Donuts beats dot-brand in fight over .express gTLD

Donuts has prevailed in the first big dust-up between a portfolio gTLD applicant and a dot-brand hopeful.
The World Intellectual Property Organization today published its decision (pdf) in the Legal Rights Objection filed by a clothing retailer called Express over the .express gTLD.
The ruling could have a big impact on future rounds of the new gTLD program, possibly giving rise to an influx of defensive, generic-word dot-brand applications.
Both Express and Donuts have applied for .express. They’re the only two applicants for the string.
Express runs about 600 stores in the US and elsewhere and has had a trademark on its name since 1979. Donuts, as with all of its 307 original applications, wants to run .express as an open gTLD.
Express argued in its LRO that a Donuts-run .express would severely damage its brand, saying:

Should applicants for new TLDs be able to operate unrestricted TLDs represented by generic words which are also extremely well known brands, billions of dollars of goodwill will be wiped out in a TLD heartbeat.

Donuts, in its response, pointed out that there are thousands of uses of the word “express” in trademarks and other contexts, and even produced a survey that it said showed only 8% of fashionistas even associate the word with the brand.
The WIPO panelist, after what appears to have been something of a crisis moment of wondering what the hell ICANN was thinking when it designed the LRO, sided with Donuts. He said:

The Panel ultimately decides that the trademark owner (Complainant) should not be able to prevent adoption by the applicant (Respondent) of the applied-for gTLD <.express> in the particular context presented here. While Complainant certainly owns rights in the EXPRESS trademark for use in connection with apparel and fashion accessories, and while that trademark is reasonably well known among a relevant segment of consumers in the United States, there are so many common usages of the term “express” that it is not reasonable to foreclose its use by Respondent as a gTLD.

He follows up with a few sentences that should give owners of dictionary-word trademarks reason to be worried.

The Panel recognizes that, should Respondent successfully secure the gTLD, Complainant may be required to address potential Internet user confusion in the commercial marketplace for its products based on the registration (or attempted registration) of certain second level domains. However, Complainant faces this risk because it adopted a common word in the English language for its trademark. Moreover, Complainant has applied for the identical <.express> string as a gTLD in competition with Respondent. Ultimately, the parties may well end up in an auction contest for the gTLD. This is not Complainant’s last chance to secure its trademark as a gTLD.

In other words, Express can either pay ICANN or Donuts a bunch of cash at auction to get its dot-brand, or it can let Donuts win and spend a bunch of cash on defensive registrations and UDRP/URS complaints. Not a great result for Express either way.
The panelist takes 10 pages of his 26-page decision to explain his deliberations, but it basically boils down to this: Express’ trademark is too generic to give the company exclusivity over the word.
It’s hard to disagree with his reasoning.
If subsequent LROs go the same way, and I suspect they will, then it will quickly become clear that the only way to guarantee nobody else gets your dictionary-word brand as a gTLD will be to apply for it yourself and fight it all the way to auction.

IAB gives dotless domains the thumbs down

The Internet Architecture Board believes dotless domain names would be “inherently harmful to Internet security.”
The IAB, the oversight committee which is to internet technical standards what ICANN is to domain names, weighed into the debate with an article apparently published yesterday.
In it, the committee states that over time dotless domains have evolved to be used only on local networks, rather than the internet, and that to start delegating them at the top level of the DNS would be dangerous:

most users entering single-label names want them to be resolved in a local context, and they do not expect a single name to refer to a TLD. The behavior is specified within a succession of standards track documents developed over several decades, and is now implemented by hundreds of millions of Internet hosts.
…
By attempting to change expected behavior, dotless domains introduce potential security vulnerabilities. These include causing traffic intended for local services to be directed onto the global Internet (and vice-versa), which can enable a number of attacks, including theft of credentials and cookies, cross-site scripting attacks, etc. As a result, the deployment of dotless domains has the potential to cause significant harm to the security of the Internet

The article also says (if I understand correctly) that it’s okay for browsers to interpret words entered into address bars without dots as local resources and/or search terms rather than domain names.
It’s pretty unequivocal that dotless domains would be Bad.
The article was written because there’s currently a lot of talk about new gTLD applicants — such as Google, Donuts and Uniregistry — asking ICANN to allow them to run their TLDs without dots.
There’s a ban in the Applicant Guidebook on the “apex A records” that would be required to make dotless TLDs work, but it’s been suggested that applicants could apply to have the ban lifted on a case by case basis.
More recently, ICANN’s Security and Stability Advisory Committee has stated almost as unequivocally as the IAB that dotless domains should not be allowed.
But for some reason ICANN recently commissioned a security company to look into the issue.
This seems to have made some people, such as the At Large Advisory Committee, worried that ICANN is looking for some wiggle room to give its new gTLD paymasters what they want.
Alternatively, ICANN may just be looking for a second opinion to wave in the faces of new gTLD registries when it tells them to take a hike. It was quite vague about its motives.
It’s not just a technical issue, of course. Dotless TLDs would shake up the web search market in a big way, and not necessarily for the better.
Donuts CEO Paul Stahura today published an article on CircleID that makes the case that it is the browser makers, specifically Microsoft, that are implementing DNS all wrong, and that they’re objecting to dotless domains for competitive reasons. The IAB apparently disagrees, but it’s an interesting counterpoint nevertheless.

