.NIKE New gTLD Application

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New gTLD Application Submitted to ICANN by: NIKE, Inc.

String: NIKE

Originally Posted: 13 June 2012

Application ID: 1-1395-25808

Applicant Information

1. Full legal name

NIKE, Inc.

2. Address of the principal place of business

One Bowerman Drive

Beaverton  97005

US

3. Phone number

+1 503 671 6453

4. Fax number

+1 503 646 6926

5. If applicable, website or URL

Primary Contact

6(a). Name

Christopher Niemi

6(b). Title

gTLD Program Manager, MarkMonitor

6(c). Address

6(d). Phone Number

+1 208 685 1857

6(e). Fax Number

+1 208 389 5771

6(f). Email Address

This email address is being protected from spambots. You need JavaScript enabled to view it.

Secondary Contact

7(a). Name

Susan Roeser

7(b). Title

Internet Paralegal

7(c). Address

7(d). Phone Number

+1 503 671 4503

7(e). Fax Number

7(f). Email Address

This email address is being protected from spambots. You need JavaScript enabled to view it.

Proof of Legal Establishment

8(a). Legal form of the Applicant

Corporation

8(b). State the specific national or other jursidiction that defines the type of entity identified in 8(a).

Oregon

8(c). Attach evidence of the applicant's establishment.

Attachments are not displayed on this form.

9(a). If applying company is publicly traded, provide the exchange and symbol.

New_York_Stock_Exchange;NKE

9(b). If the applying entity is a subsidiary, provide the parent company.

9(c). If the applying entity is a joint venture, list all joint venture partners.

Applicant Background

11(a). Name(s) and position(s) of all directors

Alan B. Graf, Jr. Director

Douglas G. Houser Director

John C. Lechleiter Director

John G. Connors Director

John R. Thompson, Jr. Director

Johnathan A. Rodgers Director

Mark G. Parker Director, President & Chief Executive Officer

Orin C. Smith Director

Philip H. Knight Director, Chairman of the Board

Phyllis M. Wise Director

Timothy D. Cook Director

11(b). Name(s) and position(s) of all officers and partners

Charles D. Denson President, NIKE Brand

David J. Ayre Vice President, Global Human Resources

Donald W. Blair Vice President & Chief Financial Officer

Eric D. Sprunk Vice President, Merchandising & Product

Gary M. DeStefano President, Global Operations

Hans van Alebeek Vice President, Global Operations & Technology

Hilary K. Krane Vice President, General Counsel & Corporate Affairs

Jeanne P. Jackson President, Direct to Consumer

John F. Coburn III Corporate Secretary

John F. Slusher Vice President, Global Sports Marketing

Kelley Hall Vice President, Treasury & Investor Relations

Roger S. Wyett President, NIKE Affiliates

Trevor A. Edwards Vice President, Global Brand & Category Management

11(c). Name(s) and position(s) of all shareholders holding at least 15% of shares

Philip H. Knight Chairman of the Board

11(d). For an applying entity that does not have directors, officers, partners, or shareholders: Name(s) and position(s) of all individuals having legal or executive responsibility

Applied-for gTLD string

13. Provide the applied-for gTLD string. If an IDN, provide the U-label.

NIKE

14(a). If an IDN, provide the A-label (beginning with "xn--").

14(b). If an IDN, provide the meaning or restatement of the string in English, that is, a description of the literal meaning of the string in the opinion of the applicant.

14(c). If an IDN, provide the language of the label (in English).

14(c). If an IDN, provide the language of the label (as referenced by ISO-639-1).

14(d). If an IDN, provide the script of the label (in English).

14(d). If an IDN, provide the script of the label (as referenced by ISO 15924).

14(e). If an IDN, list all code points contained in the U-label according to Unicode form.

15(a). If an IDN, Attach IDN Tables for the proposed registry.

Attachments are not displayed on this form.

15(b). Describe the process used for development of the IDN tables submitted, including consultations and sources used.

15(c). List any variant strings to the applied-for gTLD string according to the relevant IDN tables.

16. Describe the applicant's efforts to ensure that there are no known operational or rendering problems concerning the applied-for gTLD string. If such issues are known, describe steps that will be taken to mitigate these issues in software and other applications.

NIKE, Inc. (“Nike”) foresees no known rendering issues in connection with the proposed .NIKE gTLD for which it is applying. This answer is based upon consultation with Nike’s selected back-end provider, Neustar, which has successfully launched a number of new gTLDs over the last decade. In reaching this determination, Neustar analyzed the following data:

-ICANN’s Security Stability Advisory Committee (SSAC) entitled Alternative TLD Name Systems and Roots: Conflict, Control and Consequences (SAC009);

-IAB - RFC3696 “Application Techniques for Checking and Transformation of Names”

-Known software issues which Neustar has encountered during the last decade launching new gTLDs;

-Character type and length;

-ICANN supplemental notes to Question 16; and

-ICANN’s presentation during its Costa Rica regional meeting on TLD Universal Acceptance.

