New rules could stop registries ripping off big brands

New gTLD registries could be banned from unfairly reaching into the deep pockets of famous brands, under proposed rules soon to be considered by ICANN.

A recommendation approved by the GNSO Council last Thursday targets practices such as using reserved and premium lists to block trademark owners from registering their brands during sunrise periods, or charging them exorbitant fees.

It’s believed to target new TLDs that hope to copy controversial practices deployed by the likes of .sucks, .feedback and .top in the 2012 gTLD round.

The recommendations came in the final report of Review of All Rights Protection Mechanisms (RPMs) in All gTLDs working group, which suggests over 30 tweaks to policies such as Sunrise, Trademark Claims, Trademark Clearinghouse and Uniform Rapid Suspension.

While the recommendations almost all received full consensus of the working group, that’s largely because the group could not agree to any of the major changes that had been demanded by the intellectual property lobby.

The aforementioned RPMs will therefore not change a great deal for the next batch of new gTLD applicants.

Even the recommendation about not ripping off big brands is fairly weak, and may well be watered down to homeopathic levels by the forthcoming Implementation Review Team, which will be tasked with turning policy into practice.

This is the recommendation:

Sunrise Final Recommendation #1

The Working Group recommends that the Registry Agreement for future new gTLDs include a provision stating that a Registry Operator shall not operate its TLD in such a way as to have the effect of intentionally circumventing the mandatory RPMs imposed by ICANN or restricting brand owners’ reasonable use of the Sunrise RPM.

Implementation Guidance:

The Working Group agrees that this recommendation and its implementation are not intended to preclude or restrict a Registry Operator’s legitimate business practices that are otherwise compliant with ICANN policies and procedures.

The idea is that ICANN Compliance could come down on registries deploying unfair rules designed to rip off trademark owners.

Practices that have come in for criticism in the past, and are cited in the report, include:

.top’s attempt to charge Facebook $30,000 for facebook.top

.feedback registering thousands of brand-match domains to itself

.sucks placing brand-match domains in an expensive premium pricing tier

Famous Four Media doing the same thing

The working group could not agree on whether any of these should be banned, and it looks like the IRT will have a lot of wriggle room when it comes to interpret the recommendation.

Now that the GNSO Council has approved the RPM working group’s final report (pdf), it will be passed to the ICANN board of directors for consideration before the nitty-gritty work of translating words into reality begins.

Claims UDRP has cost over $360 million so far

Trademark owners have splashed out over $360 million on UDRP cases over the 20 years the policy has been active, according to an intellectual property trade group.
Marques, a European body representing trademark owners, reckons $360 million is a “conservative” estimate.
It reached the figure by multiplying the number of UDRP complaints filed to the end of 2018 — 72,038 — by the $5,000 estimated total cost of each complaint.
The World Intellectual Property Organization, which handles well over half of all UDRP cases, charges at least $1,500 per case, but trademark owners have other fees, such as paying lawyers to draft the complaints.
WIPO, which basically designed and wrote the UDRP back in 1998, has been paid at least $63.8 million in filing fees to date, Marques calculates.
Across all UDRP providers, well over 100,000 individual domain names have been subject to UDRP. It’s likely much more, but the National Arbitration Forum does not publish data on unique domains.
The Marques claims were made in a letter (pdf) from council member (and Com Laude managing director) Nick Wood to ICANN last week, part of IP lobbying efforts in the face of UDRP reform efforts. He wrote:

This lowest-case estimate of $360m is a very significant financial burden. Registrants, on the other hand, pay only for their own defence, if any. They do not pay damages, or even contribute to the provider fees, if they lose – which across the five active panel providers appears to be majority of the time.

One proposal that has been put forward by IP owners is for registrants to pay a $500 fee when they are hit by a UDRP complaint, which would be refundable if they prevail.
I can see this idea going down like a cup of iced sick in the domainer community.
Rather than lobbying for any specific proposal, however, Marques is asking ICANN to create an “independent expert group” outside of the usual Policy Development Process, to highlight “priority issues and possible solutions” for the PDP to consider.
Marques thinks the group should comprise a small number of trademark interests, registries and registrars, and registrant rights groups. It wants WIPO to chair it.
It also wants ICANN to coordinate UDRP providers in the creation of a unified set of data on UDRP cases processed to date, to help with future reform discussions.
ICANN community volunteers have been working on the “PDP Review of All Rights Protection Mechanisms in All gTLDs” — the RPM WG — since March 2016.
The RPM WG expects to put out its “Phase One” initial report, comprising recommendations for reform of the Trademark Clearinghouse, Trademark Claims and Sunrise policies, in early June this year.
Only then will it turns its attention to UDRP, in “Phase Two”, with talks due to begin at the ICANN 65 meeting in Marrakech later that month.
The working group has been beset by all kinds of personal drama among volunteers recently, which continues to add friction to discussions.

