Latest news of the domain name industry

Recent Posts

String confusion in disarray as Demand’s .cam loses against Verisign’s .com

Kevin Murphy, August 20, 2013, Domain Policy

Demand Media is demanding an ICANN review of its objections policy, after its applied-for new gTLD .cam was beaten in a String Confusion Objection by .com registry Verisign.

A International Centre for Dispute Resolution panelist has ruled (pdf) that .cam and .com are too confusingly similar to coexist, meaning Demand’s bid for .cam must be rejected by ICANN.

But the ruling by Urs Laeuchli conflicts with two other ICDR panel decisions on .cam, which both found that the string is NOT confusingly similar to .com and therefore can be delegated.

So while Demand’s .cam bid, under a strict reading of the rules, is now supposed to be rejected, applications for identical strings filed by AC Webhosting and dotAgency can go ahead.

ICANN has been thrown a curve ball it is not yet fully prepared to deal with.

As Akram Atallah, president of ICANN’s Generic Domains Division, told DI last week, it’s possible that the policy or the implementation of that policy may need to be revisited by ICANN and the community.

United TLD, the Demand Media subsidiary that applied for .cam, is now calling for precisely that, with vice president of business and legal affairs Statton Hammock writing today:

String confusion objections are meant to be applicant agnostic and have nothing to do with the registration or use of the new gTLD. What matters in string confusion objections is whether a string is visually, aurally or, according to ICANN’s Applicant Guidebook, otherwise “so nearly resembles another that it is likely to deceive or cause confusion.” Individuals may disagree on whether .CAM and .COM are similarly confusing, but there can be no mistake that United TLD’s .CAM string, AC Webhosting’s .CAM string, and dotAgency Limited’s .CAM string are all identical. Either all three applications should move forward or none should move forward.

The .cam cases are not alone in presenting ICANN with SCO problems.

Last week, Donuts’ bid for .pets was ruled confusingly similar to Google’s .pet, despite previous ICDR cases finding that plurals and singulars are not too confusing to coexist.

Where the .cam panelists disagreed

While there were three .cam cases, two of them were decided by the same panelist. It seems that both panelists were provided with very similar sets of evidence in all three cases.

It’s relevant to note that neither panelist — unlike some of their colleagues in other cases — thought it was appropriate to apply trademark law such as the DuPont factors in their decisions.

They did, however, consider the expected use cases of .cam.

All three applicants take .cam as short for “webcam” or “camera” and would target registrants interested in those fields (a lot of the use will likely be pornographic — AC Webconnecting is a porn firm after all).

But all three applicants also want to run “open” gTLDs, with no registration restrictions.

ICDR panelist Murray Smith was in charge of both the AC Webconnecting and dotAgency cases. He addressed expected usage explicitly in dotAgency, and explained why:

It is not just the visual, phonetic and conceptual similarity between the words that must be taken into account. In my view the greater emphasis should be focused on the use of the disputed extensions in the context of modern Internet usage. It is this context that compels the conclusion that an average Internet user would not be confused and would know that a .com website is probably a commercial website while a .cam websites would be something more focused in a particular field.

In AC Webconnecting, he wrote:

I agree that a consumer would quickly realize that a .cam website is likely associated with photography or camera use and is different than a .com website in use generally by a myriad of commercial entities.

So he’s putting the “greater emphasis” on usage — a factor that is not explicitly mentioned in the Applicant Guidebook’s description of the SCO and which may quite often differ between applicants.

Right there, in Smith’s interpretation of his task, we have a reason why SCOs will produce different results for identical strings.

I find Smith’s thinking baffling for a couple of reasons.

First, “a consumer would quickly realize that a .cam website is likely associated with photography” seems to ignore the existence of a bazillion .com web sites that are also associated with photography.

When did “commercial entities” and “photography or camera use” become mutually exclusive? Is photographyblog.com not confusingly similar to photographyblog.cam?

Second, he ignores the fact that basically anyone will be able to register a .cam web site for basically any purpose. None of the applicants want to restrict the gTLD to camera-related stuff.

ICDR panelist Laeuchli, in the Demand Media .cam case, raised this precise point, saying:

“.com” and “.cam” would use the same channels appealing to a broad audience. Even though according to Applicant, its envisioned TLD will “likely appeal” to a specific audience, it plans to operate “.cam” as an open gTLD. This would lead to extensive overlap.

