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Straw man proposed to settle trademark deadlock at secretive ICANN meeting

Kevin Murphy, November 19, 2012, Domain Policy

Trademark interests seem to have scored significant concessions in their ongoing battle for stronger rights protection mechanisms in new gTLDs, following a second closed-doors ICANN meeting.

Following a two-day discussion of the Trademark Clearinghouse in Los Angeles late last week, ICANN CEO Fadi Chehade has published a “straw man” proposal for further discussions.

The straw man — if it is ultimately adopted — would grant the Intellectual Property Constituency and Business Constituency some of the things they recently asked for.

Crucially, they’d get the right to add keywords to the trademarks they list in the Trademark Clearinghouse, making them eligible for the Trademark Claims service.

There would be a test — a UDRP or court win concerning the string in question — for inclusion, and a limit of 50 brand+keywords or misspellings per trademark in the Clearinghouse.

The idea here is to help brand owners quickly respond to the registration of — but not preemptively block — domains such as “brand-industry.tld” or “brand-password-reset.tld”.

The Trademark Claims service would be extended from 60 to 90 days, under the straw man model.

Chehade’s blog post also outlines a “Claims 2” process that would run for six to 12 months after the launch of each new gTLD and would require trademark owners to pay an additional fee.

This Claims 2 service would not necessarily give registrants the same information about trademarks related to the domains they want to registry. Why not is anyone’s guess.

Here’s how Chehade described it:

Rights holders will have the option to pay an additional fee for inclusion of a Clearinghouse record in a “Claims 2″ service where, for an additional 6-12 months, anyone attempting to register a domain name matching the record would be shown a Claims notice indicating that the name matches a record in the Clearinghouse (but not necessarily displaying the actual Claims data). This notice will also provide a description of the rights and responsibilities of the registrant and will incorporate a form of educational add-on to help propagate information on the role of trademarks and develop more informed consumers in the registration process.

I’ve long been of the opinion that Trademark Claims service will not prevent most cybersquatting (determined bad actors will click through the notices as easily as you or I click through a software license agreement) and “Claims 2” appears to be a diluted version of the same lip service.

Claims 2 and the extension of the Clearinghouse to brand+keyword strings appears to be a step in the right direction for trademark owners, but I can’t see the changes substantially reducing their costs.

There’s also already opposition to the ideas from the Non-Commercial Stakeholders Group, according to this analysis of the straw man from NCSG chair Robin Gross.

The LA meeting rejected the notion of a preemptive cross-TLD trademark block list along the lines of the ICM Registry’s Sunrise B for .xxx, which is among the IPC/BC proposals.

The only change to Sunrise proposed in the straw man model is a mandatory 30-day notice period before the mandatory 30-day Sunrise kicks off, to give brand owners time to prepare.

In summary, the straw man proposal appears to create some marginal benefit for trademark owners at the expense of some additional cost and complexity for registries and registrars.

It would also create an entirely new rights protection mechanism — Claims 2 — out of whole cloth.

While no firm decisions appear to have been made in LA, it’s impossible for us to know for sure what went down because the meeting was held behind closed doors.

ICANN even enforced a Twitter ban, according to some attendees.

The meeting was the second private, invitation-only TMCH discussion in recent weeks.

While we understand there were remote participation opportunities for invited guests unable to attend in person, there was no opportunity to passively listen in to the call.

DI was told by ICANN there was no way for us to follow the talks remotely.

According to a number of attendees on Twitter, participants were also asked by ICANN not to tweet about the substance of the discussions, after complaints from trademark interests present.

The same attendees said that ICANN plans to publish a transcript of the meeting, but this has not yet appeared.

Considering that the issues under discussion will help to shape the structure of the domain name industry for many years to come, the lack of transparency on display is utterly baffling.

Downtime emerges as key barrier to Trademark Clearinghouse changes

Kevin Murphy, October 10, 2012, Domain Services

The risk of embarrassing technical glitches is now the major stumbling block in discussions about the best way to deploy the forthcoming Trademark Clearinghouse for new gTLDs.

ICANN is worried about the “reputational implications” of the TMCH going offline if, as proposed by domain name registries, it is in the “critical path” of the live registration process.

The concerns emerged in a letter earlier this week, and were discussed during an ICANN conference call yesterday.

The TMCH is expected to be a big database of trademarks, used to support the Trademark Claims and Sunrise periods that new gTLD registries will have to offer.

