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YouPorn challenges new gTLDs with review demand

Kevin Murphy, November 17, 2011, Domain Registries

YouPorn operator Manwin is demanding a review of .xxx, and ICANN’s top-level domains program by association, in a new Independent Review Panel request.

It becomes only the second company ever, after .xxx manager ICM Registry, to file an IRP request with ICANN. The filing came at the same time as Manwin sued ICANN and ICM in California.

The IRP demand ostensibly focuses on .xxx, but it also suggests that the forthcoming new gTLD program has many of the same flaws as the process that led to .xxx’s approval.

IRP is the final, and most expensive, appeals process available within ICANN for companies that believe they’ve been wronged by the organization’s decisions.

It was first used by ICM in 2008-2009 to have the rejection of its .xxx application overturned.

To win an IRP, complainants have to convince an International Centre for Dispute Resolution panel (probably three retired judges) that ICANN violated its own bylaws when it made a harmful decision.

The only reason .xxx is in the root today is that an IRP decided by majority that ICANN broke the bylaws when it approved and then rejected the .xxx bid filed in the 2004 new gTLD round.

Manwin’s IRP claims that ICANN failed to “adequately address issues including competition, consumer protection, malicious abuse and rights protection prior to approving the .xxx TLD”.

It also claims that ICANN failed to enforce ICM’s compliance with its registry contract, allowing it to engage in “anticompetitive conduct” and help violate IP rights.

The company is basically miffed that it felt it was being forced to spend money in ICM’s sunrise period, and that it was not allowed to block its trademarks and variations of its trademarks.

One of its oddest claims, which is in the IRP as well as the lawsuit, is that ICM was selected in a “closed process” that did not consider alternative .xxx operators.

The 2004 gTLD round was of course open to any applicant, so there was nothing stopping anybody else from applying for .xxx. One gTLD, .tel, did in fact have multiple bidders.

Essentially, the IRP demand cuts to the heart of the domain name industry and the new gTLD concept in general, challenging many practices that have become norms.

Sunrise

Sunrise is “extortion”, according to Manwin.

As well as being opposed to the idea of paying for defensive registrations in general, Manwin also thinks that typos and brand+keyword domains should be eligible for blocking, presumably for free.

It also believes that porn companies should have been able to defensively block some .xxx domains (which ICM called “Sunrise B”) and register others for active use (“Sunrise A”).

Speculation

Manwin’s IRP says that ICM did not act in the best interests of its sponsored community (ostensibly the porn industry) when it sold premium .xxx domains to “known domain name speculators”.

Well-known domainers Frank Schilling and Mike Berkens have invested millions in .xxx, but Manwin says their profit motives show ICM broke its commitment to serve the adult industry only.

Schilling, who signed up to buy domains 33 domains including amateur.xxx before ICM’s registry contract had even been approved, is reportedly already leasing out some of his .xxx names to porn companies for five figures a month.

New gTLDs

Manwin seems to support what you might call a ‘string first, registry later’ model for delegating gTLDs.

It states in its lawsuit and IRP that ICANN should have opened up .xxx for competitive bidding, apparently ignoring the fact that the .xxx string was proposed by ICM, not ICANN.

In the IRP demand, it suggests that allowing gTLD applicants to select their own strings is in violation of ICANN’s bylaws. The complaint states:

[ICANN] gave ICM a permanent monopoly over the .XXX TLD without considering other candidates for registry operator and without making provision for considering other potential registry operators at the end of the initial term of the .xxx Registry Agreement.

If Manwin wins, ICANN could be forced into a situation where it must ask for string proposals from new gTLD applicants and then open up each proposed string to competitive bidding.

That’s not necessarily a bad idea, but it’s pretty much exactly the opposite of how the ICANN-approved new gTLD program is going to work.

The IRP and the lawsuit are also notable in that they target the alleged lack of economic studies that support .xxx and new gTLDs in general.

It states that ICANN “failed to conduct proper economic studies of the impact of the introduction of new TLDs, including the .xxx TLD”.

This is a frequent criticism leveled at ICANN by opponents such as the Association of National Advertisers and the newly formed Coalition for Responsible Internet Domain Oversight.

Manwin is being represented in the suit and IRP by the law firm Mitchell Silberberg & Knupp, the employer of Steve Metalitz, a well-known figure in ICANN’s intellectual property constituency.

