Donuts makes private deal with wine-makers

Donuts inked a private side-deal with wine-making regions in order to launch the .wine and .vin new gTLDs
The company signed both Registry Agreements with ICANN late last week, after the wine regions and the European Union stopped complaining.
The EU and regions had filed Cooperative Engagement Process objections with ICANN, saying that Donuts should be forced to protect “geographic indicators” such as Napa Valley and Champagne.
CEPs are often precursors to Independent Review Process complaints, but both were dropped after Donuts came to a private deal.
“The CEP filed by the Wine Regions was withdrawn because we came to a satisfactory private arrangement with the Registry concerned, Donuts,” David Taylor of Hogan Lovells, who represented the wine-making regions, told DI.
Details of the deal have not been disclosed, but Donuts does not appear to have committed to anything that could create compliance problems with ICANN in future.
“It has been a successful negotiation between private parties that avoids policy precedents,” Taylor said. “There are no special changes to these registry agreements (e.g., no new PICs)”
PICs are Public Interest Commitments, enforceable addenda to Registry Agreements that oblige the registry to adhere to extra rules.
So are GIs protected in .wine or not? For now, Taylor won’t say.
“My view is that this is not a victory for either side of the GI debate,” he said. “This is a victory for the wine community (consumers and producers) and ultimately the new gTLD program.”

.wine no longer blocked after EU drops complaint

Donuts and ICANN are currently in the process of signing new gTLD agreements for .wine and .vin, after the European Union and wine sellers dropped objections.
As of today, both gTLDs are “In Contracting” rather than “On Hold”, according to ICANN’s web site.
ICANN revealed earlier this week that the European Union and various wine trade associations have both dropped their Cooperative Engagement Process complaints.
CEP is less formal precursor to a much more expensive and lawyer-hungry Independent Review Process complaint.
With the CEPs out of the way, Donuts is now free to sign its contracts.
Donuts won the auction for .wine back in November, but its application was frozen due to ongoing arguments about the protection of “geographic indicators” representing wine-making regions.
Governments, particularly in Europe and Latin America, had protested that .wine and .vin should not be allowed to launch until areas such as Rioja and Champagne were given special privileges.
Last October, ICANN CEO Fadi Chehade told the French government that it was negotiating with applicants to get these protections included in the contracts.
Either Donuts has agreed to such protections, or the EU and wine-makers have gotten bored of complaining.
My feeling is the former is probably more likely, which may be controversial in itself.
There is no international agreement on GI protection — the US and Australia opposed the EU’s position on .wine — so this may be seen as a case of ICANN creating new rights where none previously existed.

Battles for .chat, .style, .tennis, bingo and .sas over

Seven new gTLD contention sets have been formally resolved with application withdrawals this morning, five of which we haven’t previously reported on.
Most appear to have been settled by private auctions, with Donuts often the victor.
The standout, however, is .sas, an unusual case of a contention set of two would-be dot-brand registries being resolved.
The business software maker SAS Institute, which applied as Research IP, has prevailed over the Scandinavian airline holding company SAS AB for the .sas gTLD.
Both applicants had applied for closed, single-registrant namespaces.
On the regular, open gTLD front, .chat has gone to Donuts after withdrawals from Top Level Spectrum, Radix and Famous Four Media.
.style has also gone to Donuts, after Uniregistry, Top Level Design, Evolving Style Registry and Minds + Machines withdrew their applications.
.tennis is another Donuts win. Applications from Famous Four, Washington Team Tennis and Tennis Australia have been withdrawn, after a failed Community bid from Tennis Australia.
Donuts, finally, beat Famous Four to .bingo.
Afilias and Top Level Spectrum have officially withdrawn their .wine applications. As we reported earlier this week, this leaves Donuts as the sole remaining applicant.
Top Level Spectrum’s bid for .sucks has also been withdrawn, confirming DI’s report from earlier this week that the controversial gTLD has been won by Vox Populi Registry.
But Donuts failed to win .online, withdrawing its application today. Only two applicants — Radix and I-Registry — remain in this once six-way contention set.
We’ll know the winner (my money’s on Radix) in a matter of days, I expect.