The policy behind both rights protection mechanisms is settled (essentially), but the actual technical implementation is still open to question.

While ICANN and its two contractors — IBM and Deloitte — have been quietly working on their favored model for some months, the registries that will support most new gTLDs have their own model.

Neustar, ARI Registry Services, Verisign and Demand Media have proposed a TMCH design that they say would be less costly to registries (and therefore brand owners) as well as having certain security benefits.

The problem with the registry’s plan is that it calls for real-time interactions between registrars, registries and the TMCH during the Trademark Claims phase of new gTLD launches.

This would require the Clearinghouse to operate with 100% up-time, which makes ICANN very nervous. It said in its letter this week:

Though requirements for resiliency to guard against such failures will be in place, the risk and impact of a failure incident in a centralized live query system are significant and have an impact on the reputation and, therefore, the effectiveness of the rights protection mechanisms supported by the Trademark Clearinghouse. Such an event could have reputational implications for the Clearinghouse and the New gTLD Program.

If the Clearinghouse went down, the argument goes, it would prevent domain names being registered in new gTLDs.

This would look very bad for ICANN, which has already experienced a few embarrassing technical problems with the program. How its policies and processes perform with live gTLDs will be scrutinized intensely.

But the registries say they’ve mitigated the problem as much as they can in their centralized model.

“It only puts the Trademark Clearinghouse in the critical path for registration for a limited number of registrations,” Neustar vice president Jeff Neuman said on yesterday’s call.

“In our model if a domain name does not match a trademark in the Clearinghouse then the Clearinghouse never sees it, it doesn’t matter if the Clearinghouse is up or down,” he said.

The negative impact of downtime in this scenario is that registrars would not be able to show would-be registrants Trademark Claims notices. But it would not necessarily enable cybersquatting.

Neuman further argued that the TMCH should be covered by the same kinds of service level agreements and data escrow requirements as contracted gTLD registries, minimizing the risk of downtime.

The second major hurdle to the implementation talks is the relative lack to date of input from brand owners.

The intellectual property community has previously expressed reservations about any TMCH model that would enable data mining by bad actors or opportunistic registrars and registries.

Yes, it’s a data privacy issue. Brand owners are worried that the contents of the Clearinghouse could be used by competitors to find holes in their trademark protection strategies, or by scammers.

While yesterday’s call had more input from the trademark community, the real work will come next Wednesday during a session at ICANN 45 in Toronto.

IP interests should join the Trademark Clearinghouse meeting on Tuesday

Kevin Murphy, October 5, 2012, Domain Policy

ICANN is to hold a webcast and teleconference next week to discuss alternative models for the new gTLDs Trademark Clearinghouse.

It will be the last time the community gets to discuss the issue before ICANN 45 kicks off in Toronto next weekend.

Neustar, ARI Registry Services, Verisign and Demand Media have jointly proposed two models for the mandatory new gTLD Sunrise period and Trademark Claims service that differ from ICANN’s.

While the proposals are enjoying general murmurs of support from the domain name industry side of the community, the trademark lobby has yet to have any substantial presence in the talks.

Most of the discussions to date have been hindered by this lack of input, and by a frustrating lack of hard feedback from ICANN and its two contractors, IBM and Deloitte.

Tuesday’s meeting might be a good opportunity for members of the Business Constituency and IP Constituency to brush up on the issues before Toronto.

The meeting will start at 9am US Eastern time, according to Neustar vice president Jeff Neuman, who provided the following information:

The documents are posted at:

http://newgtlds.icann.org/en/about/trademark-clearinghouse/sunrise-model-26sep12-en.pdf
http://newgtlds.icann.org/en/about/trademark-clearinghouse/claims-model-26sep12-en.pdf
http://newgtlds.icann.org/en/about/trademark-clearinghouse/model-issues-26sep12-en.pdf

The call-in information is:

Conference ID: 93759
Dial-in numbers for each country: http://www.adigo.com/icann/

Adobe Connect Room at: http://icann.adobeconnect.com/tmch/

Registries propose PKI-based new gTLD sunrises

Kevin Murphy, September 12, 2012, Domain Tech

Neustar and ARI Registry Services have come up with an alternative to ICANN’s proposed new gTLDs sunrise period process, based on a secure Public Key Infrastructure.

