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Businesses may call for more new gTLD trademark protections

Kevin Murphy, December 31, 2011, Domain Policy

It’s open season on ICANN at the moment, and as the number of letters opposing the new gTLD program flittering between Washington DC and Marina del Rey becomes confusingly voluminous many groups think they’ve found another opportunity to demand last-minute changes.

ICANN’s Business Constituency is now considering making several recommendations for “critical improvements” to protect trademark holders in the new gTLD universe.

While the recommendations are still under discussion, they could include adding the option to transfer a domain name to a brand owner after a successful Uniform Rapid Suspension complaint.

This would prove unpopular among domain investors and others as it would increase the likelihood of the untested URS being used as a replacement for the already controversial UDRP, potentially increasing the risk of reverse domain name hijacking.

The BC is also discussing whether to ask for a “permanent registry block” feature to be added the forthcoming Trademark Clearinghouse, enabling brand owners to block their trademarks from all new gTLDs for a one-time fee in much the same way as ICM Registry enabled in the .xxx sunrise.

The Coalition Against Domain Name Abuse made a similar request to ICANN last week.

The idea is unlikely to find favor because it would essentially grant trademark owners exclusivity over strings, a right not usually given to them by trademark law.

Other BC discussion topics include making the Trademark Clearinghouse permanent (instead of just running for the first 60 days of each new gTLD) and putting a firm date on the opening of the second-round application window, a popular request from brand owners.

Much like 13th-hour requests originating in the At-Large Advisory Committee, the BC’s position is likely to be substantially revised before it is submitted to ICANN officially.

While ICANN chairman Steve Crocker told .nxt this week that there are no plans to delay or rate-limit the new gTLD program, it’s less clear whether the Applicant Guidebook is still open for the kinds of substantial amendments now being discussed by the business community.

But my hunch is that, regardless of the political pressure being brought to bear on ICANN in the US, the new gTLD program is going to launch on January 12 in more or less its current form.

CADNA calls for mandatory .xxx-style sunrises

Kevin Murphy, December 27, 2011, Domain Policy

The Coalition Against Domain Name Abuse has asked ICANN to make one-time trademark blocks, much like those offered by .xxx operator ICM Registry, mandatory in most new top-level domains.

In a letter to ICANN bosses (pdf) sent last week, CADNA president Josh Bourne wrote:

ICANN should consider including a requirement in the Applicant Guidebook that all new gTLD registries that choose to sell second-level domains to registrants adopt a low-cost, one-time block for trademark owners to protect their marks in perpetuity.

ICANN should require registries to give brand owners the option to buy low-cost blocks on their trademarks before any registration period (Sunrise or Landrush) opens. This can be offered at a lower cost than sunrise registrations have been priced at in the past – this precedent has been set with the blocks offered in .XXX, where the blocks are made in perpetuity for a single, nonrecurring fee.

The recommendation is one of several. CADNA also reckons ICANN needs to name the date for its second round of new gTLD applications, and that “.brand” applicants should get discounts for multiple gTLD applications.

The letter comes as opposition to the new gTLD program in the US becomes deafening and ICANN’s board of directors have reportedly scheduled an impromptu meeting next week to determine whether the January 12 launch is still a good idea.

CADNA is no longer opposed to the program itself. Fairwinds Partners, the company that runs the lobbyist, recently restyled itself as a new gTLD consultancy.

But there’s a virtually zero chance the letter will come to anything, unless ICANN were to decide to open up the Applicant Guidebook for public comments again.

I also doubt the call for a mandatory ICM-style “block” service would be well-received by anyone other than ICANN’s intellectual property constituency.

The problem with such systems is that trademarks do not grant exclusive rights to strings, despite what some organizations would like to think.

It’s quite possible for ABC the taxi company to live alongside ABC television in the trademark world. Is it a good idea to allow the TV station to perpetually block abc.taxi from registration?

Some would say yes. The Better Business Bureau and Meetup.com, to name two examples, both recently went before Congress to bemoan the fact that they could not block bbb.xxx and meetup.xxx – both of which have meaning in the adult entertainment context and were reserved as premium names – using ICM’s Sunrise B.

With that all said, there’s nothing stopping new gTLD applicants from voluntarily offering .xxx-style blocking services, or indeed any form of novel IP rights protection mechanisms.

Some applicants may have even looked at the recent .xxx sunrise with envious eyes – with something like 80,000 defensive registrations at about $160 a pop, ICM made over $12 million in revenue and profit well into seven figures.

New gTLD failure risk bond capped at $300k

Kevin Murphy, December 26, 2011, Domain Policy

New generic top-level domain applicants will have to find between $18,000 and $300,000 per gTLD to cover the risk of their business failing, according to ICANN.

