.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. |