The concept was outlined in a draft paper published today, following an intensive two-day tête-à-tête between domain companies and Trademark Clearinghouse providers IBM and Deloitte last month.

It’s presented as an alternative to the implementation model proposed by ICANN, which would use unique codes and was criticized for being inflexible to the needs of new gTLD registries.

The PKI-based alternative from Neustar and ARI would remove some of the cost and complexity for registries, but may create additional file-management headaches for trademark owners.

Under the ICANN model, which IBM and Deloitte are already developing, each trademark owner would receive a unique code for each of their registered trademarks and each registry would be given the list of codes.

If a trademark owner wanted a Sunrise registration, it would submit the relevant code to their chosen registrar, which would forward it to the registry for validation against the list.

One of the drawbacks of this method is that registries don’t get to see any of the underlying trademark data, making it difficult to restrict Sunrise registrations to certain geographic regions or certain classes of trademark.

If, for example, .london wanted to restrict Sunrise eligibility to UK-registered trademarks, it would have no easy way of doing so using the proposed ICANN model.

But IP interests participating in the development of the Trademark Clearinghouse have been adamant that they don’t want registries and registrars getting bulk access to their trademark data.

They’re worried about creating new classes of scams and have competitive concerns about revealing their portfolio of trademarks.

Frankly, they don’t trust registries/rars not to misuse the data.

(The irony that some of the fiercest advocates of Whois accuracy are so concerned about corporate privacy has not been lost on many participants in the TMCH implementation process.)

The newly proposed PKI model would also protect trademark owners’ privacy, albeit to a lesser extent, while giving registries visibility into the underlying trademark data.

The PKI system is rather like SSL. It used public/private key pairs to digitally sign and verify trademark data.

Companies would submit trademark data to the Clearinghouse, which would validate it. The TMCH would then sign the data with its private key and send it back to the trademark owner.

If a company wished to participate in a Sunrise, it would have to upload the signed data — most likely, a file — to its registrar. The registrar or registry could then verify the signature using the TMCH’s public key.

Because the data would be signed, but not encrypted, registrars/ries would be able to check that the trademark is valid and also get to see the trademark data itself.

This may not present a privacy concern for trademark owners because their data is only exposed to registries and registrars for the marks they plan to register as domains, rather than in bulk.

Registries would be able to make sure the trademark fits within their Sunrise eligibility policy, and would be able to include some trademark data in the Whois, if that’s part of their model.

It would require more file management work by trademark owners, but it would not require a unique code for each gTLD that they plan to defensively register in.

The Neustar/ARI proposal suggests that brand-protection registrars may be able to streamline this for their clients by enabling the bulk upload of trademark Zip files.

The overall PKI concept strikes me as more elegant than the ICANN model, particularly because it’s real-time rather than using batch downloads, and it does not require the TMCH to have 100% availability.

ICANN is understandably worried that about the potentially disastrous consequences for the new gTLD program if it creates a TMCH that sits in the critical registration path and it goes down.

The PKI proposal for Sunrise avoids this problem, as registries and registrars only need a stored copy of the TMCH’s public key in order to do real-time validation.

Using PKI for the Trademark Claims service — the second obligatory rights protection mechanism for new gTLD launches — is a much trickier problem if ICANN is to stick to its design goals, however.

ARI and Neustar plan to publish their Trademark Claims proposal later this week. For now, you can read the Sunrise proposal in PDF format here.

Sunrise .xxx domains get 1.3 million hits a day

Kevin Murphy, March 21, 2012, Domain Registries

Domain names blocked by trademark holders during the .xxx sunrise period get 1.3 million hits per day, according to ICM Registry president Stuart Lawley.

The number refers to DNS queries arriving at the name servers ICM uses to serve up its standard blocking placeholder page.

I estimate that this works out to about 20 queries, on average, per domain per day.

The placeholder is displayed whenever a web user visits a domain that was registered during the Sunrise B launch phase last October.

A million DNS queries does not necessarily indicate a million page views, of course. Spiders and other automated processes likely account for some of the query traffic.

ICM does not monetize the pages, and because the names resolve to a standard placeholder ISPs don’t get to monetize the error traffic either.

How many defensive registrations is too many?

Kevin Murphy, February 24, 2012, Domain Policy

How will ICANN measure the success of its new top-level domains program, and how many defensive registrations is too many?

