New gTLD winners will be decided by lottery after all

ICANN will use a lottery to decide the order in which to process new gTLD applications, after a surprising U-turn.
ICANN this morning published a proposal that would prioritize applications based on a $100-a-ticket prize draw that would run in early December.
The results of the draw would be used to sequence applications for Initial Evaluation and, if successful, contract negotiations, pre-delegation testing and eventual delegation.
ICANN says the draw would give it an exemption to California’s anti-lottery laws, which was the primary reason it has so far resisted chance-based solutions to the batching/sequencing problem.
It’s applied for a special “fundraising drawings” license based on its non-profit status, which it expects to be granted before the end of November.
The license appears to have certain restrictions that confuse matters for applicants — they won’t be able to buy their tickets over the internet.
They’ll have to pay, in-person, for a paper ticket. But ICANN says that it can supply proxies for applicants at no cost, eliminating the need to fly a representative to California.
The whole process will be manual, so there’s little risk of an embarrassing Digital Archery-style snafu.
Applications for internationalized domain names would be given priority.
The draw would be run at some point between December 4 and 15.
Under the proposal, the results of Initial Evaluation would start to be released from March next year, starting with IDNs, at a rate of about 150 per week.
ICANN has also decided to extend the period for official objections to March 13, 2013, two months more than the current plan, due to requests for more time from potential objectors.
But the extension is unlikely to appease these objectors, which will still have to file objections before they know whether applications have passed Initial Evaluation, wasting money.
New gTLD applicants that pass Initial Evaluation, are not in contention and have no objections will have the option to immediately sign the standard registry contract.
Applicants wishing to negotiate their contracts will be processed according to their draw number.
However, no contracts will be signed before the ICANN meeting in Beijing next April. This is because the Governmental Advisory Committee does not expect to issue its formal Advice on applications before then.
ICANN expects to sign contracts and do pre-delegation testing at a rate of about 20 per week, which is roughly within the maximum 1,000-per-year delegation rate it has committed to.
The effect of this is that the first new gTLDs are expected to go live in the DNS root in the second quarter of 2013, rather than the third quarter.
I believe most of the proposals will be welcomed by most applicants. A lottery was always the most favored solution.
There will be some criticisms, however.
There does not appear to be a method envisaged for swapping slots, for example, so portfolio applicants probably won’t get to choose which of their gTLDs is delegated first.
The whole proposal is open for public comment here.

Downtime emerges as key barrier to Trademark Clearinghouse changes

The risk of embarrassing technical glitches is now the major stumbling block in discussions about the best way to deploy the forthcoming Trademark Clearinghouse for new gTLDs.
ICANN is worried about the “reputational implications” of the TMCH going offline if, as proposed by domain name registries, it is in the “critical path” of the live registration process.
The concerns emerged in a letter earlier this week, and were discussed during an ICANN conference call yesterday.
The TMCH is expected to be a big database of trademarks, used to support the Trademark Claims and Sunrise periods that new gTLD registries will have to offer.
The policy behind both rights protection mechanisms is settled (essentially), but the actual technical implementation is still open to question.
While ICANN and its two contractors — IBM and Deloitte — have been quietly working on their favored model for some months, the registries that will support most new gTLDs have their own model.
Neustar, ARI Registry Services, Verisign and Demand Media have proposed a TMCH design that they say would be less costly to registries (and therefore brand owners) as well as having certain security benefits.
The problem with the registry’s plan is that it calls for real-time interactions between registrars, registries and the TMCH during the Trademark Claims phase of new gTLD launches.
This would require the Clearinghouse to operate with 100% up-time, which makes ICANN very nervous. It said in its letter this week:

Though requirements for resiliency to guard against such failures will be in place, the risk and impact of a failure incident in a centralized live query system are significant and have an impact on the reputation and, therefore, the effectiveness of the rights protection mechanisms supported by the Trademark Clearinghouse. Such an event could have reputational implications for the Clearinghouse and the New gTLD Program.

