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Donuts loses to ICANN in $135 million .web auction appeal

Kevin Murphy, October 16, 2018, Domain Registries

Donuts has lost a legal appeal against ICANN in its fight to prevent Verisign running the .web gTLD.

A California court ruled yesterday that a lower court was correct when it ruled almost two years ago that Donuts had signed away its right to sue ICANN, like all gTLD applicants.

The judges ruled that the lower District Court had “properly dismissed” Donuts’ complaint, and that the covenant not to sue in the Applicant Guidebook is not “unconscionable”.

Key in their thinking was the fact that ICANN has an Independent Review Process in place that Donuts could use to continue its fight against the .web outcome.

The lawsuit was filed by Donuts subsidiary Ruby Glen in July 2016, shortly before .web was due to go to an ICANN-managed last-resort auction.

Donuts and many others believed at the time that one applicant, Nu Dot Co, was being secretly bankrolled by a player with much deeper pockets, and it wanted the auction postponed and ICANN to reveal the identity of this backer.

Donuts lost its request for a restraining order.

The auction went ahead, and NDC won with a bid of $135 million, which subsequently was confirmed to have been covertly funded by Verisign.

Donuts then quickly amended its complaint to include claims of negligence, breach of contract and other violations, as it sought $22.5 million from ICANN.

That’s roughly how much it would have received as a losing bidder had the .web contention set been settled privately and NDC still submitted a $135 million bid.

As it stands, ICANN has the $135 million.

That complaint was also rejected, with the District Court disagreeing with earlier precedent in the .africa case and saying that the covenant not to sue is enforceable.

The Appeals Court has now agreed, so unless Donuts has other legal appeals open to it, the .web fight will be settled using ICANN mechanisms.

The ruling does not mean ICANN can go ahead and delegate .web to Verisign.

The .web contention set is currently “on-hold” because Afilias, the second-place bidder in the auction, has since June been in a so-called Cooperative Engagement Process with ICANN.

CEP is a semi-formal negotiation-phase precursor to a full-blown IRP filing, which now seems much more likely to go ahead following the court’s ruling.

The appeals court ruling has not yet been published by ICANN, but it can be viewed here (pdf).

The court heard arguments from Donuts and ICANN lawyers on October 9, the same day that DI revealed that ICANN Global Domains Division president Akram Atallah had been hired by Donuts as its new CEO.

A recording of the 32-minute hearing can be viewed on YouTube here or embedded below.

Chutzpah alert! DotKids wants ICANN handout to fight gTLD auction

Kevin Murphy, September 24, 2018, Domain Policy

New gTLD applicant DotKids Foundation has asked ICANN for money to help it fight for .kids in an auction against Amazon and Google.

The not-for-profit was the only new gTLD applicant back in 2012 to meet the criteria for ICANN’s Applicant Support Program, meaning its application fee was reduced by $138,000 to just $47,000.

Now, DotKids reckons ICANN has a duty to carry on financially supporting it through the “later stages of the process” — namely, an auction with two of the world’s top three most-valuable companies.

The organization even suggests that ICANN dip into its original $2 million allocation to support the program to help fund its bids.

Because .kids is slated for a “last resort” auction, an ICANN-funded winning bid would be immediately returned to ICANN, minus auction provider fees.

It’s a ludicrously, hilariously ballsy move by the applicant, which is headed by DotAsia CEO Edmon Chung.

It’s difficult to see it as anything other than a delaying tactic.

DotKids is currently scheduled to go to auction against Google’s .kid and Amazon’s .kids application on October 10.

But after ICANN denied its request for funding last month, DotKids last week filed a Request for Reconsideration (pdf), which may wind up delaying the auction yet again.

According to DotKids, the original intent of the Applicant Support Program was to provide support for worthy applicants not just in terms of application fees, but throughout the application process.

It points to the recommendations of the Joint Applicant Support working group of the GNSO, which came up with the rules for the support program, as evidence of this intent.

It says ICANN needs to address the JAS recommendations it ignored in 2012 — something that could time quite some time — and put the .kids auction on hold until then.

.kids gTLD auction probably back on

Amazon, Google and a small non-profit appear to be headed to auction to fight for ownership of child-friendly new gTLDs.

ICANN last week defrosted the contention set for .kids/.kid; DotKids Foundation’s bid for .kids is no longer classified as “On-Hold”.

This means an ICANN-managed “last resort” auction is probably back on, having been cancelled last December in response to a DotKids request for reconsideration.

The RfR was thrown out by the ICANN board of directors, on the recommendation of its Board Accountability Mechanisms Committee, in May.

.kids and .kid are in the same contention set because DotKids fought and won a String Confusion Objection against Google’s .kid application.

It’s also directly competing with Amazon for .kids.

A last-resort auction would mean that proceeds would be deposited in a special ICANN bank account currently swollen with something like a quarter-billion dollars.

Three-letter .net leads as NamesCon charity auction raises €4,150 for Kenyan school

Kevin Murphy, June 8, 2018, Domain Sales

A domain auction at NamesCon Europe raised €4,150 for charity today.

A total of 22 domains were sold, each of which had been donated by a conference attendee.

The top sale was bbe.net, which went for €650, followed by xvs.net, which fetched €500.

The three-letter jjh.org went for €150, which some said was a bargain.

Also selling were smartphone.global and caring.global for €450 and €400 respectively.

The auction was organized by Shaun Wilkinson, COO of domain broker Nidoma, who wants to raise a total of €6,500 during NamesCon for the Hope Children’s Centre, which is trying to finish building a secondary school in Kenya.

Anyone wishing to help the charity reach its target can donate online here.

Have your say on single-character .com domains

ICANN wants your opinion on its plan to allow Verisign to auction off o.com, with a potential impact on the future release of other single-character .com domain names.

The organization has published a proposed amendment to the .com registry contract and opened it for public comment.

The changes would enable Verisign to sell o.com, while keeping all other currently unallocated single-character names on its reserved list.

The company would not be able to benefit financially from the auction beyond its standard $7.85 reg fee — all funds would be held by an independent third-party entity and distributed to undisclosed non-profit causes.

The arrangement would also see the buyer pay a premium renewal fee of 5% of the initial outlay, doubling the purchase price over the course of 25 years.

They would not be able to resell the domain without selling the registrant company itself.

It’s a pretty convoluted system being proposed, given that there may well end up only being one bidder.

Overstock.com, the online retailer, has been pressuring ICANN and Verisign to release o.com for well over a decade, and the proposed auction seems to be a way to finally shut it up.

The company has a US trademark on O.com, so any other bidder for the name would probably be buying themselves a lawsuit.

The proposed auction system does not address trademark issues — there’s no sunrise period of trademark claims period.

One party already known to be upset about lack of rights protection is First Place Internet, a search engine company that has a US trademark on the number 1.

It told ICANN (pdf) back in January that the o.com deal would “set a dangerous precedent” for future single-character name releases.

The ICANN public comment period, which comes after ICANN received the all-clear from US competition regulators, closes June 20.

As a matter of disclosure, several years ago I briefly acted as a consultant to a third party in support of the Verisign and Overstock positions, but I have no current interest in the situation one way or the other.