Kirikos lawyers up after ICANN etiquette fight

Domain investor George Kirikos has hired lawyers to send nastygrams to ICANN after a fight over the rules of etiquette on a working group mailing list.
Kirikos claims there’s a “campaign of intimidation” against him by fellow volunteers who do not agree with his opinions and forthright tone, but that he “has not done anything wrong”.
In response, ICANN CEO Goran Marby this evening revealed that he has assigned his general counsel and new deputy, John Jeffrey, to the case.
Even by ICANN standards, it’s a textbook case of a) manufacturing mountains out of molehills, and b) how it can become almost impossible to communicate like sensible human beings when everyone’s tangled in red tape.
The dispute started back in May, when Kirikos got into a fight with IP lawyer Greg Shatan on the mailing list of the Rights Protection Mechanisms working group.
Both men are volunteers on the group, which seeks to refine ICANN policy protecting trademark owners in gTLDs.
The argument was about the content of a World Intellectual Property Organization web page listing instances of UDRP cases being challenged in court.
Kirikos took a strident tone, to which Shatan took exception.
Shatan then reported Kirikos to the working group’s co-chairs, claiming a breach of the Expected Standards of Behavior — the informal code of conduct designed to prevent every ICANN discussion turning into a flame war and/or bare-knuckle alley fight.
Under GNSO PDP rules, working group volunteers have to agree to abide by the ESB. Group chairs have the ability to kick participants who repeatedly offend.
At this point, the sensible thing to do would have been for Shatan and Kirikos to hug it out and move on.
But this is ICANN.
What actually happened was a pointless procedural back-and-forth between Kirikos, Shatan, and working group chairs Phil Corwin of Verisign and Brian Beckham of WIPO, which resulted in Kirikos hiring two lawyers — Andrew Bernstein of Torys and regular ICANN participant Robin Gross of IP Justice.
It’s believed to be the first time a WG participant has hired counsel over a mailing list argument.
Far too boring to recount here, Corwin’s timeline of events can be found from page 24 of this transcript (pdf) of remarks delivered here in Barcelona during ICANN 63, while the Bernstein/Kirikos timeline can be found here (pdf).
The rub of it is that Kirikos reckons both Corwin and Beckham are biased against him — Beckham because Kirikos voted against his chairship, Corwin because of a similar dispute in a related working group earlier this year — and that the ESB is unenforceable anyway.
According to Bernstein: “Mr. Kirikos has strong concerns that whatever process ICANN purports to operate with respect to Mr. Shatan’s complaint, it will not be fairly or neutrally adjudicated.”
He added that Kirikos had said that “due to the precise language of Section 3.4 of the Working Group Guidelines, Mr. Shatan lacked a basis to initiate any complaint”.
That language allows complaints to be filed if the ESB is “abused”. According to Corwin’s account, Kirikos — well-known as a detail-oriented ICANN critic — reckons the correct term should be “violated”, which rendered the ESB “null and void and unenforceable” in this instance.
Bernstein has since added that the ICANN board of directors never intended the ESB to be anything but voluntary.
The sum of this appears to be that the dispute has had a chilling effect on the RPM working group’s ability to get anything done, consuming much of its co-chairs’ time.
Kirikos lawyering up seems to have compounded this effect.
Now, as ICANN 63 drew to a close this evening, CEO Marby said in a brief prepared statement that the WG’s work has “more or less stalled for the last several months” and that he’s assigned general counsel John Jeffrey to “look into the issues surrounding this matter”.
ICANN “takes the issue very seriously”, he said.
As well it might. The Kirikos/Shatan incident may have been blown waaaaay out of proportion, but at its core is a serious question about civil discourse in ICANN policy-making.
Personally, I hold out hope it’s not too late for everyone to hug it out and move on.
But this is ICANN.

Sunrise accounts for under 1% of new gTLD regs

New gTLD registries can expect just 125 sunrise registrations on average, according to statistics just released by ICANN.
The new data, current as of May 2015, also shows that there have been just 44,077 sunrise registrations in total, over 417 new gTLDs.
That’s less than 1% of the total number of new gTLD domain registrations to that date.
The numbers were published in a revised version of ICANN’s Revised Report on Rights Protections Mechanisms, a discussion paper on mechanisms such as sunrise, Trademark Claims and URS.
It also contains the first authoritative breakdown of sunrise regs by TLD, though it’s limited to the 20 largest.

