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Crunch day for new TLDs

Kevin Murphy, September 24, 2010, Domain Registries

The ICANN board has kicked off a two-day retreat during which it will attempt to finalize the rules for applying for new top-level domains.

The big question for many is this: are more delays or the cards, or will ICANN finally put a firm timeline on the first new TLD application round?

One constituency that seems bent on more delays is the intellectual property community.

Dozens of organizations, including Microsoft, AT&T, Time Warner, Adobe and Coca-Cola, told ICANN in late July that the current IP protections in version 4 of the Draft Applicant Guidebook are not good enough.

The proposed Uniform Rapid Suspension process has become bloated and burdensome and the Trademark Clearinghouse does not go far enough to proactively protect trademarks, they say.

Just this week, it emerged that the International Trademark Association has called for further studies into the potential economic harms of new TLDs, which could easily add a couple of quarters of delay.

But there are good reasons to believe ICANN is done with being pushed around by IP interests.

As I reported earlier this week, chairman Peter Dengate Thrush has recently publicly stated that the current state of intellectual property protection in the DAG is a compromise position reflecting the views of all stakeholders and that IP lawyers “have had their chance”.

It’s not just IP interests that will be affected by the ICANN board’s discussions this weekend. The board’s decisions on “vertical integration” will make or break business models.

The VI issue, which governs whether registrars can apply for new TLDs and whether registrars can act as registrars, is perhaps the most difficult problem in the DAG. The working group tasked with sorting it out failed to reach consensus after six months of debate.

The DAGv4 currently says, as an explicit placeholder, that there can be no more than 2% cross-ownership of a registry by a registrar and vice versa.

This would mean that registrars that want to get into the TLD game, such as Demand Media’s eNom, would not be allowed to apply.

It may also cause problems for publicly listed registries such as VeriSign and Neustar, or registries that already have registrar shareholders, such as Afilias.

The proposals on the table include raising the ownership cap to 15% to eliminating it altogether.

A move by ICANN to restrict ownership will certainly attract allegations of anti-competitive behavior by those companies excluded, while a move too far in the opposite direction could lead to accusations that the rules do not go far enough to protect registrants.

There are no correct answers to this problem. ICANN needs to find a balance that does the least harm.

Also up for debate will be the rules on how governments and others can object to new TLD applications on “morality and public order” grounds.

Following the report of a working group, which I blogged about here, it seems likely that the term “morality and public order” will be replaced entirely, probably by “Objections Based on General Principles of International Law”.

If the board adopts the recommendations of this “Rec6” working group, there will be no special provision in the Guidebook for governments to make objections based on their own national laws.

There’s also the suggestion that ICANN’s board should have to vote with a two-thirds super-majority in order to deny a TLD application based on Rec6 objections.

It’s another almost impossible problem. Some say the Rec6 recommendations as they currently stand are unlikely to appease members of the Governmental Advisory Committee.

In summary, ICANN’s board has just two days to define the competitive parameters of a market that could be worth billions, figure out how to politely tell some of the world’s largest IP rights holders to back off, and write the rule-book on international governmental influence in the new TLD process.

I predict a small boom in sales of coffee and pizza in the Trondheim region.

Group wants trademark study before new TLDs launch

Kevin Murphy, September 21, 2010, Domain Services

The International Trademark Association has told ICANN it believes a study into the economic “harms” of launching new TLDs is “essential” before the program gets under way.

INTA president Heather Steinmeyer wrote, in a September 8 letter (pdf) published today (my emphasis):

We applaud the recommendation… to conduct a study to assess the harms associated with intellectual property abuse and related forms of consumer fraud in the domain name system, including how the current gTLDs have affected intellectual property and consumers since their introduction. Indeed trademark owners believe that such a study is not only a sensible recommendation, but an essential prerequisite before any rollout of new gTLDs.

Steinmeyer offered INTA’s assistance with any such study.

The recommendation she refers to can be found in “An Economic Framework for the Analysis of the Expansion of Generic Top-Level Domain Names”, a report prepared for ICANN by three independent economists in June.

That report made a number of suggestions for possible further studies of the possible benefits and harms (although Steinmeyer only mentions the harms) of introducing new TLDs. It did not make any firm conclusions.

Following a public comment period that ended July 22, the status of that report appears to be ‘in limbo’.

The public comments have not yet been compiled into a summary and analysis document and as far as I can tell no other action has been taken on the report’s recommendations.

At least one ICANN director, chairman Peter Dengate Thrush, seems to consider the problem of balancing trademark protection and other parties’ interests pretty much resolved.

Just last week, in a fairly strongly worded statement at the Internet Governance Forum in Vilnius, Lithuania, he said:

The IP lawyers… have had their chance to make all these cases in a five-year process, and the intellectual property protections that have been put in place are the result of a delicate balance that has been wrought with everybody in the community, not just with the IP lawyers. IP lawyers always want more protections.

Some Skype domain names still owned by ex-employees

Kevin Murphy, August 10, 2010, Domain Policy

Oops! A number of Skype’s domain names are still registered in the names of people who no longer work for the company.

