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Lawyer tries to nuke Donuts and Demand Media’s gTLD bids

Kevin Murphy, August 1, 2012, Domain Registries

A lawyer has called for new gTLD uber-applicants Demand Media and Donuts to be banned from running gTLD registries due to Demand’s history of cybersquatting.

Jeffrey Stoler of Boston law firm McCarter & English has written to ICANN’s leadership, along with the chair of the Governmental Advisory Committee, to allege that Demand Media, Donuts and their key executives:

are, by ICANN’s established eligibility guidelines, unsuited and ineligible to participate in the new gTLD program.

It goes on to state that:

ICANN can and should reject the applications from Donuts and its subsidiaries, Demand Media and its subsidiaries, and their respective affiliated companies.

The two companies have, combined, applied for 333 new gTLDs. Donuts, which was founded by former Demand executives, also plans to use Demand as its back-end registry provider.

Demand Media subsidiaries, however, have a rotten record of losing cybersquatting cases filed under the UDRP, as Stoler’s generally well-researched 24-page letter spells out in some detail.

This, Stoler argues, should cause both companies to fail ICANN’s background checks, which are specified in the Applicant Guidebook.

Companies that have “been involved in a pattern of adverse, final decisions” under the UDRP, defined as more than three losses in the last four years, are supposed to fail the background check.

Demand Media seems to fit that definition, and then some, assuming you include UDRP losses incurred by its subsidiaries.

Donuts, as a brand new company, does not have the same track record, but Stoler reckons there is “strong evidence that Donuts is merely an alter ego of, and working in concert with, Demand Media”.

The letter states:

In June 2009, when ICANN’s rules went into effect and it was widely thought that implementation of the new gTLD program was imminent, the executives of Demand Media Group realized that Demand Media’s sordid history would clearly block its ability to successfully apply for the new gTLDs.

As an initial gambit, Demand Media petitioned ICANN to revise the rules.

When ICANN rejected those revisions, the undersigned believes Demand Media decided it would be necessary to create a new entity to participate in the new gTLD program. As a result, Donuts was formed by Messrs. Stahura and Tindal.

It would make a mockery of ICANN rules, however, if Demand Media Group and its executives could absolve themselves of their record of adverse UDRP decisions merely by forming a new entity.

Donuts founders Paul Stahura and Richard Tindal were both with Demand when it lost a bunch of UDRP cases.

Stoler alleges that they left to form Donuts mainly because they didn’t think Demand would pass ICANN’s background checks.

While Donuts has made no secret of the fact that it’s behind 307 applications — and ICANN’s leadership is certainly already aware of this — each application has been filed by a different shell company.

The trail to Donuts is at least two companies deep in many cases, and it’s not entirely clear how its applications with Demand Media are structured, from a corporate point of view.

Ironically, Stoler’s letter does not disclose his affiliations — which clients he’s working for — either.

The smart money is probably on big trademark interests, but it’s not beyond the bounds of possibility, I suppose, that he could be on the payroll of rival new gTLD applicants.

I’ve reached out to Stoler, Donuts and Demand Media for comment and will provide updates later as appropriate.

Here’s the Stoler letter (pdf)

.radio gTLD applicant joins the GAC

Kevin Murphy, June 28, 2012, Domain Policy

The European Broadcasting Union, which is one of four applicants for the .radio top-level domain, has asked to join ICANN’s Governmental Advisory Committee as an observer.

It is believed that its request is likely to be accepted.

The move, which comes just a couple of weeks after ICANN revealed its list of new gTLD applications, could raise conflict of interest questions.

While several GAC governments and observers are backing new gTLD bids – the UK supports .london, for example – they’re generally geographic in nature and generally not contested.

But .radio has been applied for by Afilias, BRS Media and Donuts in addition to the EBU.

While any organization can file objections against applications, under the rules of the new gTLD program the GAC has the additional right to issue special “GAC Advice on New gTLDs”.

Consensus GAC advice is expected to be enough to kill an application.

Since it’s not entirely clear how the GAC will create its formal Advice, it’s not yet clear whether the EBU will have any input into the process.

According to the GAC’s governing principles, observers do not have voting rights, but they can “participate fully in the GAC and its Committees and Working Groups”.

The EBU’s .radio gTLD would be open to all potential registrants, but it would be subject to post-registration content restrictions: web sites would have to be radio-oriented, according to the application.

It’s also the only Community-designated bid in the contention set, meaning it could attempt a Community Priority Evaluation to resolve the dispute.

The EBU has also applied for .eurovision, the name of its annual singing competition, as an uncontested dot-brand.

Demand Media applies for 26 gTLDs, partners with Donuts on 107 more

Demand Media, owner of eNom, has applied to ICANN for 26 new generic top-level domains, and may acquire rights in 107 more if applications submitted by Donuts are approved.

The company has not yet revealed which strings it’s going for.