YouPorn sues ICANN and ICM over .xxx

Kevin Murphy, November 16, 2011, Domain Registries

One of the biggest porn companies in the world has filed an antitrust lawsuit against ICANN and ICM Registry over the introduction of the .xxx top-level domain.

Luxembourg-based Manwin Licensing and California-based Digital Playground allege “monopolistic conduct, price gouging, and anti-competitive and unfair practices”.

Manwin runs YouPorn, Brazzers and, under license, several Playboy-branded web sites, while Digital Playground is among the largest porn production companies in the world.

Together they are demanding an injunction on .xxx altogether, for ICANN to be forced to impose price constraints on ICM, and to open up the .xxx contract for competitive rebidding.

The complaint, apparently filed in California today, essentially alleges that everything ICM has done to date, from its application with ICANN to its sunrise period policies, is wrong and bad.

It claims ICM’s sunrise period amounted to extortion and that ICANN willfully created a monopoly by agreeing to a registry contract with presumptive renewal but no price caps.

ICM, the complaint says, reacted to the approval of .xxx earlier this year “with the anti-competitive behavior expected of a monopolist”.

It has, for example, improperly exploited the newly created market for .XXX defensive registrations by making such registrations unreasonably expensive and difficult, and by placing onerous burdens on parties seeking to protect their intellectual property rights.

Manwin claims that the recently ended sunrise period, which saw over 80,000 defensive registrations, was priced too high given that ICM handed out free domain blocks to thousands of celebrities.

It also claims that ICM should have enabled companies to defensively block typos of their trademarks, and that porn companies without trademarks should have been able to block their brands.

It takes ICANN to task for not operating a competitive bidding process for .xxx, and claims ICM used “misleading predatory conduct and aggressive litigation tactics” to push through its approval.

I’m not a lawyer, but often antitrust cases swing on the way the court decides to define the relevant “market”.

Manwin claims .xxx is the market, whereas it could be argued that because porn sites are free to use .com or almost any other TLD, that the domain industry as a whole is the market.

The complaint states:

The market for blocking services or defensive registrations in the .XXX TLD is a distinct and separate market in part because there is no reasonable substitute for such registrations. For example, blocking or preventing others’ use of names in a non-.XXX TLD is not such a substitute. Blocking use of a name in a non-.XXX TLD does not prevent use of the name in the .XXX TLD.

ICM has a complete monopoly in the market for the sale of .XXX TLD blocking or defensive registration services through registrars.

I’m not sure if my legal thinking holds water, but this sounds rather like arguing that BMW has a monopoly on making BMWs or Coca-Cola has a monopoly on Cherry Coke.

But Manwin says that .xxx is the only porn gTLD and ICANN has basically ruled out the creation of any future porn-centric TLDs with clauses in ICM’s registry contract.

It also notes that .sex and .porn would be unlikely to be approved in the next round of new gTLDs due to the restrictions on controversial strings imposed by the Governmental Advisory Committee.

ICM president Stuart Lawley said in a statement:

The claims are baseless and without merit and will be defended vigorously. They also show an apparent lack of understanding of the ICANN process and the rigorous battle we went through with ICANN over eight years in full public scrutiny to gain approval.

The .xxx story really is the gift that keeps on giving.

Lawley quits as .xxx sponsor chairman

Kevin Murphy, November 10, 2011, Domain Registries

ICM Registry president Stuart Lawley has stepped down as chairman of IFFOR, the sponsoring organization for .xxx, after ongoing criticism over potential conflicts of interest.

He will be replaced by Clyde Beattie, a former chair of .ca manager CIRA, who was already on IFFOR’s governing board of directors.

IFFOR, the International Foundation For Online Responsibility, was set up by ICM to act as the “sponsoring organization” required by ICANN’s 2004 new gTLD process.

The organization is supposed to be independent, consisting of a policy-creation committee overseen by a three-person board of directors.

However, it has come in for frequent criticism from the porn industry, notably the Free Speech Coalition, over the perception that it is basically an ICM puppet.

While the Policy Council has five out of nine members drawn from the porn industry, the FSC has often accused Lawley of having a “veto” on IFFOR’s decisions, which he has denied.

“Even though the bylaws ensured separation, the optics weren’t ideal,” said Lawley.

However, while Beattie takes over his role, Lawley’s empty seat on the IFFOR board will be filled by ICM general counsel Sheri Falco.

ICM still has a vote, in other words, but not the chair.

The third board member is Sebastien Bachollet, CEO of BBS Consulting. Bachollet also sits on ICANN’s board of directors as a representative of At-Large community.