The embarrassing oversight was revealed in the company’s S-1 registration statement (huge HTML file), filed yesterday as the company prepares to launch its IPO.

Here’s the relevant section, with my emphasis.

Third parties have registered domain names that contain the Skype trademark without our consent, and a small proportion of the Skype domain names are registered in the names of our former employees rather than in our name. While we are seeking to have these domain names transferred to us, we may not be successful and to the extent that Skype domain names are not under our control in certain countries, it could hinder our marketing efforts, cause confusion to our users and may harm our reputation in those countries if those domain names are used in ways unrelated to our business or in ways with which we would not agree.

The company appears to be having a hard time protecting its brand in the offline world, too.

According to the S-1, News Corp arm BskyB, which runs Sky TV in the UK, has been objecting to Skype’s trademark applications, and it recently manage to block one such application in the EU.

It’s also having problems getting trademark protection in Asia, where others have registered very similar marks.

Brand owners drop hints about .brand TLD plans

The flood of negative comments to ICANN yesterday almost obscured the fact that a few companies have hinted that they will apply for their own “.brand” top-level domains.

As Antony Van Couvering first noted on the Minds + Machines blog, IBM’s comment on version four of the Draft Applicant Guidebook makes it pretty clear the idea of a .ibm is under consideration.

IBM’s filing raises concerns about the issues of sunrise periods and vertical integration, with particular reference as to whether .brand owners would be exempt from such things.

This suggests IBM is thinking about its own .brand.

If we make the (admittedly cheeky but probably realistic) assumption that the large majority of comments filed with ICANN are self-serving, we can infer that anyone taking in an interest in the nuts and bolts of running a new TLD has probably considered applying for one.

Other than IBM, I’ve notice two others so far: Microsoft and the American Red Cross.

Microsoft, while generally opposed to a large-scale new TLD launch, is very concerned about parts of the DAG that would allow ICANN to transfer a .brand delegation to a third party if the original registry were to shut down for whatever reason.

In other words, if Microsoft one day decided that running “.windows” was a waste of time and decided to shut it down, could ICANN appoint Apple to take it over?

I suggest that this is something that you only really worry about if you’re thinking about applying for a .brand TLD.

The American Red Cross comment contains references to a hypothetical scenario where it applies for its own TLD throughout.

It’s especially concerned that its administrative overheads would increase due to the high ICANN application fees, eating into the money it can spend on worthier causes.

To date, Canon is the only company I’m aware of to publicly state it will apply for a .brand.

Will new TLDs be delayed by the trademark owner outcry?

Yesterday’s flood of criticism from big trademark holders has put another question mark next to ICANN’s plan to finalize the new top-level domain application process this year.

Heavy-hitters including Microsoft, AT&T, Time Warner, Adobe and Coca-Cola filed strong criticisms of the trademark-protection mechanisms in version four of the Draft Applicant Guidebook, and urged ICANN to delay the new TLD launch until the perceived weaknesses are addressed.

The concerns were echoed by the Motion Picture Association of America, the International Olympic Committee, Nestle, the International Trademark Association, Lego, the World Intellectual Property Organization, the American Intellectual Property Law Association, News Corp, the BBC and the American Bankers Association, among others.

Two ICANN registrars, MarkMonitor and Com Laude, also threw in with the anti-DAGv4 crowd. Indeed, MarkMonitor appears to have orchestrated at least a part of the trademark owner commentary.

It’s clear that many IP owners feel they’re being ignored by ICANN. Some organizations, notably WIPO and Time Warner, filed scathing criticisms of how ICANN makes policy.

These aren’t insignificant entities, even if some of their comments read like cases of throwing toys out of the pram.

After conversations with others, I know I’m not the only one who believes that this outcry could add delay to the new TLD process.

It certainly casts doubt on comments made by ICANN chair Peter Dengate Thrush in Brussels last month to the effect that the trademark protection portions of the DAG were very close to being finalized.

Trademark owners, including most of the outfits listed above, are concerned that the Uniform Rapid Suspension policy, designed to create a faster and cheaper version of the UDRP, has become bloated and now in some cases could take longer than a UDRP proceeding.

They also don’t think the Trademark Clearinghouse, a database of brands maintained by ICANN that new TLD registries would be obliged to protect, goes far enough to protect their marks. The previously proposed Globally Protected Marks List seems like a preferred alternative.

ICANN currently hopes to have the final guidebook close to readiness by its public meeting in Cartagena, Colombia, this December. Its board of directors will meet over a weekend in September to try to knock the document into shape. I don’t envy that task.

There’s a possibility, of course, that ICANN will soldier on with its time-line regardless. Dengate Thrush indicated in an interview last month that he did not want trademark issues to delay the launch any more than they have already.

Asked about the IP lobby’s concerns with the speed of the URS, he told the World Trademark Review:

I have conceptually no problem with making sure that expedited processes are available. If this one turns out to be too slow, we’ll do something else. What we can’t have is the hold up of the entire process until this is resolved.

It’s wait and see time again, but at the very least I think it’s pretty clear that the new TLD launch timeline is more in doubt today than it was 24 hours ago.