Donuts makes private deal with wine-makers

Donuts inked a private side-deal with wine-making regions in order to launch the .wine and .vin new gTLDs
The company signed both Registry Agreements with ICANN late last week, after the wine regions and the European Union stopped complaining.
The EU and regions had filed Cooperative Engagement Process objections with ICANN, saying that Donuts should be forced to protect “geographic indicators” such as Napa Valley and Champagne.
CEPs are often precursors to Independent Review Process complaints, but both were dropped after Donuts came to a private deal.
“The CEP filed by the Wine Regions was withdrawn because we came to a satisfactory private arrangement with the Registry concerned, Donuts,” David Taylor of Hogan Lovells, who represented the wine-making regions, told DI.
Details of the deal have not been disclosed, but Donuts does not appear to have committed to anything that could create compliance problems with ICANN in future.
“It has been a successful negotiation between private parties that avoids policy precedents,” Taylor said. “There are no special changes to these registry agreements (e.g., no new PICs)”
PICs are Public Interest Commitments, enforceable addenda to Registry Agreements that oblige the registry to adhere to extra rules.
So are GIs protected in .wine or not? For now, Taylor won’t say.
“My view is that this is not a victory for either side of the GI debate,” he said. “This is a victory for the wine community (consumers and producers) and ultimately the new gTLD program.”

.wine no longer blocked after EU drops complaint

Donuts and ICANN are currently in the process of signing new gTLD agreements for .wine and .vin, after the European Union and wine sellers dropped objections.
As of today, both gTLDs are “In Contracting” rather than “On Hold”, according to ICANN’s web site.
ICANN revealed earlier this week that the European Union and various wine trade associations have both dropped their Cooperative Engagement Process complaints.
CEP is less formal precursor to a much more expensive and lawyer-hungry Independent Review Process complaint.
With the CEPs out of the way, Donuts is now free to sign its contracts.
Donuts won the auction for .wine back in November, but its application was frozen due to ongoing arguments about the protection of “geographic indicators” representing wine-making regions.
Governments, particularly in Europe and Latin America, had protested that .wine and .vin should not be allowed to launch until areas such as Rioja and Champagne were given special privileges.
Last October, ICANN CEO Fadi Chehade told the French government that it was negotiating with applicants to get these protections included in the contracts.
Either Donuts has agreed to such protections, or the EU and wine-makers have gotten bored of complaining.
My feeling is the former is probably more likely, which may be controversial in itself.
There is no international agreement on GI protection — the US and Australia opposed the EU’s position on .wine — so this may be seen as a case of ICANN creating new rights where none previously existed.

Donuts wins .wine auction

Donuts has become the only applicant for .wine and .vin after winning a private auction for .wine, according to sources familiar with the situation.
I gather that the auction, which saw Donuts knock out rival applicants Afilias and Famous Four, happened a couple of weeks ago. I don’t know what the winning bid was.
Neither losing application has yet been withdrawn, presumably because the whole contention set has been placed “On Hold” by ICANN pending talks about the protection of wine-making region names.
As we reported yesterday, ICANN seems to be currently acting as a middleman between Donuts, European governments and wine-makers that want so-called “geographic indicators” specially protected.
A letter (pdf) from ICANN CEO Fadi Chehade to the French government indicated that ICANN expects to make GIs protected, contractually, with the successful .wine and .vin applicants (now, it seems, Donuts).
Domains such as larioja.wine and bordeaux.vin seem set to enjoy some form of protection, reserved for use by eligible parties only, if these talks pan out the way Chehade expects them to.
Donuts was the only applicant for .vin.

.wine applicants changing tune on geo protection?