17. (OPTIONAL) Provide a representation of the label according to the International Phonetic Alphabet (http://www.langsci.ucl.ac.uk/ipa/).

Mission/Purpose

18(a). Describe the mission/purpose of your proposed gTLD.

.NIKE Mission and Purpose

The principal business activity of NIKE, Inc. (“Nike”) is the design, development, and worldwide marketing and selling of high quality footwear, apparel, equipment, and accessory products. Nike is the world’s largest seller of athletic footwear and athletic apparel. Nike sells its products to retail accounts; through Nike-owned retail stores and Internet sales, referred to as “Direct to Consumer” operations; and through a mix of independent distributors and licensees, in over 170 countries. Nike’s online content is viewable in .COM, .MOBI, .ORG, and .NET, and various ccTLDs.

Nike’s athletic footwear products are designed primarily for specific athletic use, though many products are worn for casual or leisure purposes. Nike places great emphasis on high quality construction and innovation in products designed for men, women, and children. Running, training, basketball, soccer, sport-inspired casual shoes, and kids’ shoes are currently Nike’s top-selling footwear categories and Nike expects them to continue to lead product sales in the near future. Nike also markets footwear designed for baseball, cheerleading, football, golf, lacrosse, outdoor activities, skateboarding, tennis, volleyball, walking, wrestling, and other athletic and recreational uses.

Nike sells sports apparel and accessories covering most of the above categories, sports-inspired lifestyle apparel, athletic bags, and accessory items. Nike apparel and accessories feature the same trademarks and are sold through the same marketing and distribution channels. Nike often markets footwear, apparel, and accessories in “collections” of similar design or for specific purposes. Nike also markets apparel with licensed college and professional team and league logos.

Nike sells a line of performance equipment under the NIKE Brand name, including bags, socks, sport balls, eyewear, timepieces, electronic devices, bats, gloves, protective equipment, golf clubs, and other equipment designed for sports activities.

Nike has entered into license agreements that permit unaffiliated parties to manufacture and sell certain apparel, electronic devices, and other equipment designed for sports activities. Nike’s brands include Nike, Cole Haan, Converse, Hurley, Jordan, NIKE Golf, and Umbro.

Nike has invested millions of dollars in advertising and promoting the NIKE Mark and has sold billions of dollars in merchandising under the Mark. In addition to its inherent distinctiveness and as a result of Nike’s extensive marketing efforts, substantial sales, and the resulting success of its merchandise, the NIKE Mark has also become famous and represents extraordinarily valuable goodwill associated with and owned by Nike. The fame and reputation symbolized by the NIKE Mark has been developed, in part, through Nike’s extensive efforts to rigorously protect its NIKE Mark. The NIKE Mark is exceedingly well known and famous, and recognized worldwide as an indication of merchandise emanating from Nike.

Nike intends to analyze general market adoption to determine short- and long-term potential best use options to most effectively serve and enhance its online strategy.

The intended future mission and purpose of .NIKE is to serve as a trusted and intuitive namespace for Nike, its affiliate brands, and its consumers. However, to date there has not been enough time, or market information available, to fully analyze and evaluate all potential use options.

Although ICANN has not specifically recognized a .BRAND gTLD specification in the Applicant Guidebook, brand owners widely anticipate that this will become a specialty subset of gTLDs. .NIKE is planned as a .BRAND gTLD, with the goal of protecting Nike’s online presence and identity.

Nike intends to initially limit registration and use of domain names within .NIKE to Nike and qualified subsidiaries and affiliates. This initial limited use will allow Nike to establish operations and achieve full sustainability. This limited distribution, plus other requirements set forth in Specification 9 of the template Registry Agreement, is intended to exempt Nike from its annual Code of Conduct Compliance requirements.

After Stage Two (below), Nike expects to evaluate whether opportunities exist to carry out the business strategy for .NIKE through expansion that continues the registry’s sustainable operations.

Nike currently plans a four-stage rollout for .NIKE. The dates of these stages are subject to change depending upon business, strategic, and industry factors at the time.

1. Stage One

The initial stage of implementation of the gTLD will involve Nike registering a limited number of .NIKE second-level domains.

