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.

ICM hires Fausett to help with YouPorn antitrust case

ICM Registry has hired new lawyers to help it fend off the antitrust lawsuit filed against it by YouPorn owner Manwin Licensing.
Gordon & Rees senior partner Richard Sybert is taking over as lead counsel in the case, which relates to the launch of .xxx last year.
Notably, the new team includes long-time ICANN legal expert Bret Fausett of Internet.Pro, who represented the Coalition For ICANN Transparency in its antitrust case against ICANN and Verisign.
That’s a bit of a coup for ICM. Manwin’s recent legal arguments have relied heavily on the antitrust precedents Fausett helped set in the CFIT case.
Gordon & Rees replaces Wilmer Cutler Pickering Hale and Dorr as ICM’s outside counsel, due to the recent departure of Wilmerhale’s ICANN guru and ICM defender, Becky Burr.
Burr joined Neustar as its chief privacy officer in May.
Manwin sued ICM and ICANN last October, arguing that the launch of .xxx was little more than a shake-down.
Earlier this month, a California District Court judge ruled that ICANN is not immune from competition law and that the litigation can proceed.
The case will turn in part on the question of whether there’s a market for “defensive registrations” under competition law and whether ICANN and ICM illegally exploited it.

Court rules YouPorn can sue ICANN for alleged .xxx antitrust violations

A California court today ruled that ICANN is subject to US antitrust laws and therefore the lawsuit filed by YouPorn.com owner Manwin Licensing over the .xxx gTLD can proceed.
In a mixed ruling, the Central District of California District Court granted some parts of ICM Registry and ICANN’s motions to dismiss the case and rejected others.
Here’s what it had to say on the subject of antitrust law, which ICANN argued back in January did not apply to it because it “does not engage in trade or commerce”:

The Court finds the transactions between ICANN and ICM described in the First Amended Complaint are commercial transactions.
ICANN established the .XXX TLD. ICANN granted ICM the sole authority to operate the .XXX TLD. In return, ICM agreed to pay ICANN money.
This is “quintessential” commercial activity and it falls within the broad scope of the Sherman Act. Even aside from collecting fees from ICM under the contract, ICANN’s activities would subject it to the antitrust laws.

That’s a pretty definitive knock-back for ICANN’s ballsy opening manoeuvre.
The court is allowing Manwin’s claims against ICANN to proceed. Manwin has until September 9 to amend and re-file its complaint.
As you may recall, Manwin sued ICANN and ICM last November, alleging that they conspired to break competition law by, among other things, forcing companies to defensively register .xxx domains.
ICM and ICANN filed separate motions to dismiss the case on seven grounds, but according to today’s ruling only two of these requests were successful.
What strikes me as particularly interesting on a first read are the definitions of the relevant domain name markets.
Under the Sherman Act, antitrust allegations have to be based on a defined “market”. Manwin’s complaint was based on the markets for “defensive registrations” and “affirmative registrations”.
The court ruled today that the company failed make the case that “affirmative registrations” is a market — because Manwin is happily running hundreds of porn sites in .com:

The Court finds Plaintiffs have failed to adequately plead the affirmative registration market. Plaintiffs have not alleged why other currently operating TLDs are not reasonable substitutes to the .XXX TLD for hosting adult entertainment websites. To the contrary, Plaintiffs allege that Manwin’s own website YouPorn.com is the most popular free adult video website on the internet.

However, the court found that “defensive registrations” is a market for the purposes of this case.
I am not a lawyer, but my sense is that this (pdf) is important stuff.
Lawyers: do feel free to chip in in the comments or via email.

Christian group opposes .sex, .porn, .adult

Morality In Media, one of the groups that fought the approval of .xxx for years, has launched a letter-writing campaign against the proposed .sex, .porn and .adult top-level domains.
ICANN has received a couple dozen comments of objection to the three gTLDs over the last couple of days, apparently due to this call-to-arms.
Expect more. MIM was one of the main religion-based objectors to .xxx, responsible for crapflooding ICANN with thousands of comments in the years before the gTLD was approved.
Now that .xxx has turned out to be less successful than ICM Registry hoped, MIM feels its key belief on the subject — that porn gTLDs lead to more porn — has been vindicated.
MIM president Patrick Trueman wrote in one of his comments:

During the years of this fight against the .xxx domain, we said many times that the establishment of a .xxx domain would increase, not decrease the spread of pornography on the Internet, causing even more harm to children, families and communities, and make ICANN complicit in that harm.
That prediction has been fulfilled because the porn sites on the .com domain have not vacated the .com and moved to .xxx. Rather, as we have seen, the .xxx has just added thousand of additional porn sites on the Internet and .com porn sites stayed put. ICANN bears responsibility for this. The .xxx was not needed.

For some reason, the complaints are only leveled at the three ICM Registry subsidiaries that are applying for porn-themed gTLDs, and not the other .sex applicant.
Uniregistry’s application for .sexy has not been targeted.
And MIM has apparently not read the applications it is complaining about; its call to action complains about non-porn companies having to pay “protection money” to defensively register in .sex.
However, the three ICM bids explicitly contemplate an extensive grandfathering program under which all current defensive registrations in .xxx would be reserved in .sex, .porn and .adult.

YouPorn says ICANN not immune from .xxx antitrust

YouPorn owner Manwin Licensing has rejected ICANN’s claim to be immune from antitrust liability.
The company has told a California court that its lawsuit against ICANN and .xxx operator ICM Registry is little different from the landmark case Coalition For ICANN Transparency v Verisign.
Manwin sued ICANN and ICM last November, claiming the two illegally colluded to create a monopoly that, among other things, extorted defensive registration money from porn companies.
But ICANN has said in its attempts to have the case dismissed that the antitrust claims could not apply to it as, for one reason, it “does not engage in trade or commerce”.
Manwin’s oppositions to ICANN’s and ICM’s motions to dismiss rely heavily on the fact that the court allowed CFIT v Verisign, which challenged Verisign’s 2006 .com registry agreement, to go ahead.
Essentially, ICANN is trying to wriggle out of the suit on legal grounds at an early stage, but Manwin reckons there’s precedent for it to have to answer to antitrust claims.
You can read Manwin’s latest court filings here and here.
The case continues.