Donuts wins .wine auction

Donuts has become the only applicant for .wine and .vin after winning a private auction for .wine, according to sources familiar with the situation.
I gather that the auction, which saw Donuts knock out rival applicants Afilias and Famous Four, happened a couple of weeks ago. I don’t know what the winning bid was.
Neither losing application has yet been withdrawn, presumably because the whole contention set has been placed “On Hold” by ICANN pending talks about the protection of wine-making region names.
As we reported yesterday, ICANN seems to be currently acting as a middleman between Donuts, European governments and wine-makers that want so-called “geographic indicators” specially protected.
A letter (pdf) from ICANN CEO Fadi Chehade to the French government indicated that ICANN expects to make GIs protected, contractually, with the successful .wine and .vin applicants (now, it seems, Donuts).
Domains such as larioja.wine and bordeaux.vin seem set to enjoy some form of protection, reserved for use by eligible parties only, if these talks pan out the way Chehade expects them to.
Donuts was the only applicant for .vin.

.wine applicants changing tune on geo protection?

Aggressive lobbying of ICANN by the wine-making industries on both sides of the Atlantic may be about to bear fruit.
Applicants for .wine and .vin are talking to the organization about providing special protection for a list of “geographic indicator” terms, according to CEO Fadi Chehade.
In a letter to French secretary of state for digital Axelle Lemaire published last week, Chehade said:

The parties involved are now working on devising a mechanism which would offer protections to a reserved list of names, which would be contractually protected through ICANN’s registry agreement, along with a set of rules around how those names could be distributed to parties that have interests in and the rights to them. Once they are finalized, ICANN would be charged with monitoring and ensuring compliance with these commitments.

While the details have not yet been revealed, this appears to be what wine makers have been looking for.
GIs are terms such as “Napa Valley” and “Champagne”. While they are protected under various national and international laws, they don’t enjoy the same degree of global recognition as trademarks.
They do not qualify for inclusion in the Trademark Clearinghouse, so would not automatically be protected when .wine and .vin launch.
ICANN’s Governmental Advisory Committee was unable to reach consensus on what should be done about GIs. European countries wanted protections, but the US, Canada and Australia were against the idea.
Wine makers presented a pretty unified front, however, even when they did not benefit from the support of their own governments.
Industry groups and the European Commission had separately started Cooperative Engagement Processes with ICANN — a prelude to filing Independent Review Process complaints.
These CEPs are evidently what kick-started the current negotiations.
There are three applicants for .wine — Donuts, Famous Four and Afilias. Only Donuts has applied for .vin.
Donuts declined to comment on the talks referred to in the Chehade letter.

US winemakers rebel against their government

Groups representing thousands of US winemakers have come out against .wine and .vin, bringing their government’s position on the two proposed new gTLDs into question.
Seven regional associations, representing close to 2,000 wineries, issued a statement last night raising “strong objections” to the gTLDs with “non-existent to grossly insufficient safeguards”.
The joint statement says:

If granted to unscrupulous bidders, second-level domain names such as napavalley.wine or wallawalla.wine could be held in perpetuity by a company or individual that has never seen a vineyard, cultivated fine wine grapes or made a single bottle of wine.

It’s the first mass objection from US winemakers, but they join colleagues from France, Spain and other European Union nations in their opposition to a .wine that does not respect geographic indicators (GIs).
It also makes the US delegation to ICANN’s Governmental Advisory Committee look rather out of touch with the very companies it professes to be looking out for.
At the ICANN 50 meeting in London last week, US rep Suzanne Radell told the GAC:

The three U.S. wineries that our colleagues in Europe have cited as being privy to the exchanges between the European wine industries and the applicants are, in fact, just three U.S. wineries. If I may emphasize, the United States has thousands and thousands of wineries who are quite interested in this matter and do not support the European model of GI protection. So let’s just please put that to bed.

The US winery groups now objecting comprise almost 2,000 wineries. According to Wikipedia, the US has fewer than 3,000 wineries.
We’re looking at a two-thirds majority objection from the US wine-making industry here.
“The coalition of American quality wine regions representing nearly 2,000 U.S. wineries clearly contradicts Radell’s testimony in London on June 22,” the groups said.
The groups also have Californian congresspeople Anna Eshoo and Mike Thompson on their side. As we reported yesterday, Eshoo has already written to ICANN to urge it to kill off .wine.
The big questions are: will this be enough to change the position the US takes to the GAC in future, and will that help the GAC find consensus on anti-.wine advice?
Australia and Canada have also been vocal opponents of the European demands in the past. They’d need to change their minds too, in order for the GAC to find a new consensus.
Without a GAC consensus, the .wine and .vin applicants have little to worry about.