Aggressive lobbying of ICANN by the wine-making industries on both sides of the Atlantic may be about to bear fruit.
Applicants for .wine and .vin are talking to the organization about providing special protection for a list of “geographic indicator” terms, according to CEO Fadi Chehade.
In a letter to French secretary of state for digital Axelle Lemaire published last week, Chehade said:

The parties involved are now working on devising a mechanism which would offer protections to a reserved list of names, which would be contractually protected through ICANN’s registry agreement, along with a set of rules around how those names could be distributed to parties that have interests in and the rights to them. Once they are finalized, ICANN would be charged with monitoring and ensuring compliance with these commitments.

While the details have not yet been revealed, this appears to be what wine makers have been looking for.
GIs are terms such as “Napa Valley” and “Champagne”. While they are protected under various national and international laws, they don’t enjoy the same degree of global recognition as trademarks.
They do not qualify for inclusion in the Trademark Clearinghouse, so would not automatically be protected when .wine and .vin launch.
ICANN’s Governmental Advisory Committee was unable to reach consensus on what should be done about GIs. European countries wanted protections, but the US, Canada and Australia were against the idea.
Wine makers presented a pretty unified front, however, even when they did not benefit from the support of their own governments.
Industry groups and the European Commission had separately started Cooperative Engagement Processes with ICANN — a prelude to filing Independent Review Process complaints.
These CEPs are evidently what kick-started the current negotiations.
There are three applicants for .wine — Donuts, Famous Four and Afilias. Only Donuts has applied for .vin.
Donuts declined to comment on the talks referred to in the Chehade letter.

US winemakers rebel against their government

Groups representing thousands of US winemakers have come out against .wine and .vin, bringing their government’s position on the two proposed new gTLDs into question.
Seven regional associations, representing close to 2,000 wineries, issued a statement last night raising “strong objections” to the gTLDs with “non-existent to grossly insufficient safeguards”.
The joint statement says:

If granted to unscrupulous bidders, second-level domain names such as napavalley.wine or wallawalla.wine could be held in perpetuity by a company or individual that has never seen a vineyard, cultivated fine wine grapes or made a single bottle of wine.

It’s the first mass objection from US winemakers, but they join colleagues from France, Spain and other European Union nations in their opposition to a .wine that does not respect geographic indicators (GIs).
It also makes the US delegation to ICANN’s Governmental Advisory Committee look rather out of touch with the very companies it professes to be looking out for.
At the ICANN 50 meeting in London last week, US rep Suzanne Radell told the GAC:

The three U.S. wineries that our colleagues in Europe have cited as being privy to the exchanges between the European wine industries and the applicants are, in fact, just three U.S. wineries. If I may emphasize, the United States has thousands and thousands of wineries who are quite interested in this matter and do not support the European model of GI protection. So let’s just please put that to bed.

The US winery groups now objecting comprise almost 2,000 wineries. According to Wikipedia, the US has fewer than 3,000 wineries.
We’re looking at a two-thirds majority objection from the US wine-making industry here.
“The coalition of American quality wine regions representing nearly 2,000 U.S. wineries clearly contradicts Radell’s testimony in London on June 22,” the groups said.
The groups also have Californian congresspeople Anna Eshoo and Mike Thompson on their side. As we reported yesterday, Eshoo has already written to ICANN to urge it to kill off .wine.
The big questions are: will this be enough to change the position the US takes to the GAC in future, and will that help the GAC find consensus on anti-.wine advice?
Australia and Canada have also been vocal opponents of the European demands in the past. They’d need to change their minds too, in order for the GAC to find a new consensus.
Without a GAC consensus, the .wine and .vin applicants have little to worry about.

Democrat congressman sides with France on .wine

US Representative Anna Eshoo has written to ICANN’s top brass to express “deep concerns” about the .wine and .vin new gTLDs and urge that they be permanently killed off.
In a letter (pdf) to CEO Fadi Chehade, Eshoo wrote:

it’s my understanding that the .wine and .vin gTLDs have been met with fierce opposition from the wine industry, both here in the US and around the world. Given these concerns, coupled with the complexities of reaching agreement on Geographic Indications (GIs), I urge you to advocate for the .wine and .vin gTLDs to be permanently withdrawn from consideration.