This initial use is intended to provide Nike’s IT and security personnel time to perform tests to ensure seamless and secure access using .NIKE domain names, interoperability with various software and Web-based applications, and unbroken and secure use of all names. This initial allocation will also allow the appropriate Nike staff to coordinate with internal and external staff responsible for the delegation and setup phases of the .NIKE gTLD to ensure a proper transition from delegation to full operation.

2. Stage Two

Upon successful completion of all Stage One testing, Nike expects to begin using domain names in .NIKE for more widespread internal corporate use. During this time, Nike plans to evaluate strategies to potentially migrate traffic away from its current network of second-level domain names in a variety of TLDs, to .NIKE.

In this stage, Nike plans to evaluate expanding the operations of .NIKE to permit registration by other registrants such as licensees or strategic partners. Should an assessment of its expansion strategy lead to a decision to extend registration rights to other parties, this expansion is currently planned to occur during Stage Three. However, any expansion would be conditioned upon a review of Specification 9 (Registry Code of Conduct) in the template Registry Agreement to ensure compliance with Nike’s business model.

3. Stage Three

Depending on the analysis of the evaluations undertaken in Stage Two, Nike may begin to implement the permanent migration of Internet traffic away from the TLDs in which its domain names are currently registered, and toward .NIKE. In this stage, Nike also may implement its decision to extend registration rights to licensees or strategic parties, depending upon compliance with Specification 9 as noted above.

After consideration of the following factors: analysis of Nike’s existing domain name portfolio; internal analysis of marketing initiatives; and the fact that Nike will have full control over the number of registrations in the .NIKE gTLD namespace, Nike expects that the number of domain name registrations will be less than 10,000 in the first five years of operation.

4. Stage Four

Based on its experience with any expansion implemented in Stage Three, Nike intends to assess whether its business plan and expansion strategy should be augmented by extending registration rights to a broader class of licensees, including potentially to customers of Nike. It is anticipated by Nike that changes to the domain name industry, and particularly the impact of .BRAND gTLDs, will likely take at least five years to be realized and assessed. Any decision to expand the gTLDs beyond corporate, qualified subsidiary and affiliate, and licensee use will take into account this experience as well as the technical analysis of potential expansion.

Utilizing current projections based upon Nike’s existing businesses, future business plans, current domain name portfolio, and other strategic factors, Nike estimates second-level domain name registrations to be in line with the projections set forth in the response to Question 46 of this application.

18(b). How do you expect that your proposed gTLD will benefit registrants, Internet users, and others?

18.2 How do you expect that your proposed gTLD will benefit registrants, Internet users, and others?

Based on its current understanding of new gTLDs, Nike believes that the proposed .NIKE gTLD has the potential to offer the following benefits to Internet users and consumers:

-Establish a trusted source of information and online marketplace for consumers worldwide who purchase goods through Nike’s online retail stores; for third parties seeking information; and for the general Internet user population;

-Provide Nike and its affiliates with short and memorable Internet addresses; provide increased navigation to products, services, advertising campaigns, events, public interest content, etc.;

-Minimize the cost and need for defensive registrations because domain names will only initially be used by Nike and allocated to its qualified subsidiaries and affiliates for internal company use; and

-Develop a potential platform for the secure access to, purchase of, and distribution of Nike products and information to consumers, in order to minimize the potential for counterfeit or infringing goods.

Also, through the adoption of new gTLDs by the wider Internet user community, consumers may benefit from lower incidents of phishing and malware often associated with mistypes of domain names in the .COM space that are owned by cybersquatters, since they will be navigating to domain names in the .NIKE gTLD.

18.2.1 What is the goal of your proposed gTLD in terms of areas of specialty, service levels, or reputation?

The primary mission and purpose of the .NIKE gTLD is to provide a trusted and intuitive online marketplace to deliver Nike retail content and information on Nike’s business and focus. As Nike grows, it seeks to pursue and develop opportunities to market and distribute its online content to consumers, in the U.S. and internationally, on various platforms, including the Internet and mobile devices, among others. Given that customers increasingly request access to Nike’s brands and content through a variety of channels, which include domain names, Nike currently anticipates that the .NIKE gTLD has the potential to provide an innovative, virtual avenue to Nike online content that could deepen and broaden its relationship with consumers.

Most importantly, Nike expects to be able to provide access to its online content in a namespace devoid of piracy, cybersquatting, and other malicious activities. Providing consumers with a trusted experience is paramount to Nike and the .NIKE gTLD will be used to further that goal.

While companies such as Nike fight a never-ending battle to protect their valuable intellectual property from piracy on the Internet, Nike believes the .NIKE gTLD can offer consumers a safer and more intuitive means of accessing authorized content from Nike and its qualified subsidiaries and affiliates.