If the Clearinghouse went down, the argument goes, it would prevent domain names being registered in new gTLDs.
This would look very bad for ICANN, which has already experienced a few embarrassing technical problems with the program. How its policies and processes perform with live gTLDs will be scrutinized intensely.
But the registries say they’ve mitigated the problem as much as they can in their centralized model.
“It only puts the Trademark Clearinghouse in the critical path for registration for a limited number of registrations,” Neustar vice president Jeff Neuman said on yesterday’s call.
“In our model if a domain name does not match a trademark in the Clearinghouse then the Clearinghouse never sees it, it doesn’t matter if the Clearinghouse is up or down,” he said.
The negative impact of downtime in this scenario is that registrars would not be able to show would-be registrants Trademark Claims notices. But it would not necessarily enable cybersquatting.
Neuman further argued that the TMCH should be covered by the same kinds of service level agreements and data escrow requirements as contracted gTLD registries, minimizing the risk of downtime.
The second major hurdle to the implementation talks is the relative lack to date of input from brand owners.
The intellectual property community has previously expressed reservations about any TMCH model that would enable data mining by bad actors or opportunistic registrars and registries.
Yes, it’s a data privacy issue. Brand owners are worried that the contents of the Clearinghouse could be used by competitors to find holes in their trademark protection strategies, or by scammers.
While yesterday’s call had more input from the trademark community, the real work will come next Wednesday during a session at ICANN 45 in Toronto.

Strickling urges ICANN to bolster trademark protection for all gTLDs

US Department of Commerce assistant secretary Larry Strickling has called on ICANN to create more trademark protection mechanisms across new and existing gTLDs.
In a letter to ICANN yesterday, Strickling, head of the National Telecommunications and Information Administration, also expressed concerned about the slow progress on implementing the Uniform Rapid Suspension and Trademark Clearinghouse systems.
The URS has run into a problem because no provider ICANN has approached to date wants to run it for the $300 to $500 filing fee.
Meanwhile, the way ICANN plans to implement the Clearinghouse has been hit by criticism from registries, registrars and new gTLD applicants, many of which believe it is too inflexible.
Strickling told ICANN that “it is imperative that all fees associated with the URS remain low”, and suggested that cost savings could be achieved through integration with the Clearinghouse.
But he also called for stronger trademark protections in general, above and beyond what the ICANN community has already decided to implement.

Industry stakeholders have presented a variety of suggestions to reduce the cost of defensive registrations (e.g. trademark blocking mechanisms) and others have suggested enhanced safeguards for new gTLDs targeted at creative sectors.
While not taking a position in support of any specific proposal at this time, NTIA does believes that ICANN should continue and open and transparent dialogue between all actors in order to find solutions to these issues which have come into clearer focus since the release of the 1,930 applications this past June.

The letter was sent due to NTIA’s meeting with the 30-odd so-called “brand summit” companies — almost all household names — last month.
Among other things, they want the Clearinghouse to alert them whenever somebody registers a domain name containing their trademarks, instead of just exact matches.
The counter-argument from the domain industry is that such a proposal would create millions of false positives, due to dictionary words, run-ons and acronyms.
An example recently aired by attorney John Berryhill is the Yellow Pages trademark on “YP”, which would be triggered in the Clearinghouse whenever PayPal registered its brand as a domain name.
The brand summit companies also want a blanket trademark blocking system based on ICM Registry’s .xxx Sunrise B process, under which they pay a one-off fee to block their mark in a gTLD forever.
Opponents point out that such systems may be appropriate in single TLDs, but problems could arise when applied to all TLDs. Different companies have rights to the same strings in different fields.
Strickling appears to be aware of the problems that could be caused if the trademark community gets everything it wants. In the letter, he urges mutual understanding, writing:

Whatever process ICANN follows, trademark holders should provide clear, fact-based descriptions of the challenges they encounter in the global DNS and registries and registrars should clarify issues relating to the technical feasibility and costs of implementing any additional protections.

It’s a nice idea, but attempts to reach a sane solution have so far been unsuccessful.
Melbourne IT’s HARM proposal, which would give special rights to particularly vulnerable brands, was shot down by trademark owners as too limited during a meeting in Washington DC last month.

