.merck Domain

18.1 Mission and Purpose of .MERCK

Merck Registry Holdings, Incorporatedʹs ("MRH") parent company, MSD Sharp & Dohme, Corp. ("MSD"), is a leading healthcare company serving the wide-ranging needs of end-users and providers around the world, with approximately 86,000 employees in more than 140 countries. MSD serves a variety of retailers, physicians, veterinarians, managed health care providers, food chain and mass merchandiser outlets, hospitals, and government agencies. MSD's stated mission is to discover, develop, and provide innovative products and services that save and improve lives.

MSD has operations in several main business segments:

-PHARMACEUTICAL: MSD's Pharmaceutical segment offers therapeutic and preventive agents for the treatment of human disorders in the areas of bone, respiratory, immunology, dermatology, cardiovascular, diabetes and obesity, oncology, infectious diseases, etc. The unit also offers preventive vaccines for children, adolescents, and adults.
-ANIMAL HEALTH: MSD's Animal Health segment provides antibiotics, anti-inflammatory products, vaccines, and parasiticides for a variety of animals including cats, dogs, cattle, horses, and fish.
-CONSUMER CARE: In addition, MSD offers a wide range of over-the-counter products such as antihistamines, foot and skin care lotions, heartburn medication, and constipation relief treatments.
-ALLIANCES: MSD partners with a variety of corporations, organizations and educational institutions in product development and research efforts across the world.

The potential use of the .MERCK gTLD by these or other business segments will primarily be driven by MSD's future business strategies as identified in its annual report and investor filings, see http://www.merck.com/investors/home.html.

The intended future mission and purpose of the .MERCK gTLD is to serve as a trusted, hierarchical, and intuitive namespace for MSD and end-users, and potentially MSD's qualified subsidiaries and affiliates and potentially its licensees and other strategic parties.

Recognizing the potential dynamic evolution of the .MERCK gTLD as a trusted brand namespace, MSD has decided to utilize a wholly owned subsidiary, MRH, as the entity to file this application and bring the .MERCK gTLD to market. Although MRH is committed to moving forward with the .MERCK gTLD application, it has not at the time of filing this application been able to fully vet and analyze all potential use case options.

Although ICANN has not specifically recognized a .BRAND gTLD specification in the current gTLD application round, it is widely anticipated in the brand owner community that this will become a specialty subset of gTLDs.

.MERCK is intended to be one of those .BRAND gTLDs, with the goal of protecting MSD's online presence and identity, expanding its marketing and promotion efforts, providing a secure channel for online products and services, and offering a platform through which to consolidate many of the intellectual property activities of MSD.

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

After Stage Three, MSD will evaluate whether opportunities exist to carry out the business strategy for the .MERCK gTLD through expansion that continues the sustainable operations of the registry through registrations that may or may not be fee-based to parties other than MSD and potentially its qualified subsidiaries and affiliates.

MRH currently plans a four-stage rollout for the .MERCK gTLD:

1. Stage One

The initial stage of implementation of the gTLD will involve MRH registering a limited number of .MERCK second-level domain names.

This initial use will provide MSDʹs IT and security personnel the time to run a number of tests to ensure seamless and secure access using the .MERCK gTLD 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 MRH staff to coordinate with the internal and external staff responsible for the delegation and setup phases of the .MERCK gTLD to ensure a proper transition from delegation to full operation.

2. Stage Two

Once all testing has been successfully completed, MRH will begin allocating domain names in .MERCK for more widespread internal corporate use.

It is in Stage Two that MRH will evaluate expanding the operations of the .MERCK gTLD to permit registration by other registrants, such as licensees of MSD or other strategic parties. Should an assessment of its expansion strategy lead to a decision to extend registration rights to other parties, this expansion is currently planned to take place during Stage Three.

However, any expansion would be conditioned upon a review of Specification 9 (Registry Code of Conduct) set forth in the template Registry Agreement to ensure compliance with MRH's business model.

3. Stage Three

It is in this stage that MRH may implement its decision to extend registration rights to MSD licensees or strategic parties, depending upon compliance with Specification 9 as noted above. The dates of such expansion are subject to change depending upon business, strategic, and industry factors at the time.

After consideration of the following factors: analysis of MSDʹs existing domain name portfolio; internal analysis of marketing initiatives; and the fact that MRH will have full control over the number of registrations in the .MERCK gTLD namespace, MRH is confident 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 to the end of Year 5, and based on its experience with any expansion implemented in Stage Three, MRH will assess whether its business plan and expansion strategy should be augmented by extending registration rights to a broader class of licensees and strategic parties. It is anticipated by MSD that changes to the domain name industry, and particularly the impact of .BRAND gTLDs, will take a number of years to be realized and assessed. Any decision to expand the gTLDs beyond corporate use, and potentially use by qualified subsidiaries, affiliates, licensees, and strategic parties, will take into account this experience as well as the technical analysis of potential expansion.

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