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Architelos files bankruptcy after Afilias lawsuit

Kevin Murphy, March 21, 2016, Domain Services

Afilias has managed to bury domain security software provider Architelos, which filed for bankrupcty today.

Architelos filed Chapter 7, which basically means the company will close and its assets will be liquidated to pay off creditors.

Its only major creditor is Afilias, which won a patent lawsuit against it last August.

The jury in the case set damages at $10 million, finding that Architelos had misappropriated Afilias trade secrets, but the trial judge recently indicated her intention of reducing the award to $2 million.

Even that was a bit too rich for the company, which floated the idea of operating NameSentry on a revenue share with Afilias until its debt was paid.

Clearly, that’s no longer going to happen.

Architelos was founded by Alexa Raad in 2011, to exploit the new gTLD opportunity as a consulting and software tools provider.

It made seven figures in its first year, mainly through gTLD application consulting fees, but saw modest adoption of its subsequent security offering, NameSentry.

The flagship service only made $300,000 in revenue, according to court documents. After the August verdict, Architelos’ sales pipeline dried up.

The software and the US patents covering them are the company’s key assets, though Afilias is expected to be awarded at least partial ownership rights of the patents.

The company had about 10 employees at its peak, but has been operating on a skeleton crew of two or three for the last few months.

Architelos said in a blog post that NameSentry customers will be able to continue to use the service in the short term, but what happens to it in future depends on how the bankruptcy court appointed trustee does with it.

Afilias also has an outstanding lawsuit against Architelos and Raad in Canada.

Famous Four confirms link to AlpNames, mass new gTLD development project

Kevin Murphy, March 21, 2016, Domain Services

New gTLD registry Famous Four Media has confirmed its connections to registrar AlpNames and two other Gibraltar-based companies involved in the mass development of new gTLD domains.

FFM chief legal officer Oliver Smith said that the company shares owners with AlpNames, A Domains Ltd and a company I’d never heard of before called Socium Networks.

“It is fair to say that some of the shareholders in FFM do hold shares in and part fund these companies,” he said in an email.

“FFM is leading Gibraltar’s evolution as a technology hub by engaging with new businesses, offering up our experience, and in some circumstances such as A Domains and Socium Networks, incubating their operations,” he said.

“We engage at this level predominantly because it’s in our interest, and the domain name industries’, to support businesses who share a common purpose in growing the new gTLD market space,” he said.

“FFM has a great working relationship with all three companies, much in the same manner as we have with our other client partners, except that our geographic proximity allows for greater face time and collaboration,” he said.

The link between AlpNames and FFM will not surprise many members of the industry.

AlpNames is FFM’s biggest registrar partner by a long shot, accounting for 75%+ of the registrations in many of of the gTLDs in FFM’s stable.

It consistently prominently advertises FFM’s domains on its storefront with sub-$1 pricing.

What’s perhaps less well known are A Domains and Socium, both of which seem to be involved in bulk-developing hundreds of thousands of domains from FFM’s gTLD portfolio.

As I noted Friday, A Domains owns huge chunks of the .party, .trade and .review zones (to name three), largely long-tail geographic domains.

A UDRP complaint A Domains won last year revealed that the strategy is to algorithmically register domains matching towns and cities of over 30,000 inhabitants then populate the sites with scraped content. For example.

Socium appears to be run by the same person, Chris Cousins, and has the same strategy.

Socium’s web site states: “We have over 100,000 sites currently under management and plans to launch over 1,000,000 more by the third quarter of 2016.”

This triple-play (registry, registrar, registrant) combo seems to be at least partly responsible for the large numbers of domains in FFM’s zone files.

At least a third of .review seems to be owned by A Domains, for example.

All the A Domains names I came across were registered via AlpNames during the early days of general availability when AlpNames was selling names at cost.

It’s not a completely new way for a registry to try to (indirectly) monetize its portfolio.

When .pro was owned by Hostway, a registry subsidiary owned and developed around 43,000 .pro domains matching US zip codes, under a service known as Zip.pro.

That seems to have been a failure, however. When Afilias took over .pro in early 2012 it did not acquire Zip.pro and the domains all expired in August that year.

Employ Media has tried something similar with a partner, the DirectEmployers Association.

The Universe.jobs project, controversial when it launched, saw DirectEmployers register and mass-develop thousands of geographic and industry-focused jobs portals. Universe.jobs appears to still live.

Pritz joins Allegravita and other industry movements

Kevin Murphy, February 5, 2016, Domain Services

It’s been a busy week in the domain industry for executive changes.

Today, we hear that senior ICANN alum Kurt Pritz has joined Chinese domain marketing specialist Allegravita as a “new partner”.

Allegravita is the PR consultancy that’s made a bit of a splash in the industry over the last couple of years shepherding Western clients through the confusing but potentially lucrative Chinese market.

One of its clients is the Domain Name Association, where Pritz worked as executive director for a couple of years until last October. Prior to the DNA, he was head of ICANN’s new gTLD program.

Also today, Uniregistry announced a couple of new bods in its registrar team.

Sam Tseng and Alan Crowe join from Oversee.net and DomainNameSales (another Frank Schilling company) respectively.

They’ll be responsible for working with high-volume customers of Uniregistry’s registrar business.

Meanwhile, .tickets registry Accent Media said it has appointed Kristi Flax as its commercial operations director.

Flax was founder and COO of PPI Claimline, one of those UK companies that manages refund claims against banks that mis-sold payment protection insurance for people too simple to do it for themselves.

Thanks to relentless phone spamming by unscrupulous lead-gen affiliates, it’s one of the few industries with a worse reputation than domain name industry.

