Latest news of the domain name industry

Recent Posts

Judge hands DotConnectAfrica another bizarre win

A California judge just handed ICANN another upset in the interminable legal battle waged against it by unsuccessful .africa applicant DotConnectAfrica.

Gary Klausner yesterday admitted he made a mistake when he earlier slapped ICANN with a preliminary injunction preventing .africa being delegated to DCA rival ZA Central Registry, but said his error did not have a huge bearing on that decision.

More remarkably, he’s now suggesting that ICANN may have been wrong to make DCA undergo the same Geographic Names Review as every other new gTLD applicant.

Both DCA and ZACR applied for .africa and had to go through the same evaluation processes, one of which was the Geographic Names Review.

Both had to show that they had support from 60% of the governments in Africa, and no more than one governmental objection.

ZACR had that support — though there’s legitimate dispute over whether its paperwork was all in order — while DCA did not. DCA also had over a dozen objections from African governments.

ZACR passed its geographic review, but DCA’s application was tossed out based on Governmental Advisory Committee advice before the review could be completed.

DCA took ICANN to an Independent Review Process panel, which ruled that ICANN had failed to live up to its bylaws and that DCA’s application should be returned to the evaluation process.

ICANN returned DCA’s application to the process at the point it had left it — before the geographic review was complete.

DCA then failed the review, because it has no support.

But when he granted the injunction against ICANN back in April, Klausner thought that DCA had actually passed the geographic review on the first pass. Not even DCA had claimed that; it was just a brain fart on his behalf.

He’s now admitted the mistake, but says the April ruling was not dependent on that misunderstanding.

The Court finds that the error in its factual finding was not determinative to its ultimate conclusion that there are serious questions going toward Plaintiff’s likelihood of success on the merits.

Now, he says that there may be some merit in DCA’s claim that it should have been allowed to skip the GNR due to the IRP’s recommendation that ICANN “permit DCA Trust’s application to proceed through the remainder of the new gTLD application process.”

Klausner wrote yesterday:

At this stage of litigation, it is reasonable to infer that the IRP Panel found that ICANN’s rejection of Plaintiff’s application at the geographic names evaluation phase was improper, and that the application should proceed to the delegation phase.

The problem with this thinking is that it was not the geographic panel that flunked DCA on the first pass, it was the GAC.

DCA got this document (pdf) from the geographic panel. It just says “Incomplete”.

If DCA succeeds in persuading a jury that it should have skipped the geographic panel, Africa could wind up with a .africa gTLD operator that none of its governments support and in circumvention of ICANN’s rules.

Yesterday’s ruling isn’t a killer blow against ICANN, but it does make me wonder whether Klausner — who is also hearing the much higher-profile Stairway to Heaven case right now — is really paying attention.

Anyway, he’s thrown out the ZACR/ICANN motion to reconsider the injunction, so the case is carrying on as before. Read the ruling here (pdf).

Krueger’s suit against M+M dropped, for now

Former Minds + Machines chair Fred Krueger has dropped his lawsuit against the company, which concerned “missing” shares.

M+M announced today that the two parties have signed a “tolling agreement”, which apparently leave the door open for Krueger to re-file the suit at a later date.

If he does re-file, the company has agreed to the date of the original suit being filed if it deploys any statute of limitations defenses.

The company said in a statement to investors:

The Tolling Agreement provides that if the plaintiffs refile their suit, that any statute of limitation defenses of the defendants will be based on the date of the filing of the dismissed suit, 23 February 2016, but will not be deemed to revive any of the plaintiffs’ causes of action, claims, rights, legal positions, or defenses, at law or in equity, that were time-barred prior to 23 February 2016.

Krueger sued claiming M+M or its accountants had misplaced five million shares he was due.

He was looking for $1.5 million in damages.

XYZ settles Verisign’s back-end switcheroo lawsuit

XYZ.com has settled a lawsuit filed against it against Verisign stemming from XYZ’s acquisition of .theatre, .security and .protection.

Verisign sued the new gTLD registry operator for “interfering” with its back-end contracts with the previous owners last August, as part of its campaign to compete against new gTLDs in the courtroom.

XYZ had acquired the .security and .protection ICANN contracts from security Symantec, and .theatre from a company called KBE Holdings.

As part of the transitions, all three applications were modified with ICANN to name CentralNic as the back-end registry services provider, replacing Verisign.

Verisign sued on the basis of tortious interference and business conspiracy. It was thrown out of court in November then amended and re-filed.

But the case appears to have now been settled.