Eshoo, a Democrat, is breaking rank with the official position of the Obama administration on this, which is that no special treatment is warranted for the two wine-related gTLDs.
Europe, on the other hand, is vehemently opposed to the introduction of either without strong protection for GIs.
At ICANN 50 in London last week the European Commission and France led the charge against approval of the gTLDs, with the Commission even floating the idea of legal action at one point.
France, meanwhile, seems ready to throw ICANN’s ambitions for independence under a bus in order to get what it wants.
Eshoo is ranking member of the House Communications and Technology Subcommittee, which recently passed the DOT-COM Act over her protestations that it was “embarrassing”.
She also represents the Silicon Valley area of northern California, which is known for its wineries.
While a handful of US winemakers do have a decidedly European attitude to GI protections, the US Governmental Advisory Committee delegation last week said that only a few out of “thousands” agree with France.

France slams ICANN after GAC rejects special treatment for .wine

France says that “ICANN is no longer the appropriate forum to discuss Internet governance” after it failed to win support from other governments for special protections in .wine and .vin gTLDs.
The government came to ICANN 50 in London this week apparently determined to secure a Governmental Advisory Committee consensus that .wine should have protection for geographic indicators.
GIs are protected geographic terms such as “Champagne”, “Parma” and “Cheddar” that link a product to the region in which it is traditionally produced. France has a lot of wine-related GIs.
But the GAC — as I think everyone, including France, expected — failed to come to an agreement.
The GAC’s London communique (pdf) reads:

There was further discussion on the issue of .wine/.vin, but no agreement was reached because of the sensitive nature of the matter.
The matter of .wine and .vin was raised at the High Level Governmental Meeting, where some members expressed concerns in terms of ICANN’s accountability and public policy. These concerns are not shared by all members.

In the absence of a consensus GAC objection, the most likely outcome is ICANN pushing the competing .vin/.wine applicants along the contention resolution process to auction.
France has won a lot of media coverage this week, throwing out allegations such as the idea that ICANN is “opaque”, and questioning ICANN’s ability to do its job properly.
Quizzed about France’s statements at a press conference on Monday, ICANN CEO Fadi Chehade pointed out that studies have show ICANN is extremely transparent and wondered aloud whether France’s position is the one where you “scream that everything’s broken when you don’t get what you want”.
Today’s French statement is a little, but not much, more relaxed. Translated, it partially reads:

Current procedures at ICANN highlight its inability to take into account the legitimate concerns of States and to ensure common resource management in the direction of respect for cultural diversity and balance of interests in economic sectors that its decisions affect.
…
Accordingly, it will propose to its European partners and all other stakeholders to reflect on the future of Internet governance based on transparency, accountability, and equal stakeholders. Commission also believes that ICANN is no longer the appropriate forum to discuss Internet governance.

The government did, however, reiterate its support for the notion of multi-stakeholder internet governance.
French wine producers were less diplomatic. We received a statement from ANEV, the Association Nationale des Elus de la Vigne et du vin, this afternoon that called upon the French government and European Union to block all domain names that use GIs in violation of local law.
Personally, I don’t think that’s going to happen.
During an ICANN session on Monday, the French GAC rep used the .wine controversy to call for the creation of a “General Assembly” at ICANN.
I’m working from the transcript, which has been translated by ICANN into English, and some media reports, but it seems that France is thinking along the lines of an ITU-style, voting-based rather than consensus-based, approach to generating GAC advice. I may be wrong.
During Monday’s press conference, Chehade did not oppose France’s suggestions, though he was careful to point out that it would have to be approved by the whole ICANN community first (implicitly a tall order).
A vote-based GAC could well favor European Union countries, given the make-up of the GAC right now.
On the .wine issue, it’s mainly a few Anglophone nations such as the US, Canada and Australia that oppose extra GI protections.
These nations point out that the GI issue is not settled international law and is best dealt with in venues such as the World Trade Organization and the World Intellectual Property Organization.
France actually says the same thing.
But while France says that ICANN’s refusal to act on .wine jeopardizes GI talks in other fora, its opponents claim that if ICANN were to act it would jeopardize the same talks.
Chehade said during the Monday press conference that France had not yet run out of ways to challenge ICANN’s position on this, so the story probably isn’t over yet.

