Why ICANN’s CEO did not vote on .xxx

President and CEO Rod Beckstrom has explained his decision to abstain from voting on ICM Registry’s .xxx top-level domain when it came before the ICANN board last month.
As expected, Beckstrom provided substantially the same explanation for his abstention as he did at the Brussels meeting last June – not on the merits of .xxx, but because he had legal concerns.
Specifically, he abstained because he objected to one of the majority findings of an Independent Review Panel, which forced .xxx back to the table last year after ICANN had tried to reject it.
Beckstrom wrote, in a recently published statement (pdf):

while I accept the contribution to ICANN’s accountability and transparency provided by the existence and the use of the independent panel review process, I nonetheless remain concerned about the determination by two of the three panelists that the ICANN board should not use business judgment in the conduct of its affairs.

This refers to the “business judgment rule”, a piece of California law under which courts give deference to the judgment of company directors, unless their decisions were made in bad faith.
If an IRP panel – the last port of appeal for companies upset with ICANN’s decisions – were required to use this rule, it would substantially raise the bar for a successful complaint.
But the panel in the case of ICM Registry versus ICANN (the only such panel to date) decided, by a 2-1 vote, that ICANN’s actions should be “appraised not deferentially but objectively.”
This allowed ICM to win its case by merely showing ICANN had acted outside its bylaws, and not necessarily in bad faith.
The dissenting IRP panelist, Dickran Tevrizian, wrote: “The rejection of the business judgment rule will open the floodgates to increased collateral attacks on the decisions of the ICANN Board of Directors”.
However, the IRP did not specifically rule that ICANN “should not use business judgment” as Beckstrom’s statement suggests, just that the IRP was not obliged to defer to it.
Beckstrom’s statement also gives a shout-out to the Governmental Advisory Committee:

In addition, I note the concerns of the GAC, which while not expressed as a clear decision, was nonetheless directional.

As I previously blogged, ICANN approved the .xxx contract over the objections of some members of the GAC, using the fact that the GAC’s official advice was vague enough to be worked around without explicitly rejecting it.
Beckstrom, incidentally, did not even sign the .xxx contract with ICM, which I believe is a first for an ICANN registry contract. It was instead signed by general counsel John Jeffrey.
(via InternetNews.me)

NAF sees rise in UDRP cases

The National Arbitration Forum saw a steep increase in the number of cybersquatting complaints filed under the Uniform Dispute Resolution Policy last year.
According to a NAF announcement, 2,177 cases were filed in 2010, up 24% on the previous year.
That seems to be roughly in line with the experience of the World Intellectual Property Organization, which recently reported a 28% increase in UDRP complaints to 2,696 last year.
On that basis, it appears that WIPO has ever so slightly widened the market share gap between itself and NAF.
Between 1999 and the end of last year, NAF had handled 15,763 domain disputes, compared to WIPO’s over 20,000.
A basic UDRP filing covering a few domain names with a single panelist presiding costs about $1,500 with both providers, not including lawyers’ fees and other expenses.
With roughly 35,000 complaints filed to date, we can estimate that the revenue from UDRP flowing to WIPO and NAF together has been in the ball park of $50 million in slightly over 11 years.

Go Daddy: let registrars seize domain names

Go Daddy has called for domain name registrars, not registries, to be responsible for seizing domain names associated with criminal activity.
In testimony submitted yesterday to the US House Subcommittee on Intellectual Property, Competition and the Internet, general counsel Christine Jones said that instructing registries to turn off domains can sometimes cause more harm than good.
Registrars, she said, often aid law enforcement with investigations into, for example, child pornography, and that registry interference can be dangerous.
In her prepared remarks (pdf), Jones wrote:

The registry in many instances has no knowledge of these highly confidential and sensitive matters, and we have experienced several occasions in which the sudden disabling of a domain name by a registry disrupted weeks or months of work investigating serious criminal activity by the registrant.
We would like to see future government and private industry efforts focused on naming the registrar as the primary contact for courts and law enforcement regarding all criminal and civil matters relating to domain names.

