As .spa launches, former partner pisses in the champagne

The world’s newest gTLD is due to hit its landrush launch phase tomorrow, but a disgruntled former business partner is warning that it plans to get all the registrations cancelled.

DotPH, the ccTLD registry for the Philippines, reckons it is owed half of the equity in .spa under a 2012 agreement, and has been warning registrars that to sell .spa domains would be to breach three injunctions it has secured through a Hong Kong court.

The latest such injunction (pdf), dated April 23, in part prevents the registry, Asia Spa and Wellness Promotion Council:

(whether directly or indirectly and whether by itself or via its agents or service providers (viz. registrars and registry backend) (“Agents/Service Providers”), employees and/or associated corporate entities whatsoever) be restrained from entering into any agreements for the sale, lease or other use or disposal of any .spa sub-domains (“Launch Agreements”) and/or causing, procuring or giving consent to the Agents/Service Providers to enter into any Launch Agreements

The injunctions are being interpreted differently by DotPH and ASWPC.

DotPH told participating registrars — there are at least 36 of them, according to the ASWPC web site — in a May 12 letter (pdf) from its lawyers:

ASWPC must stop selling .spa domains – by itself, or by or through its agents including Registrars… ASWPC cannot allow or permit any of its Registrars to sell any .spa domains.

It goes on to say:

Our clients will seek orders to cancel all registrations accepted by the .Spa Registry in breach of the Court order. You should alert any existing registrants, and any intending registrants of the Court order, and of the likelihood that any .spa domains registered are likely to be cancelled – unless they have a contract dating before 19 April 2021 requiring ASWPC, or you, to register their domains.

ASWPC’s interpretation appears to differ, in that it does not believe registrars are bound by the injunction, due to the chain of contracts between registry and registrant.

DotPH says that the Hong Kong High Court is next due to consider the case in August.

The .spa landrush phase is due to run from 1600 UTC May 26 until October 1. It’s ostensibly a community-based gTLD, but has eligibility policies that make it open to essentially anyone.

Defensive windfall on the cards for .spa? It’s not just for spas any more

Forthcoming new gTLD .spa has published its planned launch dates and registrations policies, and it’s not just for spas any more.

Asia Spa and Wellness Promotion Council, the registry, has informed ICANN that it plans to take .spa to sunrise for 30 days starting April 20 and expects to go to general availability around the start of July.

But despite being a “Community” gTLD under ICANN rules, it appears to be also marketing itself at any Italian company that uses the S.p.A corporate suffix, which is generally equivalent to the US Inc/Corp and UK Plc.

According to its eligibility criteria (pdf), under the heading “Coincidental Community Guidelines”, proof of an Italian business address should be enough for any SpA company to qualify to register.

The registry’s web site at nic.spa currently says:

Apart from the spa and wellness industry, .spa can also be a abbreviation to represent:

• Società per Azioni (a form of corporation in Italy, Public Limited Companies By Shares)
• Sociedad por acciones (Joint-stock company in South American Countries)

This offers a great opportunity for entitles in Italy and South American Countries to registered a wonderful name.

This is interesting, because ASPWC applied for .spa as a Community applicant dedicated to the spa and wellness industry.

The primary reason it’s getting to run .spa rather than rival applicant Donuts is that ASPWC won a Community Priority Evaluation, enabling it to avoid a potentially costly auction against its deeper-pocketed competitor.

There’s no mention of Italians or South Americans in its 2015 CPE result (pdf).

Donuts fought the CPE result in ICANN’s Cooperative Engagement Process for three years, but eventually backed away for unknown reasons.

In its original application, ASWPC spends a lot of time discussing its “intended use” of .spa and possible overlap with other meanings of the string. Among this text can be found:

The use of “S.p.A.” as a short form for the Italian form of stock corporation: “Società Per Azioni” is also relatively much less prevalent than the word as intended for the spa community. Furthermore, a more proper and popular way of denoting the form of corporation is “S.p.A.” with the periods included. While this is an important usage of the string “SpA”, the Registry believes that it should not take away from the significant meaning of the word “spa” in its intended use for the spa community as a TLD. Furthermore, additional preventive measures can be put in place to mitigate against any concerns for abusive utilization of the TLD in this manner.

I could find no text explicitly ruling out the Italian corporate use in the application, nor could I find any indication that it was part of the hard-C “Community” upon whose behalf ASWPC was applying for, and eventually won, the gTLD.

The application does seem to envisage some kind of reserved names list that could include S.p.A companies, but that doesn’t appear to be what the registry has in mind any more.

.spa registry relocates to .xyz

Newly installed .spa registry Asia Spa and Wellness Promotion Council has started using a .xyz domain for its official registry web site.

The organization last week had its IANA records updated to change its “URL for registration services” from aswpc.org to dotspa.xyz.

It currently resolves to a placeholder “Coming Soon” page.

Choosing a TLD other than its own, which entered the DNS root in September, is pretty unusual.

Most new gTLD registries activate nic.example pretty quickly after delegation, even if they ultimately use a domain such as get.example or register.example for their primary marketing sites.