18.2.2 What do you anticipate your proposed gTLD will add to the current space, in terms of competition, differentiation, or innovation?

As a branded gTLD, the primary driving factors of the .NIKE gTLD are differentiation and innovation. Nike does not believe that the number of domain names registered will measure the success of the gTLD. Instead, Nike expects success to be judged by the levels of consumer recognition and trust that are placed in the .NIKE gTLD. Using this benchmark, Nike will strive to build consumer recognition and trust through a variety of mediums, which could include the usage of the .NIKE gTLD.

As noted above, Nike is the largest seller of athletic footwear and athletic apparel in the world. Nike leverages numerous distribution channels and emerging technologies to deliver its online content and consumer goods to its customers in the U.S. as well as internationally. The .NIKE gTLD has the potential to augment this online strategy, if the potential benefits that ICANN has projected become a reality.

18.2.3 What goals does your proposed gTLD have in terms of user experience?

Nike believes that the .NIKE gTLD could provide a single, trusted ecosystem experience for the millions of consumers worldwide who purchase Nike’s retail goods, as well as other constituents, such as investors and media, who seek information about Nike. In addition to providing consumers with short, memorable, and intuitive domain names, consumers should recognize that all domains and content are owned and controlled by Nike, and thus they are better protected from potential infringing, counterfeit, and other harmful content that consumers are plagued with in .COM and other open gTLDs.

Nike expects the initial use of the .NIKE gTLD to involve Nike registering a limited number of second-level domain names. This initial use will likely provide Nike with the ability to ensure seamless and secure access to the Nike websites and interoperability with various software and Web-⁄mobile-based applications. Once appropriate security and stability issues have been satisfactorily addressed, Nike anticipates allocating domain names for internal corporate use at Nike and may redirect .NIKE domain names to preexisting content. This phased rollout will likely take place over a multi-year period, subject to change depending upon a range of external factors.

Concurrently, Nike expects to evaluate potential strategies to migrate traffic away from its current network of second-level domains, which are registered in various TLDs, to the .NIKE gTLD, which offers the potential to provide customers with a single, trusted online source for Nike brand products and services.

After consideration of the following factors: analysis of Nike’s existing domain name portfolio; internal analysis of marketing initiatives; and the fact that Nike will have full control over the number of registrations in the .NIKE gTLD namespace, Nike reasonably estimates and expects that the number of domain name registrations will be less than 10,000 in the first five years of operation.

18.2.4 Provide a complete description of the applicant’s intended registration policies in support of the goals listed above.

Nike currently intends for the .NIKE gTLD to be used exclusively by Nike and its qualified subsidiaries and affiliates. Because of this condition, and because the Nike trademarks are valuable brands, the protection of which is paramount to Nike, it intends to address registration and use requirements in the qualified affiliate⁄subsidiary agreements that exist between those qualified affiliates⁄subsidiaries and Nike, rather than in a domain name registration agreement.

Notwithstanding these concerns, Nike expects to incorporate all required ICANN consensus policies and other legal⁄policy requirements imposed on new gTLD applicants into the terms and conditions of the domain name registration agreements that each qualified subsidiary and affiliate of Nike executes.

18.2.5 Will your proposed gTLD impose any measures for protecting the privacy or confidential information of registrants or users? If so, please describe any such measures.

As a global company, Nike respects the privacy of its customers and other consumers. Nike employs a variety of physical, electronic, contractual, and managerial safeguards to protect personal and confidential information in its stores and on its websites. Nike expects to take similar precautions to protect registrant and user data associated with the .NIKE gTLD. Furthermore, given that every domain name will initially be registered to Nike or its qualified subsidiaries and affiliates, Nike has a vested interest to ensure that accurate and current domain name information is readily available in connection with each .NIKE domain name.

Nike expects that the operation of the .NIKE gTLD will be consistent with Nike’s Privacy Policy, see http:⁄⁄help-us.nike.com⁄app⁄answers⁄detail⁄article⁄privacy-policy⁄a_id⁄16378.

In addition, Nike intends to incorporate contractual language in its Registry-Registrar Agreement (RRA) modeled after language that has been included in the template Registry Agreement and that has been successfully utilized by existing ICANN gTLD Registry Operators.