Panelist Smith has some other notions about confusion that seem to defy common sense. He wrote in the AC Webconnecting case:

The .com TLD is the most widely recognized string in the Internet world. No reasonable Internet user would fail to recognize the .com TLD. The very reputation of the .com name serves to limit the potential for an average Internet user to be confused by the proposed .cam TLD. It is indeed unlikely that an online consumer would confuse a .com website with a .cam website.

Does this not strike anyone else as bad thinking?

It seems to me to be a little like saying that it’s perfectly okay to market a brand of carbonated beverage called Cuke, because Coke is so famous that nobody could possibly be confused. I don’t know where the law stands on that issue, but I’m pretty sure Coke wouldn’t be happy about it.

There’s also some weirdness in Laeuchli’s decision in the Demand case.

He puts some weight on the similarity scores produced by the controversial Sword algorithm in his decision, but apparently without doing even the basic research. He writes in his findings:

No matter what the standards and purpose the ICANN SWORD algorithm includes, it has comparative value.

Since pairs such as “God” and “dog” (85%) reach similarity scores of 84% and higher, how much more similar would “cxm” and “cxm” be (x being replaced with a vowel)!

The answer is that, according to Sword, they’re less similar. Sword scores “cam” v “com” at 63%.

Laeuchli knows it’s 63%, because he makes reference to that fact in his summary of Verisign’s evidence. He doesn’t need to speculate about the number based on what “god” v “dog” scores (and if he did the “dog” v “god” query himself, why on earth didn’t he just query “com” v “cam” too?)

His finding that .cam and .com will cause probable confusion seems to be based largely on expert witness testimony provided by both Verisign and Demand, in which he found Verisign’s more persuasive.

This evidence seems to have largely comprised the opinions of linguists, examining mouth shapes and acoustic frequencies, and market research looking into internet user behavior. As none of it has been published, it’s difficult to judge which side had the better arguments.

But it’s undeniably about the similarity of the strings, rather than the proposed usage, which makes Demand Media’s statement today — that SCOs “are meant to be applicant agnostic and have nothing to do with the registration or use of the new gTLD” — quite confusing.

Demand lost its case based on the string similarity, whereas the other two applicants won theirs based on the usage.

Perhaps Demand senses that its .cam application will not be immediately rejected if ICANN reopens the debate about string similarity. If think it’s probably correct.

Verisign lays out ‘buy once’ IDN gTLD plans

Verisign has finally clarified how it proposes to let existing registrants of internationalized domain names grab the matching domains in its 12 forthcoming IDN gTLDs.

The company has applied for transliterations of .com in nine non-Latin scripts and .net in three, but its applications were light on details about existing registrants’ rights.

But today Verisign senior vice president Pat Kane outlined precisely how name allocations will be handled.

At first glance it sounds like good news for existing IDN registrants, particularly domainers whose investments in IDN .com and .net domains are about to become much more valuable.

If you already own a .com domain that is an IDN at the second level, you will have exclusive rights to that IDN string in all other .com transliterations, but not .net transliterations.

That works the other way around too: if you own the IDN .net domain, you get the matching second level in all of Verisign’s .net transliterations.

Owning the Chinese word for “beer” in Latin .com would not give you rights to the Thai word for “beer” in the Thai transliteration of .com, but you could buy the Chinese equivalent.

The rules seem to apply to future registrations too.

You could register the Hebrew for “beer” in the Hebrew transliteration of .com and you would also get the exclusive right to that Hebrew string in Latin .com.

There would be no obligation, and you wouldn’t lose your right to register matching domains if you chose not to immediately exercise it, Kane said. He wrote:

Two primary objectives in our strategy to implement new IDN gTLDs are, where feasible, to avoid costs to consumers and businesses from purely defensive registrations in these new TLDs, as well as to avoid end-user confusion.

It all sounds pretty fair to me, based on Kane’s blog post.

There’s a hint that trademark rights protection mechanisms may complicate matters, which has apparently been discussed in a letter to ICANN, but if it’s been published anywhere I’ve been unable to find a copy.

Surprise! Verisign to increase .net fees

Kevin Murphy, December 19, 2012, Domain Registries

Verisign has just announced that it will increase its .net registry fee by 10% next year.

The changes, which will become effective July 1, 2013, see the charge for a one-year registration increase from $5.11 to $5.62.

The increase, which is permitted under Verisign’s contract with ICANN, was inevitable given the fact that the company has just lost the right to increase .com prices.

US Department of Commerce intervention in .com means that prices there are frozen for the next six years, so Verisign can be relied upon to seize every alternative growth opportunity available to it.