.xxx faces big test as landrush kicks off

Kevin Murphy, November 8, 2011, Domain Registries

The landrush phase for ICM Registry’s .xxx domain is scheduled to begin today, following the oversubscribed sunrise period that closed last week.

Given the inherently defensive nature of sunrise periods – most of the almost 80,000 applications were for non-resolving domains – landrush is the first big test of public demand for working .xxx names.

I expect healthy interest from domainers, despite the relatively high price of landrush registrations.

High-profile investors including Frank Schilling and Mike Berkens have already invested seven figures in .xxx via its Founders Program, which may set the tone for the rest of the community.

The landrush period runs until November 25. Contested domains will go to auction in December. General availability is currently scheduled to begin December 7.

Domain Name Wire has compiled a handy guide to the best-priced landrush registrars.

.xxx sunrise auctions delayed after 80k applications

Kevin Murphy, November 2, 2011, Domain Registries

ICM Registry has apparently delayed the results of its just-closed .xxx sunrise period until December to give it a chance to clear its backlog of unverified applications.

Corporation Services Company, a major brand-protection registrar, is reporting tonight that ICM and its validation firm, IProta, does not expect to finish validating trademark claims until November 28.

That’s a week later than ICM had planned to kick off the auction phase of the sunrise period, during which contested domains will be awarded to the highest bidder.

“The results of the applications that were submitted during the Sunrise phase will therefore not be available until the first week of December,” CSC said on its blog.

ICM announced yesterday that it has received almost 80,000 sunrise applications from trademark owners and porn companies seeking .xxx domains to match their .coms.

Almost half of those applications were filed during the last week of sunrise. Each trademark claim needs to be individually validated against government databases by IProta.

The plan, according to ICM’s web site, was to start auctioning contested sunrise domains November 21 and to take .xxx into general availability December 6.

Landrush kicks off next Tuesday, running for 17 days. Landrush auctions are scheduled to commence December 12, according to ICM’s web site.

ICM extends .xxx sunrise

Kevin Murphy, October 28, 2011, Domain Registries

ICM Registry, which has evidently seen a last-minute rush of defensive registration applications this week, has extended its sunrise period until Monday.

It had been due to end at 4pm UTC today.

The company just issued this statement:

Due to unprecedented demand in the last week and following several requests from major registrars for more processing time for their backlogs, ICM Registry has extended the Sunrise A and Sunrise B registration periods for an additional three days to conclude Monday, October 31, 2011 at 16:00 UTC (Noon ET). This extension provides prospective registrants valuable time to secure their domains and protect their brands.

Sunrise A is for people in the porn business, B is the “block” for companies outside the “biz” that want to make sure their brands do not become associated with porn.

Guess which has been most popular. (It’s B.)

ICM originally said it expected 10,000 sunrise registrations, but it blew through that estimate weeks ago. The last published count was 42,000, on Monday, with “thousands” coming in daily,

If it hits 70,000 by Monday I will not be surprised.

.xxx sunrise on track for 50,000 domains

Kevin Murphy, October 25, 2011, Domain Registries

ICM Registry has seen over 42,000 sunrise applications since September 7, with “thousands more pouring in each day”, according to the company.

With a last-minute rush possible by porn-scared brand owners before the process closes this Friday, .xxx may well hit 50,000 sunrise applications.

The 42,000 number seems to cover all three sunrise phases – the ‘B’ process for non-porn companies and the AT and AD processes for pornographers.

Sunrise B applications cost $162 at the registry level and over $200 from registrars. ICM’s breakeven point was 10,000 applications, so it will be profitable to the tune of several million dollars.

Because Sunrise B applications incur a one-time fee, ICM has essentially made a windfall now at the expense of recurring revenues from renewals.

IFFOR hires McCarthy to handle .xxx outreach

Kevin Murphy, October 10, 2011, Domain Registries

Kieren McCarthy, CEO of the .nxt new top-level domains conference, has reportedly joined the International Foundation For Online Responsibility to manage policy communications.

IFFOR is the sponsoring organization for ICM Registry’s new gTLD, responsible for setting the policies that will govern .xxx domain names.

ICM’s opponents in the Free Speech Coalition fear IFFOR, claiming it will be both toothless in the light of ICM’s “veto power” over policies (which ICM disputes) and dangerous to .xxx domain holders.

As well as outreach, McCarthy will be tasked with “developing the tools through which Internet community members and IFFOR Policy Council members can reach consensus positions”, according to Xbiz.

