Patent covers dynamic domain pricing, registration requirements and more.
The U.S. Patent and Trademark Office has granted patent number 11,244,368 (pdf) to Verisign (NASDAQ: VRSN) for Adaptive control of domain name registrations via dynamically variable registration requirements.
It’s a sweeping patent covering many aspects of domain pricing and allocation. It broadly covers four areas of domain pricing and registration management.
Dynamic domain pricing
Verisign implemented premium pricing for domain names many years ago with .tv. When new top level domain names launched nearly a decade ago, most registries implemented premium pricing for some second level domains in their strings.
You might be surprised to learn how archaic the process is for relaying premium pricing information to registrars. Many registries send spreadsheets to registrars telling them which domains are premium and how much to charge for them. It’s a time-consuming process to update these prices, so registries can’t quickly adjust prices if a word, such as NFT or Metaverse, suddenly becomes hot.
Some registry platforms allow for faster price updating in a centralized management system. Still, when a keyword becomes more popular, the registry has to notice the trend and make adjustments.
Verisign’s patent describes a system that would dynamically set the price based on data such as signals indicating increased demand:
Level of demand or interest for the strings can include a frequency of requests to register or resolve domain names containing at least one string in the string set, a change in frequency of requests to register or resolve domain names containing at least one string in the string set, the registration history of domain names containing at least one string in the string set, trending topics or search terms containing at least one string in the string set, etc.
The price could also be impacted by how much traffic a non-registered domain currently gets (NXD data).
So if the term NFT or ETH suddenly becomes hot, registry pricing for domains including these terms could automatically adjust to premium.
Manage registration requirements
Another aspect of the patent covers registration requirements and methods that could reduce abusive registrations. For example:
An example of an accreditation requirement for a domain name likely to be used for charitable or non-profit purposes (e.g., “RedCross.tld”) can require that the requesting entity be a registered 501(c) organization. An example of an authentication requirement can require authentication of the requesting entity’s stated individual or organization identity via proof of the stated identity, such as pertinent documentation, identity certificates, passwords, etc.
To block potentially abusive registrations, the registry system could request proof of ownership of related domains before registering a similar domain.
An example of a domain name ownership requirement can require the requesting entity to provide proof of ownership of “example.tld” when the requesting entity attempts to register “wwwexample.tld” or other commonly-mistyped domain name.
Dynamically establishing and adjusting registration requirements (e.g., raising the offer price, setting entity eligibility requirements, etc.) for domain names with constituent strings exhibiting certain assessments (e.g., have high or spiking DNS lookup rates) also provides the benefit of protecting vulnerable end-users from malicious middlemen seeking to exploit public confusion. For example, if a domain name has either recently expired or is in high demand because of recent media attention, malicious middlemen can register the domain name at a below-market price to confuse unwitting end users over legitimate websites by causing the domain name to resolve to a phishing website (e.g., fake donation websites for natural disasters). Because most malicious middlemen are highly price-sensitive, registration controller 230 can keep such malicious middlemen from cheaply registering the domain name.
So if an earthquake hits Haiti, the registry could increase the price of domains that might refer to the earthquake to discourage bad actors from registering the domains. Or, it could require registrants to verify non-profit status before registering the domains.
Adjust expired domain pricing and requirements
Verisign has filed multiple patents relating to how expired domains are allocated, and the newly-issued patent makes several references to expired domains.
One of the references is to changing the price based on who registers the domain. This could be interesting as it relates to first-year promotional pricing for domains. Many new top-level domains charge a low price for the initial registration and much more when the domain renews. If a domain isn’t in demand, an entity can let the domain expire and then re-register it at a lower price.
The patent notes that registration requirements for a domain could include:
…a whitelist of one or more entities eligible to register the domain name at the offer price (e.g., entities that have never been a registrant of the domain name), a blacklist of one or more entities ineligible to register the domain name at the offer price (e.g., the domain name’s current/recent registrant)…
A registry could also tweak pricing based on the potential demand for the expired domain (such as high traffic) or set an initial expired domain price that changes later if no one registers it within a set period of time.
Registrant (or registrar) whitelisting
In 2008, domain name registrar Network Solutions started reserving domain names people searched for at the registrar. If you searched for example.com, Network Solutions would go ahead and register the domain. The customer could still register it, but they were blocked from registering the domain at another registrar. The company said it was doing this because it believed someone was snooping on registration requests and preemptively registering domains.
Verisign’s patent describes a way to limit registrations to specific entities. I read this in a couple of ways. One is that the registry could restrict registration to the entity that first searched for the domain. If I search for example.tld, the registrar presents a price to me. If I don’t register the domain within a day, the price drops, or another person becomes eligible to register.
Another is that it could limit registrations to specific entities for a period of time, at which point it opens up. This could apply to a sunrise scenario, or one in which a TLD opens up new namespace to companies that have registered a similar domain (e.g., .co.uk offering .uk and now .com.au offering .au registrations).
Here’s a relevant excerpt from the patent:
If, at stage 360, the registration controller determines that feedback received is not positive, for example, the requesting entity cancels the registration request, rejects the registration offer, fails to accept or satisfy all relevant registration requirements during the offer period, then process 300 can proceed to stage 365. At stage 365, the registration controller can determine whether or not to reassess the domain name, for example, by evaluating whether or not the domain name’s current assessments and/or registration requirements remain valid (e.g., not yet expired based on associated time-to-live). If, at stage 365, the registration controller elects to not reassess the domain name, then process 300 can jump to stage 340, at which the registration controller can calibrate or adjust the domain name’s registration requirements to account for any relevant feedback or lack thereof, if warranted, or simply maintain the domain name’s registration requirements. For example, subsequent to determining that the domain name failed to receive positive feedback within the domain name’s offer period, the registration controller can calibrate or adjust the domain name’s registration requirements by lowering the domain name’s offer price, extending the offer period, adding one or more TLDs for which the offer price applies, adding entities to the whitelist of entities eligible for the offer price, removing entities from the blacklist of entities ineligible for the offer price, lowering or removing entity eligibility requirements, and the like. However, if at stage 365 the registration controller elects to reassess the domain name, for example, because the domain name’s current assessments and/or registration requirements are no longer valid (e.g., expired based on the registration requirements’ associated time-to-live), then process 300 can jump to stage 330 to reassess the domain name.
A big patent
Companies apply for patents for services they currently offer, that they might provide in the future, or that a competitor might use. It’s worth reading Verisign’s patents to understand how it might change policies or tactics in the future, and this patent is a good example. This strikes me as one of the more important patents Verisign has obtained.
Verisign applied for the patent in 2016, and it was granted today.
David Michaels says
This business method patent for domain frontrunning is not novel. Cybersquatters operating packet sniffers were doing this to scoop domains that I searched for in the 1990s.
If I didn’t register a domain for a client within minutes, it was taken by someone shortly after I searched for it and found it available.
This is a predatory practice that Verisign should never do, otherwise they will be subject to class action lawsuits for breach of trust and cybersquatting.