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Winners and losers in the next Applicant Guidebook

Kevin Murphy, February 23, 2011, Domain Registries

Who’s going to be happy, and who won’t be, after ICANN publishes the next version of its Applicant Guidebook for new top-level domains in April?

We now have a rough idea of the answers to those questions, following the publication this week of ICANN’s analysis of comments received between November and January.

The 163-page document (pdf) outlines where ICANN is still open to changing its rules for applying for a TLD, and where it believes the book is firmly shut.

As you might expect, at this late stage in the game, most of the analysis is essentially “thanks, but no thanks”, reiterating the reasons why the Guidebook currently says what it says.

But there are strong indications of which changes will be made to the “next” version of the Guidebook, which is currently expected to hit the ICANN web site April 14.

Here’s a high-level analysis of the winners and losers.

Impatient Applicants

Companies and entrepreneurs that have been tapping their feet for the last couple of years, hit by delay after delay, can probably take comfort from the fact that ICANN is still making encouraging noises about its commitment to the new TLDs program.

Noting that some issues are still in need of further work, ICANN staff writes:

it is ICANN’s intention to reach resolution on these issues. It would be irresponsible to use community resources to run a process without the intention to see it through to conclusion.

ICANN continues to approach the implementation of the program with due diligence and plans to conduct a launch as soon as practicable along with the resolution of these issues

Beyond what I noted in a post earlier this afternoon, there are no clues about the timetable for actually launching the program, however.

Trademark Holders

It’s a mixed bag for the intellectual property lobby, but on balance, given the length of its wish-list, I expect the trademark crowd will be more disappointed than not.

In general, ICANN is firm that the rights protection mechanisms (RPMs) in the Guidebook are the result of community compromise, and not for changing.

This is sometimes the case even when it comes to issues ICANN plans to discuss with its Governmental Advisory Committee next week.

One of these is the Trademark Clearinghouse, the database of trademark rights to be used to reduce cybersquatting, of which ICANN says:

subject to further refinement through the GAC consultation and other comments received to date, the positions in the Clearinghouse proposals will be finalized substantially similar to as it was in the Proposed Final Applicant Guidebook.

On the Globally Protected Marks List, a mechanism trademark holders want included in the Guidebook, ICANN is suitably mysterious:

It is clear that the trademark interests have continued to raise the GPML as possible RPM. While this discussion may continue, no further progress or decisions have been made.

The most substantial concession ICANN appears ready to make to trademark holders concerns the Uniform Rapid Suspension mechanism, a cousin of the UDRP that will be used to address clear-cut cases of cybersquatting in new TLDs.

A major concern from the IP lobby has been that the URS is too slow and complex to meet its original goals. ICANN disagrees that it does not do the job, but plans to streamline it anyway:

Discussions are continuing and some additional implementation detail revisions will likely be made, for example, creating a form complaint that reduces the 5000-word limit to 500 words. The 500-word limit might not, however, be placed on the respondent, as the respondent will be required to describe the legitimate basis upon with the domain name is registered. The respondents word limit be decreased from 5,000 to something less, possibly 2,500 words, in order to decrease the examinations panel‘s time requirements and thereby enhance circumstances for a relatively loss cost process. (Remember that in the vast majority of cases, it is expected that the respondents will not answer.)

This will certainly be a topic of discussion at the ICANN-GAC meeting in Brussels on Monday, so I expect IP attorneys are even now briefing their governments on how these proposed changes won’t go far enough for whatever reason.

Domainers

There’s bad news if you’re a high-rolling domain investor, looking at bagging a new TLD or three, and you also have a few UDRP losses against your name.

The background check ICANN will carry out on applicants for their history of cybersquatting stays, and it will still use the three-losses-as-UDRP-respondent benchmark.

However, ICANN has recognized that UDRP decisions are not always final. If you lost a UDRP but subsequently won in court, that decision won’t count against you.

In addition, reverse domain name hijacking findings will now also count against applicants to the same degree as UDRP losses.

I believe both of those concessions capture so few entities as to be more or less irrelevant for most potential applicants.

