thereby qualify for a trademark registration.

Are Generic .com Domain Names Now All Trademarkable?

No. Rather, they are all potentially trademarkable but it will depend on the facts and the evidence that is marshalled to prove consumer identification, which is arguably the same as before, although now the law is clearer as a result of the Booking.com decision.

Did the Booking.com Case Make it Easier for Trademark Owners to Take Away My Domain Name?

As discussed above, registered trademarks were obtainable even before the Booking.com case and the Booking.com case clarified the law and rejected the USPTO’s new proposed approach of prohibiting all generic .com domain names, period. Before the Booking.com case, there were already registered trademarks for Weather.com, Hotels.com, and others, yet there were few if any cases of these trademark owners using their trademark registrations to try to take away similar domain names. For example, registered alongside HOTELS.COM as a registered trademark, are ULTIMATEHOTELS.COM and SUPERSAVE-HOTELS.COM. Additionally, Laws.com exists as a website along the trademarked LAW.COM, and TheWeather.com exists as a website along with the trademarked WEATHER.COM.

It is doubtful that legitimately registered and used domain names that contain a generic word will be more susceptible to attack by generic .com trademark owners after the Booking.com decision. The Supreme Court noted the USPTO’s concern that allowing a generic .com to be trademarked could hinder competitors by preventing them from using the word “booking” or adopting domain names like “ebooking.com”[1] or “hotel-booking.com”. As the Supreme Court pointed out however, the concern over overly broad rights for generic .com trademark owner already exists when it comes to descriptive trademarks, and the law deals with this concern by “hemming in” the scope of such trademarks “short of denying trademark protection altogether”. In other words, such trademarks are inherently very weak, and the weaker the mark, the less likelihood of confusion. As the Court pointed out, when a trademark incorporates a very common generic word, such as hotels, or booking, consumers are less likely to think that other uses of the common term relate to the trademark owner alone. As an example, the Court pointed out that the word “grand” is in many hotel names, and consumers know to differentiate one from another. The Court noted that even if there were to be some confusion between a generic .com trademark registration and a similar domain name, the doctrine of “classic fair use” can protect the domain name owner where the domain name owner uses the domain name fairly and in good faith as a descriptive term. For example, HotelBookings.com ought to be safe from attack from Booking.com even after Booking.com gets a trademark registration, if it is used in a fair and descriptive manner. Nevertheless, domain name registrants must remain vigilant in their defense of generic and descriptive domain names in the event that a generic .com trademark owner attempts, as they are often prone to do, to overreach the actual limited scope of protection afforded to a generic .com trademark.

The Supreme Court specifically stated that existing principles of trademark law that provide weak marks with a very limited scope of protection guard against a monopoly on the term “booking” itself, even if Booking.com gets a trademark registration. The Supreme Court noted that “Booking.com itself acknowledged that close variations are unlikely to infringe” and that a trademark registration “would not prevent competitors from using the word ‘booking’ to describe their own services”.

Is the Booking.com Case Good for Domain Name Investors?

Yes, for three reasons. First, the domain name investment community is generally focused on the registration of generic domain names and the Booking.com case made it clear that such domain names are potentially trademarkable. This incrementally enhances the value of such generic .com domain names to end users because it offers the possibility that if a business builds a powerful, widely recognized brand on a generic .com domain name it may be eligible for trademark registration. If the possibility of trademark protection was permanently foreclosed, an end-user may have second thoughts about building its brand on a generic .com domain name that could never benefit from trademark protections, albeit modest protections, thus reducing demand for such generic .com domain names and likely valuations as well.  Second, the Supreme Court confirmed that inherently weak marks such as generic .com domain names are entitled to little scope of protection and domain name investors should not be prevented from continuing to use terms descriptively even when there is a similar registered trademark. Third, the Booking.com case highlighted the domain name industry and in particular showcased the substantial value and attractiveness of generic domain names, thereby boosting the industry. In his dissent, Justice Breyer noted the benefits that a generic .com owner has by being savvy enough to register such a “valuable piece of online real estate”. This is what domain name investors have been saying for years, and now a Supreme Court justice has proclaimed the same.

Nevertheless, domain name investors will need to monitor how this case is treated in subsequent court actions and UDRPs and ensure that generic .com trademark owners only obtain the limited protections that they are entitled to as suggested by the Booking.com case. It would have been preferable if the Court provided a more robust discussion of the limitations on generic .com trademarks. It will be interesting to see how this area of law evolves and how this case is interpreted in the future.

[1] Ebooking.com already has a USPTO registered trademark for EBOOKING.COM and a design.

By Zak Muscovitch

Should generic .com domain names never be entitled to trademark protection? When a domain name like booking.com is identified as a brand by the public, should it still be denied trademark protection as a matter of law? The ICA takes a position on this difficult question in an amicus brief submitted to the U.S. Supreme Court of the United States through its counsel, Wiley Rein LLP.

The brief asks the Supreme Court to affirm the current legal status quo as per the decision of the U.S. Court of Appeals for the Fourth Circuit holding that the addition of a top-level domain such as “.com” to an otherwise generic term may result in a protectible trademark where evidence demonstrates that the trademark’s primary significance to the public as a whole is the source of a product or service and not the product or service itself.