Many of these numbers match closely what DI has previously reported, but .porn and .adult are substantially lower because ICM Registry only revealed consolidated numbers that took account of its unique non-TMCH sunrise periods.
None of the ICANN figures include .sucks, which hit sunrise after the numbers were compiled in May.

Are new gTLD registries ripping off brands with unfair sunrise fees?

Forget .sucks — several less controversial new gTLD registries have come under fire from the likes of Google, Facebook and Adobe for charging sunrise fees as high as $17,000 for domains matching famous trademarks.
According to figures supplied to DI by ICANN’s Business Constituency, the domain instagram.love carries a $17,610 “Premium Name Fee” during the current sunrise period.
Instagram is of course the photo sharing service belonging to Facebook, and to the best of my knowledge not a dictionary word.
The domain facebook.love has a $8,930 fee, these figures show, while google.love costs $6,610, both in addition to sunrise fees of $350 and annual fees of $60.
The regular sunrise fee for .love comes in at $265 at some registrars.
The new gTLDs .design, .video, .wang, .wein, .rich and .top also seem to carry very high fees for brands such as Facebook, according to the BC’s numbers.
Google recently filed a public comment with ICANN which warned:

some registry operators are taking advantage of rights owners during Sunrise by charging exorbitant and extortionate Sunrise registration fees. Although such pricing policies are not strictly within the ICANN compliance mandate, they contravene the spirit of the RPMs [rights protection mechanisms], damage ICANN’s reputation, harm consumers in contravention of ICANN’s mandate to promote the public interest, and create disincentives for rights owners to take advantage of the Sunrise period

Similar comments were sent by the Intellectual Property Constituency, BC, and others.
The issue of registries charging super-high “premium” fees for trademarked names has been on the radar of the BC and the IPC since at least 2013.
It seems that in at least some cases, trademark owners are being hit with the higher fees because their marks are dictionary words that the registry has identified as premium due to their regular meaning.
For example, adobe.design is on the list of names provided by the BC, carrying a $1,175 registration fee.
But Andrew Merriam, director of business development at .design registry Top Level Design, denied that the software company is being targeted. Instead, he said “adobe” refers to the material used in architecture — its dictionary meaning.
He said: “Stucco.design, concrete.design, wood.design, granite.design (and many other materials and building styles) are all on the premium list, at varying prices. In fact, adobe.design is priced on the lower end of all these materials.”
Merriam said the registry’s premium fee for adobe.design is actually $250 and speculated that $1,175 could be the price quoted by Adobe’s brand protection registrar post-markup. It was $349 at Go Daddy, he said.
In other cases, trademarks may have found their way on to premium lists due to a lack of manual vetting by the registry, rather than nefarious targeting.
In the case of instagram.love, Evatt Merchant of .love registry Merchant Law Group told DI that Facebook can buy the name for the normal sunrise fee if it wants.
He told DI that trademark owners should contact the registry if they believe their marks have been wrongly given premium prices. He said:

While it is possible that some brand terms that are frequently googled have ended up on the premium list, valued based on their Google search frequency, there is a simple solution. During the sunrise period, brands seeking non-dictionary trademarked domain names can contact the registry so that a review of individual sunrise pricing can occur. As has already occurred, such requests will often result in the .LOVE TLD voluntarily offering to reduce their sunrise application cost to the base sunrise price and that would certainly be the case for Instagram.

ICANN’s does not regulate pricing in new gTLDs, but nevertheless the IPC and BC and their members have asked ICANN to include premium pricing of trademarked names in its upcoming review of rights protection mechanisms.