“.brand” Applicants

ICANN is in favor of companies applying to run “innovative” TLDs, such as “.brands”, but it is reluctant to carve out exceptions to the rules for these applicants.

The organization does not plan to give .brands a pass when it comes to protecting geographic names, nor when it comes to the requirement to register domains through an accredited registrar.

This seems to mean, for example, that if Microsoft successfully obtains .microsoft and wants to register usa.microsoft to itself, it will have to ask the US government for permission.

It also means .brands will still have to seek ICANN accreditation, or work with an existing registrar, in order to sell domains to themselves. It’s an added cost, but not an unworkable one.

Would-be .brand applicants did, however, win one huge concession: If they decide to turn off their TLD, it will not be redelegated to a third-party. ICANN wrote, with my emphasis:

In the limited case of .brand and other TLDs that operate as single-registrant/single-user TLDs it would probably make sense to not force an outgoing operator to transition second-level registration data (since presumably the operator could just delete all the names as the registrant anyway and then there would be nothing to transition), and therefore ICANN will put forward proposed language for community review and feedback that would provide for alternative transition arrangements for single-registrant/single-user gTLDs.

If .microsoft was unsuccessful and Microsoft decided to stop running it, Google would not be able to take over the ICANN registry contract, for example.

Poor People/Cheapskates

Some commenters wanted ICANN to reduce application fees in cases where the applicant is from a poorer nation, a non-governmental organization, or when they intend to apply for multiple versions of the same TLD.

They’re all out of luck.

The $185,000 baseline application fee is to stay, at least for the first round. ICANN thinks it could be reduced in future rounds, once more uncertainty has been removed from the process.

Currently, $60,000 of each fee is set aside for a “risk” (read: litigation) war-chest, which will be presumably less of an issue after the first round is completed.

Special Interests

The International Olympic Committee and the Red Cross, as well as financial services organizations, may receive the special concessions they asked for in the next Guidebook.

The IOC and Red Cross may be given the same protections as afforded to ICANN, regional internet registries, and generic terms such as “example” and “test”.

ICANN is considering the nature of these protections, and if appropriate, might augment the reserved names lists in special cases such as requested by the International Olympic Committee (IOC) and the International Red Cross, both of which are globally invested in representing the public interest.

It also emerged that ICANN is working with the financial services industry to clarify some of the security-related language in the Guidebook.

Community Applicants

Sorry guys, ICANN intends to keep the threshold score for the Community Priority Evaluation at 14 out of 16. Nor will you get a bonus point for already showing your cards by starting community outreach two years ago. Winning a CPE is going to be as tough as ever.

*

This is just a brief, non-exhaustive overview of the changes that are likely to come in the next Applicant Guidebook, setting the stage for the GAC talks next week and the San Francisco ICANN meeting next month.

One thing seems pretty clear though: this is end-game talk.

ICANN chair expects more new TLDs delay

Kevin Murphy, February 3, 2011, Domain Registries

ICANN’s new top-level domains program is unlikely to be approved at its San Francisco meeting next month, according to chairman Peter Dengate Thrush.

“We don’t think we’ll be able to approve the final applicant guidebook in March,” he said in a new interview with World Trademark Review.

This confirms my suspicion that changes to the Guidebook made following the upcoming meeting between ICANN and its Governmental Advisory Committee may be too extensive for ICANN to rubber-stamp without first consulting the community.

The ICANN board and the GAC are due to meet in Brussels, February 28 and March 1, to discuss the GAC’s outstanding concerns.

Chief among these concerns is trademark protection, where the GAC is pretty much aligned with the interests of the intellectual property constituency.

Brussels will also cover matters such as geographic names protection and procedures for dealing with controversial strings that governments may want to object to.

While ICANN is under no obligation to adopt the GAC’s suggestions wholesale, if it makes substantial concessions its bylaws will likely demand more public comment on the changes.

ICANN’s board indicated last week that it plans to tell the GAC where it disagrees with its advice at a consultation March 17, one day before its San Francisco meeting.

It also said that it plans to approve a Guidebook “as close as practically possible to the form as set out in the Proposed Final Applicant Guidebook” published in November.