Earlier this week, Sedo announced several changes at the top of its ranks.

First, the Germany-based company has appointed telco industry alum Barbara Stolz as its new CFO. She replaces Torsten Hauschildt, who returns to parent United Internet as senior VP of finance and M&A

Its director of marketing, Christian Voss, has been promoted to chief marketing officer, and Dimo Beitzke has been moved up to chief sales officer. Solomon Amoako has left his job as North American CSO for personal reasons.

Afilias $10 million court win slashed by judge

Kevin Murphy, January 18, 2016, Domain Services

A US judge has dramatically reduced a $10 million ruling Afilias won against Architelos in a trade secrets case.

Architelos, which a jury decided had misappropriated trade secrets from Afilias in order to build its patented NameSentry domain security service, may even be thrown a lifeline enabling it to continue business.

A little over a week ago, the judge ordered (pdf) that the $10 million judgment originally imposed by the jury should be reduced to $2 million.

That won’t be finalized, however, until she’s ruled on an outstanding injunction demanded by Afilias.

The judge said in court that the original jury award had been based on inflated Architelos revenue projections.

The company has made only around $300,000 from NameSentry subscriptions since launch, and its sales pipeline dried up following the jury’s verdict in August.

The service enables TLD registries to track and remediate domain abuse. It was built in part by former Afilias employees.

Afilias has a similar in-house system, not available on the open market, used by clients of its registry back-end business.

Even a reduced $2 million judgment is a bit too rich for Architelos, which is desperately trying to avoid bankruptcy, according to court documents.

But the judge seems to be considering an injunction that would enable Architelos to continue to exist.

It may even be permitted to sell NameSentry, as long as it gives almost a third of the product’s revenue to Afilias for up to five years or until the $2 million is paid off.

The injunction might also grant joint ownership of the disputed patents to the two companies, allowing them to jointly profit from the technology.

This has all yet to be finalized, however, and Afilias can always appeal whatever injunction the judge comes up with.

It emerged in court earlier this month that Architelos offered to give full ownership of its patent, along with NameSentry itself, to Afilias in order to settle the suit, but that Afilias refused.

Afilias is also suing Architelos over the same matters in Canada, but that case is progressing much more slowly.

TLS says .feedback will be “UDRP-proof”, will hire lawyers to defend registrants

Kevin Murphy, December 21, 2015, Domain Services

Top Level Spectrum plans to make its .feedback domains dirt cheap for domainers during its forthcoming Early Access Period, and is claiming that its domains will be “UDRP-proof”.

CEO Jay Westerdal told DI today that the registry will even hire lawyers to defend its registrants if and when UDRP cases arise.

The company has also introduced a new $5,000 “claims” service that is guaranteed to drive the intellectual property community nuts.

.feedback is shaping up to be one of the most fascinating new gTLD launches to date.

The company’s original plan, to sell 5,000 trademark-match domains to a single entity after its sunrise period ends has been tweaked.

Now, it will instead offer huge rebates during its Early Access Period next month, which will bring the price to registrants down from as much as $1,815 to as little as $5.

It’s called the “Free Speech Partner Program”.

To qualify for the program rebate, registrants will have to agree to stick to using TLS’s specially designated name servers, which point to a hosted feedback service managed by the registry.

An example of such a site can be seen at donaldtrump.feedback, which is among several US presidential candidate names TLS has registered to itself recently.

That commitment will be passed on if the domain ever changes hands, and a $5,000 fee will be applicable if the registrant wants to switch to their own name servers.

A registry charging a lower fee during EAP than GA is unheard of, but that’s what TLS is planning.

Rebates will not be available during the first three days of EAP, which starts January 6 at $14,020 per name. Days two and three see domains priced at $7,020 and $3,520.

From January 9 to January 18, rebates will bring the prices down to $5 per domain.

That’s a quarter of the $20 registry fee it plans to charge during general availability.

“Our plan is to sell thousands of domains before normal GA,” Westerdal said.

“It is a great opportunity for domainers to register domains that will be UDRP proof,” he said. “As free speech sites they are going to improve the world and let anyone read reviews on any subject.”

“I think they are UDRP proof,” he said. “As a registry we will hire lawyers to fight cases that arise.”

Asked to confirm that TLS would pay for lawyers to defend its registrants in UDRP cases, he said: “Hell yes we will.”

The registry plans to give trademark owners a way to avoid UDRP, however, if they’re willing to pay $5,000 for the privilege.

“Free Speech” registrants will have to agree not only to use TLS’s feedback platform, but also to allow the owners of trademarks matching their domains to more or less unilaterally seize those domains for up to two years after registration.

This “claims period” is also unprecedented in new gTLD launches. It’s described like this:

The registry will accept trademarks for a period of 2 years after the initial registration on a “Free Speech Partner Program” domains. The cost is $5,000 to have the mark validated, if the trademark is found to be the first to successfully make a claim against a domain in the program the domain will be transferred to the mark holder. The mark holder will be allowed to change name servers and is not subject to the “Free Speech Partner Program” terms of service.

Domain registrants of the “Free Speech Partner Program” agree the outcome of a validated mark by the Registry have no further claim to the domain if it is transferred to a new registrant.

If TLS is trying to design a system that will enrage the trademark community to the maximum extent possible, it’s doing a fantastic job.

It even introduced a new clause (2.9, here) to its registration agreement earlier this month, obliging registrants to point their domains to a web page that collects feedback. That means nobody will be allowed to leave their .feedback domains dark.

Are these measures justifiable disincentives, or plain old extortion? Opinion will no doubt be split along the usual lines.