DoJ says new gTLD private auctions might be illegal

Companies hoping to resolve their new gTLD contention sets via private auction are about to get a rude awakening: according to the US Department of Justice, they might be illegal.
Portfolio applicant Uniregistry, the company founded by domainer Frank Schilling, said today that the DoJ has told it that:

arrangements by which private parties agree to resolve gTLD string contentions solely to avoid a public auction present antitrust issues.

The company contacted the department last October to get a “business review” decision, basically asking the DoJ for an assurance that it would not be prosecuted if it participated in a private auction.
The DoJ refused to give that assurance.
Uniregistry counsel Bret Fausett told DI that private auctions might be seen as “bid rigging”, an illegal practice in which competitors fix the awarding of contracts.
Schilling said that Uniregistry asked the DoJ for its advice because “we don’t want to go to jail”.
According to the company:

On March 18, 2013, Uniregistry was informed that the Department of Justice has declined to issue a business review of various private gTLD contention resolution mechanisms. In making its decision, the Department emphasized that no private party, including ICANN, has the authority to grant to any other party exemptions to, or immunity from, the antitrust laws. The decision means that the Department of Justice reserves its right to prosecute and/or seek civil penalties from persons or companies that participate in anti-competitive schemes in violation of applicable antitrust laws.

New gTLD applicants are now being advised to consult their own lawyers before participating in a private auction.
The news will come as a huge blow to companies such as Right Of The Dot and Cramton Associates, which have been at the forefront of pushing the private auction concept to applicants.
It’s also going to be a massive blow to any company that had banked on getting a pay-off to withdraw their applications following a private auction.
The benefit of private auctions — over the ICANN-managed auctions of last resort — is that the losing applicants get a share of the winning applicant’s winning bid.
In an ICANN auction, all the money goes to ICANN, which has promised to use to money to fund worthy causes.
Uniregistry has issued a press release on its talks with the DoJ here (pdf).

Del Monte v Del Monte is the first new gTLD trademark objection

Two companies trading under the name Del Monte are involved in the first-to-be-revealed Legal Rights Objection, over the .delmonte gTLD, under the new gTLD program.
The World Intellectual Property Organization revealed the LRO — expected to be the first of many — this evening.
The applicant for .delmonte is a subsidiary of Fresh Del Monte Produce, Inc. The objector is Del Monte Corp.
Both companies are primarily known for canning fruit. According to Wikipedia, Fresh Del Monte was spun off from Del Monte in 1989 and continues to have a licensing arrangement to use the brand.
The deal apparently doesn’t extend to playing nicely over gTLDs, however.
Del Monte does business at delmonte.com, while Fresh Del Monte lives at freshdelmonte.com.
Legal Rights Objections allow trademark owners to challenge gTLD applications that look too much like their marks. It looks like Del Monte has a pretty good case, on the face of it.

New gTLD registry hopeful CentralNic taken out by “total power failure”

Emerging new gTLD back-end player CentralNic today suffered a two-hour blackout of its registry systems, due to a “total power failure” at its data center.
Its registry, which handles subdomain services such as uk.com and gb.com and the ccTLD .la, was offline from 0930 to 1130 UTC this morning, the company said.
Even though the company has all the necessary backup precautions you’d expect from a total-uptime domain name registry, for some reason they failed to kick in, it seems.
CentralNic said:

The data centre is equipped with fully resilient power supply including N+1 redundant [Uninterruptible Power Supply] arrays and backup diesel generators, and the exact cause of the outage, and why the UPS and diesel generator system did not take over to maintain power, is not yet known.

The company is the named back-end provider for 60 gTLD applications, including a handful of dot-brands.
Coming so soon before ICANN starts the pre-delegation testing of registry providers, the outage is embarrassing to say the least.

Amazon and Google hit as Independent Objector files 24 new gTLD objections

Alain Pellet, the new gTLD program’s Independent Objector, has filed 24 official objections against new gTLD applications.
Five of its 13 Community Objections are against dot-brands that have geographical meanings — Amazon’s .amazon and three translations, an outdoor clothing maker’s bid for .patagonia and a Mumbai cricket team’s application for .indians.
Other recipients are the two applications for .charity and the one for the Chinese translation .慈善.
Every other objection is related in some way to health.
The remaining six Community Objections target .med, .health, .healthcare and .hospital bids.
Limited Public Interest Objections have also been filed against the four .health applications, .healthcare, the four .med bids and the one .hospital.
That’s right, the .hospital and .healthcare applications, both filed by Donuts subsidiaries, have been hit twice.
Donuts is not the only one: Google’s .med bid has a Community Objection and a Limited Public Interest objection too.
The reasons for the objections do not appear to have been published yet.
The objections stand to delay each of the target apps by about five months, according to ICANN’s timetable.
The full list of IO objections can be found here.