Also testifying was John Morton of US Immigration and Customs Enforcement, the agency responsible for recent controversial domain name seizures under Operation In Our Sites.
The ICE operation has so far bypassed registrars, going directly to registry operators such as VeriSign. This is arguably more efficient, and avoids jurisdictional problems associated with non-US registrars.
Other registrars have previously echoed Jones’ remarks. Registrars have the relationship with the customer, after all. When a domain is seized by a registry, they have to deal with the fallout.
As we saw with the first phase of the ICE seizures last year, the fact that the registrar had no knowledge of the matter led to a misunderstanding and ICANN being blamed in several media reports.
But yesterday’s Congressional hearing, which aimed to gather information for legislation expected to replace the Combatting Online Infringement and Counterfeiting Act (COICA), spent very little time discussing domains.
At one point, Rep. John Conyers took Morton to task for ICE’s accidental seizure of over 80,000 third-level domains as part of a child porn sting.
Jones was also quizzed about the difference between filtering domains at the ISP level (which she said was unworkable and potentially dangerous) and blocking them at the registry-registrar level.
But Google was in the room, in the form of general counsel Kent Walker, and he took most of the flak, with Congressmen lining up to grill him over Google’s apparently happiness to connect users to bootleg digital content and counterfeit physical goods.

Man writes to ICANN with Whois look-up

A second person has asked ICANN for “a list of all registered domains”, using the organization’s freedom of information policy.
Jorge Sabate made a Documentary Information Disclosure Policy filing (pdf) last December, published this week, in which he made the request. He added:

If you are unable to provide the whole information, i would like to know the dste [date] was created the domain name christiansmith.com

That’s right. Sabate’s method of doing a Whois look-up on a single domain name appears to involve asking ICANN for a database of all 200 million registered domain names.
He’s not the first person to use the DIDP to make such a strange request. One Barry Carter asked for the same list last September, and was similarly unsuccessful.
No such database exists, of course, so ICANN had to rebuff both men.
But to answer your question, Mr Sabate: christiansmith.com was originally registered November 13, 1998.

ICANN sponsors line up for Singapore

ICANN’s web page for its Singapore meeting has gone live, and the organization looks to have already attracted almost $200,000 in sponsorship fees.
The meeting, which officially begins June 19 at the Raffles City Convention Center, is widely expected to be the meeting when ICANN finally signs off on its Applicant Guidebook for new top-level domains.
As such, I expect it’s going to see a fair bit of sponsor interest.
Prices have been reduced somewhat since the San Francisco meet last month, due to some complaints from domain name companies, but there are still some big-ticket opportunities, including a $250,000 Diamond deal and two $150,000 Platinum Elite deals.
So far, five sponsors have already signed up, the biggest spenders being Neustar and the Public Interest Registry, which have both opted for $75,000 Platinum-tier arrangements.
Don’t expect any lengthy security briefings this time around – Singapore is one of the safest cities in the world, due in part to its harsh judicial system. You’re more likely to get beaten up under court order than by a mugger.
The weather: hot and wet.
The host of the meeting, which is ICANN’s 41st, is the Infocomm Development Authority of Singapore.

New UDRP guidelines reflect unpredictability

Cybersquatting cases filed under the Uniform Dispute Resolution Policy have become less predictable, judging from complex new guidelines for adjudication panels.
The World Intellectual Property Organization has just published WIPO Overview 2.0, which sets out over 10 years of UDRP precedent for panelists to consider when deciding future cases.
The document is a must-read for domain investors and trademark holders.
Updated for the first time since 2005, it contains new sections covering developments such as registrar parking, automatically generated advertising and proxy/privacy services.
The Overview has quadrupled in length, from 5,000 to 20,000 words. With that, has come increased complexity. WIPO notes:

While predictability remains a key element of dispute resolution systems, neither this WIPO Overview nor prior panel decisions are binding on panelists, who will make their judgments in the particular circumstances of each individual proceeding.

