Companies hoping to resolve their new gTLD contention sets via private auction are about to get a rude awakening: according to the US Department of Justice, they might be illegal.
Portfolio applicant Uniregistry, the company founded by domainer Frank Schilling, said today that the DoJ has told it that:
arrangements by which private parties agree to resolve gTLD string contentions solely to avoid a public auction present antitrust issues.
The company contacted the department last October to get a “business review” decision, basically asking the DoJ for an assurance that it would not be prosecuted if it participated in a private auction.
The DoJ refused to give that assurance.
Uniregistry counsel Bret Fausett told DI that private auctions might be seen as “bid rigging”, an illegal practice in which competitors fix the awarding of contracts.
Schilling said that Uniregistry asked the DoJ for its advice because “we don’t want to go to jail”.
According to the company:
On March 18, 2013, Uniregistry was informed that the Department of Justice has declined to issue a business review of various private gTLD contention resolution mechanisms. In making its decision, the Department emphasized that no private party, including ICANN, has the authority to grant to any other party exemptions to, or immunity from, the antitrust laws. The decision means that the Department of Justice reserves its right to prosecute and/or seek civil penalties from persons or companies that participate in anti-competitive schemes in violation of applicable antitrust laws.
New gTLD applicants are now being advised to consult their own lawyers before participating in a private auction.
The news will come as a huge blow to companies such as Right Of The Dot and Cramton Associates, which have been at the forefront of pushing the private auction concept to applicants.
It’s also going to be a massive blow to any company that had banked on getting a pay-off to withdraw their applications following a private auction.
The benefit of private auctions — over the ICANN-managed auctions of last resort — is that the losing applicants get a share of the winning applicant’s winning bid.
In an ICANN auction, all the money goes to ICANN, which has promised to use to money to fund worthy causes.
Uniregistry has issued a press release on its talks with the DoJ here (pdf).
Two companies trading under the name Del Monte are involved in the first-to-be-revealed Legal Rights Objection, over the .delmonte gTLD, under the new gTLD program.
The World Intellectual Property Organization revealed the LRO — expected to be the first of many — this evening.
The applicant for .delmonte is a subsidiary of Fresh Del Monte Produce, Inc. The objector is Del Monte Corp.
Both companies are primarily known for canning fruit. According to Wikipedia, Fresh Del Monte was spun off from Del Monte in 1989 and continues to have a licensing arrangement to use the brand.
The deal apparently doesn’t extend to playing nicely over gTLDs, however.
Del Monte does business at delmonte.com, while Fresh Del Monte lives at freshdelmonte.com.
Legal Rights Objections allow trademark owners to challenge gTLD applications that look too much like their marks. It looks like Del Monte has a pretty good case, on the face of it.
ICANN’s At-Large Advisory Committee has voted to object to three of the four applications for the .health gTLD.
Afilias, which is one of the applicants, will not receive an ALAC objection. By a single vote, ALAC decided not to go after its application.
Fourteen of the 15-member ALAC panel voted on Tuesday. For DotHealth LLC’s bid, the yes/no/abstain vote was 8/3/3; dot Health Ltd’s was 10/3/1, and Donuts’ was 10/3/1.
Afilias managed to get one extra “no” vote (its result was 7/4/3). so with only 50% of the voters voting “yes”, the motion to object failed.
The ALAC did not vote on .健康, which means “healthy” or “wellness” in Chinese, despite earlier indications that it would.
The identities of the voters and the way they voted does not appear to have been revealed.
The objections will be of the Community or Limited Public Interest variety, and paid for by ICANN.
Healthcare-related gTLDs are already the most controversial of those being applied for.
Each .health bid received four Governmental Advisory Committee Early Warnings late last year, and earlier this week the Independent Objector’s list of 24 objections was dominated by medically oriented strings.
Alain Pellet, the new gTLD program’s Independent Objector, has filed 24 official objections against new gTLD applications.
Five of its 13 Community Objections are against dot-brands that have geographical meanings — Amazon’s .amazon and three translations, an outdoor clothing maker’s bid for .patagonia and a Mumbai cricket team’s application for .indians.
Other recipients are the two applications for .charity and the one for the Chinese translation .慈善.
Every other objection is related in some way to health.
The remaining six Community Objections target .med, .health, .healthcare and .hospital bids.
Limited Public Interest Objections have also been filed against the four .health applications, .healthcare, the four .med bids and the one .hospital.
That’s right, the .hospital and .healthcare applications, both filed by Donuts subsidiaries, have been hit twice.
Donuts is not the only one: Google’s .med bid has a Community Objection and a Limited Public Interest objection too.
The reasons for the objections do not appear to have been published yet.
The objections stand to delay each of the target apps by about five months, according to ICANN’s timetable.
The full list of IO objections can be found here.
The formative domain name industry trade association that DI has blogged about a few times recently has found itself a web site.
The Google-backed initiative can be found now at WhatDomain.org, which currently carries a bit of brief information about the organization’s rough plans and a call for potential members to get in touch.
The site states:
We are organizing to help educate the world on the coming changes in the domain landscape and to support the interests of the domain name industry. We are inviting any organization with a similar interest in domains to join us in working to create and launch an organization that will enable us to work together to achieve these objectives.
The association will eventually have membership tiers and fees, but those details have yet to be arranged.
We understand that while new gTLD applicant Google is doing most of the “heavy lifting” getting the project off the ground, the company wants to go as arms-length as possible very quickly.
The first informal meeting of what may or may not become officially known as WhatDomain took place at during an intersessional ICANN meeting in Amsterdam this January.
The idea is to promote new gTLDs and domain names in general, raise the reputation of the industry and promote the universal acceptance of TLDs among software developers.
During a session here at the Digital Marketing & gTLD Strategy Congress in New York yesterday, ICANN head of stakeholder engagement Sally Costeron seemed to commit ICANN to help support the initiative.