Defensive registrations with Donuts could be 95% cheaper than normal domains

Portfolio gTLD applicant Donuts plans to offer trademark owners defensive registrations at 5% to 10% of the cost of a normal domain name registration, co-founder Richard Tindal said today.
Speaking at the Digital Marketing & gTLD Strategy Congress here in New York, Tindal also revealed some of Donuts’ current thinking about the Domain Protected Marks List service outlined in its gTLD applications.
DPML, which was created by Donuts rather than ICANN, is a little like ICM Registry’s Sunrise B service for .xxx — trademark owners will be able to block domains related to their trademarks.
DPML domains will not resolve, and there’ll be no annual renewal fee.
But there will likely be several differences with .xxx, as Tindal explained.
How to get a block
Each DPML listing will block a string across all of Donuts’ gTLDs, which could be as many as 307 (if Donuts wins all of its contention sets), potentially reducing administrative headaches for trademark owners.
Second, while ICM only allowed strings to be blocked that exactly matched the trademark, Donuts’ standard will merely be that the blocked domain contains the trademarked string.
Trademark owners will have to buy a DPML listing for each string they want blocked, however. It’s not going to be a “wildcard” system. ING wouldn’t be able to block everything ending in “ing”.
If Microsoft wanted to block microsoft.tlds and microsoftwindows.tlds, it would have to request both of those strings separately, but the blocks would be place across every Donuts TLD.
The standard for inclusion is probably going to be that the trademark is listed in the official Trademark Clearinghouse, and that it would qualify for a Sunrise registration (ie, it’s actually being used).
Trademarks that qualify for the Trademark Claims service but not Sunrise would not, it seems, qualify for DPML.
Un-blocks
There’s also going to be a way for trademark owners to un-block domains that have been blocked by other trademark owners.
If Apple the gadget maker blocked the string “apple” across all Donuts gTLDs, for example, Apple Records would be able to unblock apple.music (if Donuts wins .music) if it had a trademark on “apple” in the TMCH.
The standard again would be that Apple Records qualified for a Sunrise, but the unblocking could actually happen long after the .music Sunrise period was over.
If Apple the gadget maker thought it might want to use apple.tld domains in future, its best best would be to register the domains during Sunrise, Tindal said.
Pricing
DPML listings would be available for either five or 10 years (Donuts hasn’t decided yet, but it’s leaning towards five) and pricing will probably be between 5% and 10% of the cost of registering the domains normally during general availability, Tindal said.
Let’s say, for example, that Donuts wins only a certain number of its contention sets and ends up launching 200 new gTLDs, each of which is priced at $10 per domain per year.
If the 5-10% price estimate holds, trademark owners would have to pay between $0.50 and $1 per string, per gTLD, per year. For a single trademark, that would be between $100 and $200 per year, or $500 to $1,000 over the five-year period of the block.
It doesn’t sound like there’s going to be an option for trademark owners to block their sensitive strings in only selected, relevant Donuts gTLDs using DPML. It’ll be all or none.
Donuts has not yet disclosed its pricing plans for any of its proposed gTLDs, so the numbers used here are of course just examples. They could be higher or lower when the domains come to market.
In addition, if the string in question is a “premium” generic word in one or more of Donuts’ gTLDs, the price of blocking it could head sharply north.
Tindal noted that the plans outlined during today’s conference session represent Donuts’ current thinking and may be subject to change.

Google-backed new gTLD industry group appears at WhatDomain.org

The formative domain name industry trade association that DI has blogged about a few times recently has found itself a web site.
The Google-backed initiative can be found now at WhatDomain.org, which currently carries a bit of brief information about the organization’s rough plans and a call for potential members to get in touch.
The site states:

We are organizing to help educate the world on the coming changes in the domain landscape and to support the interests of the domain name industry. We are inviting any organization with a similar interest in domains to join us in working to create and launch an organization that will enable us to work together to achieve these objectives.

