How to protect your trademark in .xxx

ICM Registry today revealed the details of its policies for trademark holders that want to defensively register or block their .xxx domain names.
The company plans to kick off its sunrise period in early September. It will last 30 days, and will be followed a few weeks later by a 14-day landrush.
The date for general availability has not been set in stone, but is likely to be in early December.
Two sunrise periods will run concurrently. Sunrise A is for the adult entertainment industry, those who want to actually set up porn sites at .xxx domains. Sunrise B is for everyone else.
ICM is trying something new with .xxx, in response to non-porn brands that are worried about cybersquatting and also don’t want to actually own a .xxx domain name.
Under Sunrise B, non-porn trademark owners can pay a one-time fee to have their brand essentially turned off in .xxx.
These domains will all resolve to a standard placeholder page, informing visitors that the domain has been blocked.
Because the domains resolve, they will usually not be picked up by any ISP system whereby non-existent domains show advertisements instead of an error message.
The fees we’ve seen so far from registrars for this service range from $299 to $648, but ICM seems to think $200 to $300 is more realistic.
The blocks are expected to last forever, but because ICM’s registry agreement with ICANN only lasts for 10 years, it can only guarantee the blocks for that amount of time.
So while it looks like a $30 to $65 annual fee, over the lifetime of the TLD it may well steadily approach a negligible sum, if you’re thinking super-long-term.
To qualify for Sunrise B, you need a nationally registered trademark for the exact string you want to block. To use an example, Lego could block lego.xxx, but not legoporn.xxx.
ICM is currently planning a post-launch block service for brands that emerge in future, but it probably won’t have the flat one-time pricing structure, due to the registry’s own annual per-domain fees.
If you’re in the porn business, Sunrise A allows you to claim your brand if you have a trademark that is registered with a national effect.
It will also enable the “grandfathering” of porn sites in other TLDs that do not have a registered trademark. If you own example.com or example.co.uk, you’d qualify for example.xxx.
Lego could, for example, register legoporn.xxx using Sunrise A, because it already owns legoporn.com, but only if it actually intended to publish Lego-based pornography.
If it were to register legoporn.xxx in this way, and use it for non-porn purposes, it would be at risk of losing the domain under ICM’s planned Charter Eligibility Dispute Resolution Policy (CEDRP).
In the event that a Sunrise A applicant and a Sunrise B applicant both apply for the same string, the Sunrise A (porn) applicant will be given the option to withdraw their application.
If they don’t withdraw, they will be able to register the domain, trumping their non-porn rival.
Two Sunrise A applicants gunning for the same .xxx domain will have to fight it out at auction.
It’s probably worth mentioning, because many cybersquatters seem to think it’s a .com-only deal, that the UDRP does of course also apply to .xxx domain names.
If you own, for example, the string “virgin” in another TLD, and use it for a porn site, you will actually be able to use it in Sunrise A to secure virgin.xxx, but you risk losing it to Virgin in a UDRP.
If you’ve “pre-registered” a domain with ICM already, it doesn’t seem that you’ll have any notable advantages during sunrise or landrush.
The registry plans to email these pre-registrants soon with instructions. More info on the new ICM site: XXXempt.com.
The sunrise policies were devised by IPRota.

Pricing competition begins in .xxx

DomainMonster plans to charge between $75 and $300 for .xxx domain names, a fair bit cheaper than the only other registrar to so far disclose its prices.
A single .xxx domain will cost $99.99, dropping to $89.99 and $74.99 if the customer has more than 10 or more than 25 items in their cart when they check out, according to CEO Matt Mansell.
DomainMonster’s pricing scheme offers discounts on all products – including non-domain services – when more than 10 are purchased at the same time, and this will also apply to .xxx.
For trademark holders wanting to register or block their names during the sunrise period, the company will charge $299.99, $289.99 and $249.99, all but $50 of which is non-refundable.
Grandfathering prices for existing porn sites without trademarks will cost $199.99, $179.99 and $149.99, with the same non-refundable component. Landrush fees will be the same.
The only other registrar I’m aware of to announce prices so far is Key-Systems. Regular .xxx names will cost $133 there, with landrush names checking in at about $250.
ICM Registry, the .xxx manager, will charge $60 for domains during general availability. I hear through the grapevine that its fee to “block” a trademark for 10 years is $162.
According to ICM, the ratio of pre-registered domain names to registrants works out to between 20 and 30 names per person, so it’s seems possible DomainMonster’s volume pricing has a market.
About 60 registrars have been approved to sell .xxx domain names so far.