Democrat congressman sides with France on .wine

US Representative Anna Eshoo has written to ICANN’s top brass to express “deep concerns” about the .wine and .vin new gTLDs and urge that they be permanently killed off.
In a letter (pdf) to CEO Fadi Chehade, Eshoo wrote:

it’s my understanding that the .wine and .vin gTLDs have been met with fierce opposition from the wine industry, both here in the US and around the world. Given these concerns, coupled with the complexities of reaching agreement on Geographic Indications (GIs), I urge you to advocate for the .wine and .vin gTLDs to be permanently withdrawn from consideration.

Eshoo, a Democrat, is breaking rank with the official position of the Obama administration on this, which is that no special treatment is warranted for the two wine-related gTLDs.
Europe, on the other hand, is vehemently opposed to the introduction of either without strong protection for GIs.
At ICANN 50 in London last week the European Commission and France led the charge against approval of the gTLDs, with the Commission even floating the idea of legal action at one point.
France, meanwhile, seems ready to throw ICANN’s ambitions for independence under a bus in order to get what it wants.
Eshoo is ranking member of the House Communications and Technology Subcommittee, which recently passed the DOT-COM Act over her protestations that it was “embarrassing”.
She also represents the Silicon Valley area of northern California, which is known for its wineries.
While a handful of US winemakers do have a decidedly European attitude to GI protections, the US Governmental Advisory Committee delegation last week said that only a few out of “thousands” agree with France.

France slams ICANN after GAC rejects special treatment for .wine

France says that “ICANN is no longer the appropriate forum to discuss Internet governance” after it failed to win support from other governments for special protections in .wine and .vin gTLDs.
The government came to ICANN 50 in London this week apparently determined to secure a Governmental Advisory Committee consensus that .wine should have protection for geographic indicators.
GIs are protected geographic terms such as “Champagne”, “Parma” and “Cheddar” that link a product to the region in which it is traditionally produced. France has a lot of wine-related GIs.
But the GAC — as I think everyone, including France, expected — failed to come to an agreement.
The GAC’s London communique (pdf) reads:

There was further discussion on the issue of .wine/.vin, but no agreement was reached because of the sensitive nature of the matter.
The matter of .wine and .vin was raised at the High Level Governmental Meeting, where some members expressed concerns in terms of ICANN’s accountability and public policy. These concerns are not shared by all members.

In the absence of a consensus GAC objection, the most likely outcome is ICANN pushing the competing .vin/.wine applicants along the contention resolution process to auction.
France has won a lot of media coverage this week, throwing out allegations such as the idea that ICANN is “opaque”, and questioning ICANN’s ability to do its job properly.
Quizzed about France’s statements at a press conference on Monday, ICANN CEO Fadi Chehade pointed out that studies have show ICANN is extremely transparent and wondered aloud whether France’s position is the one where you “scream that everything’s broken when you don’t get what you want”.
Today’s French statement is a little, but not much, more relaxed. Translated, it partially reads:

Current procedures at ICANN highlight its inability to take into account the legitimate concerns of States and to ensure common resource management in the direction of respect for cultural diversity and balance of interests in economic sectors that its decisions affect.
…
Accordingly, it will propose to its European partners and all other stakeholders to reflect on the future of Internet governance based on transparency, accountability, and equal stakeholders. Commission also believes that ICANN is no longer the appropriate forum to discuss Internet governance.

The government did, however, reiterate its support for the notion of multi-stakeholder internet governance.
French wine producers were less diplomatic. We received a statement from ANEV, the Association Nationale des Elus de la Vigne et du vin, this afternoon that called upon the French government and European Union to block all domain names that use GIs in violation of local law.
Personally, I don’t think that’s going to happen.
During an ICANN session on Monday, the French GAC rep used the .wine controversy to call for the creation of a “General Assembly” at ICANN.
I’m working from the transcript, which has been translated by ICANN into English, and some media reports, but it seems that France is thinking along the lines of an ITU-style, voting-based rather than consensus-based, approach to generating GAC advice. I may be wrong.
During Monday’s press conference, Chehade did not oppose France’s suggestions, though he was careful to point out that it would have to be approved by the whole ICANN community first (implicitly a tall order).
A vote-based GAC could well favor European Union countries, given the make-up of the GAC right now.
On the .wine issue, it’s mainly a few Anglophone nations such as the US, Canada and Australia that oppose extra GI protections.
These nations point out that the GI issue is not settled international law and is best dealt with in venues such as the World Trade Organization and the World Intellectual Property Organization.
France actually says the same thing.
But while France says that ICANN’s refusal to act on .wine jeopardizes GI talks in other fora, its opponents claim that if ICANN were to act it would jeopardize the same talks.
Chehade said during the Monday press conference that France had not yet run out of ways to challenge ICANN’s position on this, so the story probably isn’t over yet.