Four governments file ICANN appeals over .wine

France, Spain, the UK and the European Commission have formally appealed ICANN’s decision to allow the .wine and .vin new gTLD applications to proceed.
In doing so, they’ve become the first national governments to file Requests for Reconsideration with ICANN since the process was introduced in 1999.
All four governments are demanding that ICANN take another look at its March 22 resolution in which it said .wine and .vin could be taken off hold and proceed through the remainder of the new gTLD process.
The four applications in question (three for .wine, one for .vin) have been frozen since the Beijing meeting a year ago, at which the Governmental Advisory Committee said it needed more time to consider them.
European nations, with some Latin American support, think that wine-related gTLDs should not be approved unless the applicants agree to give special protection to geographic indicators, such as “Champagne”.
The RfRs are all, as you might expect, a bit “inside baseball”, focusing on the minutiae of ICANN’s bylaws.
What’s illegal and what isn’t?
A key concern is that ICANN’s New gTLD Program Committee, in passing the resolution, relied in part on an analysis of the legal issues (pdf) conducted by French law professor Jerome Passa.
Passa concluded that there’s nothing under the law to prevent ICANN assigning .wine to Donuts, one of the applicants, because “wine” is not a protected GI string.

As regards the applications for the assignment of the new gTLDs ‘.vin’ and ‘.wine’ filed by the Donuts company, there is no rule of the law of geographical indications, nor any general principle which obliges ICANN to reject the applications or accept the applications under certain specific conditions.

From my reading of Passa’s opinion, a domain name containing a GI would only be illegal if it was used to sell counterfeit wines.
For example, it would be perfectly okay for a Chinese registrant to own champagne.wine if he used it to sell genuine champagne from Champagne, but it would be uncool if he used it to sell champagne-style sparkling wine.
Passa doesn’t seem to think it would be necessarily illegal for a registry to sell that domain, or for ICANN to delegate a .wine gTLD that could possibly be abused by said registrant in future.
The four governments are not so much concerned by his legal arguments (though they do disagree with them), but rather by the fact that the GAC was not shown Passa’s opinion before the NGPC made its decision
Under section XI-A of ICANN’s governing bylaws, the GAC “shall have an opportunity to comment upon any external advice received prior to any decision by the Board.”
By not giving Passa’s analysis to the GAC prior to its March 22 resolution, the NGPC violated ICANN’s bylaws, the four governments argue.
However, ICANN has already responded to this argument and others, suggesting that the four new RfRs may already be dead in the water.
In a resolution last Thursday the NGPC stated that the bylaws were not broken because the requirement to show the GAC “external expert advice” only applies when the board is determining matters of policy.
An explanation of last week’s NGPC decision says:

the NGPC has concluded that there was no process violation or procedural error under the Bylaws, particularly because the Independent Legal Analysis was not sought as External Expert Advice pursuant to Article X1-A, or any other Bylaws provision. Rather, the Independent Legal Analysis was sought pursuant to Module 3.1 of the Applicant Guidebook, and partly at the GAC’s suggestion.