Governments back Olympic domain bans

ICANN’s Governmental Advisory Committee has called for a ban on domain names containing terms relating to the Red Cross and Olympics movements.
Both organizations have for some time been calling for their trademarks to be added to the list of specially reserved strings that nobody will be able to register under new top-level domains.
The GAC “strongly supports” these demands.
In a piece of uncharacteristically straightforward advice (expect much more of this in the wake of the .xxx decision), GAC chair Heather Dryden wrote to ICANN:

The GAC advises the ICANN Board to approve these requests and to direct staff to reflect the Board’s approval in the May 30, 2011 version of the Applicant Guidebook.

It’s special pleading, of course, but there’s plenty of precedent for the Olympics, Red Cross and Red Crescent being given special protection under national laws, as Dryden notes in her letter.
I’d guess that this is a bone ICANN may be willing to throw, given that it has more important unresolved issues still to discuss with the GAC, some of which could delay the new gTLD program.
The Applicant Guidebook’s current list of reserved names includes the names of ICANN and related organizations, several terms used in networking, and country names.

Europe and US to meet on .xxx and new TLDs

European Commissioner Neelie Kroes is to meet with the US Department of Commerce, a month after she asked it to delay the launch of the .xxx top-level domain.
Tomorrow, Kroes will meet with Larry Strickling, assistant secretary of the National Telecommunications and Information Administration, according to a press release:

This follows the controversial decision of the ICANN Board in March to approve the “.XXX” Top Level Domain for adult content. Ms Kroes will make clear European views on ICANN’s capacity to reform. In particular, Ms Kroes will raise ICANN’s responsiveness to governments raising public policy concerns in the ICANN Governmental Advisory Council [Committee] (GAC) , the transparency and accountability of ICANN’s internal corporate governance and the handling of country-code Top Level Domains for its most concerned public authorities.

In April, Kroes asked Strickling’s boss, Commerce Secretary Gary Locke, to put a hold on the addition of .xxx to the domain name system root until the GAC had chance to discuss it further.
Strickling declined, saying that for the US to take unilateral action over the root would provide ammunition to its critics in the international community.
The US and EC are two of the most active and vocal participants in the GAC – at least in public. Whatever conclusions Strickling and Kroes come to tomorrow are likely to form the basis of the GAC’s short-term strategy as negotiations about new TLDs continue.
ICANN’s board is scheduled to meet with the GAC on May 20, for an attempt to come to some final conclusions about the new gTLD program, particularly in relation to trademark protection.
ICANN wants to approve the program’s Applicant Guidebook on June 20, but is likely to face resistance from governments, especially the US.
Strickling has indicated that he may use the upcoming renewal of ICANN’s IANA contract as leverage to get the GAC a stronger voice in ICANN’s decision-making process.

First .xxx domain name prices revealed

New .xxx domain name registrations could retail for as much as $158 a year, a markup of almost $100 over the wholesale registry fee, it has emerged.
Key-Systems, one of the first registrars approved to sell .xxx names, plans to charge €92.44 ($133), or €110.00 ($158) including VAT, per name per year during general availability.
The prices were revealed on the German company’s consumer-facing web site, DomainDiscount24.com.
ICM Registry’s wholesale fee is $60 per year. Excluding VAT, Key-Systems stands to make a whopping $73 margin on .xxx domains.
For comparison, the registrar’s margin on .com domains is less than $10.
Prices for trademark holders that wish to register .xxx names defensively will be even higher.
In the first sunrise period, reserved for porn companies with trademarks, the company will charge a non-refundable application fee of €134.95 ($194), plus €130.90 ($188) per name per year.
In a second sunrise, which “grandfathers” registrants of porn domains in other TLDs, domains will cost €95.20 ($137) in non-refundable application fees, with the same again for the first year’s registration.
If you’re a non-porn trademark holder, and you want to block your brand from the .xxx namespace – say you’re Disney and you want disney.xxx permanently reserved – it will cost €450 ($648).
That’s a “one-time fee”, but it’s not yet clear how many years it covers for 10 years, which works out to €45 per year.
Landrush fees, for non-trademark holders, will be €80 ($115) per application, non-refundable, plus €95 ($137) per domain per year.
Key-Systems is the first registrar to disclose its pricing plans. It’s possible other registrars will offer lower (or, I suppose, higher) prices.

