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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.

Domaining Europe moves to the Netherlands

Kevin Murphy, December 2, 2015, Domain Services

Domaining Europe conference will be held in the Netherlands for the first time in 2016.

Organizers say the venue will be the Grand Hotel Amrâth Kurhaus in The Hague, which is about an hour by train from Amsterdam’s Schipol airport.

Since its inception, Domaining Europe has been held in Valencia, Spain.

The plan for 2016 is to hold the conference May 29 to 31, two days after the TheNextWeb Europe conference ends in Amsterdam.

NamesCon hotel “scam” doing the rounds

Kevin Murphy, November 9, 2015, Domain Services

A company with a track record of misleading conference attendees into booking hotels with higher fees appears to be targeting NamesCon.

This morning I received a phone call from somebody claiming to be from NamesCon, but he pronounced it “Name Escon”.

I asked him what company he worked for, and he continued to insist he worked for “Name Escon”.

So I indulged him for a while, and it turned out he was trying to book me into a Las Vegas hotel for the duration of the January 10-13 trade show.

He offered me a rate at the Tropicana of $99 per night, including breakfast. That’s actually not a bad rate — about $20 less than what Expedia is currently asking.

I kept him on the phone until he sent an email to an address he had on file for me (the one from DI’s About page, which I don’t use to sign up for anything).

It arrived immediately, from Exhibitors Housing Services (ehshousing.com), which appears to be a Los Angeles company, with a link to housing-portal.com.

The link led to a credit card authorization form, pre-tailored to my details and the rate offered, which included some terms and conditions I didn’t like the look of.

A simple web search revealed that the company is widely believed to be Bad News.

The same outfit appears to regularly target annual conferences using the exhibitor lists published on earlier conference web sites. Contact information appears to be taken from the exhibitor’s own site.

According to the likes of Affiliate Summit and The Physiological Society, and the Society of Trust and Estate Practitioners and the Agricultural & Applied Economics Association these guys may charge up-front processing fees and/or have a very unfavorable cancellation policy.

In fact, just Googling for “Exhibitors Housing Services” will return pretty much nothing but scam warnings from various conference organizers.

One chap even posted a YouTube video explaining what he thinks the scam is.

I’m pretty certain the company has nothing to do with NamesCon.

Pritz quitz DNA

Kevin Murphy, October 2, 2015, Domain Services

Domain Name Association boss Kurt Pritz has resigned after two years on the job.

Neustar’s Adrian Kinderis, chair of the domain industry trade group, made the announcement in an email to members yesterday.

No immediate replacement for Pritz has been named, but Kinderis said the DNA’s board wasn’t worried:

Fellow members may have concerns about the current and future management of the DNA and its many activities. Please be advised that the board and I have no serious concerns. The DNA partners with Virtual and Allegravita, two full-service external consultancies that manage all areas of operational excellence and communications. These two organizations have the full trust and support of the board, and the various DNA member committees that I’m proud to see are generating substantial and practical work product on a weekly basis.

Pritz joined the DNA in November 2013, having previously spent years in senior roles, including chief strategy officer, at ICANN.

Under his watch, the DNA has done things like adopting a webinar series for new gTLD registries and launching a site highlighting examples of new gTLD domains advertised “in the wild”, as well as carrying various advocacy work.

Afilias wins $10m judgment in Architelos “trade secrets” case

Kevin Murphy, August 25, 2015, Domain Services

Afilias has won a $10 million verdict against domain security startup Architelos, over claims its flagship NameSentry abuse monitoring service was created using stolen trade secrets.

A jury in Virginia today handed Afilias $5 million for “misappropriation of trade secrets”, $2.5 million for “conversion” and another $2.5 million for “civil conspiracy”.

The jury found (pdf) in favor of Architelos on claims of business conspiracy and tortious interference with contractual relations, however.

Ten million dollars is a hell of a lot of cash for Architelos, which reportedly said in court that it has only made $300,000 from NameSentry.

If that’s true, I seriously doubt the four-year-old, three-person company has even made $10 million in revenue to date, never mind having enough cash in the bank to cover the judgment.

“We’re disappointed in the jury’s verdict and we plan to address it in some post-trial motions,” CEO Alexa Raad told DI.

The lawsuit was filed in January, but it has not been widely reported on and I only found out about its existence today.

The original complaint (pdf) alleged that three Architelos employees/contractors, including CTO Michael Young, were previously employees or contractors of Afilias and worked on the company’s own abuse tools.

It claimed that these employees took trade secrets with them when they joined Architelos, and used them to build NameSentry, which enables TLD registries to monitor and remediate abuse in their zones.

Architelos denied the claims, saying in its March answer (pdf) that Afilias was simply trying to disrupt its business by casting doubt over the ownership of its IP.