Basically, it’s round two the old “policy versus implementation” debate, in which the ICANN board and GNSO Council have regularly sparred, kicking off with new opponents.
Spain argues in its RfR that the bylaws “the supreme governing rules” of ICANN, apply to implementation matters too and that there’s “no legal basis” for ICANN’s finding that they only apply to policy.
It further notes that a legal analysis of the related .amazon new gTLD controversy, also written by Passa, has been circulated to the GAC for comment as per the bylaws.
Disturbing views on “consensus”
In order for an RfR to be successful, complainants have to show that the ICANN board or NGPC did not consider all the evidence they should have at the time of their decision.
The governments are only slippery ground here, as all they can seem to point to are the barrage of letters that have been sent to ICANN by wine producers, associations and governments over the last year or so.
It may not have mentioned each one explicitly in its resolution but it’s very unlikely, in my view, that the NGPC was not aware of these letters when it made its call.
More significantly, these objecting governments are arguing that the NGPC was misled by GAC chair Heather Dryden about the extent of “consensus” in the GAC with regards .wine and .vin.
Dryden told ICANN in a September 9, 2013 letter that the GAC had not reached a consensus to object to the two new gTLDs, so they could proceed.
It appeared that the GAC — with members such as the US, Canada and Australia disagreeing with Europe — had simply hit an immovable brick wall in its talks, so consensus was never going to be reached.
France states in its RfR that the Dryden letter was sent without first consulting the GAC:

The GAC Chair’s statement that “The GAC has finalised its consideration of the strings .wine and .vin and further advises that the applications should proceed through the normal evaluation process” is not a consensus view of the GAC as per the aforementioned Operating Principle, but a mere interpretation and opinion of the GAC Chair.

Where France’s opinion, which seems to match previous statements by the European Commission, gets disturbing is in its interpretation of what “consensus” means. It wrote:

in reality a significant number of GAC members were in consensus not to allow the .WINE and .VIN applications to proceed through evaluation until sufficient additional safeguards were in place. The reality is that the GAC as a whole could not reach consensus, what does not necessarily imply that the strings can proceed through the normal evaluation process without further consideration.

It’s worded awkwardly, but France seems to be saying that agreement among a certain subset of GAC members (ie, the Europeans) somehow constitutes a GAC consensus that the applications should be indefinitely delayed.
It’s disturbing close to arguing for majority rule on the GAC, which as I explained in depth earlier this week is something to be avoided at all costs.
Anyway, that’s the second prong of the RfR attack: whether the NGPC had been misled about the GAC’s views.
The four separate RfRs appeared on the ICANN web site today. The file labeled as being from the European Commission appears to be a copy of the French one; possibly an uploading error.
UPDATE: It was an uploading error. You can find a copy of the European Commission RfR here (pdf).

.wine frozen after EU complaint

ICANN has frozen the applications for .wine and .vin new gTLDs, again, following a complaint about process violations from the Governmental Advisory Committee.
The New gTLD Program Committee of the ICANN board on Thursday voted to prevent any of the four affected applicants signing Registry Agreements for at least 60 days.
But the NGPC found that there had been “no process violation or procedural error” when it decided to take the .wine and .vin applications off hold status during the Singapore meeting last month.
The 60-day freeze is “to provide additional time for the relevant impacted parties to negotiate”, the resolution states.
The GAC advise in its Singapore communique stated that it had not had time to comment upon “external advice” — believed to be an opinion of a French lawyer (pdf) — that the NGPC had used in its deliberations.
That would have been a violation of ICANN’s bylaws.
The GAC said that ICANN should “reconsider” its decision to allow the applications to proceed and should give the applicants more time to negotiate a truce with the governments opposed to their proposed gTLDs.
The European Union wants .wine and .vin blocked unless the applicants promise to implement special protections for “geographic indicators” such as “Champagne” and “Bordeaux”.
But other nations, including the US, Canada and Australia, don’t want these protections. The GAC has therefore been unable to provide consensus advice against either string.
Essentially, the NGPC this week has found none of the bylaws violations alleged by the GAC, but has nevertheless given the GAC what it asked for in its Singapore communique. ICANN explained:

In sum, the NGPC has accepted the GAC advice and has carefully reviewed and evaluated whether there was a procedure or process violation under the Bylaws. The NGPC has determined that there was not because, among other reasons, ICANN did not seek the Independent Legal Analysis as External Expert Advice pursuant to Article XI-A, or any other portion of the Bylaws.

