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Three strikes UDRP rule worries Demand Media

Kevin Murphy, May 16, 2011, Domain Policy

Demand Media and the Internet Commerce Association have called for ICANN to drop the “three strikes and you’re out” ban on applying for new top-level domains.

In the current version of ICANN’s Applicant Guidebook, if you’ve lost three UDRP cases in the last four years you’re considered a cybersquatter and effectively barred from applying for a new TLD.

It’s not entirely clear, but it is quite possible that this provision may capture Demand Media and Go Daddy, which, via subsidiary companies, have lost several UDRP complaints.

In comments filed with ICANN yesterday, Demand senior vice president Jeff Eckhaus said that a simple “three strikes” benchmark does not prove a pattern of cybersquatting:

losing a few contested UDRP cases in what amounts to a tiny percentage of their total domain name portfolio certainly doesn’t seem to constitute a “pattern” as most people would define the term

by all reasonable standards, it is difficult to conclude that an entity or an individual has engaged in a history/pattern of cybersquatting when they own hundreds or thousands of domain names and have lost a few UDRP or similar proceedings.

The ICA, which represents high-volume registrants, also has a problem with the rule. Principal Phil Corwin wrote ICANN:

We continue to believe that the “three strikes” criteria is too inflexible and that applicant evaluation criteria should take into account the total size of an applicant’s domain portfolio as well as the percentage of adverse UDRP decisions rendered against them in comparison to all UDRP proceedings they have been involved with.

Demand also argues that three strikes is “extremely broad standard that we believe will unintentionally disqualify otherwise qualified applicants.”

That strikes me as quite a weak argument, which could be equally applied to any of the background checks in the Guidebook. A murder conviction will also “disqualify otherwise qualified applicants”.

I’m not sure it’s “unintentional” in either case. If you work from the assumption that ICANN expects Demand and other speculators to successfully apply for new TLDs, it is. If you assume it’s designed to make their lives more difficult, it isn’t.

But Corwin noted in his comments that ICANN can waive the ban in “exceptional circumstances”, and said he suspects this could be used to allow large registrars to pass the background checks.

In any event, as Andrew Allemann has pointed out at Domain Name Wire, the way the Guidebook is phrased there may well be a loophole that would allow Demand and others to slip through.

Go Daddy, which DNW also reports could be affected by the rule, does not appear to have filed any comments on the latest Applicant Guidebook yet.

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Trademark lobby makes final new gTLD demands

With ICANN’s latest and potentially last call for comment on its new top-level domains program just hours away from closing, the arguments are shaping up along familiar lines.

Trademark protection is unsurprisingly still center stage, with loud calls for the Applicant Guidebook’s rights protection mechanisms to be amended more favorably to brand owners

Meanwhile, many of those strongly in favor of the new gTLD program launching soon have submitted more subdued, concise comments, merely urging ICANN to get a move on.

While there are still some fringe opinions, many within the intellectual property community are on the same page when it comes to rights protection mechanisms.

URS

The Uniform Rapid Suspension policy, which enables trademark holders to relatively quickly shut down obvious cases of cybersquatting, comes in for particular attention.

In the latest draft of the URS, as well as its sister policy, the Trademark Clearinghouse, brand owners have to present “proof of use” for the trademarks which they want to enforce.

The International Trademark Association, the Intellectual Property Constituency and others want this provision eliminated, saying it is inconsistent with many national trademark laws.

The also want the burden of proof lowered from the “clear and convincing evidence” standard, and want to expand the “loser pays” model, to provide an economic disincentive to cybersquatting.

In the latest version of the Applicant Guidebook, ICANN introduced a system whereby a cybersquatter has to pay the cost of a URS they lose, but only if the case comprises over 25 domains.

INTA, the IPC and others want this reduced to something like five domains, on the grounds that 25 is too high a bar and may actually encourage larger-scale squatting.

IP Claims

They also want the Clearinghouse’s IP Claims service, which serves a warning to registrants when they try to register potentially infringing domains, expanded beyond exact-match strings.

Currently, you’ll receive a warning about possible infringement if you try to register lego.tld or foxnews.tld, but not if you try to register legostarwars.tld or foxnewssucks.tld.

Many commenters want this changed to also include brand+keyword domains (fairly easy to implement in software, I imagine), or even typos (not nearly so easy).

This makes sense if you assume that cybersquatting patterns in new TLDs mirror those in .com, where brand+keyword squatting comprise the majority of UDRP cases.

But if you look at the about 100 UDRP cases to be filed so far in .co, it seems that brand-only cybersquatting is clearly the order of the day.

Depending on how this was implemented, it could also create a “chilling effect” whereby IP Claims notices are sent to legitimate registrants.

It seems likely that with a brand+keyword approach, if someone tried to register legourmetchef.tld, they could wind up with a notice that the domain infringes the Lego trademark.

The trademark lobby also wants this IP Claims service extended beyond the first 60 days of a new TLD’s life, on the grounds that the cybersquatting risk does not disappear after a TLD launches.

According to submissions from existing TLD registries and potential applicants, this could add to the costs of running a TLD, increasing prices for registrants.

GAC

Most of these demands are not new. But in many cases, the IP lobby now has the support of the ICANN Governmental Advisory Committee.

The GAC and ICANN are due to meet by teleconference this Friday, ostensibly for their “final” consultation before ICANN approves the Guidebook a little over a month from now.

But with the US and Europe now strategically aligned, it seems likely that ICANN will find itself under more pressure than ever before to concede to the demands of trademark holders.

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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.

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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.

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Governments back Olympic domain bans

Kevin Murphy, May 13, 2011, Domain Policy

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.

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