ICANN tries to dodge .jobs legal fees

“Please don’t sue us!”
That’s the message some are taking away from the latest round of published correspondence between lawyers representing ICANN and .jobs registry Employ Media.
Employ Media last week said it will take ICANN to the International Chamber of Commerce, after they failed to resolve their dispute over the company’s controversial Universe.jobs venture.
Now ICANN has asked the registry’s executives to return to the negotiating table, apparently to reduce the risk of having to spend millions of dollars on lawyering.
In a letter (pdf) to Employ Media’s attorneys, ICANN outside counsel Eric Enson of Jones Day said that ICANN wishes to avoid “costly legal fees associated with arbitration or litigation”:

I again request a meeting among the business persons involved in this matter to discuss potential resolutions before spending more of ICANN’s funding on unnecessary litigation.

The latest round of published correspondence, like the last one, and the one before that, seems to contain a fair bit of legal posturing, with both sides accusing the other of conducting negotiations in “bad faith” for various reasons.
Filing the arbitration notice with the ICC might turn out to be a smart move by Employ Media, knowing how risk-averse and cash-conscious ICANN is.
ICANN is still smarting from the last time it headed to arbitration, for its Independent Review Panel over ICM Registry’s .xxx top-level domain.
ICANN lost that case in February 2010, and had to cover the panel’s almost $500,000 in costs, as well as its own legal fees. The overall price tag is believed to have comfortably made it into seven figures.
But that may well turn out to be small beer compared to the price of losing arbitration against the .jobs registry.
Unlike the IRP, in which both parties pay their own lawyers no matter who wins, Employ Media’s contract states that the losing party in arbitration must pay the legal fees of the winner.
To go up against .jobs at the ICC and lose could hit ICANN’s coffers harder than the .xxx dispute, in other words. That’s not to say it would lose, but with matters as complex as this there is that risk.
It’s worth noting that Employ Media’s lead attorney has form when it comes to reaching into ICANN’s pockets – Crowell & Moring’s Arif Ali also represented ICM Registry in the .xxx IRP case.

Europe asked the US to delay .xxx

European Commissioner for the Digital Agenda Neelie Kroes asked the US Department of Commerce to delay the introduction of the .xxx top-level domain after ICANN approved it, I can reveal.
In an April 6 letter to Secretary of Commerce Gary Locke, a copy of which I have obtained, Kroes expressed dismay with ICANN’s decision, and wrote (my emphasis):

I would therefore consider it necessary for the [ICANN Governmental Advisory Committee] to reflect, at a senior level, on the broader implications of the Board’s decision on .XXX, and to do so before the TLD is introduced into the global Internet. I assume that the United States government would appreciate the opportunity to hear the views of other countries on this important issue, and I very much hope therefore that I can count on your support for such an initiative.

