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Could vertical integration kill registrar parking?

Kevin Murphy, November 14, 2010, 20:59:11 (UTC), Domain Registries

Will ICANN’s decision to allow registrars and registries to own each other help reduce the practice of registrars parking unused or expiring domain names?
A reading of the new top-level domain Applicant Guidebook in light of the recent “vertical integration” ruling it incorporates certainly raises this kind of question.
The AGB includes a policy called the Trademark Post-Delegation Dispute Resolution Procedure, or PDDRP, which allows trademark owners to seek remedies against cybersquatting registries.
The policy is quite clear that registries cannot be held accountable for cybersquatting by third parties in their TLD, unless they have, for example, actively encouraged the squatters.
But another example of infringement is given thus:

where a registry operator has a pattern or practice of acting as the registrant or beneficial user of infringing registrations, to monetize and profit in bad faith.

Now, this wouldn’t be a cause for concern in the current vertically separated market.
Most registries are only generally able to register domain names in their own TLD by going through an accredited registrar. Proving bad faith intent in that situation would be trivial.
But what of an integrated registry/registrar that also automatically parks recently registered or expiring domains in order to profit from pay-per-click advertising?
This is common practice nowadays. It’s been used to prove a registrant’s bad faith during many recent UDRP proceedings and one registrar is even being sued by Verizon for doing it.
Would a registrar parking an expired, trademark-infringing domain constitute it acting as a “beneficial user” of the domain “to monetize and profit in bad faith”?
Text added to the PDDRP section of the AGB in its most recent revision strongly suggests that “the registrar did it” would not be a defence for a vertically integrated company:

For purposes of these standards, “registry operator” shall include entities directly or indirectly controlling, controlled by or under common control with a registry operator

The PDDRP allows complainants to seek remedies such as injunctions, as well as the suspension of new registrations in a TLD and, exceptionally, the full revocation of their registry contract.
With that in mind, would an integrated registry/registrar want to risk any practice that puts their TLD at risk?

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Comments (2)

  1. Louise says:
    November 14, 2010 at 11:04 pm

    It’s interesting in view of uBid’s suit against GoDaddy:
    uBID, INC., Plaintiff-Appellant, v. The GODADDY GROUP, INC., et al., Defendants-Appellees
    where the Registrar itself is liable for profiting from Trademarked names. @ Kevin, you’re saying the liability in such a suit would be shared by the Registry GoDaddy works with!

    Reply
    • Kevin Murphy says:
      November 15, 2010 at 1:58 am

      I don’t think I am saying that.
      That’s a lawsuit in a US court, I’m just talking about the potential future implications of ICANN policies.

      Reply

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