He has the right background. He’s the former general manager for public participation at ICANN, and lately one of its fiercest critics. More recently, he’s also done some consulting work for ICM.

Hopefully one of his first actions at IFFOR will be to add DI to the press release mailing list, so I don’t have to source Xbiz the next time the organization has news to report.

Will URS really be as cheap as ICANN says?

Kevin Murphy, September 29, 2011, Domain Policy

I’m having a hard time believing that trademark holders will be able to enforce their rights in new top-level domains for just $300.

The Uniform Rapid Suspension policy (pdf) is one of the new systems ICANN is putting in place to deter cybersquatters from abusing trademarks in new gTLDs.

It’s very similar to the existing UDRP, but it’s quicker and it only deals with the suspension – not transfer – of infringing domain names.

No URS arbitration provider has yet been appointed, but ICANN’s Applicant Guidebook, which spells out the policy, currently estimates a price of $300 per single-domain filing.

At least twice during the newdomains.org conference in Munich this week I heard ICANN representatives quote a price between $300 and $500.

I’m wondering how realistic this is.

Typically, domain arbitration fees are split between the provider, which receives a third, and the panelist, who receives the remaining two thirds.

With a $300 fee, that’s $100 to the provider and $200 to the sole panelist – who must be an experienced trademark lawyer or similar – compared to a $500/$1,000 split with the UDRP.

My question is: how many trademark lawyers will get out of bed for $200?

The URS gives panelists between three and five days to come up with a decision, but I’m guessing that you’d be lucky, for $200, to buy three to five hours of a panelist’s time.

Even I charge more than $200 for half a day’s work.

The Rapid Evaluation Service recently introduced by ICM Registry, which serves essentially the same purpose as URS but for the .xxx gTLD, costs $1,300 in National Arbitration Forum fees.

Like URS, the RES is designed for a speedy turnaround – just three days for a preliminary evaluation – of clear-cut cybersquatting cases.

Like URS, complaints submitted using RES have a tight word-count limit, to minimize the amount of work panelists have to do.

With that in mind, it seems to me that a $300 fee for URS may be unrealistic. Even the $500 upper-end ICANN estimate may be optimistic.

It will be interesting to see if ICANN’s negotiating clout with likely URS providers is better than ICM’s and, more importantly, to see whether $200 is enough to buy consistent, reliable decisions from panelists.

RodBeckstrom.xxx will never see the light of day

Kevin Murphy, September 14, 2011, Domain Registries

ICM Registry has reserved the names of dozens of ICANN directors, former directors and members of staff from the new .xxx top-level domain.

RodBeckstrom.xxx, it seems, is going to be permanently protected from cybersquatters.

I’ve reported before that thousands of celebrity names – about 4,300, it has since emerged – were placed into Registry Reserved status.

I can’t believe it did not occur to me until now to see if any domain industry “personalities” were also given the same preemptive protection.

It seems that every current member of the ICANN board has had their name reserved. One borderline case appears to be Ray Plzak, who’s only protected as RaymondAPlzak.xxx.

Two former ICANN directors who left the board this year – Peter Dengate Thrush and Rita Rodin Johnston – are also reserved, though Rita only as RitaRodin.xxx.

Further back, there’s spotty coverage. Raimundo Beca (left the board in 2010), former CEO Paul Twomey (2009) and Michael Palage (2006) have their names reserved, but many others have not.

Lots of ICANN staffers have been bestowed reserved status too, but again it appears to be quite random whether they’re included or not.

It does not appear to be based on rank (some VPs are excluded, but some mid-level employee names are reserved) or profile (some reserved names will be unfamiliar to anybody who does not attend ICANN meetings).

ICM has also reserved the names of all of its own employees.

I have been unable to find any big industry names from outside ICM and ICANN that are on the list. Bob Parsons is going to have to defensively register bobparsons.xxx, for example.

It’s worth noting that it’s against ICM’s rules to register any personal name under .xxx that is not the registrant’s own legal name or stage name, no matter what their intentions are.

Unlike .com, with .xxx registrants have to enter into an agreement with the registry – not just the registrar – when they buy a .xxx name.

It’s quite possible – though I’ve yet to confirm – that ICM will be able to disable any unauthorized personal name registered in .xxx without the offended party having to file an expensive claim.

And because registrants’ identities will be checked by ICM at the time of registration, even if they use Whois privacy, that should presumably be fairly easy to enforce in most cases.