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ICANN: antitrust law does not apply to us

Kevin Murphy, January 21, 2012, Domain Registries

ICANN says it “does not engage in trade or commerce” and therefore US antitrust laws do not apply to its approval of the .xxx top-level domain, according to court documents.

The organization and .xxx operator ICM Registry yesterday submitted their coordinated responses to the antitrust lawsuit filed by YouPorn owner Manwin Licensing.

ICANN claims it cannot be held liable under antitrust law and ICM has accused Manwin of filing a nuisance lawsuit because it missed its opportunity to secure some premium .xxx domain names.

Manwin sued in November, alleging ICANN and ICM illegally colluded to deliver “monopolistic conduct, price gouging, and anti-competitive and unfair practices”.

The company, which runs the largest porn sites on the internet, claims ICANN should have opened the .xxx contract to competitive bidding and that ICM’s sunrise policies amounted to “extortion”.

It wants a California District Court to shut down .xxx entirely.

But ICANN has now argued that Manwin’s antitrust claims cannot possibly apply to it because it is a charitable, public-interest organization:

ICANN cannot, as a matter of law, be liable under the antitrust laws with respect to the conduct alleged in the Complaint because ICANN does not engage in “trade or commerce.”

[ICANN] does not sell Internet domain names, it does not register Internet domain names, and it certainly is not an Internet pornographer. ICANN does not make or sell anything, it does not participate in any market, and its Bylaws expressly forbid it from participating in any of the markets referenced in the Complaint.

Its motion to dismiss (pdf) goes on to say that the introduction of .xxx is actually pro-competition, and that Manwin only sued because it is scared of losing market share.

Plaintiffs claim to be upset with the manner in which ICM is operating the new .XXX registry, but since Plaintiffs already operate (by their own admission) some of the most successful pornographic websites on the Internet, websites that will continue to operate irrespective of anything ICM might do, what the Plaintiffs are really complaining of is the potential competition that their websites may face from the operation of .XXX.

ICM Registry makes similar arguments in its motion to dismiss (pdf):

what Plaintiffs are really complaining about is the fact that they lost the opportunity to purchase the least expensive defensive registry options offered by ICM because they missed the deadline

But ICM also says that the lawsuit falls foul California’s laws against so-called SLAPPs (“strategic lawsuits against public participation”), basically nuisance suits designed to suppress speech.

Declarations from CEO Stuart Lawley (pdf) and marketing director Greg Dumas (pdf) detail conversations between Manwin and ICM in the run-up to the gTLD’s approval and launch.

Manwin managing partner Fabian Thylmann offered to invest in ICM in July 2010, but Lawley declined, according to an ICM exhibit (pdf).

By October 2010 these offers had turned to legal threats, according to Dumas’ declaration:

Manwin saw the introduction of the .XXX sTLD as a threat to Manwin’s dominance over the adult Internet industry. At that time, Thylmann said that he would do whatever he could to stop .XXX. Specifically, Thylmann said that if ICANN approved the .XXX sTLD, Manwin would file a lawsuit against ICM to disrupt its ability to conduct business

Shortly after ICANN’s December 2010 meeting in Cartagena concluded with an ambiguous resolution on .xxx’s future, Thylmann rebuffed Dumas’ overtures about the .xxx Founders Program.

He predicted in an email to Dumas that ICANN’s Governmental Advisory Committee would force ICANN to reject .xxx, adding “the .xxx domain is useless even if it comes to market”, according to an ICM exhibit.

In September 2011, when the .xxx launch was already well underway, Manwin demanded thousands of free premium .xxx domains and a veto over some registry policies, according to Dumas:

Manwin demanded that ICM: allocate a minimum of several thousand .XXX domain names to Manwin free of charge; commit to prevent IFFOR from making any policies that ban or restrict the operation of user-generated content “tube” sites on .XXX domains; grant across-the-board discounts on all .XXX domain registrations; and allow Manwin to operate certain ‘premium’ or high value domain names, such as “tube.xxx,” through a revenue sharing arrangement between Manwin and ICM.

ICM says that these demands were accompanied by legal threats.

The lawsuit and Manwin’s boycott of companies using .xxx domains has harmed ICM’s business, according to the company’s court filings.

The case continues.

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Fox takes control of squatted .xxx domain

Kevin Murphy, January 21, 2012, Domain Policy

Twentieth Century Fox has withdrawn its cybersquatting complaint about the domain name foxstudios.xxx after the domain was transferred into its control.

As I reported on Tuesday, the UDRP case was a no-brainer. Fox Studios is Fox’s production subsidiary, and the owner of foxstudios.xxx had offered the domain for sale on eBay for a ludicrous $1.9 million.

This would have been more than enough to show bad faith.

The Whois record for the domain shows it is now owned by Fox, with an email address corresponding to an outside law firm. From here, it still resolves to a for-sale page, however.

Three more .xxx UDRP complaints have been filed this week, all by Turkish companies, bringing the total since December 29 to eight.