First three new gTLD objections thrown out

Three objections against new gTLD applications have been thrown out by the World Intellectual Property Organization, two of them on the basis that they were blatant attempts to game the system.
The objections were all Legal Rights Objections. Essentially, they’re attempts by the objectors to show that for ICANN to approve the gTLD would infringe their existing trademark rights.
The applications being objected to were Google’s .home, SC Johnson’s .rightathome and Vipspace Enterprises .vip.
The decisions are of course completely unprecedented. No LROs have ever been decided before.
Let’s look at each in turn.
Google’s .home
The objector here was Defender Security Company, a home security company, which has also applied for .home and has objected to nine of its competitors for the string.
Basically, the objection was thrown out (pdf) because it was a transparent attempt to game the trademark system in order to secure a potentially lucrative gTLD.
Defender appears to have bought the application, along with associated companies, domains, social media accounts and trademarks, from CGR E-Commerce, a company owned by .music applicant Constantine Roussos.
The panelist in the case apparently doesn’t have a DomainTools subscription and couldn’t make the Roussos link from historical Whois records, but it’s plain to see for those who do.
The case was brought on the basis of a European Community trademark on the term “.home”, applied for in December 2011, just a few weeks before ICANN opened the new gTLD application window, and a US trademark on “true.home” applied for a few months later.
The objector also owned dothome.net, one of many throwaway Go Daddy domain name resellers Roussos set up in late 2011 in order to assert prior rights to TLDs he planned to apply for.
The panelist saw through all the nonsense and rejected the objection due to lack of standing.
Here’s the money quote:

The attempted acquisition of trademark rights appears to have been undertaken to create a basis for filing the Objection, or defending an application. There appears to have been no attempt to acquire rights in or use any marks until after the New gTLD Program had been announced, specifically two weeks before the period to file applications for new gTLDs was to open.

For the EC trademark, lack of standing was found because Defender didn’t present any evidence that it actually owned the company, DotHome Ltd, that owned the trademark.
For the US trademark, which is still not registered, the panelist seems to have relied upon UDRP precedent covering rights in unregistered trademarks in his decision to find lack of standing.
The panelist also briefly addresses the Applicant Guidebook criteria for LROs, although it appears he was not obliged to, and found Defender’s arguments lacking.
In summary, it’s a sane decision that appears to show that you can’t secure a gTLD with subterfuge and bogosity.
It’s not looking good for the other eight objections Defender has filed.
Vipspace Enterprises’ .vip
This is another competitive objection, filed by one .vip applicant against another.
The objector in this case is German outfit I-Registry, which has applied for four gTLDs. The respondent is Vipspace, which has only applied for .vip.
In this case, both companies have applied for trademarks, one filed one month before the other.
The panelist’s decision focuses, sanely again, on the generic nature of the string in question.
Because both trademarks were filed for the word “VIP” meaning “Very Important Person”, which is the intended meaning of both applications, it’s hard to see how either is a proper brand.
The panelist wrote (pdf):

while SOAP, for example, may be a perfectly satisfactory trade mark for cars, it cannot serve as a trade mark for the cleaning product “soap”.
…
While the parties have used the term, “VIP”, in various forms on their website to indicate the manner in which the term will be used if they are successful in being awarded the domain, there is nothing before the Panel (beyond mere assertion) to show that either of them has yet traded under their marks sufficiently to displace the primary descriptive meaning of the term and establish a brand or at all.

In other words, it’s a second case of a WIPO panelist deciding that getting, or applying for, a trademark is not enough to grant a company exclusive rights to a new gTLD string.
Sanity, again, prevails.
SC Johnson’s .rightathome
While it contains the word “home”, this is a completely unrelated case with a different objector and a different panelist.
The objector here was Right At Home, a Nebraska-based international provider of in-home elderly care services. The applicant is a subsidiary of the well-known cosmetics company SC Johnson, which uses “Right@Home” as a brand.
It appears that both objector and applicant have really good rights to the string in question, which makes the panelist’s decision all the more interesting.
The way the LRO is described in ICANN’s new gTLD Applicant Guidebook, there are eight criteria that must be weighed by the panelist.
In this case, the panelist does not provide a conclusion showing how the weighting was done, but rather discusses each point in turn and decides whether the evidence favors the objector or the applicant.
The applicant here won on five out of the eight criteria.
The fact that the two companies offer different products and/or services, accompanied by the fact that the phrase “Right At Home” is in use by other companies in addition to the complainant and respondent appears to have been critical in tipping the balance.
In short, the panelist appears to have decided (pdf) that because SC Johnson did not apply for .rightathome in bad faith, and because it’s unlikely internet users will think the gTLD belongs to Right At Home, the objection should be rejected.
I am not a lawyer, but it appears that the key takeaway from this case is that owning a legitimately obtained brand is not enough to win an LRO if you’re an objector and the new gTLD applicant operates in a different vertical.
This will worry many people.