ICANN revealed the figures, which have been calculated from prices quoted by 14 potential emergency back-end registry operators, in a pre-Christmas info-dump on Friday.

The so-called Continued Operations Instrument is designed to cover the cost of paying an EBERO to manage and/or wind down a failed gTLD business over up to three years.

All new gTLD applicants must either secure credit or put cash in escrow to cover the COI, the amount of which depends on how many domains under management they anticipate.

This table shows the size of the COI for various sizes of zone.

Projected Number of DomainsEstimated 3 Year COI (USD)
10,000$18,000
25,000$40,000
50,000$80,000
100,000$140,000
250,000$250,000
>250,000$300,000

This essentially means that any registry that plans to grow its gTLD into a commercially successful volume business needs to find $300,000 to cover the cost of its potential failure.

Only five previously introduced new gTLDs have topped 250,000 domains under management in their first five years: .info (with 8 million today), .biz, .name, .mobi and .tel (which peaked at 305,000).

Smaller gTLDs, comparable to a .cat, .jobs or .travel, will only have to find $40,000 to $80,000. It’s likely that the majority of .brand applicants will only need to secure the minimum $18,000.

While potentially expensive, it’s welcome clarity into new gTLD funding requirements, albeit coming just two weeks before ICANN begins to accept applications.

ICANN also threw a bone to potential applicants from countries with poor access to credit.

The organization previously only contemplated allowing credit from banks with an ‘A’ rating or higher, but it now says it will accept, in its discretion, financial instruments from the highest-rated institution available to the applicant.

ICANN said it may also consider becoming a party to these credit agreements, again in its sole discretion, but that such applicants could lose points when their application is scored as a result.

Congressmen ask ICANN to delay new gTLDs

Kevin Murphy, December 22, 2011, Domain Policy

Seventeen US Congressmen have put their names to a letter asking ICANN to delay its new generic top-level domains program.

The bipartisan group was led by Rep. Fred Upton, chairman of the House technology subcommittee that held a hearing into new gTLDs last week. They wrote:

Although we believe expanding gTLDs is a worthy goal that may lead to increased competition on the Internet, we are very concerned that there is a significant uncertainty in this process for businesses, non-profit organizations, and consumers. To that end, we urge you to delay the planned January 12, 2012 date for the acceptance of applications for new gTLDs.

The letter (pdf), sent yesterday to ICANN president Rod Beckstrom and chairman Steve Crocker, goes on to note the objections of several groups, including the Coalition for Responsible Internet Domain Oversight, that have opposed the program in recent weeks.

Given these widespread concerns, a short delay will allow interested parties to work with ICANN and offer changes to alleviate many of them, specifically concerns over law enforcement, cost and transparency that were discussed in recent Congressional hearings.

It is notable that the letter was sent directly to ICANN’s top brass.

Previous requests of this kind have been sent to ICANN’s overseers in the US Department of Commerce, which has already indicated that it does not intend to strong-arm ICANN into changing its new gTLD plans.

ICANN’s senior vice president Kurt Pritz said last week that the chance of delay was “above zero”.

Whether this latest letter changes the math remains to be seen.

Opposition to the January 12 launch date in the US currently appears to be reaching a critical mass.

At-Large mulls new gTLDs U-turn

Kevin Murphy, December 22, 2011, Domain Policy

In what is likely to turn out to be a storm in a teacup, ICANN’s At-Large Advisory Committee is set to vote on a resolution calling for a delay to the new generic top-level domains program.

The ALAC, ICANN’s policy-making body tasked with representing individual end users, has been discussing a possible update to its position on new gTLDs for the last few days.

A first-draft motion, proposed by vice-chair Evan Leibovitch, said the program “would be harmful to the public interest” and requested that its January 12 launch be “suspended”.

It’s since been watered down twice, and may well be watered down further before (and if) the ALAC considers it at its January 24 monthly meeting.

The resolution currently talks about a “a deep concern about the possible harmful effect on Internet end-users of a single massive expansion of gTLDs”.

It adds that ICANN should “phase-in” the introduction of new gTLDs, “releasing no more than 25 every three months” with about a third coming from poor or community-based applicants.

It appears to be a reaction to ICANN’s newly developed applicant support program, which was weaker than many proponents of the cheaper gTLDs for worthy applicants had hoped.

Even in its current form, the resolution is attracting much more opposition than support from members of the At-Large, so it seems unlikely that it will go anywhere.

To advocate for a phased approach to new gTLDs, or to recommend a delay, would represent a huge U-turn from the ALAC’s existing position.

In 2009, the group said supported “the expedient introduction of new gTLDs” and that it did not believe a “trial run” with a limited number of applications was appropriate.

Still, there’s nothing wrong with changing one’s mind as new evidence comes to light, of course.