IP interests should join the Trademark Clearinghouse meeting on Tuesday

ICANN is to hold a webcast and teleconference next week to discuss alternative models for the new gTLDs Trademark Clearinghouse.
It will be the last time the community gets to discuss the issue before ICANN 45 kicks off in Toronto next weekend.
Neustar, ARI Registry Services, Verisign and Demand Media have jointly proposed two models for the mandatory new gTLD Sunrise period and Trademark Claims service that differ from ICANN’s.
While the proposals are enjoying general murmurs of support from the domain name industry side of the community, the trademark lobby has yet to have any substantial presence in the talks.
Most of the discussions to date have been hindered by this lack of input, and by a frustrating lack of hard feedback from ICANN and its two contractors, IBM and Deloitte.
Tuesday’s meeting might be a good opportunity for members of the Business Constituency and IP Constituency to brush up on the issues before Toronto.
The meeting will start at 9am US Eastern time, according to Neustar vice president Jeff Neuman, who provided the following information:

The documents are posted at:
http://newgtlds.icann.org/en/about/trademark-clearinghouse/sunrise-model-26sep12-en.pdf
http://newgtlds.icann.org/en/about/trademark-clearinghouse/claims-model-26sep12-en.pdf
http://newgtlds.icann.org/en/about/trademark-clearinghouse/model-issues-26sep12-en.pdf
The call-in information is:
Conference ID: 93759
Dial-in numbers for each country: http://www.adigo.com/icann/
Adobe Connect Room at: http://icann.adobeconnect.com/tmch/

.cialis and .chatr new gTLD bids dumped

Two more new gTLD applications have been formally withdrawn.
ELi Lilly & Co has dropped its bid for .cialis and Rogers Communications has withdrawn its .chatr application.
Both were dot-brand applications — Cialis is a drug and Chatr is a Canadian wireless company — and neither was contested, though there are four applications for the very similar .chat.
This makes a total of six dead bids, following Google’s withdrawal of .est, .and and .are and German pump-maker KSB withdrew its dot-brand .ksb.
From ICANN’s statements, we know that there’s at least one other bid that is in the process of being withdrawn, but its identity is not yet known.

No more Club Med? America and Africa would lose out under ICANN meetings overhaul

ICANN is having a big rethink about how it decides where to drag the community to on its thrice-yearly meetings.
A proposal published tonight would reduce the number of cities it visits between 2014 and 2016 from nine to seven, meaning Africa and North America would both lose a meeting.
ICANN says its meetings are getting bigger and it’s getting harder to find suitable locations that it hasn’t already been to:

As ICANN Meetings have increased in size and scope, the number of facilities capable of hosting an ICANN Meeting has decreased considerably. In addition, the number of facilities that actually meet all of the established meeting location selection criteria is very limited.
ICANN Meetings have already been held in more than 40 different cities worldwide. It is becoming increasingly difficult to identify new hosts, as well as new host cities with the appropriate facilities.

Under the new proposal, ICANN would pre-select conference centers worldwide that are big enough, are easy to get to, have decent internet access, have plenty of nearby hotels and so forth.
It reckons it could save money by negotiating multi-year deals with such venues, but that this would mean a reduced number of locations.
Under ICANN’s current plan, 2014-2016 would see two meetings in Europe, two in North America, two in Asia-Pacific, two in Africa, and one in Latin America. Each would be in a different city.
The new plan would increase Europe and Asia-Pacific to three meetings each, but in four countries instead of six. Africa and North America would both lose a meeting. Latin America would still have one meeting.
ICANN wants to know what you think about this idea. I can see it being divisive along predictable lines.