The letter was sent after ICANN had approved .xxx, but nine days before the National Telecommunications and Information Administration instructed VeriSign to add it to the DNS root.
It seems to be an implicit request for the NTIA to delay .xxx’s go-live date to give the Governmental Advisory Committee of ICANN time to regroup and consider how best to continue to oppose the domain.
As I reported this morning, assistant secretary Lawrence Strickling replied to Kroes later in April, agreeing with her in principle but saying that to intervene could do more harm than good.
Kroes objected on the grounds that GAC had “no active support” for .xxx, that national-level blocking of the TLD could threaten internet stability, and that parents will be given a “false sense of security” if they choose to filter .xxx domain names.
She also didn’t buy ICANN’s rationale for its decision, saying it contained “mostly procedural arguments that do not adequately reflect the significant political and cultural sensitivities” created by .xxx.
She additionally noted that:

Most importantly, perhaps, are the wider consequences that we have all have to deal with as a result of this decision. We are both aware of the broader geo-political Internet governance debate that continues regarding the legitimacy of the ICANN model. I am concerned therefore that ICANN’s decision to reject substantive GAC advice – of which there is also an apparent risk in relation to the new generic TLD process – may be detrimental to the multi-stakeholder, private sector-led model which many of us in the international community have been stoutly defending for years.

This seems to be a reference to the longstanding debate over whether the International Telecommunications Union, or another intergovernmental body, may be better suited to overseeing domain name system policy.
In his reply to Kroes, Strickling offered to meet her by teleconference or in person in Brussels, in order to discuss how to proceed.
The fallout from .xxx’s approval may not be over by a long shot.
UPDATE: Read the Kroes letter: Page One, Page Two.

Did Europe ask America to block .xxx?

The European Commission may have asked the US Department of Commerce to block or delay the .xxx top-level domain, it has emerged.
I’ve heard rumors for a few weeks that Neelie Kroes, vice president of the Commission responsible for the digital economy, wrote to Commerce in April, asking it to delay the go-live date for .xxx.
Today, a reply from Lawrence Strickling, assistant secretary at Commerce, has emerged, published on the blog of Polish technology consultant Andrzej Bartosiewicz.
It appears to confirm the rumors. Strickling wrote:

While the Obama Administration does not support ICANN’s decision, we respect the multi-stakeholder Internet governance process and do not think it is in the long-term best interest of the United States or the global Internet community for us unilaterally to reverse the decision.

It’s certainly possible to infer from this that Kroes had asked the US to exercise its unique powers over the domain name system’s root database to block or delay .xxx.
The Kroes letter was evidently sent April 6, about 10 days before the National Telecommunications and Information Administration, part of Commerce, instructed VeriSign to add .xxx to the root.
In his April 20 response, Strickling shared Kroes’ “disappointment” with ICANN’s decision, saying the organization “ignored the clear advice of governments worldwide, including the United States”.
He said the decision “goes against the global public interest and will spur more efforts to block the Internet” and agreed that ICANN “needs to make to engage governments more effectively”.
To that end, Strickly offered to fly to Brussels to meet with Kroes to conduct a “senior level exchange” on how to better work with ICANN.
While it’s probably too late for any of this to affect .xxx, operated by ICM Registry, it is a clear sign that governments are taking a renewed interest in ICANN’s work.
ICANN’s Governmental Advisory Committee issued weak advice on .xxx, noting merely that no governments outright supported it, and that “several” were opposed. The was no consensus.
Because the GAC did not explicitly say “do not approve .xxx”, ICANN was able to rationalize its decision by saying it was not explicitly overruling governmental advice.
At least three countries — Saudi Arabia, India and Kenya — have already indicated that they may block .xxx domains within their borders.
UPDATE: Kroes did in fact ask Commerce to delay .xxx.

ICM adds another .xxx registrar

DomainMonster has become the latest registrar, the first in the UK, to announce support for ICM Registry’s upcoming .xxx porn-only top-level domain.
The company said it has been accredited by ICM, and that it will start taking pre-orders for the domains on its Domainbox reseller platform soon.
Others registrars to have announced that they plan to carry .xxx domains over the last few months include Network Solutions, Blacknight, EnCirca, RRPProxy.net and United Domains.
I’m not sure if any have been officially accredited yet — no .xxx registrars show up on ICANN’s offical list.
DomainMonster CEO Matt Mansell said: “We anticipate the .XXX launch to be the biggest we’ve seen in recent years. The demand our support teams are seeing already far outstrips anything that’s gone before.”
ICM has previously projected somewhere between 300,000 and 500,000 registrations after launch. It took around 600,000 pre-reservations in the few years before it was approved by ICANN.
Getting .xxx accrediation is said to be quite a lengthy process. Registrars have to answer 14 detailed questions, including agreeing to abide by ICM’s policies and detailing how they plan to promote the domains.