How to make $10,000 from .xxx domains

The policy body overseeing .xxx domain names plans to dish out grants of up to $10,000 to worthy causes.
The International Foundation For Online Responsibility expects to launch a new IFFOR Grants Program on June 1, according to a March announcement I only just noticed.
According to IFFOR, the grants will be capped at $10,000 per individual or organization and will be given to those who contribute to IFFOR’s four official policy goals:

Fostering communication between the Sponsored Community and other Internet stakeholders
Protecting free expression rights as defined in the United Nations Declaration of Human Rights
Promoting the development and adoption of responsible business practices designed to combat online child abuse images and to support user choice and parental control regarding access to online adult entertainment, and
Protecting the privacy, security, and consumer rights of consenting adult consumers of online adult entertainment goods and services

It seems like a pretty good opportunity for free speech advocacy groups to top up their funding.
ICM Registry, the .xxx manager, gives IFFOR $10 per year for every resolving .xxx domain name registered.
Its funding is therefore very likely approaching the $1.5 million mark in the hundreds of thousands of dollars right about now.

Is .xxx really that crappy?

It’s not a huge secret that the new .xxx gTLD isn’t doing as well, five months after launch, as ICM Registry would have hoped, but how does it shape up against other top-level domains?
Domain Name News earlier this week published an analysis of the top one million most-trafficked web sites, according to Alexa rankings, and found that .xxx had just 61 entries.
Per DNN reporter Mike Cohen:

We would not have thought that only 61 domains in total would be ranking inside the top 1,000,000 most visited sites in the world. That number was suppose to be exponentially higher by all accounts even a few month’s in, which we now are well into 2012, however reality says otherwise.

I’m not sure what “all accounts” DNN is referring to — possibly ICM’s marketing hype — but I thought the analysis was interesting so I thought I’d try to replicate it.
This morning I parsed today’s Alexa top million sites list and came up with the following (sortable) table.
[table id=7 /]
These are quick and dirty numbers, based on Alexa data, and my code might be wonky, so please don’t place too much faith in them.
I only looked at the “new” gTLDs introduced since 2001, as well as two mass-market ccTLDs (.co and .me) introduced over the same period.
The .co numbers do not include third-level domains under .com.co and the ccTLD’s other legacy extensions.
The “Months Active” column is the number of months since the TLD was delegated into the DNS root, measured by the date of the first registry report it filed with ICANN or the IANA (re)delegation date, not the date of general availability.
The fourth column is the number of domains divided by the number of months. It’s a fairly arbitrary measure, presented merely to give you an idea of the “success” of the TLD over time.
You could possibly, loosely, think of it as “how many domains a TLD can expect to get into the Alexa 1 Million per month”.
By that measure, .xxx isn’t doing too badly.
It’s even beating .jobs and .tel in absolute terms.

Did a university just pay $3,000 for its .xxx domain?

The domain name sju.xxx has changed hands for $3,000 on Sedo.
It’s the first .xxx domain I recall popping up in Sedo’s sales feed.
However, I think there’s a pretty good chance it’s a damage-mitigation move by an American university.
SJU is the acronym used by Saint Joseph’s University in Philadelphia, PA. The college uses sju.edu as its primary domain.
Knowing how paranoid universities have been about protecting their reputations in .xxx, and given that the sale came in just below the price of a cheap UDRP, I suspect we’re looking at a defensive move.
The Whois record for the domain is currently under privacy protection. Until recently, it belonged to one Jay Camina. It resolves to a suggestive Go Daddy parking page.

ICM confirms three porn gTLD bids

ICM Registry has applied to ICANN for the new gTLDs .sex, .porn and .adult.
If its applications are successful, the company plans to automatically block any second-level domain that is already registered in .xxx, including the Sunrise B defensive registrations.
This means if you own example.xxx, the equivalent .sex, .porn and .adult domains would be reserved until you pay a “nominal” activation fee to activate them.
As well as trademark owners, that would probably be pretty good news for owners of “premium” .xxx domains.
According to ICM, the four domains will not be permanently linked, so if you own a good .xxx you’ll be able to pay a normal registration fee then activate and sell off the three “freebies”.
Because the domains would be permanently reserved, there would be no renewal fees until you choose to activate them, which could well be the same day you sell them.
There’s a good chance these gTLDs will be contested by other applicants and objected to by governments, of course.
I’ve written more on the announcement for The Register here.

YouPorn’s .xxx settlement talks extended

YouPorn owner Manwin, .xxx manager ICM Registry and ICANN have asked a California court for a few more weeks to settle Manwin’s antitrust lawsuit.
According to a court filing yesterday, the three want to extend ICANN and ICM’s window to respond to Manwin’s complaint extended from April 17. The submission reads:

The parties’ settlement discussions have not yet finished. In order to complete those discussions, the parties stipulate to extend, by an additional about three weeks until May 8, 2012, the deadline for Defendants to respond to Plaintiffs’ First Amended Complaint.

By May 8 the world is going to know whether ICM and/or Manwin have applied to ICANN for other adult-oriented gTLDs (.sex, .porn, etc), which could change the picture considerably.
Manwin sued ICANN and ICM in November, alleging that they colluded on .xxx to deliver “monopolistic conduct, price gouging, and anti-competitive and unfair practices”.
ICM and ICANN have denied the allegations.