What are alternative domain name extensions?
What action should brand owners take?
Comment
With the rise of blockchain, cryptocurrencies and non-fungible tokens (NFTs), alternative domain name extensions associated with web 3.0 – such as ".eth", ".bitcoin", ".blockchain", ".crypto" and ".nft" – are starting to flourish. This article examines the nature of such alternative domain name extensions and what trademark owners should do in cases of infringement.
What are alternative domain name extensions?
These domain names are not the same as classic domain names:
- They are not governed by the Internet Corporation for Assigned Names and Numbers.
- They cannot be detected via the usual domain name watch systems used to discover new reservations.
- There are no extrajudicial dispute resolution procedures similar to, for example, the Uniform Domain-Name Dispute-Resolution Policy.
Such alternative domain names are part of an alternative naming system, the main use of which is to name resources that are on the blockchain. Like traditional domain names, which initially aimed to help users memorise internet protocol addresses more easily, the aim of alternative domain names is to replace a crypto wallet address that is impossible to memorise.
Currently, the use of alternative domain names is limited, but they are associated with web 3.0, which can only be accessed under specific technical conditions via particular browsers or with the help of gateways. The number of reservations is still limited for the 11 extensions available to date. The extensions with the most reservations are ".eth" (with less than 1.2 million reservations) and ".crypto" (with only 300,000 reservations).
What action should brand owners take?
It appears that some trademarks have already been reserved to identify the wallets of particular users. Therefore, brand owners – and in particular well-known brands – face the risk of being robbed at the dawn of web 3.0. This section sets out how brand owners should anticipate and react to this new trend.
Reserve and protect
It would usually be unwise to file multiple defensive reservations of brand names with these domain name extensions for obvious cost reasons, but also insofar as this kind of approach can never be an exhaustive remedy against the risks of cybersquatting. Nevertheless, it may be prudent to reserve major names, at least with the most widely used extensions.
To a certain extent – and if it is of additional interest, depending on the company's immediate or future projects – brand owners are also recommended to consider trademark protection of strong identifiers in relation to virtual portfolios and products, NFTs and the metaverse.
Monitor
Monitoring processes relating to classic domain names do not cover these alternative extensions. It is therefore necessary to set up new monitoring tools to be informed quickly of trademark reservations.
Buy back
If it is already too late and the name has been taken by a third party, the brand may have an interest (to be assessed on a case-by-case basis) in buying back the disputed alternative domain name – provided, of course, that the holder agrees to sell and that the price to be incurred is not unreasonable.
Claim
Various private players and platforms provide these alternative domain name extensions. It is therefore advisable to analyse their general conditions to check:
- which procedure – preferably an amicable one – may be used;
- the applicable law;
- whether there are any provisions in the event of infringement of IP rights; and
- whether any such processes are in place.
Regarding reservation and buy back, it must be kept in mind that these measures will be settled in cryptocurrency. This has several implications, in particular:
- The price in Euro of cryptocurrencies can fluctuate in a significant and extremely fast way.
- The brand owner will need to hold a cryptocurrency account to be able to finance these extensions.
Given the above, it is important to be assisted by a trusted partner to conduct the necessary legal and pragmatic thinking on the strategic level and to act as a proxy and avoid the creation of a cryptocurrency account if necessary.
For further information on this topic please contact Charlotte Urman at INLEX IP Expertise by telephone (+33 1 56 59 70 90) or email ([email protected]). The INLEX IP Expertise website can be accessed at inlex.com.