The document reflects decisions already made, rather than creating new law, but as such it also reflects the tilting balance of the UDRP in favor of complainants.
For example, while the 2005 guidelines presented majority and minority views on whether [trademark]sucks.com domains meet the “confusing similarity” criterion, Overview 2.0 presents only a “consensus view” that they do, suggesting that it is now settled law.
On whether parking a domain with PPC ads meets the “legitimate interests” criterion, the guidelines refer to precedent saying that the ads must not capitalize on a trademark:

As an example of such permissible use, where domain names consisting of dictionary or common words or phrases support posted PPC links genuinely related to the generic meaning of the domain name at issue, this may be permissible and indeed consistent with recognized sources of rights or legitimate interests under the UDRP, provided there is no capitalization on trademark value

Supporting this view, the Overview states that “bad faith” can be shown even if the domain owner does not control the content of their parked pages and makes no money from the ads:

Panels have found that a domain name registrant will normally be deemed responsible for content appearing on a website at its domain name, even if such registrant may not be exercising direct control over such content – for example, in the case of advertising links appearing on an “automatically” generated basis… It may not be necessary for the registrant itself to have profited directly under such arrangement

There is a defense to this, if the respondent can show they had no knowledge of the complainant’s trademark and made no effort to control or profit from the ads.
Because the UDRP calls for “registration and use in bad faith”, the guidelines also ask: “Can bad faith be found if the disputed domain name was registered before the trademark was registered or before unregistered trademark rights were acquired?”
The original guidelines said no, with a carve-out for cases where the squatter anticipated, for example, a future corporate merger (microsoftgoogle.com) or product release (ipad4.com).
The new guidelines are a lot less clear, calling it a “developing area of UDRP jurisprudence”. The document lists several cases where panelists have chosen to essentially set aside the registration date and concentrate instead just on bad faith usage.
The question of whether a renewed domain counts as a new registration is also addressed, and also has a couple of exceptions to give panelists more flexibility in the decisions.
The Overview covers a lot of ground – 46 bullet points compared to 26 in the first version – and will no doubt prove invaluable reading for people filing or fighting UDRP cases.
The guidelines are not of course set in stone. The 2005 version read:

The UDRP does not operate on a strict doctrine of precedent. However, panels consider it desirable that their decisions are consistent with prior panel decisions dealing with similar fact situations. This ensures that the UDRP system operates in a fair, effective and predictable manner for all parties

But the new version adds a caveat to the end of the sentence: “while responding to the continuing evolution of the domain name system.”

UDRP filings hit new record

The World Intellectual Property Organization handled more cybersquatting cases in 2010 than in any other year to date, according to just-released statistics.
WIPO said today it received 2,696 UDRP complaints last year, up 28% over 2009’s 2,107 cases.
But the number of domains covered by these cases actually slipped a little, from 4,688 to 4,370, according to WIPO.
Since the policy was created in 1999, WIPO says it has decided over 20,000 UDRP complaints, covering over 35,000 domain names in 65 TLDs.
It may sound like a lot, but it’s actually a vanishingly small percentage of the 205.3 million domain names that are registered across all TLDs today.

ICANN asks the US to cut it loose

ICANN has officially requested the loosening of its contractual ties to the US government.
In a letter to the National Telecommunications and Information Administration (pdf), ICANN president Rod Beckstrom said the US should finally make good on its promise to privatize the management of the internet’s naming and addressing resources.
Currently, ICANN manages the so-called IANA functions, which give it powers over the domain name system’s root zone, under a no-fee procurement deal with the NTIA.
That contract is up for renewal in September, and the NTIA recently issued a Notice Of Inquiry, soliciting public comments on how the IANA functions should be handled in future.
In Beckstrom’s response to the NOI, he says that a US government procurement contract is not the most suitable way to oversee matters of global importance.
Its close links to the NTIA are often cited by other governments as proof that ICANN is an organization that operates primarily in the interest of the US.
Beckstrom said there is “no compelling reason for these functions to be performed exclusively pursuant to a U.S. Government procurement contract.”
He noted that the original plan, when ICANN was formed by the Clinton administration in 1998, was to transition these functions to the private sector no later than September 2000.
The privatization of the DNS is, in effect, 11 years late.
Beckstrom wrote:

The IANA functions are provided for the benefit of the global Internet: country code and generic top-level domain operators; Regional Internet Registries; the IETF; and ultimately, Internet users around the world. Applying U.S. federal procurement law and regulations, the IANA functions should be performed pursuant to a cooperative agreement.

