Anti-Parking Policy Stripped from Final gTLD Applicant Guidebook

Responding to a strongly worded ICA comment letter filed on May 15th, ICANN has deleted applicant evaluation criteria from the Final Applicant Guidebook (AG) for new gTLDs that would have encouraged applicants to constrain parked websites offering advertising links.

ICANN has just issued what it hopes will be the Final version of the AG (available at http://www.icann.org/en/topics/new-gtlds/comments-7-en.htm). ICA’s May 15th comment letter took vigorous exception to new anti-parking criteria that popped up in the last version of the AG, stating:

New AG language that equates parked domains with negative social consequences and costs is unjustified, inappropriate, and at odds with prior ICANN findings and policy, proposed URS evaluation criteria, and WIPO guidance to UDRP examiners. We demand its deletion.

ICA is pleased that ICANN has complied with our views on this important matter. Regardless of whether any new gTLD attracts sufficient traffic to make domain parking a viable domain monetization option, it was simply unacceptable to have ICANN adopt a policy that equated non-infringing parked domains with negative effects.

As regards ICA’s other requests for AG modifications, ICANN:

•    Left in place an overly inflexible policy of automatic disqualification for any applicant with, or including individuals with, three or more adverse final decisions under the UDRP, ACPA, or equivalent legislation in the past four years, while retaining the same disqualification criteria for entities and individuals found to have engaged in reverse domain name hijacking. We continue to believe that such evaluation should consider the size of an applicant’s portfolio and its overall UDRP/ACPA win/loss record.

•    Did not clarify the criteria to be used in determining whether a registrant’s request for a good faith extension of its time to respond to a Uniform Rapid Suspension (URS) complaint would be granted – but also made no substantive changes to the URS that are adverse to registrants. In particular, the URS does not allow for a domain transfer option that would make it the functional equivalent of the UDRP. ICA had strongly objected to that possibility after the Board had tentatively agreed to it earlier this year.

It remains to be seen whether this Final AG will in fact be adopted by ICANN’s Board at its upcoming meeting in Singapore. The new Final AG is accompanied by a statement that, “The Board of Directors will consider approval of the New gTLD Program at an extraordinary meeting on Monday, 20 June 2011, during ICANN’s international meeting in Singapore.” However, it is also accompanied by the latest version of comments from the Governmental Advisory Committee (GAC) regarding the new gTLD program (available at http://www.icann.org/en/topics/new-gtlds/gac-comments-new-gtlds-26may11-en.pdf ). Continuing to carry water for large corporate brand owners, that GAC communiqué identifies five outstanding rights protection areas in which it wants the

Board to acquiesce, stating:

There remain, however, five significant GAC proposals in the GAC’s advice where the Board and the GAC to date have been unable to reach agreement, namely:

i. The IP claims and sunrise services should include exact matches plus key terms associated with the goods or services identified by the mark, and typographical variations identified by the rights holder.

ii. The notification function of the Trademark Clearinghouse should continue beyond the currently proposed 60 day period after the initial launch of each gTLD.

iii. There should be no requirement to provide evidence of use for eligibility to be included in the Clearinghouse which would conflict with many national IP legal frameworks.

iv. The standard of proof required for the URS and the PDDRP should be reduced from “clear    and convincing evidence” to the less burdensome “preponderance of evidence”.

v. The loser pays threshold should be substantially reduced to less than 26 domain names.

Board acceptance of these requests would result in the expansion of brand owners’ claims to domains that go far beyond exact matches of trademarks that are actually in use (especially if brand owners could list unlimited numbers of purportedly objectionable variations of a single trademark!), elimination of a key evidentiary distinction between the URS and the UDRP, and a worrisome reduction in the number of contested domains that result in triggering a “loser pays” regime. Such changes would not only diminish registrants’ rights but have a materially adverse effect on the economic prospects of many new gTLDs – and we hope the Board draws the line against them.

It remains unclear whether the Board will actually approve the AG at its June 20th meeting. The GAC has requested, for example, that the Board provide it with a detailed document on the issue of evidence of use for valid trademarks, as follows:

The GAC maintains its advice to the Board that the requirement to provide evidence of use (iii) should    be removed because it is inconsistent with trade mark law in many jurisdictions, burdensome for business, disproportionate and discriminatory. The GAC notes that the principal reason the Board    disagrees with the GAC’s advice is that this requirement would in its view deter gaming. In view of the Board’s concern about this as an overriding risk that outweighs the concerns raised by the GAC if this requirement were to be imposed, the GAC asks the Board to provide a written document for the GAC’s consideration by 8 June 2011, so that there is opportunity for GAC review before meeting in Singapore, which:

a) provides a detailed, evidence-supported analysis of the gaming threat at the second level;

b) explains why the Board believes that this requirement is the only practicable solution for addressing this threat and would successfully deter the practice of gaming;

c) provides an analysis of the likely impact of this requirement on legitimate mark holders who would be rendered ineligible for inclusion in the Clearinghouse if this requirement is imposed;

d) assesses the costs to business of having to furnish evidence of proof;

e) explains the resources which ICANN will expect to be deployed by the Clearinghouse for the rigorous examination of evidence of use.

The GAC requests a discussion of this paper with the Board at the meeting in Singapore before finalizing its advice to the Board on the proposal to require evidence of proof. (Emphasis added)

Assuming that the Board requires with this request and is able to furnish such a detailed response by June 8th, it seems doubtful that jet-lagged GAC members meeting with the Board on Sunday, June 19th could discuss the document in detail and then finalize advice on this specific issue before the Board’s meeting to consider AG approval the next day.

This latest GAC response also identifies a number of other areas in which it is seeking significant change, including—

•    Further discussions “between the GAC and the ICANN Board to find a mutually agreed and understandable formulation for the communication of actionable GAC consensus advice regarding proposed new gTLD strings.” This issue is a critical one going to the very essence of the GAC’s role in reviewing new gTLD applications.

•    A demand that “the categories of law violations that will be considered in the background screening process must be broadened to include cou
rt or administrative orders for consumer protection law violations. If an applicant has been subject to a civil court or administrative order for defrauding consumers, it should not be permitted to operate a new gTLD.” This could be a contentious matter for many large corporations considering .brand applications if they have admitted to past consumer protection violations.

•    A dramatic, 76% reduction of the application fee for applicants from “developing nations” (from $185,000 to $44,400), reduction of other applicable fees, and waiver of the annual $25,000 operation fee during the first three years of such a gTLD’s operation. This demand raises the specter that the new gTLD program will become one in which applicants from developed nations subsidize those from less developed regions.

With June 20th less than three weeks away, it remains to be seen whether the Board can balance its commitment to end the AG development process and vote for new gTLDs to launch in Singapore with the political realities of maintaining GAC support as well as placating a U.S. government that has been harshly critical of the new gTLD program, and that is considering the upcoming renewal of the IANA contract that provides the technical foundation for all of ICANN’s policy development. We suspect that the decisive vote may not come on Monday, June 20th but at the Board’s second scheduled meeting on Friday, June 24th — with lots of backroom maneuvering in the interim.

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