First-come, first-served sunrise periods on the cards

New gTLD registries will be able to offer first-come, first-served sunrise periods under a shake-up of the program’s rights protection mechanisms announced a week ago.
The new Trademark Clearinghouse Rights Protection Mechanism Requirements (pdf) contains a number of concessions to registries that may make gTLD launches easier but worry some trademark owners.
But it also contains a concession, I believe unprecedented, to the Intellectual Property Constituency that appears to give it a special veto over launch programs in geographic gTLDs.
Sunrise Periods
Under the old rules, which came about following the controversial “strawman” meetings late last year, new gTLD registries would have to give a 30-day notice period before launching their sunrise periods.
That was to give trademark owners enough time to consider their defensive registration strategies and to register their marks in the Trademark Clearinghouse.
The new rules give registries more flexibility. The 30-day notice requirement is still there, but only for registries that decide to offer a “Start Date” sunrise period as opposed to an “End Date” sunrise.
These are new concepts that require a bit of explanation.
An End Date sunrise is the kind of sunrise we’re already familiar with — the registry collects applications for domains from trademark owners but doesn’t actually allocate them until the end of the period. This may involve an auction when there are multiple applications for the same string.
A Start Date sunrise is a relative rarity — where registrations are actually processed and domains allocated while the sunrise period is still running. First-come, first-served, in other words.
This gives more flexibility to registries in their launch plans. They’ll be able to showcase mark-owning anchor tenants during sunrise, for example.
But it gives less certainty to trademark owners, which in many cases won’t be able to guarantee they’ll get the domain matching their mark no matter how wealthy they are.
Under the new ICANN rules, only registries operating a Start Date Sunrise need to give the 30 days notice. These sunrise periods have to run for a minimum of 30 days.
It seems that registries running End Date Sunrises will be able to give notice the same day they start accepting sunrise applications, but will have to run their sunrise period for at least 60 days.
Launch Programs
There was some criticism of the old RPM rules for potentially limiting registries’ ability to run things such as “Founders Programs”, getting anchor tenants through the door early to help promote their gTLDs.
The old rules said that the registry could allocate up to 100 names to itself, making them essentially exempt from sunrise periods, for promotional purposes.
New gTLD applicants had proposed that this should be expanded to enable these 100 names to go to third parties (ie, “founders”) but ICANN has not yet given this the green light.
In the new rules, the 100 names still must be allocated to the registry itself, but ICANN said it might relax this requirement in future. In the legalese of the Registry Agreement, it said:

Subject to further review and analysis regarding feasibility, implementation and protection of intellectual property rights, if a process for permitting registry operators to Allocate or register some or all of such one hundred (100) domain names (plus their IDN variants, where applicable) (each a “Launch Name”) to third parties prior to or during the Sunrise Period for the purposes of promoting the TLD (a “Qualified Launch Program”) is approved by ICANN, ICANN will prepare an addendum to these TMCH Requirements providing for the implementation of such Qualified Launch Program, which will be automatically incorporated into these TMCH Requirements without any further action of ICANN or any registry operator.

ICANN will also allow registries to request the ability to offer launch programs that diverge from the TMCH RPM rules.
If the launch program requested was detailed in the new gTLD application itself, it would carry a presumption of being approved, unless ICANN “reasonably determines that such requested registration program could contribute to consumer confusion or the infringement of intellectual property rights.”
If the registry had not detailed the program in its application, but ICANN had approved a similar program for another similar registry, there’d be the same presumption of approval.
Together, these provisions seems to give registries a great deal of flexibility in designing launch programs whilst making ICANN the guardian of intellectual property rights.
Geo gTLDs
For officially designated “geographic” gTLDs, it’s a bit more complicated.
Some geographic gTLD applicants had worried about their ability to reserve names for the governments backing their applications before the trademark owners wade in.
How can the .london registry make sure that the Metropolitan Police obtains police.london before the Sting-fronted pop group (or more likely its publisher) snaps up the name at sunrise, for example?
The new rules again punt a firm decision, instead giving the Intellectual Property Constituency, with ICANN oversight, the ability to come up with a list of names or categories of names that geographic registries will be allowed to reserve from their sunrise periods.
It’s very unusual — I can’t think of another example of this happening — for ICANN to hand decision-making power like this to a single constituency of the Generic Names Supporting Organization.
When GNSO Councillors also questioned the move, ICANN VP of DNS industry engagement Cyrus Namazi wrote:

In response to community input, the TMCH Requirements were revised to allow registry operators the ability to submit applications to conduct launch programs. In response to the large number of Geo TLDs who voiced similar concerns, the IPC publicly stated that it would be willing to work with Geo TLDs to develop mutually acceptable language for Geo TLD launch programs. We viewed this proposal as a way for community members to work collectively to propose to ICANN a possible solution for an issue specifically affecting intellectual property rights-holders and Geo TLDs. Any such proposal will be subject to ICANN’s review and ICANN has expressly stated that any such proposal may be subject to public comment in which other interested community members may participate.

While ICANN is calling the RPM rules “final”, it seems that in reality there’s still a lot of work to be done before new gTLD registries, geo or otherwise, will have a clear picture of what they can and cannot offer at launch.