These questions are now firmly on the ICANN agenda, following the publication of 37 draft recommendations for how to measure the success or otherwise of new gTLDs.

The advice of the Consumer Trust Working Group, published last night and now open for public comment, is a must-read for anyone interested in the emerging new gTLD market.

The recommendations describe myriad ways ICANN could benchmark the performance of new gTLDs three years from now, to fulfill its promise to the US Department of Commerce to study the effect of the program on consumer choice and competition.

While it’s a broad document covering a lot of bases, I’m going to be disappointingly predictable here and immediately zero in on the headline wedge issue that I think will get most tongues wagging over the coming weeks and months:

Defensive registrations.

The working group decided to recommend that, as a measure of success, domain name registrations in new gTLDs should be no more than 15% defensive* three years after launch.

Defensive in this case would mean they were registered during the mandatory Sunrise period.

The idea is that consumer choice can be demonstrated by lots of registrations in new gTLDs, but that defensive registrations should not count toward that goal.

The 15%-Sunrise baseline number was chosen fairly arbitrarily – other suggestions were 20% and 12% – and is designed to spur community discussion. It’s not final.

Still it’s interesting.

It implies that if a registry has 15,000 Sunrise registrations, it needs to sell another 85,000 domains in three years to be seen as having made a successful contribution to consumer choice.

By way of an example, if it were to be retroactively applied to .xxx, the most recent gTLD to launch, ICM Registry would have to get its total registrations up to 533,000 by the end of 2014.

Is 15% too low? Too high? Is it even a useful metric? ICANN wants to know.

Whatever the ultimate number turns out to be, it’s going to be handy for plugging into spreadsheets – something opponents of new gTLDs will find very useful when they try to make the case that ICANN endorses a certain dollar value of trademark extortion.

Because many registries will also accept defensive registrations after Sunrise, two more metrics are proposed.

The group recommends that domains in new gTLDs that redirect to identical domains in legacy TLDs – strongly implying a defensive registration – should be no more than 15% after three years.

It also recommends that ICANN should carry out a survey to see how many registrants own matching second-level domains in legacy TLDs, and that this should also be lower than 15%.

I’ve only outlined three of the working group’s recommendations here. Many of the other 34 are also interesting and will be much-debated as the new gTLD program continues.

This is vitally important stuff for the future of new gTLDs, and applicants would be well advised to have a good read — to see what might be expected of them in future — before finalizing their applications.

* It should be noted that the recommendation as published confusingly reads “Post-Sunrise registrations > 15% of total registrations”, which I think is a typo. The > operator implies that non-defensive registrations only need to be over 15% of total registrations, which I’m certain is not what the working group intended to say.

(UPDATE: this typo has now been corrected).

YouPorn owner acquires fellow .xxx plaintiff

Kevin Murphy, January 18, 2012, Domain Registries

Manwin, the porn company currently suing ICANN and ICM Registry over the .xxx launch, has acquired co-plaintiff Digital Playground.

“To me this deal is no different than the acquisition of Pixar by Disney,” Digital Playground CEO Ali Joone said, according to Xbiz.

Terms of the deal were not disclosed.

While Digital Playground was named as a plaintiff on the .xxx lawsuit, Manwin was clearly the lead. Manwin has also launched a solo Independent Review Process arbitration case against ICANN.

The company is one of the biggest porn producers on the internet, owning YouPorn as well as managing Playboy’s web presence under license.

Manwin claims that ICM’s launch amounted to “extortion”, and that it gave away its lack of respect for the porn industry by selling premium names to domainers including Frank Schilling and Mike Berkens.

ICM’s response to the lawsuit is due later this week.

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.

Was .xxx’s launch disappointing?

Kevin Murphy, December 8, 2011, Domain Registries

The weekend box office numbers are in, and .xxx didn’t put as many bums on seats as might have been expected.

ICM Registry sold 55,367 new .xxx domain names in its first 24 hours of general availability, giving it a total of almost 159,351 registrations, according to the company.

That’s pretty good going for a TLD which, despite the spin in ICM’s recent TV commercials, is intended for a limited customer base, and which is selling for $80 to $100 a year.

Given its $60 registry fee, ICM will have taken over $3.3 million in revenue yesterday, over $550,000 of which will be given to its sponsoring organization, IFFOR.

However, the 159,351 total includes non-resolving domains, ICM has confirmed.