Euro govs livid as ICANN takes .wine off ice

The new gTLD applications for .wine and .vin are now live again, raising the ire of European governments.
ICANN chair Steve Crocker has written to the European Commission, along with the governments of France, Spain and the US that the three applications are once again being processed.
That’s after a 60-day temporary freeze, ostensibly in order to give the governments more time to push applicants for geographic indicator protections, expired earlier this month.
Geographic indicators are terms such as “Champagne” and “Bordeaux” which are protected under European law — they have to be produced in those regions — but not in the US and other non-EU countries.
France is expected to point to the .wine controversy as evidence of how ICANN is deficient as an organization.
“The problem is it is totally opaque, there is no transparency at all in the process,” Axelle Lemaire, minister for digital affairs, told the Financial Times today.
France also reckons ICANN’s decision will impact transatlantic trade negotiations unrelated to the domain name industry, the FT reported.
Lemaire’s comments about transparency are odd, given that pretty much the entire debate — whether in person at ICANN meetings or through correspondence — has been put on to the public record by ICANN.
The issue seems to be rather than the ICANN process does not give national governments a means to push their agendas onto the industry unless all participating governments agree.
The Governmental Advisory Committee was unable to come to a consensus on .wine and .vin — EU states wanted strong protection for GIs, but the US, Canada and Australia disagreed.
Lacking GAC consensus, ICANN had no mandate to act on requests for individual government requests.
But when its board decided to move ahead on the new gTLDs in March, the GAC noted that its process for making the decision may have broken its bylaws.
The EC, UK, France, Spain, Italy, Portugal, Luxembourg and Switzerland then filed formal Requests for Reconsideration with ICANN, asking for the decision to be overturned.
Those RfRs were rejected by ICANN’s Board Governance Committee a month ago.
Last week Crocker wrote to governments on both sides of the debate to confirm that, with the 60 days expired and no outstanding GAC advice, .wine and .vin will proceed to contention resolution and contracting as normal.
The letters are all pretty much the same, with Crocker explaining the process to date and suggesting again that ICANN be not be the best forum for governments to hash our their disagreements over GI protections.
Crocker told (pdf) EC vice president Neelie Kroes:

should the GAC be in a position to provide any additional advice on this issue, we would welcome it. Similarly, should governments succeed in resolving these issues in other global trade fora such as the WTO [World Trade Organization] that, too, will be taken into account.

Expect the debate to continue this week at ICANN 50, the public meeting that kicked off in London yesterday.
The EU and its most-affected member states are not going to let this die.

Four governments file ICANN appeals over .wine

France, Spain, the UK and the European Commission have formally appealed ICANN’s decision to allow the .wine and .vin new gTLD applications to proceed.
In doing so, they’ve become the first national governments to file Requests for Reconsideration with ICANN since the process was introduced in 1999.
All four governments are demanding that ICANN take another look at its March 22 resolution in which it said .wine and .vin could be taken off hold and proceed through the remainder of the new gTLD process.
The four applications in question (three for .wine, one for .vin) have been frozen since the Beijing meeting a year ago, at which the Governmental Advisory Committee said it needed more time to consider them.
European nations, with some Latin American support, think that wine-related gTLDs should not be approved unless the applicants agree to give special protection to geographic indicators, such as “Champagne”.
The RfRs are all, as you might expect, a bit “inside baseball”, focusing on the minutiae of ICANN’s bylaws.
What’s illegal and what isn’t?
A key concern is that ICANN’s New gTLD Program Committee, in passing the resolution, relied in part on an analysis of the legal issues (pdf) conducted by French law professor Jerome Passa.
Passa concluded that there’s nothing under the law to prevent ICANN assigning .wine to Donuts, one of the applicants, because “wine” is not a protected GI string.

As regards the applications for the assignment of the new gTLDs ‘.vin’ and ‘.wine’ filed by the Donuts company, there is no rule of the law of geographical indications, nor any general principle which obliges ICANN to reject the applications or accept the applications under certain specific conditions.