It’s not “policy”, it’s “implementation”, in other words.
The NGPC also, despairingly I imagine, has suggested that the full ICANN board might want to take a look at the broader issues in play here, resolving:

the NGPC recommends that the full Board consider the larger implications of legally complex and politically sensitive issues such as those raised by GAC members, including whether ICANN is the proper venue in which to resolve these issues, or whether there are venues or forums better suited to address concerns such as those raised by GAC members in relation to the .WINE and .VIN applications.

While I’m sure 60 days won’t be too much of a burden for these long-delayed applicants, this rather vague promise for more talks about “larger implications” may prove a cause for concern.

ICANN puts .islam and other gTLD bids in limbo

Or should that be Barzakh?
Rather than making the tricky decision on whether to approve .islam and .halal new gTLD applications, ICANN seems to have place both bids into permanent limbo.
It’s also put off calls on applications for .spa, .amazon, .wine and .vin, due to objections from the Governmental Advisory Committee.
On .islam and .halal, ICANN chair Steve Crocker wrote to Turkish applicant Asia Green IT System to say that the New gTLD Program Committee will not address the bids until AGIT has worked out its differences with the Organization for Islamic Cooperation.
He noted that AGIT has expressed a willingness in the past to work with the OIC, but that the OIC has formally decided to object to the two applications. Crocker wrote:

There seems to be a conflict between the commitments made in your letters and the concerns raised in letters to ICANN urging ICANN not to delegate the strings. Given these circumstances, the NGPC will not address the applications further until such time as the noted conflicts have been resolved.

This is not a formal rejection of the applications, but ICANN seems to have placed them in a limbo that will only be resolved when AGIT withdraws from the program or secures OIC support.
There’s also delaying treatment for .wine and .vin, which have become the subject of a raging row between Europe on the one hand and the US, Canada and Australia on the other.
Europe wants these two wine-related gTLDs to be subject to strict rules on who can register domains containing geographic indicators, such as “Champagne”. The others don’t.
ICANN in response has commissioned a third-party study on GIs, which it expects to be able to consider at its Singapore public meeting next month. Again, a decision has been avoided.
The two applicants for .spa don’t have any closure either.
Spa is the name of a town in Belgium, whereas the two applicants — Donuts and Asia Spa and Wellness Promotion Council — intend to use the string in its English dictionary sense.
There was a bit of a scandal during the Buenos Aires meeting last November when it was suggested that Belgium was using its position on the GAC to shake down the applicants for money.
Belgium denied this, saying the city of Spa didn’t stand to gain financially from the deals that it was trying to make with applicants. Some money would go to “the community served by .spa”, Belgium said, without elaboration.
ICANN has now decided to put .spa on hold, but wants to know more about these talks:

ICANN will not enter into registry agreements with applicants for the identified string at this time. The NGPC notes concern about concluding the discussions with the applicants and will request the GAC to (1) provide a timeline for final consideration of the string, and (2) identify the “interested parties” noted in the GAC advice.

Finally, ICANN has yet again delayed making a call on Amazon’s application for .amazon — until at least Singapore — out of an abundance of legal caution.
The GAC recommended that ICANN should reject .amazon because a few Latin American states claim ownership of the string due to it being the same as the Amazon region they share.
Amazon and others claim that it would be in violation of international law that prevents governments interfering with the use of trademarks for the GAC to block .amazon.
ICANN’s NGPC said:

ICANN has commissioned an independent, third-party expert to provide additional analysis on the specific issues of application of law at issue, which may focus on legal norms or treaty conventions relied on by Amazon or governments. The analysis is expected to be completed in time for the ICANN Singapore meeting so that the NGPC can consider it in Singapore.

In my view, the .amazon issue is the one most likely to bring a lawsuit to ICANN’s doorstep, so the organization clearly wants to get its legal position straight before making a call one way or the other.
All these decisions were made on Wednesday. You can read the NGPC’s resolution here and the important details here.