Chehade joins Twitter

ICANN CEO Fadi Chehade now has his own Twitter account, the organization has confirmed.
Here he is, tweeting this morning:

Receive the best of our meeting in Durban sent directly to your email with the #myICANN platform. http://t.co/PRD7nBHPQw #ICANN47

— ICANN President (@icann_president) July 9, 2013

And here’s ICANN confirming it:

@DanielNegari @DomainIncite – Yes. That is Fadi's official twitter handle.

— ICANN (@ICANN) July 9, 2013

And here’s somebody who is definitely not Chehade, but is quite amusing anyway:

It's been a year since my selection as #ICANN CEO and I'm in a celebrating kind of mood. Anyone else need an engagement center?

— Shit Fadi Says (@ShitFadiSays) June 27, 2013

2013 RAA is illegal, says EU privacy watchdog

European privacy regulators have slammed the new 2013 Registrar Accreditation Agreement, saying it would be illegal for registrars based in the EU to comply with it.
The Article 29 Working Party, which comprises privacy regulators from the 27 European Union nations, had harsh words for the part of the contract that requires registrars to store data about registrants for two years after their domains expire.
In a letter (pdf) to ICANN last month, Article 29 states plainly that such provisions would be illegal in the EU:

The fact that these personal data can be useful for law enforcement does not legitimise the retention of these personal data after termination of the contract. Because there is no legal ground for the data processing, the proposed data retention requirement violates data protection law in Europe.

The 2013 RAA allows any registrar to opt out of the data retention provisions if it can prove that to comply would be illegal its own jurisdiction.
The Article 29 letter has been sent to act as blanket proof of this for all EU-based registrars, but it’s not yet clear if ICANN will treat it as such.
The letter goes on to sharply criticize ICANN for allowing itself to be used by governments (and big copyright interests) to circumvent their own legislative processes. It says:

The fact that these data may be useful for law enforcement (including copyright enforcement by private parties) does not equal a necessity to retain these data after termination of the contract.
…
the Working Party reiterates its strong objection to the introduction of data retention by means of a contract issued by a private corporation in order to facilitate (public) law enforcement.
If there is a pressing social need for specific collections of personal data to be available for law enforcement, and the proposed data retention is proportionate to the legitimate aim pursued, it is up to national governments to introduce legislation

So why is ICANN trying to get many of its registrars to break the law?
While it’s tempting to follow the Article 29 WP’s reasoning and blame law enforcement agencies and the Governmental Advisory Committee, which pushed for the new RAA to be created in the first place, the illegal data retention provisions appear to be entirely ICANN’s handiwork.
The original law enforcement demands (pdf) say registrars should “securely collect and store” data about registrants, but there’s no mention of the period for which it should be stored.
And while the GAC has expressly supported the LEA recommendations since 2010, it has always said that ICANN should comply with privacy laws in their implementation.
The GAC does not appear to have added any of its own recommendations relating to data retention.
ICANN can’t claim it was unaware that the new RAA might be illegal for some registrars either. The Article 29 WP told it so last September, causing ICANN to introduce the idea of exemptions.
However, the European Commission’s GAC representative then seemed to dismiss the WP’s concerns during ICANN’s public meeting in Toronto last October.
Perhaps ICANN was justifiably confused by these mixed messages.
According to Michele Neylon, chair of the Registrars Stakeholder Group, it has yet to respond to European registrars’ inquiries about the Article 29 letter, which was sent June 6.
“We hope that ICANN staff will take the letter into consideration, as it is clear that the data protection authorities do not want create extra work either for themselves or for registrars,” Neylon said.
“For European registrars, and non-European registrars with a customer base in the EU, we look forward to ICANN staff providing us with clarity on how we can deal with this matter and respect EU and national law,” he said.

Geo gTLD bidders propose new constituency

Applicants for geographic gTLDs voted unanimously to form a new ICANN constituency last week.
According to minutes of a meeting hosted by .london applicant London & Partners in London last Thursday, 20 applicants voted in favor of a constituency and nobody voted for the alternatives.
Not every geo was in attendance, however. Twenty votes represents less than a third of the overall geographic gTLD applicant base.
A new constituency would likely join registries and registrars in the Contracted Parties House of the Generic Name Supporting Organization.
A constituency for dot-brand applicants, the Brand Registry Group, is also currently being formed.