UPDATE: I had an opportunity to put Dengate Thrush’s comments to ICANN CEO Rod Beckstrom this afternoon. He said: “I’m not going to forecast when the final Applicant Guidebook will be approved.”

US wants veto power over new TLDs

Kevin Murphy, January 29, 2011, Domain Registries

The United States is backing a governmental power grab over ICANN’s new top-level domains program.

In a startling submission to the ICANN Governmental Advisory Committee, a copy of which I have obtained, the US says that governments should get veto power over TLDs they are uncomfortable with:

Any GAC member may raise an objection to a proposed string for any reason. If it is the consensus position of the GAC not to oppose objection raised by a GAC member or members, ICANN shall reject the application.

In other words, if Uganda objected to .gay, Iran objected to .jewish, or Egypt objected to .twitter, and no other governments opposed those objections, the TLD applications would be killed off.

The fate of TLDs representing marginal communities or controversial brands could well end up subject to back-room governmental horse-trading, rather than the objective, transparent, predictable process the ICANN community has been trying to create for the last few years.

The amendments the US is calling for would also limit the right to object to a TLD on “morality” grounds to members of the GAC, while the current Applicant Guidebook is much broader.

The rationale for these rather Draconian proposals is stability and “universal resolvability”.

The worry seems to be that if some nations start blocking TLDs, they may well also decide to start up their own rival DNS root, fragmenting the internet (and damaging the special role the US has in internet governance today).

The US also wants TLDs such as “.bank” or “.pharmacy” more closely regulated (or blocked altogether) and wants “community” applications more strictly defined.

In the current ICANN Applicant Guidebook, any applicant can designate their application “community-based”, in order to potentially strengthen its chances against rival bids.

But the US wants the Guidebook amended to contain the following provisions:

“Community-based strings” include those that purport to represent or that embody a particular group of people or interests based on historical components of identity (such as nationality, race or ethnicity, religion or religious affiliation, culture or particular social group, and/or a language or linguistic group). In addition, those strings that refer to particular sectors, in particular those subject to national regulation (such as .bank, .pharmacy) are also “community-based” strings.

In the event the proposed string is either too broad to effectively identify a single entity as the relevant authority or appropriate manager, or is sufficiently contentious that an appropriate manager cannot be identified and/or agreed, the application should be rejected.

In practice, this could potentially kill off pretty much every vertical TLD you can think of, such as .bank, .music and .hotel. How many industries have a “single entity” overseeing them globally?

While the goal appears to be noble – nobody wants a .bank or .pharma managed by hucksters – the Community Objection procedure in the Guidebook arguably already provides protection here.

The US also wants the policy allowing the vertical integration of registries and registrars reining in, for TLD applicants to justify the costs their domains will incur on others, and a dramatic overhaul of the trademark protection mechanisms in the Guidebook.

In short, the US wants the new TLDs program substantially overhauled, in ways that are certain to draw howls of protest from many in the ICANN community.

The document does not appear to be official GAC policy yet. It could well be watered down before the GAC meets the ICANN board in Brussels at the end of February.

ICANN said earlier this week that it plans to approve a Guidebook “as close as practically possible” to the current draft, and heavily hinted that it wants to do so at its San Francisco meeting in March.

But if many of the US recommendations were to make it through Brussels, that’s a deadline that could be safely kissed goodbye.

IP lawyers call for halt to new TLDs

Kevin Murphy, January 13, 2011, Domain Registries

Some trademark interests are ratcheting up the rhetoric in opposition to ICANN’s new top-level domains program, with one company calling for it to be scrapped altogether.

While ICANN’s extended public comment period on the proposed final Applicant Guidebook does not end until the weekend, a Danish bloc of companies has already made its objections known.

The most vociferous views so far this week have come from Lundbeck, a drug company that researches treatments for diseases such as Alzheimer’s and Parkinson’s.

Lundbeck trademark counsel Søren Ingemann Larsen accused ICANN of operating “fake” comment periods that ignore feedback from the trademark lobby.