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End in sight for Go Daddy’s 60-day transfer lock

Kevin Murphy, January 21, 2012, Domain Registrars

Go Daddy’s unpopular 60-day domain name lockdown period, which prevents customers moving to other registrars, could be reduced to as little as five days under new ICANN policy.

ICANN’s GNSO Council this week voted to amend the Inter-Registrar Transfer Policy, which is binding on all registrars, to clarify when and how a registrar is allowed to block a transfer.

Today, Go Daddy has a policy of preventing transfers for 60 days whenever the registrant’s name is changed in the Whois record.

It’s designed to help prevent domain name hijacking, but to many customers it’s frustrating and looks shady; as a result it’s one of the most frequently cited criticisms of the company.

Other registrars may have similar policies, but Go Daddy is the only one you ever really hear complaints about.

Some have even posited that the practice violates the IRTP, which explicitly prevents registrars spuriously locking domains when customers update their Whois.

But ICANN’s compliance department has disagreed with that interpretation, drawing a distinction between “Whois changes” (cannot block a transfer) and “registrant changes” (can block a transfer).

Essentially, if you change your name in a Whois record the domain can be locked by your registrar, but if you change other fields such as mailing address or phone number it cannot.

Go Daddy and other registrars would still be able prevent transfers under the revised policy, but they would have to remove the block within five days of a customer request.

This is how ICANN explains the changes:

Registrar may only impose a lock that would prohibit transfer of the domain name if it includes in its registration agreement the terms and conditions for imposing such lock and obtains express consent from the Registered Name Holder: and

Registrar must remove the “Registrar Lock” status within five (5) calendar days of the Registered Name Holder’s initial request, if the Registrar does not provide facilities for the Registered Name Holder to remove the “Registrar Lock” status

Registrars may have some freedom in how they implement the new policy. Unblocking could be as simple as checking a box in the user interface, or it could mean a phone call.

Go Daddy, which was an active participant in the IRTP review and says it supports the changes, supplied a statement from director of policy planning James Bladel:

In the coming months, Go Daddy is making a few changes to our policy for domains in which the registrant information has changed.

We believe this new procedure will continue to prevent hijacked domain names from being transferred away, while making the transfer experience more user-friendly for our customers.

The changes were approved unanimously by the GNSO Council at its meeting on Thursday.

Before they become binding on registrars, they will have to be approved by the ICANN board of directors too, and the soonest that could happen is at its February 16 meeting.

The changes are part of a package of IRTP revisions – more to come in the near future – that have been under discussion in the ICANN community since 2007. Seriously.

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.bank trademark canceled after “mistake”

Kevin Murphy, January 20, 2012, Domain Policy

A US trademark on the term “.bank” granted to a likely .bank top-level domain applicant has been canceled just over a week after it was approved.

The Patent & Trademark Office withdrew trademark 4,085,335 yesterday, stating that it had been issued to Asif LLC in error.

The USPTO noticed that the application was for a gTLD string after receiving a letter of protest on January 6, which it forgot to process before granting the trademark.

In a letter to Asif’s lawyers, the USPTO noted that it has a policy of not approving trademarks for TLDs, adding:

The USPTO has broad authority to correct mistakes…

In view of the letter of protest prior to registration and the clear violation of the USPTO’s established policy that marks such as this do not function as trademarks, this registration is canceled as inadvertently issued

Asif, which recently changed its name to Domain Security Company, intends to apply to ICANN for .bank and .secure, but as I reported last week it faces an uphill battle given rival .bank bids.

It used a Wild West Domains reseller account to demonstrate to the USPTO it was using the .bank mark.

It’s not currently clear who was responsible for the letter of protest.

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M+M wins contract for ‘laptops and lederhosen’ gTLD

Kevin Murphy, January 20, 2012, Domain Registries

Minds + Machines has won governmental approval for its .bayern new gTLD application, according to the company.

The Bavarian state government has said it will back a bid for .bayern from Bayern Connect, which is majority-owned by M+M parent Top Level Domain Holdings, TLDH said today.

According to its press release, M+M will provide the back-end registry services, which strongly suggests that it does not plan to outsource to Neustar on this occasion.

Bayern Connect is not the only company to have announced a .bayern application, however.

Rival applicant PunktBayern, which is backed by United Domains and InterNetX among others, has been public about its plans for a couple of years too. Last year, it selected Afilias to provide its registry back-end.

If the Bavarian government is offering its exclusive support to Bayern Connect, as TLDH now says, it puts a serious question mark over the viability of the PunktBayern bid.

Under ICANN’s rules, any gTLD purporting to represent a state must secure the support or non-objection of the relevant government. Without that support, applications will be rejected.

PunktBayern does have a registered trademark on “.bayern”, however, so the tussle may not be quite over yet.

Bayern is the German name for Bavaria. The state has a population of about 12.5 million and quite a strong sense of its own identity.

It’s often referred to as the land of “laptops and lederhosen” due to a long-running government policy of friendliness to the tech industry.

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