RRPproxy and Hexonet offering new gTLD pre-regs

Two reseller-oriented registrars this week have enabled their resellers to start taking new gTLD pre-registrations.
Key-Systems said its RRPproxy API and web interface now support pre-regs for hundreds of applied-for gTLDs, noting that the transactions are “an expression of interest without any commitment”.
The company seems to have filtered out the obvious dot-brands, but it’s still offering some gTLDs — such as .antivirus and .lifeinsurance — whose applicants are planning single-registrant models.
Separately today, Hexonet launched its Expressions Of Interest offering to enable its resellers to take “non-binding requests” for domains in possible forthcoming gTLDs.
Opinions are mixed about whether these kinds of services are good for the industry’s reputation. There’s no guarantee that these gTLDs will launch, or whether these registrars will qualify to sell them.

ICM files $120m lawsuit over Manwin’s .xxx “boycott”

ICM Registry has counter-sued YouPorn owner Manwin Licensing, looking for at least $120 million in damages, saying the porn giant is using its market power to sideline the .xxx domain.
The company claims that Manwin’s antitrust lawsuit, filed last October, is merely one of several attacks against its business.
The counter-suit alleges that Manwin, after trying and failing to invest in ICM, illegally restrained trade by forcing its business partners not to do business with ICM.
The suit (pdf) reads:

Manwin has utilized its dominance in the adult entertainment industry to encourage the wholesale boycott of the .XXX TLD in the industry in order to destroy any competition tat may arise from the commercialization of .XXX and has secured agreement, either express or implied, by those within the industry that they will not do business with .XXX.

Manwin, for example, “coerced .XXX spokesmodels to end relationships with ICM” and “conditioned contracts with third parties on their non-involvement with the .XXX TLD”, according to ICM.
The counterclaims were filed in a California court on Friday, as the latest stage of the two companies’ ongoing legal battle.
The registry is looking for $40 million in damages for Sherman Act violations, trebled.
Manwin claims ICM and ICANN broke US competition law by setting up the .xxx “monopoly”, which both ICANN and ICM deny.

Nominet caught using Google Translate on Welsh gTLD site

Welsh internet users have accused Nominet of using Google to translate its .wales and .cymru gTLD sites into Welsh.
According to a Welsh-speaking reader, the majority of the Welsh version Domain For Wales makes “no linguistic sense”.
The site “looks like it has been initially translated using Google Translate, and amended by someone who isn’t that proficient in the language”, the reader said.
While I do not read Welsh, the Nominet site does bear some of the giveaway hallmarks of Google Translate.
If you regularly use Google to translate domain name industry web sites, you’ll know that the software has problems with TLDs, misinterpreting the dot as a period and therefore breaking up sentences.
That seems to be what happened here:

Nid yw eto’n bosibl i gofrestru. Cymru neu. Enw parth cymru gan fod y ceisiadau yn cael eu hystyried gan ICANN.

On the English site, the text is:

It is not yet possible to register a .cymru or .wales domain name as the applications are under consideration by ICANN.

Running a few other English pages through Google Translate also produces the same text as Nominet is using on the Welsh version of the same pages.
Welsh language tech blogger Carl Morris first spotted the errors.
Nominet has applied to ICANN for .wales and .cymru with the blessing of the Welsh and UK governments.
Its selection was initially criticized by some in Wales because Nominet is based in England and has no Welsh presence.
The company has committed to open an office in Wales, hiring Welsh-speaking staff, however.

GNSO Chair contest is Rickert v Robinson

Two candidates for the soon-be-vacated chair of the Generic Names Supporting Organization have been put forward.
Jonathan Robinson has been nominated by the contracted parties house (registries and registrars), while Thomas Rickert has been put forward by the non-contracted parties.
Rickert, an IP lawyer, is director of names and numbers at Eco, a German internet industry association. He was appointed to the GNSO Council by the ICANN Nominating Committee last year.
UK-based Robinson is a longstanding member of the domain name industry and a registries rep on the Council. He’s a director of Afilias and runs IProta, the startup that managed ICM Registry’s sunrise last year.
The two men will be voted on by the GNSO Council before the chairman’s seat, currently occupied by Stephane Van Gelder, is vacated at the end of the Toronto meeting next month.
Van Gelder is coming to the end of his term on the Council after two years in the chair, hence the need for a replacement.