Donuts said last week that it’s applying for 307 gTLDs with Demand Media as its back-end provider, but it seems that Demand will not have ownership rights in 200 of those.

The deal with Donuts, which was founded by eNom alum, is a “strategic relationship”, according to a press release.

Schilling applies for “scores” of new gTLDs

Domaining icon Frank Schilling’s new venture, Uniregistry, has applied for “scores” of new generic top-level domains, “most” of which he expects to be contested.

Schilling won’t say exactly how many or which strings Uniregistry is pursuing, but he did reveal that while he is not going for .web, he will be in contention with Google for .lol.

“It’s closer to TLDH than Donuts,” Schilling told DI in an interview this evening, referring to the announcements of Top Level Domain Holdings’ 68 and Donuts’ 307 applications.

I’m guessing it’s around the 40 to 50 mark.

Despite the portfolio and Schilling’s history in domain investing, Uniregistry isn’t what you might call a “domainer” play.

The company doesn’t plan on keeping whole swathes of premium real estate for itself or for auction, Schilling said. Nor does it intend to rip off trademark owners.

“We’ve seen good TLDs fail with bad business plans,” he said, pointing to premium-priced .tv as an example. “You need to allow other people to profit, to evangelize your space.”

“I’m not going to get as rich from this as some of our registrants,” he said.

Uniregistry only plans to hold back a “handful” of premium names, Schilling said. The rest will be available on a first-come, first-served basis.

To avoid creating wastelands of parked domains, the company plans to deploy technical countermeasures to prevent too many domains falling into too few hands.

“The way we’re going stage the landrush it will be very difficult to game it,” he said. “There’ll be significant rate limiting, so you can’t come and take 500 domains in ten milliseconds.”

“What we want to avoid is someone going in and getting 100,000 of the best ones on day one. It’s not fair, and it’s unhealthy for the space.”

Schilling is one of the industry’s most successful domainers. His company, Name Administration, is one of the largest single owners of second-level domain names.

Now Schilling says he’s brought his considerable experience as a domain name registrant Uniregistry’s business model and policies.

The company’s message is that it’s “registrant-centered”.

While that sounds like an easy, glib marketing statement, Schilling is backing it up with some interesting policies.

He’s thinking about a much closer relationship between the registry and the registrant that you’d see in the .com space.

When a second-level domain in a Uniregistry gTLD expires, registrants will get 180 days to claim it back from the registry, possibly even circumventing the registrar.

Uniregistry will even directly alert the registrant that their name is going to expire, a policy that Schilling said has been modeled in part on what Nominet does in the .uk space.

“Registrants have the ability to go to the registry to manage their .co.uk, to transfer the domain, to change certain pieces of information,” he said.

The 180-day policy is designed in part to prevent registrars harvesting their customers most valuable domains when they forget to renew them.

Rogue registrars and registrars competing against their own customers are things that evidently irk Schilling.

“I prefer a system that protects registrants,” he said.

But existing registrars are still the company’s proposed primary channel to market, he said. Uniregistry plans to price its domains in such a way as to give registrars a 50% margin.

“I think there’s enough margin in these strings for registrars to make a great living,” Schilling said.

Schilling hasn’t ruled out an in-house pocket registrar, but said it wouldn’t be created to undercut the regular channel.

The company has hired Internet Systems Consortium, maker of BIND and operator of the F-Root, as its back-end registry provider.

Judging by Uniregistry’s web site, which carries photos of many ISC staff, it’s an unusually close relationship.

I’ll have more on Uniregistry’s plans for Whois and trademark protection in a post later.

Donuts applies for 307 (yes, 307) gTLDs

Donuts Inc has finally showed its hand.

The company, which was set up as a portfolio gTLD player by domain industry veterans Paul Stahura, Richard Tindal, Jonathon Nevett and Daniel Schindler, is applying for 307 gTLDs.

Yes, 307. That’s roughly 15% of all the applications ICANN has received.

We were all expecting big plans from Donuts, but I’m not sure many people thought it would go for so many strings.

The company has raised $100 million from Austin Ventures, Adams Street Partners, Emergence Capital Partners, TL Ventures, Generation Partners and Stahurricane to fund the ambitious plans.

Demand Media has been chosen to provide the back-end registry.

Donuts has also staffed up with some familiar faces. Former ICANN CFO Kevin Wilson is its new CFO, former Oversee marketing chief Mason Cole has joined as vice president of communications and industry relations.

The company says it has created almost two dozen new rights protection mechanisms for its gTLDs, but that it has an “open internet” philosophy.

“We have resources set aside for handling objections by parties who, for whatever reason, believe only they are equipped to administer a generic term,” Stahura said in a press release.

“The Internet is an engine of information, ideas and commerce, and one that’s not restrictive unnecessarily. Donuts intends to preserve that openness for all users, not operate a ‘by invitation only’ section of the Internet.”

I’m guessing this means there’s going to be fireworks in contention sets such as, say, .music.

The full list of applied-for strings doesn’t seem to be available yet.