Demand Media withdraws .bar application

Demand Media has withdrawn is application for the .bar new gTLD.
It’s the first of the company’s applications, filed via its United TLD subsidiary, to be withdrawn.
It was in a contention set with only one other applicant, a Mexican venture by the catchy name of Punto 2012 Sociedad Anonima de Capital Variable, which has also applied for .cafe and .rest.
There are now 97 withdrawn applications and a maximum of 1,357 future delegated gTLDs.

Amazon’s dot-brand likely doomed as US withdraws geo objection

The US government is set to allow the Governmental Advisory Committee to kill off Amazon’s application for .amazon, along with eight other new gTLDs with geographic flavors.
In a position paper published last night, the National Telecommunications and Information Administration said:

the United States is willing in Durban to abstain and remain neutral on .shenzen (IDN in Chinese), .persiangulf, .guangzhou (IDN in Chinese), .amazon (and IDNs in Japanese and Chinese), .patagonia, .yun, and .thai, thereby allowing the GAC to present consensus objections on these strings to the Board, if no other government objects.

According to a GAC source, US protests were the “only reason” the GAC was unable to reach a consensus objection to these applications during the Beijing meeting three months ago.
Consensus would strengthen the objection, giving the ICANN board the presumption that the applications, some of which have already passed Initial Evaluation, should not be approved.
None of the nine applications in question met ICANN’s strict definition of a “geographic” string, but they nevertheless look geographic enough to raise concerns with GAC members.
Amazon’s application for .amazon raised the eyebrows of the Latin American countries that share the Amazonia region.
The company has been in talks with these GAC members since Beijing. If it wants to secure .amazon, it has a little over a week to address their concerns, if it wants to avoid an objection.
While the US is now promising to drop its objection to the GAC’s objection, it does not appear to have changed its position, claiming that governments have no rights to geographic strings. NTIA said:

The United States affirms our support for the free flow of information and freedom of expression and does not view sovereignty as a valid basis for objecting to the use of terms, and we have concerns about the effect of such claims on the integrity of the process.
…
the United States is not aware of an international consensus that recognizes inherent governmental rights in geographic terms.

It’s calling for a rethink of the process, during the mandatory review of the new gTLD program that ICANN must conduct before accepting a second round of applications.
Given that the GAC currently has the ability to object to any string for any reason, it’s difficult to see how a review could achieve the NTIA’s goal without reining in the GAC’s powers.

Today’s new gTLD updates: two withdrawals and two “Not Approved”

DotConnectAfrica and GCCIX WLL have become the first new gTLD applicants to have their applications — for .africa and .gcc respectively — officially flagged as “Not Approved” by ICANN.
Both were killed by Governmental Advisory Committee advice.
While GCC had passed its Initial Evaluation already, DCA’s IE results report (pdf), which were published last night, simply states: “Overall Initial Evaluation Summary: Incomplete”.
In both cases the decision to flunk the applications was taken a month ago by ICANN’s New gTLD Program Committee.
DCA filed a formal Reconsideration Request (pdf), challenging the decision in typically incomprehensible style, on June 19, threatening to take ICANN to an Independent Review Panel (ICANN’s very expensive court of appeals) if it does not overturn its decision.
Here’s a sample:

We have no intention of withdrawing our application against the backdrop that we rightly believe that the Board decision is injudicious, very wrong and injurious to our application and to our organizational aspirations. We are placing faith in the possibility that this particular communication will serve the purpose of causing the ICANN Board to have a rethink, and see the wisdom in allowing DCA Trust to continue to participate in the new gTLD Program without the necessity of going to an Independent Review Process (IRP) Panel to challenge the ICANN Board Decision which we presently disagree with in the most absolute terms.

The Board Governance Committee, which handles Reconsideration Requests, has a sturdy track record of denying them, so I think the chances of DCA’s being approved are roughly zero.
But if the company is nutty enough to try its hand at an IRP, which could quite easily set it back a few million dollars in legal fees, the story might not be over yet.
The GAC didn’t like DCA’s .africa bid because African governments back UniForum, DCA’s South Africa-based competitor for the string.
Had the application made it to Initial Evaluation — its processing number wasn’t up for a few weeks — it would have been flunked by the Geographic Names Panel due to its lack of support anyway.
GCC’s application for .gcc was also rejected by the GAC on geographic grounds. It stands for Gulf Cooperation Council, and the Persian/Arabian Gulf nations in question didn’t support the bid.
Also today, the American insurance company Allstate withdrew its applications for .carinsurance and .autoinsurance. Both were single-registrant “closed generics”, which ICANN has indicated might not be approved, also due to GAC advice.

ICANN says DotConnectAfrica’s .africa bid is officially “Not Approved”