The association will eventually have membership tiers and fees, but those details have yet to be arranged.
We understand that while new gTLD applicant Google is doing most of the “heavy lifting” getting the project off the ground, the company wants to go as arms-length as possible very quickly.
The first informal meeting of what may or may not become officially known as WhatDomain took place at during an intersessional ICANN meeting in Amsterdam this January.
The idea is to promote new gTLDs and domain names in general, raise the reputation of the industry and promote the universal acceptance of TLDs among software developers.
During a session here at the Digital Marketing & gTLD Strategy Congress in New York yesterday, ICANN head of stakeholder engagement Sally Costeron seemed to commit ICANN to help support the initiative.

Confusion reigns over three “hijacked” ccTLDs

Control over three ccTLDs is currently up in the air due to the alleged hijacking of one of the registry operator’s domain names.
The TLDs for the Turks and Caicos Islands (.tc), the British Virgin Islands (.vg) and Grenada (.gd) are all nominally managed by a UK-based company called AdamsNames.
Last October, AdamsNames outsourced the back-end technical functions of the registry to KSRegistry, the registry sister company to German registrar Key-Systems.
But this week, it’s difficult to say who’s in charge any more.
KSRegistry, in an official statement, said yesterday that an unspecified “third party” had managed to take over the registry’s domain name, AdamsNames.net, and was operating a “shadow registry” there.

Today, the KSregistry GmbH, a hundred percent subsidiary of the Key-Systems GmbH, has learned that a third party has executed a transfer of the domain name adamsnames.net and now operates a shadow registry under this domain. According to the CEO of AdamsNames Ltd., Mr. Carsten Pauli, this transfer was not authorized by the registry operator.

Whois records show that the domain was transferred away from Key-Systems to Hexonet last week, and that the administrative contact changed from an address in London to an address in Istanbul.
The name on the records was Ertan Ulutas before and after the transfer.
So has Ulutas, by taking control over what is in effect the official registry web site, hijacked all three registries?
Statements appearing on AdamsNames.net this week tell a different story.
Whoever’s in control of the domain — presumably Ulutas — claims that the outfit is “currently experiencing a high level Corporate hijack from the minority shareholder Carsten Pauli and Key Systems GmbH.”
A statement today reads:

As you are all aware AdamsNames Ltd has been run by us for a while. Key Systems is our former Registry Backend provider. We recently noticed, the adamsnames.com domain, for which Key Systems was the Registrar had been illegally transferred into another account without any notice or authorisation from us.
Upon realising this we transferred our other gTLD domains to another Registrar. Due to this matter we lost trust in Key Systems GmbH and decided to run it ourselves. Please be aware that our Registry is fully operational.
All domains can be registered, renewed and updated as usual. We could not trust a company with three ccTLD’s if we could not trust them with one domain!

Whois records show that Pauli recently became the owner of AdamsNames.com. Ulutas was the previous owner. The domain is registered via Key-Systems.
KSRegistry, which has declined to comment beyond its prepared statement yesterday, said:

KSregistry GmbH still provides the technical back-end services for the ccTLDs .TC, .GD and .VG authorized by AdamsNames Ltd., but this is currently hampered by the actions of the third party.
In order to not endanger the integrity of the zone after addressing the issues, the Key-Systems GmbH as registrar has decided to not permit current modifications to domains under .TC, .GD and .VG. The resolution and renewal of the domains are not affected.

What seems to be happening here is that Pauli and Ulutas have had some kind of dispute, and that as a result the registrants and the reputation of three countries’ ccTLDs have been harmed.
Very amateurish.
UPDATE: Key-Systems founder and CEO Alexander Siffrin has issued the following updated statement in response to the latest claims on Adamsnames.net:

Key-Systems GmbH has at no time hijacked a domain name from Adamsnames Ltd. It has in the incident referred to by the party currently claiming to represent Adamsnames acted upon a request of the director of Adamsnames Ltd. who is also the signatory of the agreement outsourcing the technical backend of the registry to KSregistry GmbH.
On the other hand the transfer of the domain name adamsnames.net and with that the ability to change the management of the zone has to our knowledge been initiated without permission of Adamsnames Ltd.
It is noteworthy that at this time the domain names listed by the current technical operator do not list Adamsnames Ltd. as registrant:
ADAMSNAMES.NET
adamsnames.org
adamsnames.eu
You may draw your own conclusions.