ICANN gives governments powers over new TLDs

ICANN has made some significant concessions to government demands in the newly published revision of its new top-level domains Applicant Guidebook.
After lengthy consultations with its Governmental Advisory Committee over the last few months, ICANN has updated the rulebook to address the vast majority of GAC concerns.
We’ve gone from the “proposed final Applicant Guidebook” published in November to the “April 2011 Discussion Draft” that appeared on the ICANN web site in the wee hours of this morning.
On first perusal, it appears that ICANN has walked the fine lines between GAC advice, hard-fought community consensus and common sense more or less successfully.
While the new Guidebook gives plenty of ground to the GAC, making it a more integral part of the new TLDs approval process, it avoids adopting some of its more problematic requests.
In this post, I’ll look at the powers ICANN has given to governments to object to TLDs.
Early Warning System
While ICANN has sensibly not given individual governments the right to veto TLDs they are not happy with, they do get substantially more input into the approval process than in previous drafts.
The major update to the Guidebook is a new Early Warning system that will allow governments to pre-object to TLDs they don’t like.
An Early Warning, which can only be filed by the GAC chair, is “an indication that the application is seen as potentially problematic by one or more governments.”
Applicants in receipt of such a warning will have 21 days to decide whether to drop out of the process, receiving a $148,000 refund, 80% of their $185,000 application fee.
But they won’t have to. The warning is just a heads-up that the GAC or some of its members may formally object at a later stage. A warning does not represent a GAC consensus position.
The Early Warning process will run for 60 days, at the same time as the public comment period that begins the day the applications are published.
Advice of Doom
Any applicants that decide to ignore such a warning face the possibility of receiving a formal GAC objection, which could come at any point in the first seven months after the applications are published.
This is now being called “GAC Advice on New gTLDs”. It could be quite a powerful tool:

GAC Advice on New gTLDs that includes a consensus statement from the GAC that an application should not proceed as submitted, and that includes a thorough explanation of the public policy basis for such advice, will create a strong presumption for the Board that the application should not be approved.

This is pretty close to a GAC veto, but it crucially requires GAC consensus. The Guidebook explains:

GAC Advice on New gTLDs should identify objecting countries, the public policy basis for the objection, and the process by which consensus was reached.

Even if the GAC reaches consensus, the ICANN board will be able to overrule its objections in accordance with its bylaws, in much the same way it just did with .xxx (in practice, I suspect .xxx may ultimately prove a fairly unique exception to the rule).
The Guidebook indicates that any wishy-washy, non-consensus, politician-speak advice given by the GAC will not be considered grounds for rejecting an application. The objection must be specific, grounded, and it must have support.
Importantly, ICANN has not conceded to the GAC’s request to allow applicants to amend their applications to remedy the GAC’s concerns.
As I noted earlier in the week, this could have led to companies gaming the system, and ICANN has ruled out amendments for precisely that reason.
Freebies
Individual governments will of course be allowed to object to any application using any of the other procedures that the Guidebook allows, such as the Community Objection.
ICANN’s problem is that these processes carry third-party fees, and governments don’t think they should have to pay these fees (for some reason that’s never been adequately explained).
Addressing this concern, the new Guidebook says that ICANN will cover each national government to the tune of $50,000 to fund a single objection.
That’s a total of potentially well over $1 million, funded from ICANN’s reserves. ICANN expects that governments will coordinate their objections to limit its costs.
Overall, it appears that ICANN has addressed pretty much everything the GAC wanted in terms of objections procedures. With a couple of reasonable exceptions, the GAC has received what it asked for.
Members may not be completely happy with ICANN’s decrees on what form GAC advice must take in order to have a useful impact, but in general it seems that this could well now be a closed issue.
In my next post, I’ll look at how intellectual property protection changes in the new Guidebook.