In a cap-happy missive, he said the program should be “HALTED” until ICANN can prove the domain market lacks competition, then “cancelled” if such proof is not forthcoming.

The fact of the matter is that the only entities that are in favour of the Program are the ones who can make money out of it, and that is ICANN and the Registrars. The “internet community”, including private users and brand owners, are NOT interested.

Lundbeck, which has brands such as “Cipralex” and “Xenazine”, does not appear to be a major target for cybersquatters, judging by how many UDRP complaints it has filed (none).

It did however join CADNA, the Coalition Against Domain Name Abuse, at the same time as prolific UDRP user Lego Juris, last November.

Lego, and a few other companies submitting virtually identical comments to ICANN this week, have reiterated criticisms of the program’s trademark protections expressed in previous months.

But they have now also seized upon elements of the latest independent economic report into the costs and benefits of new TLDs, which ICANN published last month.

One extract Lego and the others quote questions whether new TLDs are needed to provide some of the services proposed by community TLD wannabes:

Are there other ways to achieve the primary objectives of the proposed gTLD, such as: (a) second-level domain names; (b) certificates; (c) software tags; and (d) filters that look at content beyond the URL and any tags? How do the alternatives, if any, compare in terms of their likely effectiveness in achieving the primary objectives of the gTLD and the costs they would impose on different members of the Internet community?

It’s an interesting argument – that a community TLD could just as well operate as a second-level domain – not one I recall reading in a long while. I don’t think it has legs.

What next for new TLDs? Part 1 – Unresolved Issues

Kevin Murphy, December 14, 2010, Domain Services

Like or loathe the decision, ICANN’s new top-level domains program appears to have been delayed again.

But for how long? And what has to happen now before ICANN starts accepting applications?

In short, what the heck happened in Cartagena last week?

In this four-part post, I will attempt an analysis of the various things I think need to happen before the Applicant Guidebook (AGB) is approved.

In this first post I will look at the issues that ICANN has explicitly tagged as unresolved, with special reference to trademarks.

Unresolved Issues

ICANN chairman Peter Dengate Thrush, explaining the board’s resolution on new TLDs on Friday, said:

The intention has been, as much as possible, to indicate those areas where the board feels that the work that has been done is sufficient to move to closure… What we’ve also tried to do is indicate which areas are still clearly open for consideration.

The resolution names only two issues that are explicitly still open for further policy development: geographic strings and “morality and public order” objections. I’ll discuss these in a future post.

Issues considered already reflecting “the negotiated position of the ICANN community” include “trademark protection, mitigating malicious conduct, and root-zone scaling”.

But does this mean that the trademark issue, easily the most contentious of these three “overarching issues” is really sufficiently “closed” that we’ll see no more changes to those parts of the AGB?

I don’t think so. While the Cartagena resolutions say trademark protection has been addressed, it also says “ICANN will take into account public comment including the advice of the GAC.”

It may be too late for the IP community to affect changes directly, beyond the comments they’ve already filed, but the GAC, which has already aligned itself with the trademark lobby, may be able to.

Beyond the text of the resolution, ICANN chair Peter Dengate Thrush said in an interview with ICANN head of media relations Brad White:

We’ve spent a lot of time with the trademark community and come up with three new independent mechanisms for protecting trademark rights on the internet. So the sense of board and the sense of the community is that that’s probably a sufficient effort in developing mechanisms. What we now might look at is how we might enhance, tweak and improve those processes, but we’re not going to convene another process to look at yet another kind of solution for intellectual property rights.

In other words, according to Dengate Thrush, ICANN isn’t planning to create any new IP rights protection mechanisms in the AGB, but these mechanisms, such as Uniform Rapid Suspension and the Trademark Clearinghouse, could be still be modified based on comments received from the trademark lobby over the last week or so.

Most of the outcry from the IP lobby recently has called for the specifics of these two mechanisms to be tilted more in favor of trademark interests; there’s been little call for any new mechanisms.

Trademark rights protections also account for two of the 11 issues that the Governmental Advisory Committee has tagged “outstanding” which “require additional discussion”, by my reading.

More on the GAC bottleneck in part two of this post.