His position was not unanticipated.
At the start of ICANN’s San Francisco meeting last week, Beckstrom and former chairman Vint Cerf both said that a “cooperative agreement” would be a better way for the US to manage IANA.
VeriSign’s role in root zone management is currently overseen by this kind of arrangement.
The NTIA has specifically asked whether IANA’s three core areas of responsibility – domain names, IP addresses and protocol parameters – should be split between three different entities.
Beckstrom also argued against that, saying that there are “many examples of cross-functional work”, and that ICANN already has the necessary expertise and relationships in place to handle all three.
The NOI (pdf) is open until end of play next Thursday, March 31. Half a dozen responses have already been filed here.
At least one respondent believes the IANA powers could be broken up.

Facebook files 21 domain name complaints

Facebook has filed a UDRP complaint covering 21 domain names that include its trademark.
All seem to belong to the same domainer: Mike Mann. His company, Domain Asset Holdings, which has over 162,000 domains to its name, is listed in the Whois for each.
It’s the largest single UDRP filing by Facebook to date, and only its second to include brand+keyword domains.
The contested domains include: aboutfacebook.com, facebookbabes.com, facebookcheats.com, facebookclub.com, facebookdevelopment.com, killfacebook.com and many more.
All 21 covered by the UDRP are currently available for sale at Mann’s DomainMarket.com, with list prices between $350 and $8,000 and above.
A quick search on that site for other well-known social media brands returned dozens of results.
Mann is known as co-founder of BuyDomains, and more recently as one of the former owners of sex.com, which sold for $13 million last year.

Canon’s sexy reason for .canon?

Canon made headlines and gave a small amount of momentum to the idea of “.brand” top-level domains when it announced, a year ago, that it would apply to ICANN to manage .canon.
There are plenty of good reasons why the company would want the TLD.
Beyond the more obvious search-oriented branding opportunities, some say Canon could try to boost customer loyalty and create new revenue streams by offering camera buyers services such as photo hosting at personalized .canon domains.
But here’s another reason that doesn’t seem to have received many column inches: as I recently discovered from a few continental friends, “canon” also means “sexy” in French slang.
I expect this coincidence was the very least of Canon’s concerns when its executives met to discuss their .brand TLD strategy, but it does highlight a major issue that some companies will have to deal with when the ICANN new gTLD program gets underway.
They may think their brand is unique, but unless they’ve done their homework they may find themselves competing with, or blocked by, equally legitimate applicants from other nations.
Companies planning to participate in the program – even only as a challenger – will need to have done a fairly daunting audit of their key brands if they want to avoid nasty surprises.
Ensuring a brand is a unique, registered trademark in one’s home territory is only the beginning.
Companies need to also ask themselves what, if anything, their mark means in other languages, what it looks like in non-Latin scripts such as Arabic and Chinese, and whether it has similarity of “appearance, phonetic sound, or meaning” to any other potential new TLD string.
We already have at least one double entendre in the DNS – the ccTLD for the tiny Pacific island of Niue, .nu, means “.naked” in French, as the registry discovered to its benefit many years ago.
If Canon had not decided to apply for .canon, could a French-speaking pornographer have applied for the TLD instead, on the quite reasonable basis that it is also a “generic” string?
ICANN’s trademark protection policies would make such a delegation highly unlikely, but Canon would have found itself forced into a defensive fight to protect its mark.
Of more immediate concern to the company is of course the question of who gets to register canon.xxx.
It seems likely that ICM Registry’s sunrise policy is strong enough to ensure that this particular .xxx domain is never used for pornography, but only if a) no existing pornographer has a trademark on the string and b) Canon remembers to defensively register.
In the unlikely event that Canon forgets to defend its mark, a pornographer who registered canon.xxx for a legitimate French porn site could well find himself with a UDRP-winning domain.
And don’t get me started on Virgin…