Donuts’ service is not cheap, but it’s much easier and cheaper than the alternative.
Donuts, applicant for over 300 top level domain names, has launched its “Domains Protected Marks List” offering to trademark holders.
The service allows trademark holders to block the registration of second level domains that contain their mark across all of Donuts’ domains. In order to qualify, the trademark must be registered with the Trademark Clearinghouse. Companies with generic/premium or three letter domain names might not be able to use the service.
A quick Google search shows that a couple participating domain name registrars are already selling the service. Both Encirca and 101Domain offer a five year block for about $3,000. If Donuts ends up procuring 200 domain names, that comes out to about $3 per domain per year.
The service only blocks the domains from registration. The trademark holder does not get to use the domain names. However, companies that use the service can pay extra to activate the domains. For example, Pizza Hut may pay for the block but then also pay to register and use PizzaHut.pizza.
Some brands may still want to register domains instead of block them because other companies that have trademark rights to a blocked domain can “override” the block and register them. This is particularly the case with more generic terms.
The blocking service seems like a good value for popular brands that have already made great efforts to procure a second level domain in most of the hundreds of existing top level domain names. For second level domains companies haven’t registered in .info, .biz, .uk, etc., it probably doesn’t make sense.
Although I’m sure some will cry “extortion”, I bet Donuts could make more money by not offering this service and requiring companies to participate in individual sunrises.