The template Registry Agreement states, “Registry Operator shall (i) notify each ICANN-accredited registrar that is a party to the registry-registrar agreement for the TLD of the purposes for which data about any identified or identifiable natural person (“Personal Data”) submitted to Registry Operator by such registrar is collected and used under this Agreement or otherwise and the intended recipients (or categories of recipients) of such Personal Data, and (ii) require such registrar to obtain the consent of each registrant in the TLD for such collection and use of Personal Data. Registry Operator shall take reasonable steps to protect Personal Data collected from such registrar from loss, misuse, unauthorized disclosure, alteration or destruction. Registry Operator shall not use or authorize the use of Personal Data in a way that is incompatible with the notice provided to registrars.ʺ

18.2.6 Describe whether and in what ways outreach and communications will help to achieve your projected benefits.

As noted above, Nike’s driving factor in securing the .NIKE gTLD in ICANN’s first round is precautionary in nature, and while Nike sees the potential for this gTLD to be able to play a large role in Nike’s future online strategic initiatives, there are a number of unanswered questions concerning consumer recognition, the adoption of new gTLDs, and the response from search engines in the marketplace that will influence the usage of the gTLD and communication about that usage.

Notwithstanding this, Nike is evaluating plans to start using .NIKE domains initially as redirects to existing .COM domains. As the aforementioned questions are answered over time, Nike may decide to initiate a targeted, pilot rollout using select gTLD domains as primary addresses and, after careful analysis and study of this rollout, Nike may plan to engage in a broader initiative should the results be satisfactory and in accordance with Nike’s overall strategic goals, both in the online space and in its retail store operations. The actual usage of .NIKE domain names will influence what public communications and consumer outreach is done to encourage navigation to .NIKE domain names. This may include, but is not limited to, advertising, media outreach, in-store communications, email campaigns, etc.

18(c). What operating rules will you adopt to eliminate or minimize social costs?

18.3 What operating rules will you adopt to eliminate or minimize social costs (e.g., time or financial resource costs, as well as various types of consumer vulnerabilities)?

Nike expects that its proposed operating rules to initially limit registration to Nike and its qualified subsidiaries and affiliates will provide a trusted online environment for consumers to access Nike’s online content, and by default, it expects to minimize social costs. This verified ecosystem is anticipated to provide consumers with a single, trusted source for Nike retail goods with a substantially lower risk of fraud and⁄or scams. Nike does not anticipate consumer vulnerabilities. Therefore, one example of how costs are mitigated is that there is no need for other trademark and brand owners to defensively register second-level domains in the .NIKE gTLD. In total, Nike’s expectation is that the usage of the .NIKE gTLD will mitigate or eliminate many of the vulnerabilities that Nike consumers face in the Internet today.

18.3.1 What other steps will you take to minimize negative consequences⁄costs imposed upon consumers?

Nike believes that the proposed operation of the .NIKE gTLD as set forth in this application has little or no known negative consequences or cost implications to consumers.

18.3.2 How will multiple applications for a particular domain name be resolved, for example, by auction or on a first-come⁄first-serve basis?

Nike does not currently envision multiple applicants for the same domain name, as domain names will initially only be allocated to Nike and its qualified subsidiaries and affiliates. Nike may expand upon the registration depending on evaluations so as to include select licensees and partners as potential registrants in the future.

18.3.3 Explain any cost benefits for registrants you intend to implement (e.g., advantageous pricing, introductory discounts, bulk registration discounts).

Nike does not envision any advantageous pricing, introductory discounts, or bulk registration discounts because these marketing⁄commercial initiatives are inconsistent with the mission and purpose of the .NIKE gTLD as a trusted online source identifier. Moreover, it is the current intention to provide domain name registrations to Nike and its qualified subsidiaries and affiliates at no cost, though Nike reserves the right to reevaluate this current expectation and may alter it in the future.

18.3.4 Note that the Registry Agreement requires that registrars be offered the option to obtain initial domain name registrations for periods of one to ten years at the discretion of the registrar, but no greater than ten years. Additionally, the Registry Agreement requires advance written notice of price increases. Do you intend to make contractual commitments to registrants regarding the magnitude of price escalation? If so, please describe your plans.

Nike is committed to providing the domain name registration periods set forth in the Registry Agreement. However, as noted above, as a branded gTLD, the registration and use of .NIKE domain names are conditioned upon a separate relationship with Nike. Therefore, providing contractual commitments in a domain name registrant agreement regarding the magnitude of price escalations does not seem relevant or appropriate. Additionally, as noted above, the current business model envisions Nike initially providing domain name registrations to qualified subsidiaries and affiliates at no cost.

Nike acknowledges that the current template Registry Agreement requires that the Registry Operator “shall offer registrars the option to obtain registration periods for one to ten years at the discretion of the registrar.” However, Nike and its qualified subsidiaries and affiliates, as the sole registrants within the .NIKE gTLD, will only be registering domain names on an annual basis. This is done to better account for costs on an annual basis as well as to provide for more concise financial statements in Question 46, i.e., no multi-year registration or deferred revenue.