Many domain name owners have heavily invested in generic domain names which through extensive use and promotion, whether by domain name investors or a subsequent purchaser, are sometimes capable of acquiring distinctiveness and thereby affording trademark protection. Denying generic domain names the opportunity to ever be registered as a trademark would devalue otherwise valuable intellectually property assets by making them unappealing to companies seeking to develop brands that could be registered as trademarks.  Denying the possibility of trademark protection to generic domain names would not benefit domain name investors, but would rather harm them, by severely limiting the commercial potential of such generic domain names.

Additionally, new top-level domains – like “.homes,” “.inc,” “.doctor,” “.law,” “.bank,” “.cars,” “.news,” “.cpa,” “.ngo,” and “.organic” – hold great promise for improved e-commerce and online security, but their adoption will be stunted if the Government succeeds in foreclosing trademark protection for domain names in all cases, regardless of the degree of use and promotion.

The ICA’s Code of Conduct enshrines protection for intellectual property rights. The ICA’s brief explains how enabling trademark protection where warranted can help prevent two of the most common malicious activities involving the domain names, namely typosquatting and domain name theft. The ICA’s amicus filing supports intellectual property rights where warranted and stands against cybersquatting and malicious domain name theft.

To read the ICA’s amicus brief, please click here: Booking.com Amicus Brief

The ICA wishes to express its great appreciation to Wiley Rein LLP and attorney David Weslow (the winner of the inaugural ICA Lonnie Borck Memorial Award) for submitting such a well-argued brief on issues of importance to the domain name investment community.

The ICA submitted its comment to ICANN in connection with the Proposed Amendment 3 to the .COM Registry Agreement. ICA voices its concerns as to the effectiveness of ICANN’s Public Comment process in general as well as demonstrates that ICANN allowing Verisign to charge more for .COM domains is not justifiable.

We encourage everyone to read our full comment and to submit their own in opposition of ICANN allowing increases on .COM domains. You can do so here.

Read the full letter here: Letter to Cyrus Namazi – January 15 2020

ICANN’s announcement that it “reached a proposed agreement” with Verisign to amend the .com registry agreement raises serious concerns and questions. The Internet Commerce Association will be closely studying the proposed changes and will deliver its comments to ICANN in due course.

Amongst the preliminary concerns and questions that ICANN’s announcement raises are the following

1. The proposed price increase imposes hundreds of millions of dollars of unjustified expenses on .com registrants for the sole benefit of a registry provider that is already grossly overpaid for the services it provides. That ICANN puts the interest of one powerful company over the interests of millions of registrants raises questions as to ICANN’s legitimacy, its accountability and its governance structure.
2. Why does ICANN go through the charade of putting the agreement that it already reached out for public comment? Surely the time to seek meaningful public feedback is before reaching an agreement. Moreover, as we saw with the overwhelming public opposition to the renewed .org Registry Agreement, ICANN just does what it wants anyhow. ICANN’s pretense that it is responsive to the public interest is a farce.
3. Who wants higher .com prices? Is there any stakeholder or group, other than Verisign, that is eager to raise prices on .com? There isn’t, save and except perhaps other registry businesses that envision being able to raise their own prices as .com pricing goes higher. If ICANN was truly looking after the public interest and was truly acting in the best interest of stakeholders and registrants in particular, there would be no impetus whatsoever to raise prices.
4. ICANN’s express claim that it “is not a price regulator” is nothing more than a misguided effort at misdirection in respect of its actual obligations and duties as the steward of the .com registry. First, of course ICANN is not a regulator – only governments are regulators. Rather, ICANN is a steward that is mandated to look after the public interest, and is the sole party able to negotiate terms with its registry operator service providers. Accordingly, ICANN does not need to be a regulator to prevent unjustified price hikes on .com domain names – it just needs to fulfil its duty as the steward.
5. In fact, ICANN expressly admits, in the very same statement wherein it states that “it is not a price regulator”, that “pricing certainty [will be achieved] by limiting the potential maximum wholesale price for .COM domain names”. Pricing certainty is one of the most fundamental obligations of a steward entrusted with ensuring the stability of the Internet, as without pricing stability on .COM domain names massive upheaval could occur if captive market registrants face unrestrained pricing. ICANN goes on to state, “the .COM TLDis an important part of global commerce, making its continued secure, stable and resilient operation a top priority for both ICANN and Verisign”. And presumably, ICANN and the Department of Commerce realizes that, and that is precisely why price caps are necessary in the absence of the preferable competitive marketplace where registry contracts are put out for competitive bid, thereby assuring that the fees imposed by the .com registry for providing registry services reasonably reflect market rates.
6. The price increase from the current wholesale price of $7.85 to the maximum price in 2024, of $10.26, represents a $2.41 annual increase. That means that in October 2024, Verisign will be receiving an additional windfall of $344,630,000 per year, assuming that .COM registrations do not rise even further as they are expected to. Verisign is already making billions of dollars in pure profit from its ICANN contract, and there is absolutely no reasonable justification for increasing its revenue other than that it is good for Verisign. It is not good, however, for anyone else. Once again, ICANN is the victim of its long history of making woefully improvident deals on behalf of the Internet community. The pitiful $20 million that ICANN is to receive when Verisign is poised to make billions off of this deal is just the latest example.