Due to the unique trademark protection mechanisms put in place for non-porn companies, it’s possible to pay for a .xxx domain that will only ever resolve to a standard registry placeholder.

ICM has previously said that it took almost 80,000 sunrise applications, and that the landrush phase put its total “comfortably over 100,000”.

It did not, however, break out the mix of Sunrise A (resolving) and Sunrise B (non-resolving) domains.

That’s an important distinction, both for ICM’s ongoing revenue and for gauging demand for .xxx among registrants.

Each Sunrise B domain gave ICM a $161 windfall but, unlike every other TLD launched to date, has the sale had no recurring revenue component.

I think it’s possible that 50,000 to 60,000 sunrise domains were non-resolvers, which would give .xxx a total of roughly 100,000 active domains under management after one day of GA.

(My assumptions are that all 80,000 sunrise applications were unique and approved, and that roughly two thirds were for Sunrise B non-resolving domains).

Assuming all the active domains are renewed, it’s a $6 million a year business (or $5 million, if you exclude the mandatory IFFOR donation) for ICM already.

The .xxx zone is already bigger than .travel, .pro, .jobs, .aero, .coop, .museum and .cat. It will likely be bigger than .name, .tel and .asia by the end of the month.

So why suggest that it’s a disappointing result?

Pre-reservations

First, for a few years ICM was accepting no-cost .xxx “pre-reservations” through its web site, while its gTLD application was in ICANN limbo.

It racked up over 900,000 such reservations for roughly 650,000 unique .xxx domain names before shutting the offer down in July this year.

One might expect that most people interested enough in .xxx to pre-register a domain months or years in advance might also be interested in grabbing that domain during landrush, sunrise or at the moment of GA. That apparently didn’t happen.

.CO

Let’s also compare .xxx to the launch of .co by .CO Internet last year.

While .CO did not have anything like the long-term media exposure as .xxx, it did of course have the advantage of offering a completely generic string priced at a third of .xxx.

Within its first 24 hours of general availability, .CO said that it had 233,000 domains under management, about 39,000 of which were landrush or sunrise registrations.

Even at the cheaper registry fee (about $20 a year) .CO still made more money in day one than ICM (although ICM wins hands-down in terms of premium domain sales).

.CO, incidentally, also only had 10 accredited registrars at launch (not counting resellers) compared to ICM’s over 70.

Go Daddy

Go Daddy is responsible for roughly half of all new .com registrations, with similar numbers in other TLDs including .co, but it does not appear to be promoting .xxx very heavily.

For the last few days, its homepage has contained only one small below-the-fold reference to .xxx domains. Its TLD drop-down menu has .xxx in tenth place, between .biz and .ca.

Conversely, ICM has been promoting Go Daddy (and DomainMonster) more heavily in its own marketing – notably on gavin.xxx, the site “owned” by its TV commercial character.

Expectations

So is .xxx on track to meet expectations at this early stage?

ICM CEO Stuart Lawley has previously predicted 300,000 to 500,000 registrations in the first few months, and that’s still an achievable goal given its day-one performance.

.CO Internet, for example, more than doubled its 233,000 first-day take within two months of going into general availability.

The new Russian ccTLD .рф registered 200,000 domains in its first six hours when it launched in November 2010, and hit 800,000 by April this year.

While .xxx clearly hasn’t yet smashed estimates in the same way as its sunrise did, I think early indications are that it’s looking pretty healthy.

One in five .рф domains have web sites

Kevin Murphy, November 14, 2011, Domain Registries

The .рф registry celebrated its first launch anniversary last week, with almost one million .рф names registered and apparently almost one in five domains with an active web site.

According to RU-Center, which says it is the registrar of record for 40% of .рф (.rf) names, about 18% of the Cyrillic domains registered in the last year resolve to full web sites.

The registrar said in a press release:

18% of names have website, 16% do redirect, 4% are on parking, 15% are just delegated but not available, and 15% have a plug webpage. 29% of .RF names are unused.

That compares to the 18.7% use penetration of .info, which has been around for over a decade, assuming RU-Center and Afilias compiled their numbers using a similar methodology.

RU-Center also said that 94% of .рф sunrise registrations have been renewed. The rate of landrush registration renewals, which give an indication of what speculators think of the space, will not be clear until December, it said.

It is apparently now also possible for non-Russians to obtain .рф domains.