.mii becomes the first new gTLD to face rejection

The applied-for new gTLD .mii is too similar to the US military gTLD .mil and will therefore be rejected by ICANN.
While many applications have been withdrawn, this is the first involuntary rejection to be announced by ICANN.
The applicant for .mii was MiTek USA, described by DI previously as the filer of the stupidest new gTLD applications of the current round.
It also applied for .connector, .mitek and .sapphire, the names of its product categories and brands.
All four of its applications will be formally rejected when ICANN publishes its Initial Evaluation results.
MiTek didn’t bother to answer the most basic questions in the new gTLD application, simply stating “TLD will not be resold. Purchased for brand protection only.” on almost every line.
The decision by the String Similarity Panel to rule .mii confusingly similar to .mil confirms what we already knew from the .hotels/.hoteis ruling — the letters I and L are confusing.
String similarity testing compares upper and lower-case letters as well as, I believe, different typefaces.

PICs could be Beijing deal-breaker for new gTLDs

ICANN’s Governmental Advisory Committee may delay the approval of new gTLDs if applicants don’t submit Public Interest Commitments tomorrow.
That’s the message coming out of ICANN today, on the eve of the deadline for PICs submission set less than one month ago.
PICs, you will recall, are binding, enforceable commitments that new gTLD applicants are able to voluntarily add to their registry contracts with ICANN.
They’re meant to satisfy the GAC’s request for ICANN to tighten its grip on new gTLD registries and to give applicants a way to avoid GAC Advice and formal objections against their bids.
Applicants that commit to do whatever was asked of them in GAC Early Warnings, for example, may be able to avoid having the warning mutate into a full-blown GAC Advice kiss of death.
When ICANN announced the PICs idea a month ago, it gave applicants until March 5 to submit them. It intends to publish them on Wednesday for public comment and the GAC’s perusal.
But applicants are understandably nervous (to put it mildly) to comply, given that PICs would be enforceable via a dispute process that has yet to be written but could put their contracts at risk.
Responding to these concerns during a conference call today, ICANN CEO Fadi Chehade urged applicants to hit the deadline or risk the GAC delaying its Advice discussions beyond Beijing.
“I don’t think we can delay the submission of the PICs,” Chehade said. “If we do, then we will definitely not have the GAC come back to use with their committed advice in Beijing.”
“Unless we want to get them to do this advice beyond Beijing, we should stick with the 30 days or so we’ve asked people to get this done and make it happen,” he said.
The Beijing meeting runs April 7 to 11. The GAC is expected to issue its advice shortly after the meeting ends.
ICANN reckons it will be able to start approving new gTLDs April 23, but has also stated on numerous occasions that it will not approve anything before the GAC has spoken.
Chehade said today, based on his conversations with influential GAC members, that pushing the PICs deadline out beyond March 5 by even a few days would seriously endanger the current GAC Advice timeline.
New gTLD applicants are now in the tricky position of having to decide between potentially costly delays today and an unknown dispute system that could prove dangerous in future.

ICM’s claims against Manwin thrown out of court

ICM Registry has suffered a blow in its ongoing lawsuit with porn merchant Manwin Licensing, with a judge this week dismissing all of the registry’s counterclaims against the YouPorn owner.
ICM was sued by Manwin on antitrust grounds in late 2011, but returned fire last October with is own set of allegations, which also included claims that Manwin’s boycott of .xxx was anti-competitive.
But the judge in the case, Philip Gutierrez, on Tuesday granted Manwin’s motion to dismiss all of ICM’s claims.
Gutierrez ruled that ICM had failed to argue it had standing to complain under competition law, stating: “Harm to ICM only is not sufficient to constitute antitrust injury. It must allege harm to the competitive process.”
He also granted Manwin’s motion to strike ICM’s claims under California’s anti-SLAPP (Strategic Lawsuit Against Public Participation) laws, which are designed to protect free speech.
The judge decided that Manwin’s boycott of .xxx was protected under the anti-SLAPP statute.
ICM is now entitled to re-draft and re-submit its counterclaims; if it does not do so it will have to pay Manwin’s legal fees in connection with the anti-SLAPP action, Gutierrez ruled.
“The judge has granted us 30 days to amend our counterclaims. We are exploring all options open to us,” ICM CEO Stuart Lawley said.
Manwin’s owner, Fabian Thylmann, was arrested in Brussels last December and extradited to Germany to face charges of tax evasion.