That doubt has certainly been cast, though the jury verdict says nothing about transferring Architelos’ patents to Afilias.

The $5 million portion of the verdict deals with Afilias’ claim that Architelos misappropriated trade secrets — ie that Young and others took work they did for Afilias and used it to build a product that could compete with something Afilias had been building.

The other two counts that went against Architelos basically cover the same actions by Architelos employees.

The company may be able to get the amount of the judgment lowered in post-trial, or even get the jury verdict overturned, so it’s not necessarily curtains yet. But Architelos certainly has a mountain to climb.

Dozens of dot-brands finally sign ICANN contracts

Kevin Murphy, August 5, 2015, Domain Services

Dot-brand gTLD applicants that were playing wait-and-see with ICANN’s contracting process signed Registry Agreements in droves last week.

At least 67 new RAs were signed in the last three days of July, on or around the ICANN’s July 29 deadline, ICANN’s web site shows.

This means that there are still about 50 applicants that have not pulled the trigger and may have to apply for an 60-day last-chance extension.

A week before the deadline, roughly 170 brands had still not signed contracts.

The July 29 deadline was put in place for dot-brands last year due to delays creating Specification 13 of the RA, which gives brands special opt-out clauses dealing with things like sunrise periods.

Those that have still not obtained RAs are expected to be flagged as “Will Not Proceed” and will have to apply to ICANN for the extension under its Application Eligibility Reinstatement process.

What split? TLD webinar series folded into the DNA

Kevin Murphy, July 21, 2015, Domain Services

A TLD operators’ webinar series initially cast as a community group has been folded in to the Domain Name Association.

The DNA has announced the creation of the DNA University, which promises to pick up where the TLD Operators Webinar left off.

Tony Kirsch of ARI Registry Services has been appointed inaugural “Dean” of the University.

The first webinar will be entitled “Premium Domain Name Planning” and will be held July 28 at 1500 UTC.

Future webinars, which are open to all registries, registrars and new gTLD applicants, will address subjects including IDNs, rights protection, contractual compliance, and many more.

The TLD Operators Webinar was originally called the TLD Operators Community and characterized as a new industry group, which led to gossip about a split within the DNA.

The program was hurriedly re-branded and re-domained to clarify that it was more, as ARI CEO Adrian Kinderis put it, “a one off effort by our consultancy team to get everyone together for a chat.”

Now it’s just a service under the DNA umbrella.

New DNA social media site highlights “in the wild” domains

Kevin Murphy, June 18, 2015, Domain Services

The Domain Name Association has launched a new web site to show off domains, primarily new gTLD names, that have been spotted “in the wild”.

InTheWild.domains points to a Tumblr blog where members and others can share, for example, photos of billboards or promotional videos that prominently feature new domains.

“Tumblr offers the DNA a very efficient and flexible platform that will help the DNA social media team and you find and post more domains, rather on non-productive management tasks,” the DNA told members.

The site currently has a few dozen posts, such as a WePark.nyc billboard and a VSquared.rocks red carpet video.

Most listed domains are in 2012-round new gTLDs, but there’s a .info, a .us and a .co in there too. I don’t see any .com names.

The submission process appears to be open to everyone, but submissions are moderated by the DNA’s social media people.

ICANN fingers perps in new gTLD breach

Kevin Murphy, May 28, 2015, Domain Services

A small number of new gTLD registries and/or applicants deliberately exploited ICANN’s new gTLD portal to obtain information on competitors.

That’s my take on ICANN’s latest update about the exploitation of an error in its portal that laid confidential financial and technical data bare for two years.

ICANN said last night:

Based on the information that ICANN has collected to date our investigation leads us to believe that over 60 searches, resulting in the unauthorized access of more than 200 records, were conducted using a limited set of user credentials.

The remaining user credentials, representing the majority of users who viewed data, were either used to:

Access information pertaining to another user through mere inadvertence and the users do not appear to have acted intentionally to obtain such information. Access information pertaining to another user through mere inadvertence and the users do not appear to have acted intentionally to obtain such information. These users have all confirmed that they either did not use or were not aware of having access to the information. Also, they have all confirmed that they will not use any such information for any purpose or convey it to any third party; or

Access information of an organization with which they were affiliated. At the time of the access, they may not have been designated by that organization as an authorized user to access the information.

We can infer from this that the 60 searches, exposing 200 records, were carried out deliberately.

I asked ICANN to put a number on “limited set of user credentials” but it declined.

The breach resulted from a misconfiguration in the portal that allowed new gTLD applicants to view attachments to applications that were not their own.

ICANN knows who exploited the bug — inadvertently or otherwise — and it has told the companies whose data was exposed, but it’s not yet public.

The information may come out in future, as ICANN says the investigation is not yet over.

Was your data exposed? Do you know who accessed it? You know what to do.