Negari issued a grovelling not-quite-apology statement on his blog:

I am pleased to report that the recent case filed by Verisign against CentralNic, Ltd., XYZ and myself has been settled. After looking at the claims in dispute, we regret that as a result of our acquisition of the .theatre, .security and .protection extensions and our arrangement for CentralNic to serve as the backend service provider for these extensions, that Verisign was prevented from the opportunity to pursue monetization of those relationships. As ICANN’s new gTLD program continues to evolve, we would caution others who find themselves in similar situations to be mindful of the existing contracts extension owners may have with third parties.

Registries changing their minds about their back-end provider is not unheard of.

In this case, large portions of Verisign’s final amended complaint were redacted, suggesting some peculiarities to this particular switch.

If there was a monetary component to the settlement, it was not disclosed. The original Verisign complaint had demanded damages of over $2 million.

ZACR wades into .africa lawsuit, tells judge he screwed up

ZA Central Registry has told the judge in DotConnectAfrica’s lawsuit against ICANN that the preliminary injunction he granted DCA recently was based on a misunderstanding.

The injunction, granted a month ago, prevents ICANN delegating the .africa gTLD to ZACR until the lawsuit reaches a conclusion.

But, in papers filed Friday, ZACR points out that the judge screwed up in his reasoning. Judge Gary Klausner’s ruling was “predicated upon a key factual error”, ZACR says.

The error is the same one I wrote about last month — the judge thinks DCA originally passed the Geographic Names Review of its Initial Evaluation for .africa, and that ICANN later failed it anyway.

In fact, DCA never passed the GNR, and the document the judge cites in his ruling is actually ZACR’s Initial Evaluation report.

The GNR is the bit of the evaluation where both .africa applicants had to prove they had support from 60% of African governments and no more than one African governmental objection.

ZACR said in one of its Friday filings (pdf):

The record is undisputed that DCA’s application had not passed the geographic names evaluation process. And it could not because DCA did not have the requisite support of 60% or more of the African Union governments. Further, DCA’s application had been the subject of 17 “Early Warning” submissions by African Union governments. Correcting for this factual error, the record is clear that DCA has no likelihood of success in this litigation.

ZACR also says Klausner erred by saying .africa could only be delegated once, saying that TLDs can be redelegated to different operators after their initial delegation.

It’s filed a motion asking the judge to “reconsider and vacate” his preliminary injunction ruling.

ZACR is now named as a defendant in the lawsuit, which originally only named ICANN and unidentified parties.

ICANN has dropped its motion to dismiss the case and last week filed its answer (pdf) to DCA’s complaint, in which it denies any wrongdoing.

ICANN appears to be happy to let the judge’s mistake slide, or at least to allow ZACR to burden the risk of potentially pissing him off by highlighting his error.

Afilias seeks to freeze Architelos patent after $10m lawsuit win

Kevin Murphy, December 22, 2015, Domain Registries

Afilias seems bent on burying domain security software maker Architelos, after winning a $10 million lawsuit against it.

The registry on Friday filed a court motion to freeze the patent at the heart of the lawsuit, which Afilias says — and a jury agreed — was based on trade secrets misappropriated by former Afilias employees.

Afilias said it wants to make sure Architelos does not attempt to sell the so-called ‘801 patent, which covers domain abuse-monitoring software.

Its motion asks for a court order “prohibiting Architelos from taking any action that would dilute… or diminish Architelos’ rights or ownership interests” in the patent.

It notes that Architelos has stated that it does not have the means to pay the $10 million damages awarded by a jury in August, which might give it a reason to try to sell the patent.

Afilias said Architelos had “raised the prospect of bankruptcy” during post-trial negotiations.

The motion seems to have been filed now because the judge in the case is taking an unusually long time to render her final judgment.

Despite the case being heard on a so-called “rocket docket” in Virginia, the two companies haven’t heard a peep out of the court since late October.

According to Afilias’ motion, the judge has indicated that Afilias will wind up at least partially owning the ‘801 patent, but that the jury’s $10 million verdict may be “tweaked”.

Judging by a transcript of the August jury trial, the judge herself was not particularly impressed with Afilias’ case and did not expect the jury to crucify Architelos so badly.

Out of the jury’s earshot, she encouraged Afilias to attempt to settle the case and said “if the jury verdict comes in against what I think is the clear weight of the evidence, I will most likely adjust it.”

She also said: “I would have trouble believing that any reasonable jury would find even if they were to award damages to the plaintiff that there’s any significant amount here.”

She clearly misread the jury, which a few days later handed Afilias every penny of the $10 million it had asked for.

That’s much more money than Architelos is believed to have made in revenue since it launched four years ago.

Afilias’ latest motion is set to be heard in court in early January.