Activating nic.example is actually an obligation under ICANN contracts. ASWPC has registered that domain, but only whois.nic.spa currently resolves.

The dotspa.xyz domain was registered about a year ago, about a month after ASWPC’s former business partner, DotAsia, washed its hands of its stake in the TLD.

Both the .com and .org versions have been registered for well over a decade, so perhaps .xyz was picked as the default third-choice generic.

But that still doesn’t explain why a registry would select a domain outside its own TLD for its primary site.

Angry investor sues for 30% of new .spa gTLD

Barely had the new gTLD .spa made it into the DNS root than it got sued by a company that claims it was stiffed out of a 30% stake in the domain.

Malaysia-based Asia Spa and Wellness Promotion Council, the newly minted registry, is being sued in Hong Kong by DotPH, the company that runs the Philippines ccTLD, .ph, over an eight-year-old investment deal DotPH says is being ignored.

It’s also named as defendants .asia registry DotAsia, DotAsia subsidiary Namesphere, and several DotAsia directors.

DotPH claims in its lawsuit that its CEO, Joel Disini, got together with DotAsia CEO Edmon Chung in early 2012 to come up with a deal whereby ownership of .spa, should its application be successful, would be split three ways.

ASWPC would hold half the shares, Namesphere 20%, and DotPH the remaining 30%, according to the complaint. DotPH claims it paid $60,000 for its stake in April 2012.

Now it claims that these shares were never formally issued, and it wants the Hong Kong court to force Namesphere to hand them over and force the original three-way ownership structure originally agreed.

But it turns out that DotAsia seems to have abandoned .spa anyway. Its board of directors a year ago voted to give ASWPC “sole rights” to the gTLD, enabling it to concentrate on .asia.

Disini, who was a member of the board at the time, claims he was only emailed about the vote a day before the meeting and did not see the email until it was too late.

He told DI: “the board of dotAsia moved to give away DotPH’s 30% equity in SPA”. He’s not happy about it. He reckons .spa could easily be a $2 million-a-year business.

The suit was filed October 19. You can read it here (pdf).

I’ve yet to receive a response to my request for comment from Chung, and will of course provide an update should he get back to me.

The internet just got its first proper new gTLD of the year, and the timing couldn’t be worse

The DNS root zone has just had its first non-branded TLD delegation of the year, and the midst of a highly virulent pandemic is probably the worst possible time for its niche.

It’s .spa, newly assigned to a Malaysian company called Asia Spa and Wellness Promotion Council.

Spas, of course, are at the top of every government’s list when it comes to sectors that get shut down at the first whiff of virus.

Unlike restaurants and bars, which drove registrations of gTLDs such as .bar in the locked-down second quarter, spa services are not something that can easily be adapted to take-out or home delivery.

.spa has taken this long to reach the root largely due to to a fight with rival applicant Donuts.

ASWPC, backed by spas worldwide and the Belgian government (which claimed geographical protection because spas are named after the town of Spa) applied as a Community Priority Evaluation applicant, and won its CPE.

The company has said it will donate 25% of its profits to the town of Spa.

Donuts fought the CPE decision, preventing ASWPC from proceeding for three years, before backing off without explanation two years ago.

Hopefully, by the time .spa is properly ready to launch, its niche will be approaching some kind of normality.

It’s the fourth root delegation this year, after Amazon’s three dot-brands.

Donuts backs away from .spa fight

Donuts has finally admitted defeat in its long-running fight to run the .spa gTLD, withdrawing its application and leaving rival Asia Spa and Wellness Promotion Council the victor.
ASWPC, run from Hong Kong by .asia’s Edmon Chung, has now entered into contracting with ICANN.
The company had won a Community Priority Evaluation back in 2015, with a passing score of 14 out of 16, which Donuts has been challenging ever since.
Donuts and ICANN were in a so-called Cooperative Engagement Process, a form of informal arbitration designed to stave off a more expensive Independent Review Process fight, from January 2016 until this month.
This meant ASWPC has been sitting twiddling its thumbs, unable to sign its contract or launch its TLD, for the better part of three years.
It’s not clear why Donuts decided not to go to a full-blown IRP. The company declined to comment for this article.
As a community applicant, the company had the backing of hundreds of spas worldwide.
It also had the backing of the Belgian government, which was important because spas are (little-known fact alert!) named after the tiny Belgian town of Spa.
It is believed that ASWPC promised up to 25% of its profits to Spa in order to gain this backing, but only from domains registered by Belgian, Dutch, Luxembourgish, French or German registrants.