The last time .net’s fee was increased was January 2012, when it went up by 10% to the current $5.11.

Verisign’s IDN gTLDs “could increase phishing” say Asian registries

Kevin Murphy, November 30, 2012, Domain Policy

It’s a bad day for Verisign.

As the company pins its growth hopes partially on its applications for IDN gTLDs — in the wake of losing its price-raising powers over .com — ccTLD registries from Asia-Pacific have raised serious concerns about its bids.

The Asia Pacific Top Level Domain Association says that many of its members reckon the proposed IDN transliterations of .com “could give rise to an increased risk of phishing and other malicious abuses”.

Verisign has applied for a dozen transliterations of .com and .net in scripts such as Hebrew, Cyrillic and Arabic. The strings themselves are meaningless, but they sound like “com” and “net”.

It’s for this reason that APTLD reckons they could cause problems. In an October 1 letter to ICANN, published today, the organization said:

In addition to the potential for user confusion, some [Working Group] members also noted that the creation of transliterated TLDs, without the development of adequate registration and eligibility polices and procedures, could give rise to an increased risk of phishing and other malicious abuses of the new spaces.

The WG notes that this potential problem manifests itself at the second level, and is not unique to tranlisterated TLDs, but would argue that the very nature of these TLDs, and their close similarity to existing TLDs, makes them particularly high-risk targets.

The letter does not single out Verisign, and does not represent a consensus APTLD view.

There are also worries among APTLD members about the application for .thai in Latin script, which could clash with Thailand’s IDN ccTLD, and various translations of “.site”.

APTLD notes that the new gTLD evaluation process only contains checks for visual similarity between TLDs.

The only way to block an application based on phonetic confusion is to file a String Confusion Objection, but the only entity eligible to object to Verisign’s applications is Verisign itself.

Winners and losers in the new .com pricing regime

Kevin Murphy, November 30, 2012, Domain Registries

Today’s shock news that Verisign will be subject to a .com price freeze for the next six years will have broad implications.

The US Department of Commerce has told the company it will have to continue to sell .coms at $7.85 wholesale until 2018, barring exceptional circumstances.

Here’s my initial take on the winners and losers of this new arrangement.

Domain investors

Volume .com registrants are of course the big winners here. A couple of dollars a year for a single .com is pretty insignificant, but when you own tens or hundreds of thousands of names…

Mike Berkens of Most Wanted Domains calculated that he’s saved $170,000 $400,000 over the lifetime of the new .com deal, and he reckons fellow domainer Mike Mann will have saved closer to $800,000 $2 million.

Brand owners

The other big constituency of volume registrants are the brand owners who spend tens or hundreds of thousands of dollars a year maintaining defensive registrations — mostly in .com — that they don’t need.

Microsoft, for example, owns over 91,000 domain names, according to DomainTools. I’d hazard a guess that most of those are defensive and that most are in .com.

Registries

There’s potentially trouble on the horizon for new gTLD applicants and existing registry operators. Verisign is looking for new ways to grow, and it’s identified its patent portfolio as an under-exploited revenue stream.

The company says it has over 200 patents either granted or pending, so its pool of potential licensees could be quite large.

Its US portfolio includes patents such as 7,774,432, “Registering and using multilingual domain names”, which appear to be quite broad.

Verisign also owns a bunch of patents related to its security business, so companies in that field may also be targeted.

Registrars

Verisign’s registrars will no longer have to pass their cost increases on to consumers every year.

While this may help with renewal rates, it also means registrars won’t be able to sneak in their own margin increases whenever Verisign ups its annual fees.

IDN buyers

Another area Verisign plans to grow is in internationalized domain names, where it’s applied to ICANN for about a dozen non-Latin variants of .com and .net.

Those registry deals, assuming they’re approved by ICANN, will not be governed by the .com pricing restrictions. Now that Verisign’s growth is getting squeezed, we might expect higher prices for IDN .com variants.

ICANN

ICANN may have suffered a small reputational hit today, with Commerce demonstrating it has the balls to do what ICANN failed to do six years ago, but money-wise it’s doing okay.

The new .com contract changes the way Verisign pays ICANN fees, and Commerce does not appear to have made any changes to that structure. ICANN still stands to get about $8 million a year more from the deal.

The Department of Commerce

Unless you’re a Verisign shareholder, Commerce comes out of this deal looking pretty good. It played hard-ball and seems to have won a lot of credibility points as a result.