From my reading of Passa’s opinion, a domain name containing a GI would only be illegal if it was used to sell counterfeit wines.
For example, it would be perfectly okay for a Chinese registrant to own champagne.wine if he used it to sell genuine champagne from Champagne, but it would be uncool if he used it to sell champagne-style sparkling wine.
Passa doesn’t seem to think it would be necessarily illegal for a registry to sell that domain, or for ICANN to delegate a .wine gTLD that could possibly be abused by said registrant in future.
The four governments are not so much concerned by his legal arguments (though they do disagree with them), but rather by the fact that the GAC was not shown Passa’s opinion before the NGPC made its decision
Under section XI-A of ICANN’s governing bylaws, the GAC “shall have an opportunity to comment upon any external advice received prior to any decision by the Board.”
By not giving Passa’s analysis to the GAC prior to its March 22 resolution, the NGPC violated ICANN’s bylaws, the four governments argue.
However, ICANN has already responded to this argument and others, suggesting that the four new RfRs may already be dead in the water.
In a resolution last Thursday the NGPC stated that the bylaws were not broken because the requirement to show the GAC “external expert advice” only applies when the board is determining matters of policy.
An explanation of last week’s NGPC decision says:

the NGPC has concluded that there was no process violation or procedural error under the Bylaws, particularly because the Independent Legal Analysis was not sought as External Expert Advice pursuant to Article X1-A, or any other Bylaws provision. Rather, the Independent Legal Analysis was sought pursuant to Module 3.1 of the Applicant Guidebook, and partly at the GAC’s suggestion.

Basically, it’s round two the old “policy versus implementation” debate, in which the ICANN board and GNSO Council have regularly sparred, kicking off with new opponents.
Spain argues in its RfR that the bylaws “the supreme governing rules” of ICANN, apply to implementation matters too and that there’s “no legal basis” for ICANN’s finding that they only apply to policy.
It further notes that a legal analysis of the related .amazon new gTLD controversy, also written by Passa, has been circulated to the GAC for comment as per the bylaws.
Disturbing views on “consensus”
In order for an RfR to be successful, complainants have to show that the ICANN board or NGPC did not consider all the evidence they should have at the time of their decision.
The governments are only slippery ground here, as all they can seem to point to are the barrage of letters that have been sent to ICANN by wine producers, associations and governments over the last year or so.
It may not have mentioned each one explicitly in its resolution but it’s very unlikely, in my view, that the NGPC was not aware of these letters when it made its call.
More significantly, these objecting governments are arguing that the NGPC was misled by GAC chair Heather Dryden about the extent of “consensus” in the GAC with regards .wine and .vin.
Dryden told ICANN in a September 9, 2013 letter that the GAC had not reached a consensus to object to the two new gTLDs, so they could proceed.
It appeared that the GAC — with members such as the US, Canada and Australia disagreeing with Europe — had simply hit an immovable brick wall in its talks, so consensus was never going to be reached.
France states in its RfR that the Dryden letter was sent without first consulting the GAC:

The GAC Chair’s statement that “The GAC has finalised its consideration of the strings .wine and .vin and further advises that the applications should proceed through the normal evaluation process” is not a consensus view of the GAC as per the aforementioned Operating Principle, but a mere interpretation and opinion of the GAC Chair.

Where France’s opinion, which seems to match previous statements by the European Commission, gets disturbing is in its interpretation of what “consensus” means. It wrote:

in reality a significant number of GAC members were in consensus not to allow the .WINE and .VIN applications to proceed through evaluation until sufficient additional safeguards were in place. The reality is that the GAC as a whole could not reach consensus, what does not necessarily imply that the strings can proceed through the normal evaluation process without further consideration.

It’s worded awkwardly, but France seems to be saying that agreement among a certain subset of GAC members (ie, the Europeans) somehow constitutes a GAC consensus that the applications should be indefinitely delayed.
It’s disturbing close to arguing for majority rule on the GAC, which as I explained in depth earlier this week is something to be avoided at all costs.
Anyway, that’s the second prong of the RfR attack: whether the NGPC had been misled about the GAC’s views.
The four separate RfRs appeared on the ICANN web site today. The file labeled as being from the European Commission appears to be a copy of the French one; possibly an uploading error.
UPDATE: It was an uploading error. You can find a copy of the European Commission RfR here (pdf).