Donuts plays the genericide card in showdown with Belgian government over .spa

Donuts has asked ICANN to approved its .spa new gTLD application over the objections of the Belgian government, saying the town of Spa no longer has exclusive rights to the string.
As we reported at the weekend, Spa is asking Donuts and rival applicant Asia Spa and Wellness Promotion Council for an up to 25% cut of profits from .spa, as well as the right to help manage the TLD at the registry’s expense.
ASWPC has agreed to these terms, but Donuts has not. It says it offered Spa extra protections for sensitive names, but does not want to hand over any managerial control or profit.
Yesterday, Donuts wrote to ICANN (pdf) to say that “spa” is now so generic that no interest would be served by ICANN enforcing the city’s demands. Here’s the meat of it:

While the City of Spa maintains a historical link to the word “spa”, that word long ago evolved as a globally recognized generic term by people who have never even heard of the city of its origin. The public interest served by making that term available to a global community of spa users far outweighs any risk of confusion with the city of the same name. And for those names that may cause confusion, Donuts has provided a rigorous series of additional protections and controls.
The City of Spa gave the word “spa” to the world many centuries ago, and the world has done a great deal with it. Just as attorneys for the City of Spa don’t fly around the world handing cease-­and-desist notices to resort operators and hot-­tub manufacturers, we do not believe it is appropriate for them to overrun ICANN procedure to try to exert control over how that term is used in the Internet’s global addressing system.

I’m going to raise my hand to say that I’d never heard of Spa before this particular controversy arose, and I expect that goes for most of the people reading this article. Donuts surely has a point.
But that’s not to say Spa doesn’t have a point too. There are plenty of governments that managed to squeeze concessions out of applicants for gTLDs matching place names in their territories, with little complaint from applicants; it’s just that the line was drawn at capital cities, something which Spa is not.
Donuts urges ICANN to give no weight to the Spa-ASWPC deal and to move both applications forward to the next stage of the process — contention resolution.
We may see some progress at the ICANN meeting in Singapore next week, when ICANN will surely press the Governmental Advisory Committee for further advice on this string.

Belgians do want a piece of Donuts’ new gTLD action

The Belgian government is blocking approval of Donuts’ bid for the new gTLD .spa until the company agrees to hand over up to 25% of its .spa profits to the community of the city of Spa.
It emerged in a letter from Spa published by ICANN this weekend that the city is also demanding a role in managing the TLD at the registry operator’s expense.
The gTLD has been applied for by Donuts and the Asia Spa and Wellness Promotion Council.
Not only does the string .spa match the name of the city, but also the English dictionary word “spa” is actually named after Spa, which has been known for centuries for its “healing” springs.
Despite this, Spa is not a capital city — it has roughly 10,000 inhabitants — so it does not qualify as a protected geographic string under the rules of ICANN’s new gTLD program.
Spa nevertheless wants a role in the TLD’s management, in order to protect the interests of itself and its local community, and wants some of the profits to benefit its local businesses.
According to the letter (pdf) from Spa outside attorney Phillippe Laurent, ASWPC has already signed a memorandum of understanding with the city. That MoU, published with the letter, states:

The turnover generated by the exploitation of the .SPA registry will be used in priority to defray reasonable out-of-pocket expenses incurred by the City as a result of its participation in the SPARC or any other of its activity related to the management and governance of the .SPA extension.
Additionally, 25% of the net profit generated by the domain names registered in the .SPA registry by any Belgian, Dutch, Luxembourgish, French or German person or entity will be earmarks to be contributed towards Internet and spa & wellness activities development in and for the City of Spa and its region, especially as related to the scope of the “.SPA” TLD, to be directed by the City of Spa.

The deal would also see ASWPC reserve 200 .spa domain names (included potential premiums such as poker.spa and golf.spa) for the city to do with as it pleases.
Donuts has refused to sign the MoU, saying it’s inconsistent with the Applicant Guidebook and sets a “bad precedent”. Spa has therefore refused to endorse its application.
The city has its national government on its side. In the April 2013 Beijing communique of the ICANN Governmental Advisory Committee, the GAC listed .spa as one of several bids needing “further consideration”.
This was reiterated in its Durban and Buenos communiques, with the GAC noting that “discussions” between “relevant parties” were “ongoing”.
Essentially, the GAC is delaying .spa from approval while Spa tries to get Donuts to agree to hand over part of its of .spa profits.
There was a somewhat testy exchange at the Buenos Aires meeting in November, after an ICANN director asked the GAC if it was appropriate for a governmental entity to try to get a financial benefit from an applicant.
The Belgian GAC representative responded later that “no money will flow to the city of Spa”, conceding that “a very small part of the profits of the registry will go to the community served by .spa”.
That now seems to be not entirely accurate.
The MoU sees Spa getting reimbursed for its self-imposed cost of inserting itself into the management of the registry, so some money will flow to it. But it will presumably be revenue-neutral to the city.
The issue of the 25% profit cut is a bit ambiguous though.
While the money would not flow directly into city coffers, the city would get the ability to direct how it was spent. Presumably, it could be spent on projects that Spa locals would otherwise look to the city to pay for.
With Donuts and Spa apparently at an impasse, ICANN recently told the GAC that it won’t sign contracts with either applicant, yet, but that it wants “a timeline for final consideration of the string”.
It also wants the GAC to “identify the ‘interested parties’ noted in the GAC advice.”
With Laurent’s letter and the MoU seemingly spelling out exactly what Spa wants and why, perhaps ICANN can move the issue closer to resolution at the Singapore meeting next week.
Is it a shakedown? Is it appropriate behavior for the GAC to hold an application hostage while it tries to obtain financial benefit for its local businesses? Or is Donuts unreasonably trying to exploit a city’s centuries-old cultural heritage for its own economic gain?